Sabre Insurance: Motor insurance claims inflation continues to hit growth

Motor insurer Sabre Insurance said it expects annual gross written premium growth to moderate slightly as claims inflation remains elevated.

The London-listed firm reported gross written premiums of £186.5m for the third quarter, up 15 per cent from £162.2m a year earlier.

Sabre said it continued to increase its rates between July and September to cover elevated claims inflation, in contrast to price reductions in the wider market.

While the firm noted “signs of claims inflation moderating”, it said inflation remained at a high single-digit level.

“We have seen clear signs that market pricing has softened considerably during the summer,” said Geoff Carter, Sabre’s chief executive.

“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.”

Sabre reaffirmed its profit guidance for the full year, adding that it was on track to deliver record premiums in 2024.

The firm said it continued to write policies at target margins. Its total policy count as of 30 September remained broadly steady compared to last year at 279,000.

Sabre reported slightly lower volumes in the third quarter compared to the first half of the year and said rising competition was “evident in clear signs of market price reductions”.

Motor insurers have come under scrutiny for rising premiums, with the new government launching a taskforce last week to crack down on high costs.

Analysis by the Financial Conduct Authority (FCA) has found UK motor insurance premiums have grown by an average of 21 per cent since June 2022, well above comparable economies like Germany, France, Spain and Italy.

Commenting on the government’s taskforce, Sabre said it was “pleased that this is primarily focusing on options to tackle the underlying cost inflation driving premium increases”.

The firm said it had minimal exposure to a separate FCA review of Britain’s premium finance market also announced last week.