Hastings profits soar as market share grows

Hastings Group reported sharply higher first half results, as it continues to gain share in the UK private car market.

The insurer, 90% of whose business is conducted through aggregators, said live customer policies grew 6% from a year earlier to 2.70 million, while its UK motor market share rose to 7.5% from 7.0%.

Combined ratio worsened slightly to 89.3% from 88.9%, while gross written premiums rose 5% to £485.6m.

Chief financial officer Richard Hoskins told Insurance Times that the improved results were down to the profitability of the group’s business model and its underwriting discipline.

He said the group’s “strong results and continued profitable growth in a competitive market demonstrate the agility, digital focus and underwriting discipline that has driven the growth of the group.”

Net revenue rose 9% to £376.3m, while adjusted operating profit rose 22% to £105.1m, though that was impacted by a boost of £14.6m from prior year VAT recovery and a £7.0m hit from adverse weather in the first quarter.

Hoskins said Hastings maintained its underwriting discipline during a period of market price reductions, with average written premiums 2% above a year earlier.

“This has been in an environment where we have seen market prices come down from the highs of 2017, driven by lower claims frequencies, the prospect of regulatory reform, and competition,” said chief executive Toby van der Meer.

“We have also seen adverse weather, continued fraud activity across the market, and some increase in the cost of repairs and mid-range bodily injury claims, resulting in a claims inflation outlook for the full year towards the upper end of a 3% to 5% range.”

Van der Meer said Hastings is “excited” about the future.

“A fast moving and increasingly digital landscape plays to our strengths,” he said.

“Our capabilities in agile pricing, analytics and anti-fraud combined with our disciplined underwriting and strong capital position means we are well positioned to continue to identify and grow in profitable parts of the market.”