Car insurer Hastings (HSTG) has seen its share price fall by 9% to 200.4p as insurance claims inflation has outstripped premium inflation, plus it has also failed to grow customer numbers.
The company says the annual loss ratio will be at the lower end of its 75% to 79% target. The loss ratio refers the amount paid out in claims compared to the amount received in premiums.
Shore Capital analyst Paul De’Ath says the third quarter results failed to meet expectations with premiums 5% lower than forecast.
‘Hastings remains confident in its ability to reach 3m customer policies in 2019 but the slowdown seen in this quarter will not be reassuring for investors,’ comments De’Ath.
‘There is little in this trading update to indicate a turnaround in fortunes in the short-term, in our view.’
The trading update reveals a 3% jump in gross written premiums to £738.5m for the nine months to 30 September.
Net revenue has increased by 7% in the period to £574.1m and the company has 2.7m live customer policies which is the same level as reported three months ago.
