Sabre bucks UK motor trend with 79.7% COR

Specialist motor insurer Sabre has posted a combined ratio of below 80% for 2010 against a background of rising claims costs and continuing losses for motor insurers in general.

In an exclusive, in-depth interview with Insurance Times, Sabre chairman Keith Morris said: "We had another good year."

Sabre’s 2010 combined ratio came in at 79.7%. While this was 14.9 percentage points higher than 2009’s combined ratio of 64.8%, the 2009 underwriting results were propped up by a one-off reserve release of £16.7m. Reserve releases in 2010 amounted to £1.5m.

Sabre’s gross written premiums jumped 58% to £156.9m in 2010 from £99.1m in 2009.

Morris said the increase was largely driven by price increases. He says the company put through cumulative rate increases of 40% during the year.

He added that a small portion of the GWP rise was attributed to an increase in the company’s underwriting portfolio.

Sabre’s profit before tax was £25.9m, down 33% on 2009’s £38.8m. The drop was driven by the lack of the one-off reserve release and a sharp drop in overall investment returns to £2.1m in 2010 from £7.7m in 2009.

Profit after tax was £18.6m in 2010, compared with 2009’s £28m.

Click here to read the full interview with Sabre's Keith Morris.

With the exception of Admiral, motor insurers have generally suffered poor results in 2010. RBS Insurance, for example, which includes Direct Line, Churchill and NIG, made a loss of £295m in 2010 and posted a combined ratio of 115%.

Lloyd’s of London’s 2010 motor combined ratio was 151.5%, comprising a 114.8% current year ratio plus 36.7 percentage points related to prior-year reserve strengthening.