Sabre Insurance Share Discussion Threads

[speedsgh] 17/11/2020 14:06

Happy to defer to your greater experience, wba1. Either way would be a satisfactory outcome imo. I do not currently hold. Kicking myself that I didn't start looking more closely at SBRE until the last few days. But am happy to wait for a future opportunity to build a position at a slightly lower price.

[wba1] 17/11/2020 13:55

I will be surprised if there is another special dividend with the 2020 final. Much more likely to look to having a progressive final dividend (ie an increase on 8.1 to, say, 8.5p. Given the recent special and the liking of the market for progressive dividend records an increase in the final would be good PR. I am also thinking that they have a little less room than last year with September 2019 solvency ratio at 186% (still excellent) compared to 198% at the same point in 2019. Of course, they have been stuffing reserves to the gunwales so have hidden leeway from reserve releases.

[speedsgh] 17/11/2020 10:36

Going by their comments in the Interim Results and Oct trading update, I would anticipate another return of surplus capital (via special dividend) alongside payment of the FY20 final dividend in May 21.

FY18 core dividend 14.00p (interim 7.20p, final 6.80p); special 6.00p = FY18 total 20.00p
FY19 core dividend 12.80p (interim 4.70p, final 8.10p); special 5.20p (declared, then postponed, then reinstated alongside FY20 interim payment) = FY19 total 'declared' 18.00p
FY20 interim 4.30p...

[wba1] 16/11/2020 19:35

GaryCook; if you take all the dividends paid in 2020 the yield has been 6.7%, but of the 17.6p, 5.2p was a special and so not to be expected every year (they paid one in 2018 but not 2019). So the predictable yield is 4.9% but with the added possibility of special dividends.

[petewy] 16/11/2020 16:12

Up the Villa. Jim O'Neil supports Man U

[garycook] 16/11/2020 16:11

wba1,So the Dividend,s paid in 2020 so far of 17.6p,gives SBRE a dividend yield of 6.71% at 262p correct ?

[wba1] 16/11/2020 15:04

Baggies indeed. For a time it seemed to be an insurance thing with others like Andy Homer (ex AXA and Towergate CEO) and Martin Capewell (ex HSBC and MIB board)season ticket holders.

[petewy] 16/11/2020 12:37

Thanks for reinforcement WBA (Baggies?)

[wba1] 16/11/2020 10:07

GaryCook; not knocking DLG. They have been a solid play for many years and remain a decent trading and income share. But market cap is irrelevant (ignoring the micro caps). What matters is what value the market cap represents relative to performance fundamentals and outlook. IMHO DLG are more exposed to headwinds than SBRE. Particularly, the threat of a dual pricing ban is horrible for DLG where in excess of 50% of their earned premium would be affected. SBRE is wholly unaffected by this issue as its business is niche with primarily scheme and broker sources. I do not expect DLG to visibly suffer for some time (if the FCA decision is as expected) because they can stash away this years excess profit in reserves and smooth profit flow for 3-4 years (ignore DLG comments about increased costs at present/higher severity - this is just them laying the ground for smoothing profit by reserve stuffing, which all insurers will do), but eventually the FCA will bite.

For an insurer (and especially an UW director (my background), what matters most is the COR/LR, and SBREs is market leading and difficult to replicate because of its niche business and data. SBRE also has an (extremely) conservative approach to investing reserves, being almost exclusively in government bonds with the resultant effect of either minimal exposure to default or being able to move to a more aggressive policy when appropriate in order to improve investment return (and profit). SBRE will not set the world on fire but is the quality play at present.

[wish i wasnt in rbs] 16/11/2020 09:19

Not quite sure where you get the 4.78% yield from Gary ?

[garycook] 16/11/2020 06:07

wba1,Sooner hold DLG,with its £4B Mcap for value,and a 7.45% plus dividend yield,compared to SBRE Mcap £650M at only a 4.78% yield atm.Similar possible 20% upside from here,in both DLG,& SBRE.

[jonwig] 30/10/2020 11:47

EI - I doubt Amazon would be interested in non-standard policies.
And would A. take the trouble of actually covering the policies (so much intrusion!), or just be a portal?

Worth saying that Aviva have a stake in Sabre, and so does a US outfit called Kayne Anderson Rudnick.

EDIT: Amazon's India underwriter is Acko General Insurance. Amazon is just a portal.

[essentialinvestor] 30/10/2020 11:24

A potential problem for the sector is Amazon.

They have now entered the Indian automotive insurance sector,

UK within 3 years imv.

[squeamish1] 30/10/2020 11:13

Thanks Jonwig, I admit I was wondering if they were a Saga-type outfit with a cosy set of brokers and a customer base happy to get fleeced year after year out of ignorance or laziness. That model can’t survive long term.

But there has to be rich pickings in the areas of the market that fail the computer-based underwriting models of the likes of Direct Line, and if that’s what they’re doing I’ll dig a bit deeper. Their accounts certainly suggest they are well rewarded for the extra risk.

[jonwig] 29/10/2020 17:07

squeamish - they target people with money who are regarded as high risk by mainstream insurers. They don't compete in the cutthroat mass market. Hence, of course, they don't penalise loyalty: they've said they will be unaffected by the ongoing investigation.

Also, they've a reputation for disputing dodgy claims. It's all a tight ship! Hence as they say, they don't pursue volume. Working largely through brokers could be an advantage.

This business model means they don't need or want growth, and can throw off surplus capital with special dividends. With Sabre, you'll get a flat share price and 7-8% pa income. (That was the plan until this month, anyway!)

[squeamish1] 29/10/2020 15:53

One thing I can’t work out here - what does the average Sabre customer look like, and why do they buy Sabre policies? How can they deliver sustainable CORs in the low-70s, when other motor insurers struggle to deliver below 100%?

Without knowing this it’s hard to understand how their margins won’t be competed away, and without that it’s impossible to imagine paying nearly 5x tangible NAV for a motor insurer. Any ideas?

[wish i wasnt in rbs] 28/10/2020 15:11

More director buying yesterday - only ISA money I suspect as £20k each for the chief actuary and his wife - bet he's a bit miffed he didn't wait a day.

[aquaesulis01] 16/10/2020 13:25

True, but it was a very positive update none-the-less and the Director buys are a positive sign. Also, the RSI has hit sub 30, oversold territory so I would anticipate this is at the bottom or near bottom and is a very good entry point for new investors especially with the promise of a healthy dividend ahead

[speedsgh] 15/10/2020 11:41

Recent Trading Update has not managed to reverse the current weakness...



Sabre Insurance Group plc (the " Group ", or " Sabre "), one of the UK's leading private motor insurance underwriters, today provides a trading update for the nine months ending 30th September 2020.

Summary

- Overall performance is consistent with expectations set at the time of the H1 results, which were announced on 28th July 2020

- The Group has continued to perform well throughout the COVID-19 pandemic and related disruption, continuing to execute our strategy of focusing on underwriting profitability over premium volume

- Prices increased to cover underlying claims and other cost inflation of around 10% per year. Temporary COVID-19 lockdown-driven price reductions fully backed out as traffic and claim levels return to near normal

- The Group continues to anticipate delivering a FY2020 combined ratio result close to our long-term mid-70%'s target

- Continuing the positive trends identified at the H1 results, Gross Written Premiums picked up in Q3, resulting in the first nine months of the year ending 9% lower year-on-year at £139.2m(1) (9 months 2019: £152.9m), having been 14% down year-on-year at H1 2020

- Year-on-year Gross Written Premium for 2020 is anticipated to be in-line with guidance provided with the H1 results, with a likely outcome of around 10% lower year-on-year depending on market conditions

- Strong organic capital generation supports the potential for an attractive full year dividend with a solvency coverage ratio of 186%(1) as at the end of September 2020 (September 2019: 198%), well above our 140% to 160% target range

- Strong balance sheet with no debt obligations

Outlook

The performance in the first nine months of the year has been in line with expectations. Policy volumes are currently better than anticipated given the rate increases implemented, with high average premiums being achieved.

Our on-going focus is on ensuring that our prices are appropriate for the life of a policy, not just the next few months, and we could be pricing somewhat ahead of the market. This may provide a growth opportunity in 2021 if some competitors need to "catch up" pricing levels. Alternatively, if data subsequently proves we have been too cautious we will be able to moderate rates whilst delivering a strong profit performance for prior periods.

Despite the continuing uncertainties we remain confident in delivering a combined operating ratio close to our mid-70%'s target. We anticipate paying an attractive dividend for the full-year, underpinned by our current solvency ratio of 186% which is well above our target 140% to 160% range.

[jonwig] 22/9/2020 11:31

The FCA is to ban loyalty penalties. Sabre is down today, but has already said (July) that it doesn't expect to be affected.

[jonwig] 19/8/2020 06:12

@ wba1 - you'll be pleased at the departure of Mr Snowball!

[thewheeliedealer] 17/8/2020 20:06

Hi all,

My mate Peter @Conkers3 and myself did a ‘Twin Petes Investing’ Podcast a few days ago and part of our discussion covers SBRE and other Insurers. We also chatted about loads of other Stocks and we managed to include a lot of educational stuff in this one – things like how much Research you need to do and what to consider regarding Retirement. Anyway, if you use Apple, Audioboom, Overcast or Spotify you can find it under the 'Conkers Corner' Channel (you want TPI Podcast 29) and you can find it on Soundcloud at the link below.

I hope you enjoy it and find it useful,

Cheers, WD
@wheeliedealer

[wish i wasnt in rbs] 04/8/2020 07:15

I rest my case - dlg up 30p this morning on special divi and resumption of dividends