The firm is on track for its full year results 

Sabre Insurance Group released its half-year results this morning reporting a pre-tax profit of £30.5m, despite lagging claims inflation and competitive market conditions.

This is lower than the £32m (adjusted basis: £32.5m) in the same six-month period last year.

Adam Westwood, chief financial officer at Sabre told Insurance Times that last year was an “exceptional year” but the current results are where the firm expected to be.

Its gross written premiums were down £7.6m year-on-year, slipping from £108.8m to £101.2m.

While Sabre’s shares were trading at 2.3% lower at 271.50 pence each, it is paying an interim dividend of 4.7 pence a share.

Its chief executive Geoff Carter said: “The financial and operational performance of Sabre demonstrates the resilience of the business model and the merit in our strategy, despite the competitive market conditions. Our relentless focus on underwriting discipline and profitability over premium volume means that we continue to deliver strong capital generation.”

Meanwhile the business is on track for its full year results.

Claims inflation

The UK private motor insurance underwriter takes a unique stance to competitors, continuing to prioritise underwriting profitability over volume and has raised prices to reflect observed claims inflation. It does not have growth targets; it views premium as an output.

This means that the firm can take a “hard-nosed” approach to cover claims inflation, Carter said. But premium outturn will depend on market conditions.

He continued: “Whilst it is difficult to predict accurately when we might see a turn in the cycle, we have continued with our strategy of increasing premiums to reflect claims inflation, which we believe is running at around 7-8% a year, to ensure we continue to write business within our long-standing mid-70%’s combined ratio target range.

“It is encouraging that our competitors, and other commentators, now appear to be moving towards the claims inflation position we have been highlighting for some time. As we have already applied rate increases to cover this anticipated inflation, any widespread market rate increases may be beneficial for us.”

It has maintained its strategy of proritising underwriting profitability over volume, with new polices and renewals written at target margins.

He told Insurance Times that claims inflation “is being driven by theft, the cost of fixing technologically advanced cars, and personal injury claims inflating at 5% per year.” He said: “Our focus over the last year has been to make sure our rates cover that claims inflation”.


Carter said that Sabre had not shifted its assumptions, sticking at the -0.75% rate.

Sabre’s “prudent approach” to pricing and reserving resulted in £0.3m benefit to incurred claims, net of reinsurance due to adjusting claims reserves to the revised Ogden discount rate -0.25% (reserves previously at -0.75%).

Looking ahead

Carter added: “We continue to operate in a prudent manner, taking pricing action only when speculation and opinion becomes fact, as evidenced by the minimal impact to our financials as a result of the recent Ogden rate change. It is only now, post that announcement, that we will reflect the change in the Ogden rate within our pricing and reserving models.

“We also remain cautious about the likely benefits from forthcoming whiplash and associated reforms. There continues to be a risk that some benefits have already been realised in terms of reduced personal injury frequency, and as always there could be unforeseeable, unintended consequences following implementation. Our approach will be to reflect rating changes based upon observed performance.

“Looking ahead, we remain confident of delivering in line with our existing guidance for 2019 – a COR slightly better than our long-term target, continued strong capital generation and an attractive dividend.”