Sabre Insurance Share Discussion Threads

[essentialinvestor] 16/3/2021 13:48

Yup, HSX does sell at a steep sector premium.

Have BEZ on a watchlist.

[wba1] 16/3/2021 13:44

I have tended to avoid Hiscox simply because it is such an aggregation of different GI businesses that it can be difficult to cut through the forest. I was interested to see the one comment in the 2020 numbers, that they hold claims reserves over 9% in excess of actuarial estimate (by which I assume they mean best estimate; if they mean estimate on usual basis that would increase the surplus even further). That suggests a hidden asset of $400m net. However, although the share price has been hit I am still cautious. The price to tangible book is nearly 1.8, which is pretty high. Lancashire (for comparison) is 1.6. Not the same business but some overlap in London market and RI, and I prefer Lancashire's track record. My other question with Hiscox is about the succession to Masojada. He must be 60+ now and has run it for over 20 years. I would not be surprised to see Hiscox price recovering but I prefer others.

[essentialinvestor] 16/3/2021 13:38

Is it still the case that only a minority of shares are publicly available,
the bulk still held by the founder and PE owners?.

[essentialinvestor] 16/3/2021 12:47

Bought a small amount of HSX earlier.

Worked in insurance for 15 years back in the day, but on the sales side.
Certainly don't have wba's grasp of actuarial science.

[father jack1] 16/3/2021 12:03

Kicking myself that I shelled out on 2500 shares at 252p yesterday. Should know that the market consistently undervalues insurance companies. Shout out to wba1, great to have somebody with his deep knowledge to peer under the bonnet and give the tyres a good kicking.

[jonnybig] 16/3/2021 11:03

You know your stuff, wba. Have you got a view on hiscox which I "think" has been over smashed?

And nice recovery here

[wba1] 16/3/2021 09:59

Just for clarity - I am all in favour of CEOs using the tools at their disposal to smooth profit. It has always happened but I have never before seen it on the scale of this year! The only thing which has surprised me this morning is that Sabre chose to pitch its COR at 75% rather than closer to the 2019 COR. He may be nervous about 2021 GWP recovery and earned rating strength this year(much from business written in 2020) will be weaker. The question is how much of the weaker earning rates will be compensated by the 3rd lockdown.

As for the wider industry pattern; it seems, reasonably enough, that CEOs want to ensure they are not seen to profit from the pandemic. I am only wondering about their lack of subtlety in fixing results.

[jonwig] 16/3/2021 09:46

wba - thank you for that analysis.
It is, I suspect, the kind of thing an experienced insurance specialist would instinctively look for. But if they are using canny manipulation, it isn't to flatter the COR!

[speedsgh] 16/3/2021 09:45

@wba1 - Your post #90. Excellent analysis. Thanks for sharing. Much appreciated.

[wba1] 16/3/2021 09:25

I am getting a bit tired of insurer CEOs being so transparent in their results manipulation. An 11.6% reduction in current year loss ratio but accompanied by a reduction in prior year release from 11% to under 3%? Rampant reserve manipulation exactly as seen in the Aviva, Zurich and DLG results. The explanation for the prior year releases is rubbish. PPOs are a very small element of prior year reserves and even less conservative companies set case reserves at best estimate plus 5%, meaning releases of (on average) 5% on settlement. Other points;

* circa £1m of premium refunds has moved from negative technical income to a reduction in premiums - so the real GWP is about that much higher if compared to 2019

* the comment on DAC (effectively amortisation of acquisition costs) and which reduced profit declared compared to 2019 is interesting. DAC manipulation is, together with reserves, a traditional CEO technique for ending up with the profit they want to publish.

* the comment about levies increasing is fair but incomplete. Levies are charged against premium on a lag basis (past years premium) so, when premium resumes growth levies will be shown as decreasing (good news for the future).

* the change in unearned premium reserve (over £12m) looks surprising, especially in a year of falling GWP. This figure should be a simple calculation and it may be driven by distorted new business paterns during the year but ....

* the claims triangles at 3.14.1 are especially interesting. The very low prior year releases are especially driven by very low releases for 2019 accident year (compared to similar releases - such as for 2018 in the 2019 results). This is especially odd, unless CEO manipulation, as most of the large claims for that year will not have developed near to settlement.

My guess is that the real result is nearer 70% than 75% COR. I have topped up at 234.

[jonwig] 16/3/2021 08:19

Is the market surprised at lower profits? Surely not, but maybe they've missed expectations, which can't be reliable anyway in this situation.

[jonnybig] 16/3/2021 08:02

maybe not! WTFDIK?

[jonnybig] 16/3/2021 07:56

Hoping for a significant tick up here

[jonwig] 16/3/2021 07:24

Final results:



Quite satisfactory, I think.
Zoom call at 8:30.

[petewy] 13/3/2021 10:39

No. I think so to.

[father jack1] 13/3/2021 10:04

Am I the only one who thinks this price is on the low side?. Maybe after Tuesday it will receive a boost.

[speedsgh] 12/3/2021 11:12

Notice of Results -

Sabre Insurance Group plc, one of the UK's leading private motor insurance underwriters, announced on 23 February 2021 that it will release its full year results for the period ending 31 December 2020 on 16 March 2021.

A virtual presentation will be held at 8:30am on the day. Please note the change of time from 9:30am to 8:30am.

Please contact [e-mail] to register. Instructions on how to connect to the meeting will be circulated ahead of the session.

[speedsgh] 23/2/2021 11:09

Notice of Results -

Sabre Insurance Group plc, one of the UK's leading private motor insurance underwriters, will announce its full year results for the year ended 31 December 2020 on 16 March 2021.

A virtual presentation will be held at 9:30am on the day. Please contact [e-mail] to register and for instructions on how to connect to the meeting.

[wba1] 09/2/2021 09:57

You can go wrong with Sabre if they target significant growth. As any underwriter will tell you, new business comes at a 5-10% (minimum) loss ratio penalty compared to renewal business. I was surprised that this did not happen with Snowball around (who used to declare Christmas sales when running Aviva GI, if he thought he was going to miss volume targets. But at least he is now gone.

Do not get me wrong. Sabre are the quality play in this sector, but have taken this position by a clear focus on underwriting quality. If they compromise this for growth the risk increases materially. I do not expect this, currently hold (but for range trading) and expect March results (and next years) to be excellent (albeit I expect them to restrict the declared profit by stashing surplus reserves for a rainy day).

[wish i wasnt in rbs] 12/1/2021 19:47

Can't go wrong with Sbre. Especially as people aren't driving in the lockdown

[speedsgh] 11/1/2021 22:30

Sabre ahead of the pack, says Peel Hunt - https://citywire.co.uk/funds-insider/news/the-expert-view-next-tp-icap-and-sabre-insurance/a1447471Sabre Insurance (SBRE) will snap back to growth once inflation returns, leaving the competition behind, says Peel Hunt.Analyst Mark Williamson retained his 'add' recommendation and increased his target price from 260p to 290p on the stock, which was trading up 0.5%, or 1.5p, at 285p at time of writing on Friday.'Sabre's consistent focus on maintaining best-in-class margins makes it premium income more volatile in a soft rate environment,' he said.'However, this is a worthwhile trade-off. We believe growth will return once claims inflation snaps back; the competition will be forced to catch up with the rate increases Sabre has already put through, driving volumes back to Sabre.'Williamson added that the 5% dividend yield remains a 'key attraction'.

[jonwig] 08/1/2021 12:45

Kayne Anderson Rudnick have increased again, to 8.01%.

[wba1] 03/12/2020 09:10

The explanation for the mid-November spike has become apparent. Kayne Anderson Rudnick increased their shareholding from 6% to 7.5%, so it was the filling of a large buy order. The interesting question is about their intentions. They are not known as an activist investor, but 7.5% is a fairly large holding.

[thebutler] 23/11/2020 13:17

Very similar to CSN the way this behaves with its random spikes and dips. Just look at that chart - a beauty for trading.

[wba1] 17/11/2020 14:37

Just my opinion speedsgh. The important thing is less the timing of specials than that Sabre will pay them when they can. I am a bit surprised at the rise today, but I never did figure out what caused it to spike to 310 in late summer and could not believe it when it fell back to the 220s.