British insurer Hastings profit rises as it adds more customers

(Reuters) - Hastings Group Holdings Plc reported a 2.6 percent rise in 2018 profit, as the insurer added more customers which helped it combat a drop in the price of motor insurance policies in Britain last year.

Hastings, which kicks off the earnings season for motor insurers, said profit before tax rose to 152.9 million pounds for the year ended Dec. 31 from 149 million pounds, a year earlier.

Gross written premiums rose 3 percent to 958.3 million pounds for the year, said the FTSE 250 company, which operates mainly in the motor insurance market.

The cost of a comprehensive motor insurance policy dipped last year, hurt by changes in the Ogden rate, used to calculate compensation for personal injuries, and the Civil Liability Bill that includes reforms likely to reduce claims for whiplash injuries.

That, coupled with a hit by claims resulting from extreme weather, including a hot summer and a late winter freeze, dubbed the “Beast from the East”, hurt British insurers in 2018.

But Hastings’ customer numbers were 2.5 percent higher at 2.7 million, helping it buffer those challenges.

Its combined operating ratio, a measure of underwriting profitability, was 89.4 percent in 2018 compared with 87 percent, a year earlier. A level below 100 percent indicates an underwriting profit.

The company also announced a 7 percent increase in its dividend for the year and said solvency coverage ratio, which is used to measure an insurer’s ability to meet its debt obligations, improved to 161 percent from 167 percent from last year.

The insurer also said it had 7.5 percent market share in a competitive sector and focuses on selling insurance products through price comparison websites, competing with Admiral Group, RSA Insurance and Direct Line.

Reporting by Muvija M and Noor Zainab Hussain in Bengaluru; Editing by Anil D’Silva, Bernard Orr