TIDMHSTG
RNS Number : 1630X
Hastings Group Holdings plc
26 April 2019
Hastings Group Holdings plc
Trading update for the 3 months ended 31 March 2019
26 April 2019
Hastings Group Holdings plc ('the Group', or 'Hastings'), the
technology driven insurance provider, today provides an update on
its trading performance for the quarter ended 31 March 2019.
The Group has made positive progress delivering on its strategy,
with policy count growth in a competitive market through improved
retention rates. The tender of the Group's claims service partners
has been successfully completed and further progress has been made
on the programme of digital initiatives.
Financial and Operational review
-- Gross written premiums up 4% to GBP235.5m for the 3 months ended 31 March 2019.
-- Live customer policies up 3% to 2.75 million, in a competitive market environment.
-- Net revenue down by 1% to GBP183.1m due to lower earn through
of premiums and reinsurance income from 2018 relative to the
equivalent period last year, which benefitted from favourable 2017
premium dynamics, offset by retail income which has grown in line
with policy volume.
-- Claims inflation remains high across the industry, with the
main drivers continuing to be repair costs and further increases in
third party property damage costs.
-- Material progress made in the transformation of repair and
mobility services. This will provide improved commercial terms,
better customer experience and new digital functionality, with the
appointment of Vizion Network, Enterprise Rent-A-Car and Autoglass
BodyRepairs as our new claims service partners.
-- As a part of the Group's strategic initiatives, new renewal
models were tested and rolled out in the 3 months ended 31 March
2019 which amongst other initiatives have increased retention rates
by circa 4ppts.
-- Focus remains on delivering operational efficiencies from the
continued digitalisation of the business. Whilst we are starting to
see the early sign of benefits, we anticipate that certain expenses
in 2019 will increase compared to the prior year, due to recent
changes in UK law restricting VAT recoveries and increases in both
the Financial Services Compensation Scheme and Motor Insurers'
Bureau industry underwriting levies.
-- The Group's digital and technology investments are
delivering, with the mobile app having been downloaded over 200,000
times, almost 35% of total loss claims now being settled digitally
and more than 1.6 million policies on Guidewire.
Toby van der Meer, Chief Executive Officer of Hastings Group
Holdings plc, commented:
"I am really pleased with the progress we have made towards the
strategy and plans we set out with the full year 2018 results. We
have clear areas of momentum that leave us very well positioned for
ongoing profitable growth in 2020 and beyond. Alongside many other
initiatives underway, our new claims supplier deals, increased
customer retention and digital enhancements demonstrate the
significant progress made in the first quarter of 2019.
"The motor market continued to be competitive in the first
quarter of 2019, but as always, we will trade through this
environment with discipline whilst remaining focused on the
execution of our strategy.
"My continued thanks go to my 3,400 colleagues for what they do
for each other and our customers every day."
Outlook
The Group continues to closely monitor market premium rate
dynamics and claims inflation, and in particular third party
property damage costs which remain high across the market. The
Group's full year loss ratio outlook depends upon the market
environment during the remainder of 2019. If the current market
premium and claims dynamics continue through the year the Group
loss ratio would be expected to move towards the higher end of the
75% to 79% target range.
In light of the good progress on key initiatives, including
renewals, digital and the new claims service partners, as well as
Hastings' strong capital position, the Board remains confident in
the Group's profitable growth opportunities driven by its
competitive advantages.
Group performance
3 months ended
==========================
31 March 31 March Growth
2019 2018
======================= ======== ======== ======
Gross written premiums
(GBPm) 235.5 226.0 4%
Net revenue (GBPm) 183.1 184.5 (1)%
========================= ======== ======== ======
As at
==========================
31 March 31 March Growth
2019 2018
======================= ======== ======== ======
Live customer policies
(million) 2.75 2.67 3%
UK Private car market
share (%) 7.6% 7.4% 20 bps
========================= ======== ======== ======
For more information, please contact:
Hastings Group
Richard Hoskins
Chief Financial Officer
T: +44 (0)1424 738244 ir@hastingsplc.com
John Armstrong
Head of Investor Relations
T: +44 (0)1424 738244 ir@hastingsplc.com
Instinctif Partners
Tim Linacre/Lewis Hill
T: +44 (0)207 457 2020 hastings@instinctif.com
About Hastings
Founded in 1996 in Bexhill-on-Sea on the Sussex coast, the
Hastings Group is one of the leading general insurance providers to
the UK market, with 2.75 million live customer policies and
employing over 3,400 colleagues at sites in Bexhill, Leicester,
Gibraltar and London.
Hastings provides straightforward products and services to UK
car, bike, van and home insurance customers with around 90% of
policies directly underwritten by Group's Gibraltar based
Underwriting business, Advantage Insurance Company Limited.
Hastings Direct is a trading name of Hastings Insurance Services
Limited, the Group's UK broker, which also trades via 'Hastings
Premier', 'Hastings Essential', 'Hastings Direct SmartMiles',
'People's Choice' and 'insurePink'.
The Group operates as an insurance provider with two separate
businesses. The Group's Retail business, Hastings Insurance
Services Limited, is responsible for the end customer pricing,
fraud management, product design, distribution and management of
the underlying customer relationships. The Group's Underwriting
business, Advantage Insurance Company Limited, engages in risk
selection, underlying technical pricing, reserving and claims
handling.
Retail is supported by, and benefits from, Underwriting's
prudent approach to risk and reserving and also benefits from a
panel of insurance partners who provide additional underwriting
capacity. The Group's integrated model deliberately separates
underlying product manufacturing from its distribution.
Forward-looking statements
This trading update may contain forward--looking statements
about current expectations, intentions or forecasts of future
events, including statements about market trends and our strategy,
investments, future operations, industry forecasts and regulatory
framework. Forward--looking statements include statements about
expectations, beliefs, plans, objectives, intentions, assumptions
and other statements that are not statements of historical fact.
Words or phrases such as "anticipate", "believe", "continue",
"ongoing", "estimate", "expect", "intend", "may", "plan",
"potential", "predict", "project", "target", "seek" or similar
words or phrases, or the negatives of those words or phrases, may
identify forward--looking statements, but the absence of these
words does not necessarily mean that a statement is not
forward--looking.
Forward-looking statements are subject to known and unknown
risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially
from those expected or implied by the forward--looking statements.
Our actual results could differ materially from those anticipated
in our forward-looking statements for many reasons, including the
factors described in the section entitled "Managing our risks" in
our 2018 Annual Report. In addition, even if our actual results are
consistent with the forward-looking statements, those results or
developments may not be indicative of results or developments in
subsequent periods.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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END
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