Hastings Group Hldg PLC (LON: HSTG) have reported that revenue has fallen, despite increase in Gross Premium Writing as a trading update for the year was reported.
GWP for the nine months to 30 September 2019 was £753.1m. This was an increase of 2% from £738.5m in the same period a year prior.
However, reported revenue fell 2% from £574.1m to £563.8m.
Toby van der Meer, CEO at Hastings Group Holdings, commented: “The market remained competitive in the third quarter, with market premium inflation continuing to lag claims inflation. We maintained focus on pricing discipline, applying rates ahead of the market, in line with our stated targets and strategy.”
Hastings group had claimed that it continued to to prioritize pricing by applying rates in line with H1 2019 claims inflation.
However, there was an acknowledgment that Hastings had become less competitive due to claims inflation lagging behind premiums.
The trading update claimed claims inflation rose to between 7% and 8% in Q3.
Additionally, the trading update showed strong growth in home policies to 200,000 saying the group’s in-house underwriting team continued to be embedded.
Analyst Ming Zhu, of Panmure Gordon, commented: “We continue to think that Hastings should focus on its underwriting rather than chasing topline growth.” She suggested that the company could see its competitive edge in the price comparison website market erode over time due to market shifts as new competitors entering the sector.
Hastings have pledged to continue their technological strategy as reported showed a 15% fall in customer service calls per live customer policy.
Van der Meer added “We have successfully transitioned to our new repair partners to benefit customers. The ongoing digitalisation of the business has been continued by the increasing popularity of our mobile app, with 430,000 downloads since its launch.”
Along with Hastings, in the financial services sector there have been updates. Lloyds shares are looking like a good investment (LON: LLOY), Integrafin (LON: IHP) have seen their annual funds rise and Georgia Capital (LON: CGEO) have seen their shares drop.
