Sabre Insurance Group plc (LON:SBRE) is the topic of conversation in an exclusive interview discussing financial services stocks with Fund Manager Gervais Williams of The Diverse Income Trust plc.
DirectorsTalk: Just turning to the insurance sector, Sabre Insurance specialise in underwriting motor insurance. They set out in their 2023 annual results a lot of good progress, strong growth, record gross premiums written, and a significant increase in profit. What’s behind their success? Do you think that they represent a good investment?
Gervais Williams: Yes, it’s interesting, isn’t it? This is a company which is operating in the car insurance market, which is a competitive market. I think they’re a very fine operation, I think the management team are more sparky than most others and I think they’re very good at helping people who’ve got problems with insurance so individuals who have specialist needs in certain areas, they’re a very specialist area. They’ve been willing to stand back from the market when it’s not been profitable and they’ve increased their exposure during periods when things are going well.
Specifically, here’s a company which is generating a lot of cash now. It’s paid a special dividend this year, so it’s yielding just under 6% but most particularly, we see that this is a market which is going to be very resilient going forward. Therefore, even if there is a global recession or some setbacks going forward, unfortunately, people will have to carry on insuring their cars.
So, the company is well positioned for the future after a period of claims inflation in the past years has peaked out now. I think overall, it’s a very good operator in a market which is very stable and we’re pretty excited by the prospects for this company.
Sabre Insurance Group plc is one of the UK’s most successful motor insurers in the UK, selling car and motorbike insurance primarily through brokers.
