Hastings Group Holdings plc (LON: HSTG), the technology driven insurance provider, has today provided an update on its trading performance for the year ended 31 December 2019.
The Group has seen elevated claims costs in the fourth quarter, with increases in repair and third party credit hire costs, slightly higher winter frequencies than the prior year, and a small number of larger bodily injury losses. As a result, the 2019 calendar year loss ratio, before the impact of the July Ogden rate change, is expected to be in the range of 81%-82% and adjusted operating profit in the region of £110m.
With the Group’s focus on pricing discipline, we have continued to apply price increases ahead of the market, resulting in live customer policies remaining broadly flat over the second half of 2019 at 2.85 million. Compared with the prior year, live customer policies are 5% up, supported by strong retention rates during the year.
The Group continues to maintain a strong capital position, with the Underwriting subsidiary Solvency II coverage ratio within the target range as at December 2019, and remains strongly cash generative.
Toby van der Meer, Chief Executive Officer of Hastings Group Holdings plc, commented:
“Whilst the market environment has been challenging, with elevated claims inflation in the fourth quarter, we remained focused on our strategy of maintaining pricing discipline, applying rate increases ahead of the market.
During the year we have also continued to make progress on our technology, operational and strategic initiatives. We have started to see the initial benefits of this come through, including our ability to maintain strong retention rates over the year, which I will talk about more at the full year results.
Taking in to account the operating performance in 2019, the Board expects the 2019 total dividend to be lower than 2018. However, the Board remains confident in the Group’s ability to capitalise on its long term profitable growth opportunities, and therefore expects to pay a total dividend above the Group’s stated 65-75% target payout range. 2020 trading has started in line with expectations.”