Sabre Insurance Group Plc · LSE:SBRE
Sabre Insurance — H1 2022 Earnings Presentation
22 slides from Sabre Insurance's earnings presentation, August 2022
Slide 1: Half-Year 2022 Trading Update
Half-Year 2022 Trading Update 9
Slide 2: Presenters and Q&A
Presenting and Q&A Presenters and Q&A Geoff Carter Adam Westwood CEO CFO Call Moderator Hanro van Heerden Group Financial Controller Trevor Webb Matt Wright Claims Director Chief Actuary 2
Slide 3: Today's agenda
Today’s agenda 1 Highlights Geoff Carter 2 Summary of trading for the six months to 30 June 2022 Adam Westwood 3 Geoff Carter The UK motor insurance market 4 Geoff Carter Summary and Outlook Q&A 5 All 3
Slide 4: Highlights
Sabre INSURANCE GROUP Highlights Geoff Carter
Slide 5: Strategic highlights
Strategic highlights ‒ Strong progress against core strategic initiatives; pro-active actions taken in response to evolving inflationary environment ‒ Challenges presented by rapid increase in inflation to 30+ years high tackled head-on, with an inevitable impact in current financial year ‒ 17% grow
Slide 6: Financial highlights
Financial highlights ‒ Top-line growth healthy but lower than plan due to persistent low market pricing insufficient to support inflationary price increases ‒ Expense ratio under control and improving with growth despite inflation ‒ Rapidity and persistency of inflation over recent months has requir
Slide 7: Summary of trading for the six months to June 2022
Summary of trading for the six months to 30 June 2022 Adam Westwood
Slide 8: Summary of trading for the six months to June 2022
Summary of trading for the six months to 30 June 2022 HY 2022 financial performance ‒ Prior-year loss ratio above expectation in H1 2022 subject to review, H1 2021 unaudited H1 2022 due to: H1 2022 H1 2021 FY 2021 ‒ Impact of inflation on open claims Gross written premium £91.8m £78.2m £169.3m ‒ Rei
Slide 9: Growth in motorcycle and taxi business
Growth in motorcycle and taxi business Motorcycle and taxi business generated growth in H1, while providing cover to allow for significant rate increases in motor Premium breakdown H1 2022 subject to review, H1 2021 unaudited Motor Motorcycle Taxi HY 2022 HY 2021 HY 2022 HY 2021 HY 2022 HY 2021 Gros
Slide 10: The UK motor insurance market
The UK motor insurance market Geoff Carter
Slide 11: Current levels of economic inflation
% 0 1 2 3 4 5 6 7 8 9 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Source – office for national statistics Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 Current levels of economic inflation CPIH May-17 Aug-17 Nov-17 Feb-18 Economic Inflation - CPIH Ma
Slide 12: Claims inflation
Claims inflation Parts inflation Paint inflation Labour and repair costs − Previously seen as a temporary − Previously 7% to 9% − Previously c.7% increase to 14% − Now likely to be over 9% − With increases in credit repair, − Shows no sign of reducing potentially 25% inflation − ABP labour rates hav
Slide 13: Claims experience and costs
Claims experience and costs ‒ Overall frequency of claims appears to have settled slightly below pre- COVID levels ‒ This is most likely linked to behaviour and the MoJ’s whiplash reforms ‒ We consider this reduction in frequency to be significantly outweighed by the rapid increase in severity costs
Slide 14: Market backdrop - Key messages from recent EY market seminar
Market backdrop - Key messages from recent EY market seminar ‒ Market pricing down 5.2% to Q1 2022 – lowest levels since 2015 ‒ EY analysts predict market CoR of nearly 114% for 2022 and 111% in 2023, with 2022 supported by above average reserve releases and assumed 20% market premium growth in 2022
Slide 15: Combined ratio bridge for 2022
Combined ratio bridge for 2022 Market conditions during 2022 have required a revision to our expected overall combined ratio for the year Mid Further short- − Our planning allows for greater than expected growth strain in motorcycle business as well as unforeseen 90%’s term pressures negative develo
Slide 16: Management actions already taken
Management actions already taken ‒ Significant price increases to reflect expected levels of inflation ‒ Appropriate reserve position taken to reflect current inflationary environment ‒ Continued focus on development opportunities to enhance resilience of the business ‒ Further enhancement of pricin
Slide 17: Cumulative rate change
Increasing rates throughout Sabre increased motor rates by 15% from December 2021 to June 2022 and 19% to July 2022 Quarterly Cumulative Rate Change 40.0% 35.0% 30.0% Cumulative rate change 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% ‒ Rate decreases during this period reflect temporary changes in driving beh
Slide 18: Material Growth Initiatives
Material Growth Initiatives ‒ Motorcycle and taxi books are growing strongly, with Sabre taking significant market share whilst implementing significant price increases in motorcycle ‒ Whilst our price increases have not been able to protect fully against the rapid extreme rise in inflation in H1 th
Slide 19: Summary and outlook
Summary and outlook Geoff Carter
Slide 20: Summary and outlook
Summary and outlook Assertive actions following analysis of impacts on claims reserves and price requirements mean we anticipate significant impacts should be restricted to 2022 and allow a rebound to more normal performance in 2023 Performance ‒ Full-year loss ratio expected to be 65% to 70% ‒ Full
Slide 21: Q&A
Q&A Geoff Carter, Adam Westwood, Matt Wright and Trevor Webb
Slide 22: 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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