Sabre Insurance Group Plc · LSE:SBRE
Sabre Insurance — FY2024 Earnings Presentation
32 slides from Sabre Insurance's earnings presentation, 2025
Slide 1: Full-Year Results
Full-Year Results Year to 31 December 2024
Slide 2: Presenting today
Presenting today Geoff Carter Adam Westwood Trevor Webb Matt Wright C.E.O. C.F.O. Claims and Policy Chief Actuary Ops Director 2 Sabre Full-year 2024 Results
Slide 3: Agenda
Agenda 01 2024 Highlights 02 Financial Performance 03 The UK Motor Insurance Market 04 Delivering Ambition 2030 05 Outlook and Summary 06 Q&A 3 Sabre Full-year 2024 Results
Slide 4: 2024 Highlights
2024 Highlights Hitting our stride
Slide 5: 2024 Highlights
2024 Highlights Financial result Growth Capital Progress on strategy Doubled profit On track for Ambition 2030 Very strong year-end “Sabre Direct” motorcycle capital position brand soft-launch in March Highest ever premium Disciplined in low pricing environment Increased dividend to 13p Improved mar
Slide 6: Financial Performance
Financial Performance For the year ended 31 December 2024
Slide 7: Full-year 2024 Financial Performance
Full-year 2024 Financial Performance Full-year Full-year Change 2024 2023 Gross written premium* £236.4m £225.1m 5.0% Net insurance margin* 17.6% 10.6% 7.0 ppts Net loss ratio* 58.7% 61.6% (2.9) ppts Expense ratio* 25.5% 30.0% (4.5) ppts Combined operating ratio* 84.2% 91.6% (7.4) ppts IFRS profit b
Slide 8: Net Insurance Margin Progression
Net Insurance Margin Progression Net Insurance Margin Progression – Improvement in loss ratio continued into 3.7% 2024, with better current-year 10.6% performance as rating increases earn 17.6% through – Expense leverage has recovered, with increase in insurance revenue significantly exceeding cost
Slide 9: Loss Ratio Performance
Loss Ratio Performance – Continued improvement in current-year FY 2024 net loss ratio FY 2023 net loss ratio loss ratio 64.3% 61.6% – Motor Vehicle and Motorcycle business (2.7%) written and performing in line with 58.2% 0.5% 58.7% margin requirement – Less benefit from prior-year run-off than norma
Slide 10: Underwriting by Product
Underwriting by Product Net earned premium and claims by product £200m Gross written Net earned Policy Net loss ratio £180m premium premium count FY 2024 £210m £188m 56.1% 216,973 £160m Motor Vehicle FY 2023 £225m £131m 55.0% 234,072 £140m FY 2024 £10m £9m 58.6% 37,537 Motorcycle £120m FY 2023 £12m
Slide 11: Attractive Capital Generation
Attractive Capital Generation – We continue to benefit from strong profitability and an efficient capital model – Total dividend for the year of 13p per share – Announcing plan for £5m buyback programme to return additional excess capital to shareholders – Strong capital generation led to a period-e
Slide 12: Dividend Policy Refresh
Dividend Policy Refresh Existing policy: Ordinary dividend policy based on a targeted payout ratio of 70% of the Group’s profit from operations, net of tax. In addition, the Directors intend to periodically distribute surplus capital through the payment of special dividends, subject to capital not b
Slide 13: The UK Motor Insurance Market
The UK Motor Insurance Market Strong management through the cycle
Slide 14: The pendulum is still swinging – the motor insurance market is now under-priced
The pendulum is still swinging – the motor insurance market is now under-priced The very high rate increases in early 2024 probably meant the pendulum swung too far for some - leaving This may have generated higher than some competitors slightly “over planned profits from those polices in pricing” c
Slide 15: A Cyclical Market
A Cyclical Market This is characteristic of a normal rate cycle, rather than the extreme position seen in previous years – Our analysis, along with that of several external experts, suggests that the market will be heading for a poor financial result in 2025; and certainly in 2026 if rates do not be
Slide 16: Other Market Factors
Other Market Factors – In addition to the “normal” rates cycle there are other factors at play… – Significant M&A activity anticipated over next 12 to 18 months. A risk this drives overly optimistic assumptions to support a growth agenda – FCA overview of premium finance and ancillary sales – could
Slide 17: Premiums must increase across the market
Premiums must increase across the market There are a number of factors driving premium costs Possible premium deflation factors − Lower accident frequency - but only lower value claims Possible premium − Ogden rate increase reduces cost of inflation factors large claims and reinsurance − Government
Slide 18: Claims inflation is at high single-digits
Claims inflation is at high single-digits First-party claims costs and third-party damage Windscreen Repair Total loss Theft Technology driving cost Increasing complexity Used car transactions Newly-identified requires longer repair up 5% in 2024 vulnerabilities exploited Cost of Advanced times Driv
Slide 19: Claims inflation is at high single-digits
Claims inflation is at high single-digits Third-party injury costs Minor Injury Major Injury General damages linked to RPI General damages linked to RPI Private treatment (e.g. physio) – use and Ogden discount rate – one-off benefit cost maximised to create value for claims administrator Availabilit
Slide 20: Delivering Ambition 2030
Delivering Ambition 2030 A reminder of our recent Capital Markets Event
Slide 21: Ambition 2030 – a Reminder
Ambition 2030 – a Reminder Sabre has ambitious medium term growth plans – to increase profit to at least £80m in 2030 These growth plans will be driven by initiatives that stay true to Sabre DNA – high-margin underwriting activities Growth will not be linear – and may accelerate and decelerate in va
Slide 22: Key Strategic Objectives
Key Strategic Objectives Efficiency of direct distribution Core Motor Increase Profit Expand market position > £80m Direct Motorcycle Increase Profit Broker profit before tax in 2030 Continued controlled expenditure 22 Sabre Full-year 2024 Results
Slide 23: Launching in Q1…
Launching in Q1… 23 Sabre Full-year 2024 Results
Slide 24: Expanding our Core Motor book
Expanding our Core Motor book We will continue to deliver our current target margin on our existing competitive footprint To drive additional growth, we will target a slightly higher loss ratio on lower risk business to allow us to pick up incremental business – moving down the ‘risk curve’ Overall
Slide 25: Sabre’s average premium is well above the market
Sabre’s average premium is well above the market % Policies sold by price Market 2023 average premium: £544 Sabre 2023 average premium: £1,000 - £1,250 . a) Up to 250 b) £250-£500 c) £500-£750 d) £750- e) £1000- f) £1250- g) £1500- h) £2000- i) £2500- j) £3000- k) £4000- l) £5000+ £1000 £1250 £1500
Slide 26: Targeting a slightly lower margin on some business
Targeting a slightly lower margin on some business Revised Illustrative Addressable Market margin for lower-risk policies Current Number of policy sales likely at margin Sabre Margin Current addressable market Increasing Margin Increased addressable market 26 Sabre Full-year 2024 Results
Slide 27: Ambition 2030
Ambition 2030 More than £80m before tax in 2030 Sabre profit development over time (Illustrative) New sources of profit will >£80m 90 be additive and will 80 70 complement growth in our 60 traditional business 50 40 Net undiscounted profit 30 margin around 20% 20 10 Growth is not expected to 0 2022
Slide 28: Timelines
Timelines 01 02 03 All foundations for these 2025 will be a year of 2026 onwards will initiatives are already in testing, transition and start to benefit from place, having been staged roll-out increased gross written developed over the premium, before a step past two years up in absolute profit All
Slide 29: Outlook and Summary
Outlook and Summary
Slide 30: First steps toward Ambition 2030
First steps toward Ambition 2030 Delivered great customer outcomes, growth in premium and more than doubled profit in 2024 “Ambition 2030” projects on track and will be tested during 2025 Growth in 2025 will be dependent on market conditions and not pivotal for medium-term plans 2025 net insurance m
Slide 31: Q&A Thank you!
Q&A Thank you! 31 Sabre Full-year 2024 Results
Slide 32: 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