Hastings Group Holdings PLC (LON:HSTG) saw its shares rise on Wednesday as the insurer reported strong growth in half-year revenue and profit despite adverse weather claims and competitive markets.
The technology-driven insurance provider said its adjusted operating profit for the six months ended 30 June 2018 rose by 22% to £105.1mln, up from £86.5mln a year earlier, as net revenue increased by 9% to £376.3mln.
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The FTSE 250-listed firm highlighted sustained growth in its live customer policies to 2.70mln as of 30 June 2018, up 6% year-on-year.
It also noted an increased share of the UK private car insurance market to 7.5% as at 30 June 2018, up from 7.0% a year earlier.
The firm said it has a strong solvency position, with its Solvency II coverage ratio increasing to 171%, up from 167% as at 31 December 2017.
Toby van der Meer, Hastings’ chief executive officer, commented: “This has been in an environment where we have seen market prices come down from the highs of 2017, driven by lower claims frequencies, the prospect of regulatory reform, and competition.
“We have also seen adverse weather, continued fraud activity across the market, and some increase in the cost of repairs and mid-range bodily injury claims, resulting in a claims inflation outlook for the full year towards the upper end of a 3% to 5% range.”
2019 targets on track
However, he added: “We remain on track to meet all our 2019 targets.”
The group is to pay an interim dividend of 4.5p per share, 10% higher than last year’s 4.1p pay-out.
In afternoon trading, Hastings shares were 1.3% higher at 246.60p.
In a note to clients, analysts at Numis Securities repeated an ‘add’ rating and 295p price target on Hastings.
They said: “The interim results beat expectations in terms of operating profit, although this was impacted by weather and helped by one-offs, but growth was slightly light in terms of gross premium written.”
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