TIDMHSTG
RNS Number : 1054A
Hastings Group Holdings plc
17 January 2020
Hastings Group Holdings plc
This Announcement Contains Inside Information
Trading update for the year ended 31 December 2019
17 January 2020
Hastings Group Holdings plc ('the Group', or 'Hastings'), the
technology driven insurance provider, today provides an update on
its trading performance for the year ended 31 December 2019.
Group performance
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 GBP110m.
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."
Information communicated in this announcement is inside
information under the provisions of Article 7 of the Market Abuse
Regulation ((EU) No 596/2014).
Management will host an update conference call for investors and
analysts at 7.45am GMT on 17 January 2020. The call can be accessed
on +44 (0)330 336 9411, confirmation code 2736605.
For more information, please contact:
Hastings Group
John Worth
Chief Financial Officer
T: +44 (0)1424 738366 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 2.85 million live customer policies and
employing over 3,300 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
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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