Sabre Insurance profits up as underwriting discipline pays off

Sabre Insurance (SBRE) found itself on the wrong side of the insurance cycle through much of 2025, with market pricing lagging claims trends, yet the motor insurer still managed to boost statutory profits, increase the annual payout broadly in line with consumer price index inflation, and initiate another £5mn share buyback. All this was achieved while keeping the post-dividend solvency coverage ratio in the targeted range of 140-160 per cent.

As you might expect, underwriting discipline was central to the improved financial performance. Profitability was prioritised over volumes, so gross written premiums contracted by 14.2 per cent, which was in line with expectations given softer market pricing. This active cycle management enabled Sabre to deliver a 160 basis point increase in the net insurance margin to 19.2 per cent. Meanwhile, the loss ratio – percentage of earned premiums paid out as claims/expenses – contracted by 4.6 percentage points to 54.1 per cent, another pointer to effective risk management.

From an operational perspective, 2025 saw the launch of Sabre’s direct motorcycle offering, while the insurer also began testing differentiated pricing models which are designed to facilitate more personalised, data-driven pricing for the core motor insurance business.

Sabre’s combined operating ratio came in at 82.3 per cent, and FactSet gives a consensus forecast of 78.2 per cent in the current year, a clear indication of increased underwriting profitability. With premium and policy growth improving through the final quarter and into the current year, chief executive Geoff Carter is confident that the group will deliver “premium growth in 2026”, along with “profit slightly ahead of 2025 as the high-margin business written in 2025 earns through”. We do not think that Sabre’s prudent and nimble approach to underwriting is adequately reflected in the somewhat narrow premium to net assets. Buy.

Last IC view: Buy, 153p, 1 Aug 2025