(Alliance News) - Sabre Insurance Group PLC on Thursday slashed its interim dividend in line with a fall in profit, but it said its solvency coverage is strong and it expects a better second half.

The Dorking, Surrey-based motor insurance underwriter reported pretax profit of GBP4.8 million for the six months that ended June 30, down from GBP8.6 million a year before.

Gross written premium rose by 8.4% to GBP99.5 million from GBP91.8 million, but net earned premium declined by 7.4% to GBP71.8 million from GBP77.5 million.

What's more, combined operating ratio rose to 93.8% from 92.7%. A ratio below 100% indicates a profit on underwriting, so the lower the better. Net loss ratio improved to 62.0% from 65.4%, but the expense ratio worsened to 93.8% from 92.7%.

Sabre said the expense ratio strain caused by low earned premium and one-off development costs is expected to improve in the second half. It guided combined operating ratio at the upper end of a range from 85% to 90% for all of 2023.

The company also said it expects gross written premium to be 15% to 20% ahead of 2022, when it was GBP171.3 million. It expects further growth in 2024.

"I am pleased with the position we find ourselves in at the half year point, and believe our long-term strategy of disciplined pricing, early assertive corrective actions when required and a tight focus on emerging claims trends continues to prove its value," commented Chief Executive Officer Geoff Carter.

"In a challenging year for the wider market, we continue to anticipate a strong result in our core motor vehicle book. The half-year results are in line with our expectations and support our full-year projections."

Sabre cut its interim dividend to 0.9 pence per share from 2.8p a year ago, which it said was in line with its dividend policy.

Sabre shares were up 4.0% to 146.20 pence at midday in London on Thursday.

By Tom Waite, Alliance News editor

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.