’We have been able to increase prices at a level to cover high on-going inflation,’ says chief executive

Sabre Insurance has revealed that it managed to grow its motor business revenue by 34% in the nine months to September 2023 despite having to battle with “very high inflation”.

In a trading update published today (19 October 2023), the insurer reveal that it achieved a gross written premium (GWP) of £162.2m during the period, up from £135.7m in 2022.

The firm also grew its motor book to 222,000 policies by 30 September, an increase from 211,000 on 30 June 2023.

Sabre said it was able improve its motor arm as rate increases mitigated the impact of claims inflation, which continues to hover at around 10%.

And it felt that an increase in solvency capital ratio reflected a return towards historical levels of underwriting profitability on its motor business.

“In recent months, core motor vehicle business has been written at an assessed sub-80% undiscounted combined operating ratio (COR) – which we have achieved at the same time as writing total GWP considerably higher than our expectations,” Geoff Carter, chief executive of Sabre, said.

“Having stuck firmly to our profitability over volume strategy through four-years of persistent market under-pricing and periods of very high inflation, we are now starting to show the benefits of our strategy as market pricing continues to correct.”

Motorcyle and taxi

Meanwhile, the firm’s motorcycle GWP dropped from £20.9m to £10.7m year-on-year.

It said that policy count and premium growth was impacted by the cessation of trading with MCE Insurance, with the broker entering administration earlier this year (19 July 2023).

However, Sabre said it had an ongoing focus on margin over volume, with it believing that rate increases will drive improved loss ratio performance.

And its taxi business improved GWP from £9.6m to £11m, with the insurer taking “significant underwriting actions” to improve performance in a “challenging” market.

“It is also pleasing to see motorcycle now performing at around the required level and taxi performance improving as planned,” Carter said.

“We have been able to increase prices at a level to cover high on-going inflation, whilst also returning anticipated profitability on written business towards our historical levels.”

Full year

Looking ahead to its full year results, Sabre said it expected its GWP across all portfolios to grow year-on-year between 20% and 25%

It also expects to see a discounted COR for the full year at the upper end of the 85% – 90% range.

“Our success so far this year is evident in the high premium levels and very strong solvency position, which will allow sufficient headroom for further growth whilst allowing the board flexibility in determining an appropriate dividend distribution at year-end in-line with our policy,” Carter said.

”I would like to thank all our people and shareholders, who have supported Sabre through an extended and challenging market as we look to a bright and exciting future.”