Sabre Insurance Group Plc · LSE:SBRE

Sabre Insurance — H1 2023 Earnings Presentation

28 slides from Sabre Insurance's earnings presentation, Oct 22, 2023

  1. Slide 1: Half-year results

    Half-year results 30 June 2023

  2. Slide 2: Presenters and Q&A

    Presenters and Q&A Geoff Carter Adam Westwood CEO CFO Trevor Webb Matt Wright Claims Director Chief Actuary 2

  3. Slide 3: Today’s agenda

    Today’s agenda 1 Highlights Geoff Carter 2 Summary of trading Adam Westwood 3 The UK motor insurance market Geoff Carter 4 Summary and outlook Geoff Carter 5 Q&A All 3

  4. Slide 4: Highlights

    Highlights Geoff Carter INSURANCE

  5. Slide 5: Strategic Highlights

    Strategic Highlights ‒ Strategy playing out as planned as market hardens ‒ Positive momentum in market pricing in core Motor ‒ Sabre able to grow policy volume and premium as competitors correct prices to reflect current and historic inflation ‒ Claims inflation remains high, and we stick to our pre

  6. Slide 6: Financial Highlights

    Financial Highlights ‒ Strong growth in core Motor book, at same time as enhancing margins ‒ Growth has accelerated in recent weeks. Weekly core motor premium in excess of 50% higher year-on-year ‒ Core product net loss ratio returning to historical position ‒ H1 gross written premium for core Motor

  7. Slide 7: Summary of trading for the half-year ended June 2023

    Summary of trading for the half- year ended 30 June 2023 Adam Westwood

  8. Slide 8: Half-year 2023 financial performance

    Half-year 2023 financial performance HY 2023 financial performance Restated under IFRS 17 Net loss ratio Unaudited Unaudited Unaudited 62.0% 65.4% 66.0% 2023 - HY 2022 - HY 2022 - YE Gross written premium £99,500k £91,800k £171,300k Net earned premium £71,834k £77,507k £153,219k 2023 - HY 2022 - HY

  9. Slide 9: Underwriting performance

    Underwriting performance Current year net loss ratio Prior year net loss ratio 4.0% 4.1% 3.5% 69.7% 2.3% 66.5% 67.9% 0.5% 61.5% 63.1% 61.9% (3.5%) Undiscounted Undiscounted Undiscounted Discounted Discounted Discounted Undiscounted Undiscounted Undiscounted Discounted Discounted Discounted 2023 - HY

  10. Slide 10: Underwriting by product

    Underwriting by product 30 June 2023 net earned premium by product − Core Motor continues to perform well and has grown 9% premium and policy count during Q2 2023 11% − Motorcycle profitability has improved as rating adjustments earned through − Very little financial impact from MCE broker administr

  11. Slide 11: Product maturity

    Product maturity Product Current Status Outlook Established product – Strong premium growth, and pricing – More profitable year than 2022, with loss Core Motor increases implemented to cover inflation ratio near historic target levels and enhance margin – Profitable 2023 performance, moving towards

  12. Slide 12: IFRS 17

    IFRS 17 ‒ IFRS 17 designed to apply a consistent set of principles for all aspects of accounting for insurance contracts ‒ Has created significant changes to presentation of the accounts and in some cases changed phasing of profits ‒ We expect this to impact different insurers in different ways ‒ St

  13. Slide 13: IFRS 17

    IFRS 17 Reconciliation of net assets £'k IFRS 4 - Net assets as at 31 December 2022 222,496 Valuation differences, including discounting 15,960 Change in insurance acquisition cash flows (7,474) Taxation impact (1,993) IFRS 17 - Net assets as at 31 December 2022 228,989 ‒ Key differences in risk adj

  14. Slide 14: The UK motor insurance market

    The UK motor insurance market Geoff Carter

  15. Slide 15: Market backdrop

    Market backdrop ‒ Market pricing appears to have recovered from low-point ‒ Market pricing increases from March 2023 onwards, and accelerating in recent months ‒ Believe that many competitors have not fully caught up with past and current inflation – so market prices should continue to increase ‒ Cl

  16. Slide 16: Sabre actions taken

    Sabre actions taken We have increased core Motor prices by over 40% since January 2022, and 17% since January 2023 Quarterly Cumulative Rate Change Cumulative rate change We have deployed significant rate increase across the core Motor book throughout 2023 in order to cover inflation and recover mar

  17. Slide 17: What might happen? Updated Half year position

    What might happen? Updated Half year position Possible positive factors ‒ Under-pricing by some competitors in prior periods bites ‒ Rational market pricing ? Challenges ‒ Inflation softens ? ‒ Some competitors lose discipline ‒ Competitor Market exits to chase volumes X ‒ Sabre: Insurer hosted ‒ Un

  18. Slide 18: Current market issues

    Current market issues Positives Risks/issues ‒ Accelerating motor insurance ‒ Market hardening runs out of steam pricing ‒ Cost of living challenges impact ‒ Managing General Agents e.g., fraud struggling for capacity reduces ‒ Inflation in operating expenditure as competition contracts renew on CPI

  19. Slide 19: Sabre priorities

    Sabre priorities ‒ Enhance customer experience ‒ Continue to deliver good outcomes for all our customers in-line with Consumer Duty rules ‒ Optimise direct business profitability and customer servicing ‒ Assess and invest benefits of new direct system allowing lower-cost and more customer-friendly d

  20. Slide 20: Summary and outlook

    Summary and outlook Geoff Carter

  21. Slide 21: Summary and outlook

    Summary and outlook ‒ Having managed-through the challenges of inflation and launching new products, we are in a strong position for H2 2023 and beyond ‒ Current trading suggests full-year core Motor gross written premium 25% to 30% above 2022 ‒ Motorcycle and Taxi premium for H2 2023 expected to be

  22. Slide 22: Q&A

    Q&A Geoff Carter, Adam Westwood, Matt Wright, Trevor Webb

  23. Slide 23: Appendices

    Appendices INSURANCE

  24. Slide 24: Reconciliation to KPIs

    Reconciliation to KPIs Gross written premium Unaudited Unaudited Unaudited 6 months ended 6 months ended 12 months ended 30 June 2023 30 June 2022 31 December 2022 Insurance revenue 86,119 90,818 181,477 Less: Instalment income (1,630) (1,771) (3,300) Less: Movement in unearned premium 14,976 2,735

  25. Slide 25: Reconciliation to KPIs

    Reconciliation to KPIs Expense ratio Unaudited Unaudited Unaudited 6 months ended 6 months ended 12 months ended 30 June 2023 30 June 2022 31 December 2022 Other operating expenses 13,243 11,362 22,815 Add: Amortisation of insurance acquisition cash flows 6,636 6,626 12,943 Add: Directly attributabl

  26. Slide 26: Reconciliation to KPIs

    Reconciliation to KPIs Undiscounted net loss ratio Unaudited Unaudited Unaudited 6 months ended 6 months ended 12 months ended 30 June 2023 30 June 2022 31 December 2022 Net claims incurred 44,503 50,690 101,148 Add: Net impact of discounting 3,045 3,956 8,278 Undiscounted net claims incurred 47,548

  27. Slide 27: Reconciliation to KPIs

    Reconciliation to KPIs Net profit margin Unaudited Unaudited Unaudited 6 months ended 6 months ended 12 months ended 30 June 2023 30 June 2022 31 December 2022 Net claims incurred 44,503 50,690 101,148 Total operating expenses 22,870 21,195 41,968 Total insurance expense 67,373 71,885 143,116 Insura

  28. Slide 28: Disclaimer

    Disclaimer LEGAL NOTICE This presentation has been prepared to inform investors and prospective investors in the secondary markets and other market participants about Sabre Insurance Group plc and its subsidiaries (the "Group") and does not constitute an offer of securities under any applicable legi

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