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Hastings full-year operating profit jumps 39 percent

(Reuters) - British insurer Hastings Group Holdings Plc reported a 39 percent jump in full-year adjusted operating profit, as it provided insurance to more customers and increased its market share.

The company, which mainly operates in the UK motor market, said adjusted operating profit rose to 184.1 million pounds for 2017 from 132.1 million pounds a year earlier.

Gross written premiums rose 21 percent to 930.8 million pounds.

“The competitive environment continues to be intense, with slower premium inflation since the end of the third quarter than that experienced in the first half of 2017 following the proposed Ogden rate review,” said Gary Hoffman, the company’s non-executive chairman designate, referring to the change in the way personal injury lump-sum payments are calculated.

Hastings said it would pay a final dividend of 8.5 pence per share and total dividend of 12.6 pence for 2017.

The combined ratio improved to 87 percent from 91.3 percent a year earlier, indicating that Hastings is not growing at the expense of profitability, Barclays analysts said. A level below 100 percent indicates a profit.

Hastings, which listed on the London stock Exchange in 2015, offers private car insurance, home insurance, motorbike and van insurance and premium financing and ancillary products.

The company’s live customer policies rose 13 percent to 2.64 million by the end of December.

Hastings has made headway in a competitive sector by focusing on selling motor insurance via price comparison websites.

Companies such as Admiral, Direct Line and esure also provide motor insurance in Britain.

A rise in vehicle repair costs, higher property damage claims per party and higher mid-range bodily injury claims have been driving up claims inflation, in turn pushing premium rates higher.

The average premium paid for motor insurance in Britain jumped 9 percent in 2017 to the highest level since 2012, data from the Association of British Insurers show.

However, premiums fell over the past two quarters after Britain said it planned to change the way personal injury lump sum payments are calculated, a move which would cut the size of those payments.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Amrutha Gayathri

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