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Hastings Group hit by elevated claims costs

Hastings Group hit by elevated claims costs | Insurance Business UK

Hastings Group hit by elevated claims costs

Ahead of its year-end results, Hastings Group released a trading update this morning – one that outlined a host of challenges for the technology driven insurance company.

The company saw claims costs hit by increases in both third-party credit hire and repair costs, as well as some larger bodily injury losses and slightly higher winter frequencies. This has led to its calendar year loss ratio, before the impact of the July Ogden rate, being expected to stand in the range of 81%-82%. Its adjusted operating profit, meanwhile, is in the region of £110 million.

With its focus firmly on pricing discipline, the company explained that it has been implementing price increases ahead of the market – meaning its live customer policies had been broadly flat in the second half of the year. Still, year-over-year, they remain up by 5%, partly due to strong retention rates.

Toby Van der Meer, chief executive officer of Hastings Group Holdings, commented that the market has been “challenging,” but he believes the strategy of maintaining pricing discipline is the best way forward, while focusing on the positives.

“During the year we have continued to make progress on our technology, operational and strategic initiatives,” he said. “We have started to see the initial benefits of this come through, including our ability to maintain strong retention rates over the year, which I will talk about more at the full year results.

“Taking in to account the operating performance in 2019, the board expects the 2019 total dividend to be lower than 2018. However, the board remains confident in the group’s ability to capitalise on its long-term profitable growth opportunities, and therefore expects to pay a total dividend above the group’s stated 65-75% target payout range. 2020 trading has started in line with expectations.”