Analyst gives view following Sabre results 

UK motor insurers are at the bottom of the pricing cycle and are feeling the pain, analysts at Berenberg said on Friday.

Berenberg’s Iain Pearce, in a note following Sabre’s trading update, said if current pricing levels continue, premium volumes could fall by as much as 7%.

“Pain is being felt across the industry and claims costs continue to increase. Anyone growing at current pricing levels is destined for trouble, in our view,” he said.

Pearce gave an endorsement of Sabre’s strategy, which has allowed premium to fall as it holds the line on pricing.

Pearce said he was ‘comfortable’ with Sabre not growing, ”given that premium rate rises continue to lag claims inflation”.

”Claims trends are also showing no signs of abating. Inflation in third-party damage and large bodily injury claims is rising and we do not believe that regulatory changes will provide the salvation that some are hoping for,” he added.

”As such, achieving rate rises now will position Sabre well for the time that the market is forced to more accurately reflect the challenging claims environment.”