(Reuters) -Sabre Insurance announced its first ever share buyback on Tuesday after annual profit more than doubled, driving shares up more than 11%.
Supply chain issues and high inflation following the pandemic and Ukraine war raised motor repair costs in recent years, boosting premiums for the likes of Sabre which outweighed the higher cost of claims.
While other insurers have since cut prices to win back customers, Sabre has not. Instead it increased prices last year in line with its view of high single-digit claims inflation, it said in a statement.
“We grew strongly in the first half of the year when market conditions were attractive, and we maintained our strict underwriting discipline despite a steep decline in market prices during the second half,” CEO Geoff Carter said in a statement.
Sabre Insurance shares surged as much as 11.2% to 138 pence, on track for their biggest intraday gain since February 2022 after full-year pre-tax profit jumped to 48.6 million pounds ($63.1 million) from 23.6 million pounds a year ago.
The company also proposed a share buyback of 5 million pounds and a better-than-expected total dividend of 13 pence per share.
“Management’s existing strategy of focusing on profitability over volume has worked well, ensuring positive earnings throughout, unlike peers,” said Abid Hussain, a Panmure Liberum analyst.
Sabre Insurance said that market prices will need to increase to reflect current levels of inflation, with its own 2025 margins expected to be within a 18% to 22% range.
Gross written premium rose 5% year-on-year to a record 236.4 million pounds for the year ended December 2024.
($1 = 0.7705 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Sherry Jacob-Phillips, Savio D’Souza and Jan Harvey)
