Hastings Group (“Hastings”), the technology driven UK insurance provider, today announces its results for the year ended 31st December 2021, delivering another period of profitable growth.
Toby van der Meer, Group CEO, commented:
“As we continue to execute our strategy to become the UK’s best and biggest digital insurance provider, I’m once again really pleased that our initiatives continue to drive profitable growth, with customer numbers now over 3.1 million, despite the competitive market environment. Unlike traditional insurance companies, we remain well positioned to respond to and take advantage of market and technology changes, and we continue to invest in building market leading capabilities. My thanks, as ever, go to my 3,300 colleagues for their hard work and commitment in supporting each other, our customers, and our local communities in another unusual year!”
- Strong financial performance, including increased profit before tax of £119 million and a calendar year loss ratio of 62.2%.*
- Adjusted operating profit of £152 million, up 16% year on year, excluding transaction costs recognised in 2020 related to the Sampo acquisition.
- Customer policies are 2% up year on year, to over 3.1 million.
- Customer retention rates continue to be high and above market averages, with overall retail income per policy also remaining broadly stable.
- Gross written premiums of £969 million, with average premiums marginally lower than prior year, reflecting a change in mix of customers to lower risk segments and the impact of market premium reductions across the UK motor market throughout 2021.
- Motor claims frequencies, though higher than 2020, remained below 2019 levels throughout 2021, largely reflecting reduced motor vehicle usage as a result of COVID-19 restrictions.
- The average cost of claims continues to rise, reflecting increases in the value of second-hand cars, affecting total loss claims, and increases in repair costs, largely due to extended repair periods as a result of COVID-19 and general inflation in labour, parts, and paint.
* Hastings Group Holdings Limited
Strategic and operational initiatives
Hastings continues to make good progress on its strategic initiatives:
- New products, pricing approaches and sources of data continue to be added, delivering policy growth during 2021 and laying the foundations for continued profitable growth.
- Digital adoption continues to increase, with a new digital customer journey launched and new functionality added on the mobile app, increasing app usage to over 350,000 unique users per month, with customer engagement and feedback also remaining positive.
- A refresh and relaunch of our brand, including new advertising campaigns.
- Claims transformation initiatives continue to make good progress, with process enhancements and technology investments, coupled with supplier changes, leading to high NPS and improved commercial outcomes.
- Home insurance customer policies are up 16% to just over 310,000, with new claims handling capabilities launched during the second half of the year further strengthening the home insurance proposition.
- New reinsurance arrangements agreed for 2022, with a reduction in quota share from 50% to 35% from 1 January 2022, meaning increased retention of profitable written premiums.
- Full compliance and deadlines met for the implementation of the FCA’s general insurance pricing practices reforms. It remains too early to fully assess the impact of these reforms, although early indications show increases in market new business prices at the start of 2022.
- Whiplash reforms, designed to reduce the cost of small bodily injury claims, came into effect across the UK market at the end of May 2021. There are early indications of both a reduction in smaller bodily injury claims frequencies and severities, however it will take time to understand fully the development of these claims.
Supporting our colleagues and communities
Hastings remains firmly committed to supporting colleagues, and the communities in which it operates. Highlights to date include:
- Highest ever colleague engagement score achieved, with good progress on internal colleague development, as well as on the recruitment of diverse talent.
- Certified carbon neutral for a second year, with action taken to move all of our electricity usage to renewable sources.
- Support for 163 local charities, schools, and community groups, including the delivery of over 3,000 food parcels to those most in need.
- The launch of our Futuready education mentoring programme, which helps motivate and inspire local school students to make better choices to improve their life-chances.
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About Hastings Group
Hastings Insurance Services Limited (“Hastings Direct”) was founded in 1996 in Bexhill-on-Sea on the Sussex coast, and the Hastings Group is now one of the leading general insurance providers to the UK market, with over 3.1 million live customer policies and employing 3,300 colleagues.
Providing simple and straightforward products and services to UK car, bike, van, and home insurance customers, 90% of policies are directly underwritten by the Group's Gibraltar based Underwriting business, Advantage Insurance Company Limited (“Advantage”).
In addition to the Group’s primary consumer brand, it also uses the trade and product names 'Hastings Premier', 'Hastings Essential', 'Hastings Direct YouDrive', 'People's Choice' and 'insurePink'.
The Group primarily operates via two separate trading subsidiaries. Hastings Direct, the Group’s Retail business, is responsible for end customer pricing, fraud management, product design, distribution and the management of underlying customer relationships. The Group's Underwriting business, Advantage, is responsible for risk selection, underlying technical pricing, reserving and claims handling.
Retail is supported by, and benefits from, Underwriting's cautious approach to risk and reserving and a panel of other insurance partners which provide additional underwriting capacity.