Sabre Insurance Group plc

Okay, good morning everyone. Thank you very much to people who are joining us in the room and online. Welcome to our results presentation. I'm pleased to say we've got consistency in presenters. My colleagues there have been gently fried by the giant screen just behind their head. As normal admin I will do the presentation. and then we'll leave all the difficult questions to Matt and Trevor to handle at the end Adam tells me it's our ninth annual results presentation now and that's for the three of us so we'll be getting the cake out for next year's next year's one I think so very briefly outline the agenda we're going to run through the highlights Adam will then run through the financial performance and our ESG credentials I'm going to spend a few minutes going through our strategy which we've tried to present in a slightly different way this year I'll then look at the outlook and summary and we'll have plenty of time at the end for Q&A as ever. So overall I think there's a title suggested we think we had a very good year last year and as importantly we've got very good momentum coming into this year as well in terms of premium so we seem to have turned the corner from having to manage for a margin into now we're back into a slight growth mode as well. For recent annual reports, I seem to have stood here with a doom-laden message to impart, be it Brexit or Covid or Ogden discount or high inflation. Almost boringly, I don't have any of that this year. The horizon seems as clear as it's been for quite some time. So hopefully we can focus on our own numbers and what we think are some good things coming through both for the sector and ourselves. So let's touch on some of the highlights. Profit before tax up almost 5%, margin very comfortably within our range, an excellent net loss ratio across the portfolio at 54%. For motor itself, a core motor vehicle, that's effectively 50% which is probably as good or better than we would normally hope to achieve. Those results have been delivered against some pretty unattractive market conditions. where we think the market has still continued to underprice against ongoing claims inflation for most of the last couple of years. We've maintained our pricing discipline and as we say we've seen return to growth in the last quarter and that growth has carried on. We've mentioned in here that our premium is up by 5% to the end of February year on year. Very robust capital position still. total dividend of 13.5 pence and we've also announced another share buyback of £5 million in addition to the 13.5p total dividend so we've delivered a good year in terms of numbers we've also made really good progress well up in terms of on track with our timetable year for ambition 2030 Two big things this year one is the launch of Sabre Direct bike which we'll talk more about later and we've continued testing the differentiated price for our core motor product which we think will drive the big volume as we go towards 2030. So having stolen most of his interest in Thunder I'm now going to hand to Adam to run through the numbers and DSG.

Alright, thanks Geoff, and good morning everyone. So I'll take us through some of the key numbers from 2025 in a little bit more detail. So our results this year perfectly reflect Sabre's core strategy. As expected and in line with performance reported to date, we've allowed our premium to drop in unfavourable market conditions, ending at £202.9 million of premium for the year. and since our last report in Q3 we have seen some momentum in premium in Q4. Our net insurance margin is now comfortably within our target range of 18-22% and at 19.2% reflects the continued discipline and control applied across the year. The net loss ratio has improved by 4.6 percentage points to 54.1% in line with our long term target and reflective of strong underwriting throughout soft market conditions. Our expense ratio is up by 1.9 percentage points, primarily due to the net-earned premium having reduced and reflecting some cost inflation during the year. As a result of the improving margin, as well as increased investment returns, our total profit before tax is up 4.9% to £51 million. This has allowed us to declare an increased dividend per share of 13.5p, leaving us with solvency capital ratios slightly above our preferred range at 161.5%, and around 154% after the proposed £5 million share buyback. This chart shows the stabilisation of our margin since the period of very high inflation. As a reminder, our net insurance margin is a function of both claims experience and expenses incurred as a proportion of insurance related income, which is primarily premium but also includes instalment income. In this chart, the growing blue bars show improving margin and we're now operating at a comfortable level and expect to maintain our net insurance margin within this target 18-22% range all the way through to 2030. For clarity, if comparing across peers, none of our headline performance ratios including the net insurance margin include any discounting benefit under IFRS 17. So this slide bakes down the loss ratio into current and prior year performance, with a comparison to last year. It shows the total claims cost divided by earned premium, net of the impact of reinsurance. The current year ratio reflects the book position for claims in 2025, and the prior year ratio reflects movements in the actual and expected ultimate claims costs for claims already on the books at the start of 2025. Overall, the 4.6 percentage point improvement in net loss ratio has been driven to a return to prior year releases during the year with the amount for 2025 a little above our long run expectation for the run off of risk adjustment. Our current year loss picks naturally reflect the greater level of uncertainty attached to the most recent year due to the larger number of new and undeveloped claims and allows for above normal inflation in the short term. The current year will always carry a risk adjustment which means the current year loss ratio is expected to be above the ultimate loss ratio achieved by that business. This chart shows the relative contribution from our motor vehicle and other products during the year. Performance in motor vehicle has improved further in 2025, delivering a loss ratio of 50.5%. Motorcycle and taxi remain much smaller, with loss ratios impacted by the individually large claims reported at the half-year stage, although both have shown much improved loss ratios in the last six months. As is demonstrated in the policy counts, we have allowed motor vehicle and taxi books to shrink in 2025, whilst market conditions were unfavourable, although we note that the motor vehicle book did return to policy count growth during the end of 2025 and throughout 2026 to date. Motorcycle policy count has grown as we have introduced more volume through our direct brand, for which we are controlling the rate of growth as the product matures. This slide shows how our capital was generated during the year. with the total dividend for the year being slightly above the net of capital generated less the increase in capital requirement reflecting very strong position coming into the year post dividend the solvency coverage ratio was above our preferred operating range so the board has elected to propose a five million pound share buyback subject to regulatory approval which will take the post buyback solvency coverage ratio at the end of 2025 to 154% which is comfortably within our preferred operating range The Group's policy remains simple, to pay an ordinary dividend in the range of 70-80% of profit after tax, and to consider paying a special dividend or utilising buybacks to distribute excess capital, generally moving the post dividend capital to within the Group's range of 140-160%. Importantly, this is a genuine range and will be utilised in the right circumstances, in this case considering the current share price and the comfort in the Group's ability to generate future capital in the coming year. So a quick update on our sustainability practices. We continue to monitor our progress towards our ambition to hit net zero by 2050 and we publish our net zero roadmap on our website. We've taken steps to minimize our direct emissions from operations and our largest emission space is the assets in which we invest, which currently we expect the related emissions to decrease naturally over time. But we'll consider taking active steps to manage this as we move towards 2050. Along with most of the industry, we carefully monitor risks and opportunities related to climate, both transitional and physical. We are well-placed to support the transition to electric vehicles, and having collected significant data over a number of years, which is aided by our willingness to cover almost all vehicles. And with that, that's Geoff.

Thanks Adam. Okay we're going to spend a few minutes just on a recap of our strategy which as I mentioned earlier we're trying to set out in a slightly different way this year just so you don't get completely bored in the room for hearing it for the ninth time. I guess the headline here is key to us we think we are a high margin business with good growth opportunities as one of our shareholders once said why would you not want to own someone who's got those characteristics. So we think we're a strong company in an attractive market and as an underwriting focused business we think we're also in the best sub-sector of that attractive market. So to pick on a few strengths, to state the obvious, motor insurance is a mandatory product for all yuko drivers. That doesn't look like that's changing anytime soon. We can talk about autonomous vehicles and how that might impact later. We specialise in high premium, high margin policies. We don't really use the word non-standard because we consider everyone is a writable policy providing they're paying the correct margin and our premium is roughly twice that of the UK average. We provide policies across the UK for car, van and motorcycle. We've got a very long track record of delivering the results. Deep, accurate and relevant data, very consistent data-driven underwriting and expert claims handling. I think importantly we've also got a very consistent, thoughtful and long-term approach to reserving which avoids as many shocks as we can manage. What we've tried to put here, people often ask what is our, what's the sort of secret to our success, what's the sort of KFC formula that we keep locked in a vault, how do we do it? We don't have a KFC formula so what we've tried to do here is unpack what would be in it if we did have one And this also gives some context into why we're confident about Ambition 2030. This is the way we work. The top one here, I'll go from the top and work around to the right. One version of the truth. So that's consistency on the key assumptions across all departments. Now that might sound obvious but that's not the way that a lot of insurance companies work. This is the first company I've ever worked out where you don't have at least a twice annual bust up between the price and then the reserve in actuary on who's got the best view of the loss ratio. So we have one version of the truth that we as a management team will buy into. very high quotability we quote for almost everything that gives us really good access and insight into the market and what's going on with pricing and where we think opportunities might lie probably the really key thing is margin management we have no premium targets in the business at all the only targets we have are related to margin and profit and that's a DNA that goes through the middle of the stick of rock but everyone I think in the business would say the same thing every policy we underwrite we validate both using automated tools and through a sniff test from humans looking at those as well similarly claim screening every claim that comes in while we try and deal with claims very quickly very fairly everything gets screened for fraud and accuracy again both using automated techniques and using human skills on that as well Very fast feedback loops. Matt and Trevor are sitting incredibly close to each other as actuaries and claims directors today and that's about as close as they sit most days as well. So very fast feedback loops from things we're seeing in the claims environment into things we need to...