
Sabre and Direct Line Group are the latest motor insurers to revise down financial outlooks as a result of inflation and rising repair costs.
Sabre reported unaudited gross written premiums of £91.8m in the first six months of the year, with after tax profits of £3.5m, and is predicting the full year combined operating ratio to be in the mid-90%s.
It said, “Since our previous update in May, the global inflation, along with claims inflation, has changed considerably and we reviewed the likely impacts across our current policies and all prior-year claims reserves.
“We have taken proactive management action in response to the evolving wider economic conditions which will have a one-off impact in 2022 and position the business strongly for 2023 onwards.”
Meanwhile, Direct Line Group has predicted overall motor claims inflation to reach 10% this year, driven up by longer repair times, rising costs in parts and higher used car values.
As a result, it expects its motor loss ratio for the first half of the year to be about 86%.
Its statement said, “Given the higher current year loss ratio, the Group now expects the full year 2022 combined operating ratio to be in the range of 96% to 98%.
“The Group has taken action in the second quarter to restore margins through increased prices to reflect higher than expected claims inflation. In addition, the Group has recently launched an updated motor risk pricing model which it believes materially improves risk selection.
“Following the trading actions already taken and continued strong cost control, the group expects a combined operating ratio of around 95% for 2023 and to return to a target range of 93% to 95% over the medium term.”
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