Sabre Insurance becomes exclusive underwriter for motorcycle insurer MCE
Motor insurance underwriter Sabre Insurance said on Wednesday that it has signed an agreement with MCE Insurance, one of the largest distributors of motorcycle insurance in the UK, to become the exclusive underwriter for its policies with immediate effect.
Under the terms of the agreement, Sabre will have complete control of pricing, claims handling and reserving. It has also received access to MCE ' s multi-year claims and policy data which will be combined with Sabre ' s leading digital pricing techniques.
Sabre is not paying a financial consideration to MCE and will not be liable for any historical policies, claims or activities of the previous underwriter.
Sabre said the deal adds more than £20m of annual premium income and should generate a pre-tax profit contribution of around £3m to £5m on a fully-earned, annualised basis.
Chief executive Geoff Carter said: "I am delighted to announce our partnership with MCE Insurance today. Motorcycle Insurance is entirely consistent with our focus on engines and wheels, providing an exciting additional opportunity alongside our UK private motor business.
"The partnership will add significant data capabilities and allows us to retain our underwriting discipline whilst providing incremental earnings growth. We will provide a further update on our progress with MCE at full year results."
Broker Peel Hunt said: "This is one of the first significant steps in Sabre’s footprint expansion strategy, and should contribute alongside the growth of the non-standard motor portfolio, which we believe will bounce back as the impact of the pandemic eases.
"The shares are attractively valued in our view at a price-to-earnings of 14x 2022E and a circa 7% dividend yield. We reiterate our buy recommendation."