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Hastings hit by major profit slump in full-year results

Hastings hit by major profit slump in full-year results | Insurance Business UK

Hastings hit by major profit slump in full-year results

We’re inching ever closer to the finish line of insurance results season, but despite the plethora of company announcements already released, there was no overlooking the eye-catching nature of Hastings Group’s figures released this morning.

Despite a rise in gross written premiums, up to £961.6 million from £958.3 million one year earlier, and a 5% jump in live customer policies at 2.85 million, the company still saw its adjusted operating profit slump to £109.7 million for the full-year 2019, compared to £190.6 million a year earlier. That left it with profit after tax for the year at £69.7 million – a considerable slide from last year’s £130.6 million. The company has been hit by elevated claims costs, as we first reported in January.

When outlining the figures, a release noted that pricing discipline had been a priority during 2019 and that there had been strong customer retention, particularly during the second half of the year. It also pointed to growth in home to 209,000 policies – representing a 27% jump year on year.

However, there was no getting away from those profit figures with CEO Toby van der Meer describing the period as “challenging.”

“As outlined in our January trading statement, the market environment was challenging in 2019, particularly due to elevated claims inflation which has impacted our loss ratio for the year and our adjusted operating profit,” he said. “We remain focused on pricing discipline and are applying rate ahead of the market.

“We have improved our digital proposition, with record levels of digital adoption. Our continued investment in technology, data and modelling techniques has also enhanced our capabilities in pricing and fraud detection, with 96% more cases of fraud identified in 2019 compared to 2018.”

In its outlook statement, the company noted that 2020 had started in line with expectations and that it would be focused on achieving a 75-79% loss ratio on written business.