Sabre Insurance Reveals First Share Buyback Following Profit Increase
By Yamini Kalia
(Reuters) -Sabre Insurance announced its first ever share buyback on Tuesday after annual profit more than doubled, driving shares up more than 11%.
Supply chain issues and high inflation following the pandemic and Ukraine war raised motor repair costs in recent years, boosting premiums for the likes of Sabre which outweighed the higher cost of claims.
While other insurers have since cut prices to win back customers, Sabre has not. Instead it increased prices last year in line with its view of high single-digit claims inflation, it said in a statement.
"We price the right profitability and let volume sort of take care of itself in the short term," CEO Geoff Carter told Reuters, adding that Sabre raised prices by around 8 or 9% last year while the market took prices down by 10% or so.
Sabre Insurance shares surged as much as 11.2% to 138 pence, after full-year pre-tax profit jumped to 48.6 million pounds ($63.1 million) from 23.6 million pounds a year ago. The shares pared gains to 5.8% by 1320 GMT. They have fallen 4.5% since the start of the year.
The company proposed a share buyback of 5 million pounds and a better-than-expected total dividend of 13 pence per share.
"Management's existing strategy of focusing on profitability over volume has worked well, ensuring positive earnings throughout, unlike peers," said Abid Hussain, a Panmure Liberum analyst.
Sabre Insurance said that market prices will need to increase to reflect current levels of inflation, with its own 2025 margins expected to be within a 18% to 22% range.
The company also sees niche insurance markets for taxis and motorcycles as lucrative with a lot of room to grow as compared to the crowded car insurance industry.
CEO Carter said that Sabre has the potential to capture a 20% market share in motorcycle insurance over time, but did not say what its current market share is.
Gross written premium rose 5% year-on-year to a record 236.4 million pounds for the year ended December 2024.
($1 = 0.7705 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Sherry Jacob-Phillips, Savio D'Souza, Jan Harvey and Susan Fenton)
