Sabre Insurance has posted a record premium income after the motor insurer reaped the benefit of price hikes while offsetting the impact of claims inflation.
The firm reported a 31 per cent jump in gross written premium in 2023, from £171.3m in 2022. The boost was driven mainly by 47.5 per cent premium growth in its motor vehicle product, which it said far exceeded management’s initial expectations and offset an anticipated reduction in motorcycle business.
The cost of car coverage rocketed up last year as inflation jacked up the cost of replacement parts for vehicles and increased labour rates.
Sabre noted a “very strong market-wide price correction” in the second half of 2023, allowing it to grow premiums while “returning profitability to historic levels”.
The firm’s pretax profit came in at £23.6m last year, up from £14.0m in 2022.
It raised its total dividend for the year of 9p from 4.5p, including a proposed final dividend of 4.2p and special dividend of 3.9p.
Sabre Insurance noted that continued claims inflation, uncertain smaller personal injury claims costs pending a Supreme Court decision and expectations of poor market profitability for 2023 meant “industry pricing discipline should sustain”.
Chief executive Geoff Carter said: “Following a challenging 2022, where we reacted early and decisively to the rapid increase in inflation, this year has seen us benefit as some competitors increased prices rapidly and others withdrew from the motor insurance market.”
He added: “We have delivered good profit for the year, ahead of expectations and we anticipate a further significant increase in profitability for 2024 as the profitable business written in 2023 earns through. We believe that ongoing market uncertainties are such that price discipline should be maintained across the sector, which, together with our ongoing focus on profitable growth, will enable Sabre to deliver strong returns to shareholders in 2024.”
Founded in 1982, the group was acquired by General Accident in 1996 and then became part of Aviva in 2000, before a management buyout in 2002. It listed on the London Stock Exchange in 2017.
The firm operates various brands including Insure2Drive, Go Girl and Drive Smart.
After Sabre’s stock price suffered a 40 per cent one-day crash in July 2022 due to reporting profits after tax had plunged to just £3.5m, the group’s shares have steadily recovered.