Hastings H1 slumps on Ogden rate change
UK insurer Hastings reported a larger-than-expected fall in first-half profits after booking a charge to cover a change in the discount rate used to calculate personal injury claims.
The company on Thursday said interim pre-tax profits fell 47% to £46.1m in the six months to June 30, below company forecasts of £50.7m. The dividend was held at 4.5p a share.
Live customer policies increased 4% to 2.81m.
The government last month said it was changing the so-called Ogden rate on personal injury claims, meaning insurers would now have to make larger lump sum payments. Hastings said it was setting aside an extra £8.4m in its calculations to meet the cost.
Gross written premiums rose 3% to £499.2m. Hastings said claims inflation was above earned premium inflation, at an underlying rate of 6% to 7%, driven by higher third party property damage and repair costs, reflecting increased vehicle sophistication and continued inflation of paint, parts and labour.