UK insurer Hastings reaps sales build up from higher car premiums
(Adds CFO comments, shares, background)
By Sanjeeban Sarkar and Noor Zainab Hussain
Aug nine (Reuters) – Rising British motor insurance premiums helped Hastings produce a twenty two percent rise in very first half profit as people shopped around for policies, which the insurer said lifted its sales.
“Almost seventy percent of people in the UK who switch their motor insurance policy do so through price comparison websites, and we pick up about 11-12 percent of that business,” Hastings’ finance director Richard Hoskins told Reuters on Tuesday.`
The insurer, which mainly operates in the British motor insurance market, said its gross written premiums rose by twenty eight percent to four hundred sixty two million pounds ($600 million) as a result of this switching during the six months ended June 30.
Hastings said adjusted operating profit rose to 86.Five million pounds, from 70.8 million pounds a year earlier.
A rise in vehicle repair costs, higher property harm claims per party and higher mid-range bodily injury claims were all factors driving up claims inflation, Hoskins said, which in turn thrusts premium rates up.
“We have seen a reduction in claims frequency, basically less accidents and safer cars but an increase in severity of those accidents,” he said, adding that claims inflation would persist along with the after-effects of a cut in the “Ogden” discount rate used to calculate individual injury claims.
The average price of UK motor insurance hit a record high in the 2nd quarter of the year, driven by fresh rules for private injury claims and a rise in the insurance premium tax, the Association of British Insurers (ABI) said.
Hastings also announced a dividend of Four.1 pence per share, while its solvency coverage ratio improved to one hundred seventy three percent from one hundred fifty six percent last year.
The company, which listed on the London Stock Exchange in 2015, offers private car insurance, home insurance, motorbike and van insurance and premium financing and ancillary products.
Hastings’ rivals Direct Line, Aviva, RSA and esure Group have also reported a surge in first-half earnings.
Shares in Hastings rose as much as Two.6 percent, before paring gains to trade up about two percent at 327.9 pence at eight hundred four GMT on the London Stock Exchange. ($1 = 0.7695 pounds)
(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair and Alexander Smith)
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