UK insurer Hastings full-year operating profit jumps

[LONDON] UK insurer Hastings Group Holdings Plc reported a jump in full-year operating profit, driven by a rise in gross written premiums, and proposed a maiden dividend of 2.2 pence per share.

Hastings shares were up 6.8 per cent at 172.5 pence in early trade on the London Stock Exchange.

Gross written premiums rose 27 per cent to 614.9 million pounds, driven by a hike in the price of insurance.

The rise comes after several years of low prices due to strong competition in British motor insurance, where Hastings earns the bulk of its revenue.

In the past few quarters prices have been increasing as high levels of claims, some of which insurers say are fraudulent, have helped to push up motor premiums. Lower oil prices have also encouraged more vehicles on the roads, pushing up accident claims, analysts said.

UK car insurance premiums rose 8 percent over 2015, with a rise in insurance premium tax fuelling some of the gains, the Association of British Insurers said in February.

Hastings' share of the total number of private car insurance policies in the UK rose to 5.8 per cent from 5.1 per cent a year earlier.

Hastings, which listed on the London Stock Exchange last year, said operating profit rose 19 per cent to 126.1 million pounds (US$179.8 million) for the year ended Dec 31.

Analysts on average had expected full-year operating profit of 120.10 million pounds according to Thomson Reuters I/B/E/S.

Shore Capital analyst Eamonn Flanagan said the dividend was better than the 2 pence per share expected by the market.

REUTERS