SBRE Sabre Insurance Group Plc

22 October 2024

Sabre Insurance Group plc

Trading Update

On track for record premium income and strong, on-target profit

Sabre Insurance Group plc (the "Group" or "Sabre"), one of the UK's leading motor insurance underwriters, today provides an update on trading for the period from 1 July 2024 to 30 September 2024.

Key Highlights

-    Gross Written Premium up 15% against the same period in 2023, on-track to deliver record Gross Written Premium for the year

-    Continued to increase rates to cover elevated claims inflation, in contrast to the wider market

-    Policies continue to be written at target margins - underpinning profitable growth for this year and positioning Sabre well into 2025

-    Focus on disciplined underwriting reflected in expectation of a profitable out-turn across all product lines

-    Continued strong capital generation supports confidence in the ability to pay an attractive dividend for the year

-    Policy count as at 30 September 2024: Motor - 230k (30 September 2023: 222k), Motorcycle - 38k (30 September 2023: 45k), Taxi - 11k (30 September 2023: 13k)

Capital Markets Event

-    A capital markets session for investors and analysts, focussed on how our strategy and business model will deliver growth and value for our shareholders in the medium-term, will be held on 5th December 2024

Market trends

-    Some signs of claims inflation moderating, but remains at a high single-digit level

-    Despite this, increasing competition for volume in the mass-market is evident in clear signs of market price reductions

-    However, level of market discounting far lower than the extreme price movements seen in recent years suggesting a more stable trading environment

-    We continue to expect market prices will need to increase to reflect current levels of inflation

-    We note the recent announcement of a cross-government motor insurance taskforce, supported by industry experts, formed to help identify the factors behind rapidly rising premiums. We are pleased that this is primarily focussing on options to tackle the underlying cost inflation driving premium increases

-    We also note the Financial Conduct Authority's recently announced premium finance market study. We look forward to engaging with the regulator as appropriate, and can confirm our full compliance with fair value rules and our belief that we have very limited regulatory exposure. The proportion of our profits expected to be generated through premium finance income remains minimal

Full-year profit guidance reaffirmed, slight softening in gross written premium

-    We continue to anticipate strong year-on-year premium growth, and profit in line with current market expectations

-    We expect our year-on-year premium growth to be moderated slightly and to be in-line with our view of high single digit claims inflation

Geoff Carter, Chief Executive Officer of Sabre, commented:

"I'm pleased with our performance at the Q3 stage and look forward with confidence to a strong full-year result. Importantly, our resolute price discipline means we expect to continue this good performance in future periods.

We have seen clear signs that market pricing has softened considerably during the summer. Our view is that market price movements outstrip any potential short-term benefits from a slight softening in claims inflation. We remain confident in our view on inflation and that market pricing will have to reflect this in due course.

Our proven, disciplined strategy has enabled us to adapt to changing market conditions successfully and rapidly. We were able to grow very strongly in attractive market conditions in H1, and then to accept slightly lower, but still good, volumes in Q3.

I am also excited that we are now completing the foundation work that will support our multi-year growth strategy. I look forward to discussing this at an update session for analysts and investors in December and updating on our progress in future results presentations."

LEI Code: 2138006RXRQ8P8VKGV98