However, chief executive says he is ’slightly more optimistic given strong volumes in recent weeks’
Sabre Insurance Group’s gross written premium (GWP) took a slight fall during the first quarter of 2023, according to a trading update released today (26 May 2023).
The group revealed that between 1 January and 30 April, it recorded an unaudited GWP total of £58.9m, down from £59.8m in Q1 2022.
This was driven by a drop in GWP from its motorcycle business, which fell from £12m in the first quarter of 2022 to £6.3m in the first four months of this year.
However, the group said the current run‐rate performance of the motorcycle business was in line with expectations.
Meanwhile, its motor GWP increased year-on-year from £45.3m to £47.9m, with Sabre saying that profitability was in line with expectations.
And its taxi business improved GWP from £2.5m to £4.7m in the same period – Sabre said underwriting actions to improve its profitability were anticipated to continue through 2023.
Geoff Carter, chief executive of Sabre, said that despite a small drop in the group’s overall GWP in Q1 2023, he was “slightly more optimistic given strong volumes in recent weeks”.
He highlighted that from mid‐March to May, the company saw weekly gross written premiums over 20% higher in the motor business than the same time last year.
“We anticipate this trend of improving market pricing will continue, albeit it is too early to tell what the pace and trajectory of improvement will be, and are confident in our ability to continue to grow volumes at the appropriate margin,” he said.
“We are currently in the fortunate position of making pricing decisions designed to find an optimal point between volume growth and margin enhancement.”
2023 outlook
In its 2022 full year result, Sabre said its profit before tax fell from £37.2m in 2021 to £12.8m.
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It said the year-on-year decrease came primarily as a result of pressure on loss ratio due to unexpected inflation.
In the same period, its combined operating ratio (COR) went from 79.4% to 96%.
However, its GWP saw a slight rise in 2022 – and the group also forecast in its full year guidance for 2023 that it expected to achieve high single‐digit growth in overall GWP.
It also predicted that its COR should be between 85% to 90%.
Claims inflation is estimated to be at least 10%.
Carter added: “We expect the loss ratios in the core motor business to improve through the rest of 2023, with pricing actions reflecting ongoing inflation.
“Volumes for the taxi business have been suppressed while this market segment remains challenging.
“The actions we took last year and this year to increase the profitability of the motorcycle businesses should generate a positive contribution to profit.
“If these positive market pricing trends and run‐rates continue through the rest of the year, we anticipate a strong bounce‐back in earnings compared to 2022.”
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