Hastings Group Holdings plc another period of profitable trading

Hastings Group Holdings plc (LON:HSTG), the technology driven insurance provider, today provided an update on its trading performance for the 9 months ended 30 September 2018.

Hastings has delivered another period of profitable trading with higher average premiums and continued net revenue growth. Customer numbers are 4% higher than the prior year and the Group continues to invest in its digital capabilities and future growth initiatives.

Trading highlights

· Whilst market conditions have remained competitive during the third quarter, with falling average market premiums, Hastings has maintained its commitment to underwriting discipline, resulting in average written premium inflation of 2% for the 9 months ended 30 September 2018. For the quarter, customer policy numbers were broadly flat, due to a combination of applying premium rate increases and the 0.5% growth in car customers being offset by a small reduction in home.

· Live customer policies were 2.70 million as at 30 September 2018, a 4% year on year increase.

· Market share of UK private car insurance of 7.5% as at 30 September 2018.

· Gross written premiums up 5% to £955.0m for the 12 months ended 30 September 2018 and up 3% to £738.5m for the 9 months ended 30 September 2018.

· Net revenue increased by 9% to £751.3m for the 12 months ended 30 September 2018 and increased by 7% to £574.1m for the 9 months ended 30 September 2018.

Operational highlights

· Ongoing investment into the Group’s technology programme, including the continued successful rollout of Guidewire, additional investment in the Group’s market leading anti-fraud capability and development of new underwriting and retail pricing models to support profitable growth in 2019 and beyond.

· Lloyds Bank General Insurance, Integra and RSA have joined the Group’s panel of home underwriters whilst the Group continues rolling out its home underwriting proposition on a test and learn basis.

· Became a founder member of the Smart Mobility Living Lab’s three year shared research programme, alongside Aviva, BP and Honda. The programme will develop, test and validate the impact of new road transport technologies, ensuring the Group is at the forefront of technological advancement.

· The Group further enhanced its digital proposition, rolling out mobile app and online portal enhancements for customers, and completed testing of a new digital claims notification system.

· Continued investment in the Group’s colleague agenda, with improved shifts, additional wellbeing activities and strengthened diversity programme, including participation in the 30% Club mentorship scheme in support of senior management gender diversity.

· Board strengthened through the appointment of Elizabeth G. Chambers as an independent non-executive director.

Group performance

Outlook

The Group expects to maintain its disciplined pricing strategy in the ongoing competitive market that is likely to continue for the rest of the year. Despite the pricing actions taken during the year, claims inflation is expected to continue to exceed premium inflation and the Group’s loss ratio for the full year is expected to be at the lower end of the target range of 75% to 79% and trend towards the middle of the target range for the year ending 31 December 2019.

The Group is confident of the underlying momentum of the business and continues to work towards its target of 3 million live customer policies during 2019 and ongoing growth beyond. This will be delivered through a combination of the launch of enhanced price comparison website pricing, additional anti-fraud capabilities, initiatives to enhance customer service and retention, the roll out of the new home panel and an enhancement of the direct and multi-car product offering. These growth initiatives will be enabled by investment in Guidewire and digital which are also expected to generate operational efficiencies.

Longer term, the Board and management remain confident in the Group’s growth opportunities driven by its’ competitive advantages of agile pricing, analytics and anti-fraud capabilities, combined with the ongoing investment in data and technology.

Toby van der Meer, Chief Executive Officer of Hastings Group Holdings plc, commented:

“We have 2.7 million customers, an increase of 4% from last year, which we achieved whilst remaining true to our pricing discipline and increasing premiums in a competitive market.

“We remain well positioned in a very large market with 31 million cars on the road, growing consumer adoption of digital channels and continued media and regulatory focus on consumer switching.

“Our focus remains on continuing to profitably grow our successful, technology led business with sophisticated and disciplined pricing at its core. As always, my thanks go to my 3,300 colleagues for what they do for each other and our customers every day.”