Sabre Insurance Group H1 2026 Earnings Report

Sabre Insurance Group EPS Results

• Actual EPS: GBX 7.33
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Sabre Insurance Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Sabre Insurance Group Announcement Details

• Quarter: H1 2026
• Date: 8/4/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 4, 2026
• Conference Call Time: 4:30AM ET

Sabre Insurance Group (LON:SBRE), through its subsidiaries, engages in the writing of general insurance for motor vehicles in the United Kingdom. It offers taxi, private car, and motorcycle insurance through a network of insurance brokers, as well as through its Go Girl and Insure 2 Drive brands. The company was founded in 1982 and is based in Dorking, the United Kingdom.

Sabre Insurance Group H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong growth and full-year confidence: Gross written premium rose 15.7% year over year to £160 million, and management remains very confident that full-year profit will be slightly ahead of 2025 despite a modest first-half profit decline.
• Neutral Sentiment: Margins expected to recover: First-half net insurance margin fell to 15.7% from 19.2%, mainly because premium growth has not yet fully earned through and the company continues investing in people and technology. Management expects the margin to return to its 18%-22% target range in the second half as earned premium increases and current-year claims performance improves.
• Positive Sentiment: Underwriting and capital remain strong: Motor delivered a 52% net loss ratio, while taxi improved to 48.2%; management said new business continues to be written at target margins and claims inflation assumptions remain covered. Solvency was 161.4% after the interim dividend and buyback, and the interim dividend increased 20% to 4.1 pence per share.
• Neutral Sentiment: Market pricing remains challenging: Pricing has stabilized and is edging upward, but management believes the market still needs further increases to adequately cover mid-single-digit claims inflation. Sabre expects to keep growing, although the pace will depend partly on whether broader market rates harden over the next 6-12 months.
• Positive Sentiment: Ambition 2030 is progressing: Motorcycle premium grew more than 50%, supported by Sabre Direct, and the company expects to quote across the entire motorcycle market toward year-end. Pricing tests in core motor and digital customer-service initiatives are also advancing, with AI being evaluated for pricing, fraud detection, coding and customer interactions.

Presentation

[Geoff Carter, CEO at Sabre Insurance Group]

Okay. Good morning, everyone. Just give a few seconds for people to join. Okay, I think we're good to go. Thank you very much for joining us and dialing in on this bright and sunny day. I'm pleased to say bright and sunny is pretty much how we feel about the half year results, actually. We think it's a good half year performance, and we're looking forward to explaining why and getting into some of the detail in the next half an hour or so. Usual process today, myself and Adam will run through a few slides, and then we'll leave all the difficult questions to Trevor and Matt to pick up at the end. As we go through, you have the option to type questions into the Q&A box.

[Geoff Carter, CEO at Sabre Insurance Group]

Now we'll pick up or at the end, put your virtual hand up and Hanro will unmute you and introduce you into the call. This will be the presentation we'll run through. Fairly punchy. We're not going to drag this out too long. Run through the top highlights. Adam will run through the financial performance, a bit of a market update, a bit of a strategy update, restate our investment case, and then the outlook. We will, as ever, leave plenty of time for Q&A at the end. The highlights are, I guess for me, strong growth. Probably slightly more growth than we expected at this point, and very confident in delivering against our current guidance of a profit slightly higher than last year. Probably impressively, we've done that ahead of a meaningful market turn in pricing as well. Looking into the detail a little bit.

[Geoff Carter, CEO at Sabre Insurance Group]

As I say, very confident in the full year profit projection. Half year probably underplays the progress. I know there's been some focus on the margin. To me, that's just maths. The margin will snap back into line with very confident by the end of the year. Matt can explain why later. Growth. We've been able to grow ahead of the market turn, like I say, partly because we've been able to reduce our claims inflation assumption, as we discussed in the full year results. By coming back from high single digit to mid-single digit. That's allowed us to rebase slightly. Importantly, we continue to write completely within our target margins on new business, and we're completely covering our forward-looking claims inflation, which we'll discuss later. Financial result, 15% up on the top line. Profit before tax, pretty healthy at this point.

[Geoff Carter, CEO at Sabre Insurance Group]

Full year profit, as I mentioned again, anticipate to be ahead of last year. All new business being written within our target markets. We're not underpricing to grow by any stretch of the imagination. Strong solvency position, dividend is fairly mechanical, but hopefully an attractive dividend coming out the half year. Virtually finished the share buyback. On strategy, good progress on Ambition 2030. First proof points coming through as motorcycle. We're also building in more customer enhancements by use of portals and looking at how chatbots can support customers going forward as well. At this stage, very happy with where we are at the half year. At that point, I will leave Adam to talk about the financial position in a bit more detail. We'll come back and give a bit more context around some of those points. Adam, if I can hand to you.

[Adam Westwood, CFO at Sabre Insurance Group]

Great. Thanks, Geoff, and good morning everyone. I'll take you through the financial performance for the first half of 2026, once the slides start to move forward. There we go. The first half reflects two important themes in the business. Firstly, we've delivered a strong and profitable growth, with gross written premium increasing by 15.7% year-on-year to GBP 160 million. Secondly, because insurance premium earns through the life of the policy, the value generated by that growth is not yet fully reflected in the period. As a result, profit before tax of GBP 23.9 million is slightly lower than the comparative period, but entirely in line with our expectations and supports our confidence in delivering full year profit slightly ahead of 2025. Our net insurance margin was 15.7%, reflecting a net loss ratio of 55.7% and an expense ratio of 29.9%.

[Adam Westwood, CFO at Sabre Insurance Group]

The loss ratio remains comfortably within our long-term expectations, whilst the expense ratio reflects lower earned premium from the reduced volumes written during 2025, together with continued investment in people and technology. Importantly, the increase in premium written during 2026 is expected to earn through progressively over the remainder of the year, resulting in a lower expense ratio, and we expect the net insurance margin to return to within our target range of 18%-22% for the full year. Our solvency position remains very strong at 161.4%, after allowing for the interim dividend and the ongoing GBP 5 million share buyback program. That strength has enabled the board to increase the interim dividend in line with our dividend policy by 20% to GBP 0.041 per share. This chart provides some additional context around the movement in net insurance margin.

[Adam Westwood, CFO at Sabre Insurance Group]

As a reminder, net insurance margin measures the proportion of net insurance revenue retained after claims and expenses, and is our key underwriting profitability metric. The principal driver of the reduction from the 19.2% achieved in 2025 to 15.7% in the first half of 2026 is the expense ratio. The expense ratio increased to 29.9%, reflecting the lower earned premium generated from reduced 2025 volumes. Because our growth returned strongly in the first half of this year, there's a natural timing mismatch between writing the business and earning the associated revenue.

[Adam Westwood, CFO at Sabre Insurance Group]

Alongside that, we've continued to invest in our people, systems and technology as we execute on Ambition 2030. As those higher premium volumes earn through during the second half, we expect the expense ratio to improve meaningfully, which, along with a strong loss ratio delivered through continued underwriting discipline, will allow the net insurance margin to return to within our target range. Our core strategy remains unchanged. We continue to write business at target margins and fully cover expected claims inflation within our pricing. As a reminder, for comparability with previous periods and many of our longstanding disclosures, all of the headline ratios shown here are presented on an undiscounted basis and do not include any benefit from IFRS 17 discounting.

[Adam Westwood, CFO at Sabre Insurance Group]

This slide breaks down the loss ratio into current year and prior year, with the chart on the left showing the performance in 2026 to date and the chart on the right showing the full-year 2025 comparative. The overall net loss ratio for the period was 55.7%, compared with 54.1% in 2025. The current year loss ratio was 66.5%. This is a little above the position at the end of 2025, but remains firmly within normal levels of volatility and is consistent with our usual approach to reserving. At the half year stage, there is always significant uncertainty around recently reported claims, so the current year position naturally includes the largest level of explicit margins. The prior year loss ratio was a favorable 10.8%. That reflects continued release of explicit margins held against older claims reserves as those claims mature, together with some positive prior year development during the period.

[Adam Westwood, CFO at Sabre Insurance Group]

There have been no unexpected adverse claims, frequency or severity trends, and our assumption for claims inflation remains unchanged at a mid-single-digit level. Waiting for the slide to change. There we go. So this slide shows the underwriting performance across our three product lines. Motor vehicle continues to be the key driver of profitability, delivering a net loss ratio of 52%, while written premium increased strongly. Policy count grew 16.5% year-on-year, demonstrating our ability to grow whilst maintaining underwriting discipline. Motorcycle premium increased by more than 50% compared to the first half of last year, largely reflecting the continued success of Sabre Direct Motorcycle.

[Adam Westwood, CFO at Sabre Insurance Group]

The product's loss ratio is elevated at the half year stage, reflecting the effect of individually large claims and normal seasonality within what remains a relatively small portfolio. Taxi performance improved significantly year-on-year, with the loss ratio reducing to 48.2%. Whilst premium volumes remain deliberately constrained, this reflects the benefit of maintaining a disciplined approach in parts of the market where pricing remains unattractive. Looking across the portfolio as a whole, the message is unchanged. We're growing where market conditions allow us to achieve target returns, and we remain willing to limit volume where pricing does not adequately compensate us for the risk. Finally, turning to capital generation. The group continues to benefit from strong profitability and an efficient capital model, generating capital organically whilst maintaining a prudent balance sheet.

[Adam Westwood, CFO at Sabre Insurance Group]

The board has declared an interim dividend of GBP 0.041 per share, up from GBP 0.034 last year, and in line with our stated dividend policy. Alongside this, the GBP 5 million share buyback announced at the full-year results is now nearing completion. After allowing for both the dividend and buyback, our solvency coverage ratio stands at 161.4%, which is slightly above our preferred operating range of 140%-160%. That provides substantial flexibility to support growth, invest in Ambition 2030, and continue to deliver attractive returns to shareholders. As ever, our capital framework remains straightforward. We prioritize underwriting discipline and capital generation by ordinary dividends in line with the policy and return surplus capital where appropriate. With that, I'll hand back to Geoff.

[Geoff Carter, CEO at Sabre Insurance Group]

Thanks, Adam. Where's the market pricing to start with? I would say slightly messy, would probably be my summary. I think it's pretty clear that more price is needed in the market. We're seeing evidence people are trying to push that price on. It's maybe not necessarily sticking. Struggling to get a really firm foothold to push on from. Clear evidence market pricing needs to go up still. It's definitely stabilized. It's definitely stopped going down. It's definitely inching forward, but quite a lot more to go is our view. We're pretty well positioned coming into this market. We've maintained our rating strength over the last couple of periods. We priced pretty strongly for claims inflation, so we still see forward-looking claims inflation of 6% or 7% from our current rating base.

[Geoff Carter, CEO at Sabre Insurance Group]

Clearly, if you've got a bit behind the curve, you may have more to catch up with on that, which we'll talk about in a second. Where we are, we see growth coming towards us as the market does eventually get a good foothold and push on with pricing. We can probably increase prices less than the market given our current price adequacy. On claims inflation, not a lot of clear evidence yet of anything coming through from the current conflicts. We're looking both at our own data and we're trying to look as far through the supply chain as we can for any early evidence of issues emerging. Far, not a lot, and we think our current 6% to 7% inflation probably covers where we are. Probably some things to be cautious of around care inflation.

[Geoff Carter, CEO at Sabre Insurance Group]

You may have seen Andy Burnham talking about the need for care workers to be well paid. Clearly, that will knock through to NHS and potentially care for seriously injured individuals. Something to watch there as well. Trevor, I'm sure, can give some more detail at the end if helpful. Regulatory, probably about as stable as it's been for a very long time. No new market interventions. Government task force concluded that the market added work competitively. There was no price profiteering going on. As a general rule, we look to maintain a very low regulatory burden anyway, low regulatory risk. We really make our money from underwriting, not from any of the things that might be seen as more controversial. To summarize the pricing piece, this is thank you to Jefferies for this slide, this graph.

[Geoff Carter, CEO at Sabre Insurance Group]

This really shows where claims inflation has gone and where premiums inflation has gone. I guess really you'd want the premium line to be on top of the claims inflation line. Similarly, other market commentators have spoken about the need for a 15-point increase over the next two years. I think some have thought that might be 4% this year, maybe 12% next year. Not a position I fully understand. If you think you're heading into trouble, why not put 12% on this year and four next year? Market still got some way to go. As I mentioned, we're not seeing the need for this to come through to drive growth, and we don't need this price to hit our margins going forward. Maybe a little frustrating the market's not moved quicker, but we're still trading perfectly nicely through it. A strategy update.

[Geoff Carter, CEO at Sabre Insurance Group]

Ambition 2030, I guess a lot of people on the call will understand the intention of Ambition 2030. Very briefly, it's to move our profit up to around GBP 80 million by 2030 by two things. One is to increase our competitive position on core motor and to increase our general market presence on motorcycle. On core motor, going pretty nicely. The base IT development's all in place. Further evolution to go over the next few years. The initial pricing tests are completed, and we're probably about to start to get into some slightly higher cadence and some slightly higher impact pricing tests as we come through the end of this year and into next year. On motorcycle, all the IT is in place. Motorcycle customer service is being done entirely online through a web chat and customer portal.

[Geoff Carter, CEO at Sabre Insurance Group]

Really interesting, we haven't seen any meaningful customer demand for phone-based support here. Clearly, we do phone outward when it's required, but most things are sticking within the portal or the chat. Motorcycle pricing, we continue to test and iterate our pricing, but our confidence grows increasingly on that. We'll be quoting across the entire market, probably as we go towards the end of this year. Inherent within all this is maintaining our expense base. We can't afford to get sloppy. We want to make sure we keep expenses controlled as we roll out this new strategy. Something that is going to become an enabler for us on 2030 is AI. This is something we spent a lot of time looking at as a business over the last six months or so. It's probably got five key areas where it's going to be an advantage to us.

[Geoff Carter, CEO at Sabre Insurance Group]

The first one is the speed of coding on systems. That's our internal systems and potentially our sort of core infrastructure systems. Clearly, coding is much quicker, and that provides new opportunities to us going forward. AI can support our fraud checks, it gives another tool to try and find fraudsters. I would say that's a bit of an arms race. As quickly as we're looking for AI to help us, we know there's a risk of AI-generated images, CCTV images and still images coming through. It's a bit of an arms race in terms of how we keep on top of that one. The actuarial team just outside my door here are getting very excited about the opportunity for AI to support some of the pricing decisions. We've got great data, great techniques, great people.

[Geoff Carter, CEO at Sabre Insurance Group]

AI gives us another tool to put on top of that as well. I think that gives another boost to our strengths going forward. We think AI is going to help on some customer interactions. Certainly the chatbots at the moment are still manned by people. We see maybe AI having a role there going forward as well. What I would say on that side of things is that for us, AI is all about enhancing people's jobs. We have no plans for redundancies whatsoever. We think as we grow, we hope we can hold our staff numbers, but we're certainly not looking to lose people as we go forward. The final box really is we've had a very tight focus on the risks of AI coming through. We've obviously seen things recently about AI bots breaking out of their sandbox to hack other companies.

[Geoff Carter, CEO at Sabre Insurance Group]

We're putting even more effort into the cybersecurity. That's both in terms of stopping hacks into us and the risk of leaking customer or company IP out as well. Lots of opportunities, but we're equally focused on what could be downsides if we are careless. Investment case. Very brief, just one slide on the investment case. We think we have some pretty significant competitive advantages. We're a very focused, pure motor insurer. I think we've got a long track record of delivering near market-leading margins and market-leading performance through all parts of the market cycle. We have a mindset which is perhaps unusual, that we're prepared to reduce volume when pricing is weak. We will always protect our margin and capital, that will maximize our medium-term profitability. We're now really in a position where we see the growth potential.

[Geoff Carter, CEO at Sabre Insurance Group]

We've always said we can grow as market rates harden. That's really what we would expect to see going through the next 6-12 months, the ability to grow further as the market increases. Clear medium-term growth plans through Ambition 2030. Very low-risk balance sheet, no debt, reinsurance cover at quite a low retention limit to protect the volatility of the P&L, and straightforward investment portfolio. Nothing complicated. We make our money from underwriting, not from taking investment gambles. Attractive income and capital returns, good dividend yield, ordinary dividend, a fairly straightforward dividend policy, and special dividends and buybacks are now part of our thinking as well, what we end up with, truly surplus capital. Really that means Ambition 2030 is an evolution of what we do today, not a revolution.

[Geoff Carter, CEO at Sabre Insurance Group]

This is really building on our core strengths rather than taking a big swing by entering perhaps more risky, new areas. This is really more of what we do today. Outlook. As promised, we've kept this presentation pretty brief and punchy, and I'll keep this outlook and summary equally punchy. We expect for this year strong growth and confident, we're very confident in the full year guidance. To reiterate, profit higher than last year. Net insurance margin will be back within the range by the end of the year. That's just maths. That will snap back in again. Ambition 2030, currently on track with the early proof points coming through from the very strong growth in Sabre Direct Motorcycle. At that point, we will pause and we're happy to take any questions whatsoever.

[Geoff Carter, CEO at Sabre Insurance Group]

If you want to stick your hand up, Hanro will unmute you and we'll go from there. Hanro, to you.

[Hanro van Heerden, Group Financial Controller at Sabre Insurance Group]

First question is from Ivan from Barclays.

[Geoff Carter, CEO at Sabre Insurance Group]

Go on, Ivan. Ivan, are you unmuted?

[Ivan Bokhmat, Analyst at Barclays]

I am now. Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

There we are.

[Ivan Bokhmat, Analyst at Barclays]

Appreciate that. I've got three questions, please.

[Ivan Bokhmat, Analyst at Barclays]

First one, just on the market outlook on pricing. I was just wondering if you could maybe share a little bit more color of how you think this is going to play out. One obvious question, there may be a 15 points of price needed, but all the major players seem to still be generating good underwriting profits. What will make them push prices up so much at the risk of losing volumes? My second question is actually going to be on the loss ratio. I think what you were talking about is the overall loss ratios within expectations. There's of course quite a bit of volatility between the current year loss ratio and the PYD. Just thinking into second half, should we expect the overall loss ratio to stay high because of current year loss ratio reducing or because of reserve releases stay high?

[Ivan Bokhmat, Analyst at Barclays]

I have a third question as well, please. This is just on the capital generation. I think we have seen in the past that episodes of strong growth at the margins that Sabre generates brings quite a lot of new capital generation, which is not the case right now. Maybe you could help us on what's happening currently and what's your outlook for the next 6-12 months there. Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Yeah, sure. No problem. I'll take the first one. Matt, you take the second, Adam, the third, if that's okay? In terms of pricing, I think, pretty consistent view is that claims inflation is now mid-single digit. I don't think it matters where your profits are at the moment, it's going to go backwards if you're not covering claims inflation on a forward-looking basis. I haven't heard anybody say they don't think claims inflation exists. Everything I'm seeing from external commentators suggests our call on this is about right, that you need to be in that 10%-15% range for price increase in the market to stay profitable. Clearly, bigger players probably have more reserves. There may be some synergy benefits coming through in some places. I think probably the most uncomfortable place to be will be the squeezed sort of middle, the mid-ranking insurers.

[Geoff Carter, CEO at Sabre Insurance Group]

Where they're small and specialist, we can afford to be focused. Big means you've got some synergy and probably some other cost savings coming out. I think, Ivan, there's not too much question that rates need to go up across the markets more when, not if. Matt, do you want to talk about the loss ratio evolution?

[Matt Wright, Chief Actuary at Sabre Insurance Group]

Yes. The question's in two parts, Ivan. First of all, around prior year movements and then current year movements. On prior years, would expect in the second half of this year to continue to see the margins come off. That's inside the risk adjustments as the claims settle. Expect some improvement from that. We don't anticipate the selected ultimates reducing further, so any further movement in the prior year loss ratio will be from the margin runoff. On the current year loss ratio, we did see that we had some large claims in Q1, less so in Q2, which is normal volatility in that top layer. We'll be writing the business at our target margins. For the second half of the year, we expect the loss ratio for current year to reduce. That more towards our target range.

[Matt Wright, Chief Actuary at Sabre Insurance Group]

During the second half of the year, the overall loss ratio to improve, driven by the current year loss ratio coming down.

[Geoff Carter, CEO at Sabre Insurance Group]

Adam, can you take the question about capital generation and growth? Once you come off mute, that is.

[Adam Westwood, CFO at Sabre Insurance Group]

I was about to get called out by that one. On capital generation, I think what's happened in the first half of the year is sort of within reasonable bands of what's happening with earnings. If you look at sort of where the starting point was versus what we've generated in the year and what's happened in the capital requirement, the capital requirement has grown, as we've grown as a business. Both in sort of the reserves we're holding and the premium we're writing. We would expect a sort of similar trend to continue through the second half of this year. We have seen in the past that when premium grows fairly rapidly, that we get a bit of a boost to capital versus earnings. That might happen.

[Adam Westwood, CFO at Sabre Insurance Group]

Although in the first half of the year, it hasn't happened as pronouncedly as it did in previous years, like 2023, for example. There's a few things to think about there. Generally, we sort of anchor capital generation on earnings and then take off a bit for capital requirement improvement, increase rather. I think that's probably the best way to think about it for now. What does that mean in terms of our policy? Well, that's obviously exactly the same. We think we can comfortably pay an ordinary dividend 70%-80% of profit after tax. We expect that there may be some surplus capital, and we'll decide what to do with that at the year-end. As always, when I'm talking about solvency, there are quite a lot of moving parts. It's very hard to put a good point estimate on it.

[Adam Westwood, CFO at Sabre Insurance Group]

Thinking about it in the round, that's the way I would think about it. Very comfortable with what we've got, comfortable with what we think we're going to generate in the second half of the year to be able to deliver the kind of capital returns that the market's expecting. We'll see what happens over the next six months.

[Geoff Carter, CEO at Sabre Insurance Group]

Thanks, Adam.

[Ivan Bokhmat, Analyst at Barclays]

Thank you very much.

[Geoff Carter, CEO at Sabre Insurance Group]

Thanks, Ivan. Hanro, who is next?

[Hanro van Heerden, Group Financial Controller at Sabre Insurance Group]

Next person is Abid from Panmure.

[Geoff Carter, CEO at Sabre Insurance Group]

Good morning, Abid. Give you a second to come off mute.

[Abid Hussain, Analyst at Panmure]

Morning. Can you hear me?

[Geoff Carter, CEO at Sabre Insurance Group]

We can. Loud and clear.

[Abid Hussain, Analyst at Panmure]

Yeah. I hadn't realized you had to manually unmute as well.

[Geoff Carter, CEO at Sabre Insurance Group]

Okay.

[Abid Hussain, Analyst at Panmure]

Let's see if I can-

[Geoff Carter, CEO at Sabre Insurance Group]

That's a hint for everyone else coming to speak as well then.

[Abid Hussain, Analyst at Panmure]

I have three questions, if I can please. The first one was on the margin. I was wondering if you could help us bridge the half year net insurance margin back to the 18%-22% range for the full year. Is it just simply the mechanical premium earn through, or do we need some normalization on the loss ratio? I think from your comments, it's probably a bit of both. Just any more color on that. The second question is on growth. The motor vehicle policy count grew, I think, some 15% since the start of the year. I'm wondering, can it grow further if pricing remains where it is, or do you need pricing now to increase from here? Just any color on that, please. The final question is on the motor vehicle NIM.

[Abid Hussain, Analyst at Panmure]

Could you share where that is for the half year? I think it might be slightly better than the group numbers. Just any further detail on that would be helpful. Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Okay. Thanks, Abid. I'll take the growth one. Matt, maybe you talk about the bridge, and Adam will talk about the NIM. See how we go on that. Growth, I think, Abid, I'm pretty confident we can carry on growing. The market's not turned in the first half dramatically, and we've managed to put on pretty good growth. The extent of growth in the second half will depend partly on that market movement, but I would be pretty confident we're going to see decent growth still coming through the second half of this year regardless. Matt, do you want to talk about the bridge between half one and half two margin?

[Matt Wright, Chief Actuary at Sabre Insurance Group]

As I mentioned before, we expect the current year loss ratio to improve in the second half of the year. Which should help the margin improve back to our target range. As Adam mentioned during the presentation, the premium is expected to be higher in the second half of the year as well, which should help the expense ratio reduce as well, which contributes towards the margin. The business we've been writing is in line with our targets. Therefore, as that earns through in the second half of the year, we expect that to be earning at that target loss ratio, which again, helps us contributes, bring us back towards our target margin. Is there anything you wanted to add to that, Adam?

[Adam Westwood, CFO at Sabre Insurance Group]

No. That's completely right. The expense ratio will be a chunk of the bridge, and the loss ratio will plug the gap essentially and hopefully get us to within our target range.

[Geoff Carter, CEO at Sabre Insurance Group]

Excellent. I've got to say, for a chief actuary, that's as wildly confident as you can hope to be. Adam, do you want to be anything?

[Adam Westwood, CFO at Sabre Insurance Group]

Sure.

[Geoff Carter, CEO at Sabre Insurance Group]

I think that was asked a bit as well, didn't it? Did I answer the NIM question? I think you did.

[Adam Westwood, CFO at Sabre Insurance Group]

No. I think where Abid was coming from was if you were to put it on a product basis, what the margin might look like for motor vehicle. Now, we don't calculate or disclose by-product margins. We have a fixed cost base across the entire business. It's not a number that we report. However, I suppose if you were to add our normal expense ratio or the expense ratio received in the first half of the year to the loss ratio for, say, motor, that would take us to around an 82% combined across that product, which would equate to a margin in the 18%-19% range. Obviously, there's a lot more factors you could try and build into that if you were doing it properly.

[Adam Westwood, CFO at Sabre Insurance Group]

I think we're pretty comfortable with the margins that we're achieving on motor vehicle, I suppose is the key answer to your question there.

[Abid Hussain, Analyst at Panmure]

Yeah, that's what I thought. That's what I was trying to just tease out there. That makes sense to me.

[Geoff Carter, CEO at Sabre Insurance Group]

Thanks, Abid. Hanro, where are we going next?

[Hanro van Heerden, Group Financial Controller at Sabre Insurance Group]

Next up is Ben Cohen from RBC. Ben, if you can unmute yourself.

[Geoff Carter, CEO at Sabre Insurance Group]

Ben.

[Ben Cohen, Analyst at RBC]

Hi there. Hi.

[Geoff Carter, CEO at Sabre Insurance Group]

Hi.

[Ben Cohen, Analyst at RBC]

Good morning, everyone. I think you can hear me. I had two questions, please. The first was just in terms of the mix of where the growth in motor is coming from. I guess overall it looks like your premium growth is really matching the number of policies that are growing. Does that have any implications in terms of the growth in terms of lower premium policies versus higher premium policies? Could you maybe talk about your competitiveness in different sub-parts of the market? The second question was just in terms of the motorcycle business. I think I took away that despite the fact that losses increased in the first half of the year on the first half of last year, that you're still quite confident with the new strategy that basically you're going to be moving that into profitability soon.

[Ben Cohen, Analyst at RBC]

Could you maybe Just talk about how you think that is going to come through, given that the loss ratios at the moment are running pretty high. Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Yeah, sure. I'll start with the motorcycle one. I guess in some ways it's simply a function of quite low earned premium in there. If you have one large claim and not much earned premium, it has an outsized impact on the loss ratio. Clearly, as we earn more premium through the second half of this year, that impact will naturally subside anyway. We're pretty confident we're right in motorcycle at the right margin. That will all come through as we get towards the year end. Matt, anything you want to add on motorcycle?

[Matt Wright, Chief Actuary at Sabre Insurance Group]

Yeah. I would say on motorcycle, with the half year, where it is kind of halfway through the peak season of the riding, we tend to see claims more weighted towards the half year for when it actually happened, therefore there's less development. As the year goes on, these claims develop, there'll be less volatility in those claims, therefore we can put more confidence in the overall loss ratio. We saw something similar last year where we were at over 100% loss ratio at half year on motorcycle, and by year end, that improved down to roughly 70%.

[Ben Cohen, Analyst at RBC]

Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Perfect. Growth in motor, there's no great change actually, Ben. I think our mix is pretty similar. Clearly bike is a lower premium. That will start to impact the overall average premium number you might look at. We're not seeing any loss in our normal markets. Clearly, as we start to roll out Ambition 2030, that will be slightly lower average premiums. You should expect to see that natural migration over time. Matt, Adam, anything you want to add on that?

[Adam Westwood, CFO at Sabre Insurance Group]

No, I think that's pretty clear.

[Matt Wright, Chief Actuary at Sabre Insurance Group]

I think all I'd say is our general mix for core motor is as expected. The price and trials continue on a very gradual basis, and we are seeing that growth on motorcycle from the Sabre Direct rollouts continuing.

[Geoff Carter, CEO at Sabre Insurance Group]

Yeah. Are they asking the questions, Ben? Okay.

[Ben Cohen, Analyst at RBC]

Yeah.

[Geoff Carter, CEO at Sabre Insurance Group]

Thank you.

[Ben Cohen, Analyst at RBC]

Thank you very much.

[Geoff Carter, CEO at Sabre Insurance Group]

Hanro, back to you.

[Hanro van Heerden, Group Financial Controller at Sabre Insurance Group]

It seems like the last question is from Carl from Berenberg, Geoff.

[Geoff Carter, CEO at Sabre Insurance Group]

Okay. Carl, if you can unmute yourself. Perfect. I think you've gone back on mute again.

[Carl Lofthagen, Analyst at Berenberg]

Can you hear me now?

[Geoff Carter, CEO at Sabre Insurance Group]

Loud and clear.

[Carl Lofthagen, Analyst at Berenberg]

Okay, great. Most have been answered already, but I just had one on AI and whether you're seeing it being used a bit more frequently by customers, or kind of just in fraud related cases and it being used to kind of create some maybe elaborate claims which perhaps you hadn't been seeing in the past that are kind of linked to these LLM models. Is that a trend that you are seeing at all?

[Geoff Carter, CEO at Sabre Insurance Group]

Sure. Trevor, perhaps you can talk about that in a second. I think we can definitely see AI being used in I'll politely say we don't get all that many complaints, but you can definitely see AI being used to generate those letters, some of which don't make a lot of sense because it quotes from U.S. case law and all that sort of nonsense. Trevor, in terms of where we are in terms of AI in claims we're seeing today?

[Trevor Webb, Claims Director at Sabre Insurance Group]

Yeah. We are absolutely vigilant for it in terms of generation of images. We are still traditionally in a lot of the things that we do in terms of inspecting vehicles physically, sending people out to take statements, and actually go to the scene of accidents. We're using those tools to help assist us in identifying potential fraud. We're very front-loaded in terms of our fraud management. I think I would echo what Geoff said around complaints. That's probably where it's most prevalent. You may also see that there's quite a lot of commentary in terms of how lawyers have been using AI, not so much in our space, but where AI is generating reference to case law that simply doesn't exist. We're vigilant for it. We've given out a lot of training in terms of sort of the features to look out for.

[Trevor Webb, Claims Director at Sabre Insurance Group]

We're not seeing huge amounts of it, though.

[Carl Lofthagen, Analyst at Berenberg]

Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Trevor, perhaps since you're talking, do you want to talk about where we see claims frequency going at the moment? It's not really covering the conversation. Might you want a minute on that?

[Trevor Webb, Claims Director at Sabre Insurance Group]

I think what I'd say is, having seen a period where claims frequency was improving, we're actually seeing sort of in the most recent periods, claims frequency easing back up again. There was potentially an expectation that as fuel prices went up earlier in the year, that that would've had an impact on frequency. We've not seen that. On the personal injury side, it's pretty flat. Again, it sort of fell around 2024. We're not really seeing that come down any further. I guess sort of linking frequency, we've obviously seen pressure around personal injury, particularly the low value in terms of severity and some of the changes that have come through that we've talked about previously.

[Trevor Webb, Claims Director at Sabre Insurance Group]

We don't see sort of necessarily good guys coming through on frequency or severity, and hence our view really that mid digit inflation needs to be thought about.

[Geoff Carter, CEO at Sabre Insurance Group]

Yeah. Thanks, Trevor.

[Trevor Webb, Claims Director at Sabre Insurance Group]

For single digit. Yeah.

[Geoff Carter, CEO at Sabre Insurance Group]

Thank you. Did that answer your question?

[Carl Lofthagen, Analyst at Berenberg]

Yeah. Very clear. Thank you.

[Geoff Carter, CEO at Sabre Insurance Group]

Okay. Thank you. There's one question on the Q&A, which I've just spotted from Ivan as a follow-up, which is, could we provide some color on reinsurance renewals, price retention, how we should think about gross versus net premiums going forward? Overall, reinsurance pricing, if we talk about across the market, reinsurance pricing on XOL seems to have come down a bit in the last year or two. I think probably the reinsurance market had priced pretty heavily for Ogden, over the previous period, and there's a bit of a correction gone on in the last year or two to bring some of those prices down a bit if you've got a decent performing portfolio. Retention, I think our view is we have, as I think everyone knows, an XOL retention of just over a million. Our general view is we should inflate that gently as the years go by.

[Geoff Carter, CEO at Sabre Insurance Group]

We're not looking for a sudden jump, I think we'll just need to ease up our retention in future periods. Gross versus net premiums going forward, Adam, do you want to say anything on that one?

[Adam Westwood, CFO at Sabre Insurance Group]

I mean, there's nothing really surprising expected on gross versus net premiums. We pay our reinsurance premium on an earned premium basis. The current sort of net earned premium in any six-month period reflects the prevailing rates at the time.

[Geoff Carter, CEO at Sabre Insurance Group]

Thank you, Adam. Unless there's anything else, I'll just pause for a second. No. In that case, thank you all very much for your time. Appreciate your time. Appreciate the questions. Anything you think of afterwards, I'm very happy to have calls later on today. We're around all today and most of the rest of the week. Thank you very much, and speak to many of you soon. Thank you.

Participants

Executives

• Geoff Carter, CEO
• Adam Westwood, CFO
• Hanro van Heerden, Group Financial Controller
• Matt Wright, Chief Actuary
• Trevor Webb, Claims Director

Analysts

• Ivan Bokhmat, Analyst at Barclays
• Abid Hussain, Analyst at Panmure
• Ben Cohen, Analyst at RBC
• Carl Lofthagen, Analyst at Berenberg