Sabre’s entry into motorcycle insurance is good news for UK brokers
The UK motorcycle insurance market underwent a shift this month with the news that Sabre Insurance is entering the market.
Sabre will take over the pricing and underwriting for broker MCE’s motorcycle book - this was previously placed into its Gibraltar MGA.
It’s a positive deal for Sabre and, potentially, the wider broker market.
Sabre eyes broking market
Speaking to Insurance Times, Sabre’s chief executive Geoff Carter said the firm’s focus will be on the partnership with MCE.
Having a broker-focused insurer such as Sabre, with good pricing and underwriting, is welcomed by UK brokers.
In the longer term, Sabre has not ruled out expanding its distribution beyond MCE to other motorcycle brokers - the motorcycle insurance market has around 1.3m policyholders.
As for what the deal means to Sabre itself, it will generate some nice profits.
Sabre is targeting a combined operating ratio of 80% on its business, with £3m to £5m of profits incoming, raising earnings by around 6%, according to analysts at Berenberg.
Sabre’s deal with MCE should last between five and 10 years, the investment bank said.
The details of the deal are that Sabre is not paying anything for taking over the book. It can reprice the business back to profitability.
MCE’s decision to go ”zero commission” is helpful in delivering consistent prices to customers - it means Sabre can retain more of the repriced business.
Exactly how much is the question, but Sabre is targeting between £20m and £25m of additional premium.
Sabre has around £180m gross written premium, so the MCE arrangement is a nice bolt-on to its current business.
For MCE, it has been a challenging period amid the run-off of its in-house Gibraltar MGA.
Having a rock-solid insurer like Sabre to sit behind pricing and underwriting is a big plus.
As far as deals go, this is a good one for all parties.
No comments yet