Hastings expects to benefit from changes

INSURER HASTINGS Group, which sells most of its policies via price comparison websites, sees opportunities to gain market share this year as legal changes drive up the cost of motor insurance premiums in Britain.

A surprise cut this year in the discount rate used to calculate lump sum payments in personal injury claims has pushed up the size of those payments and dented several insurers’ profits.

Chief executive Gary Hoffman said that its digitally focused business model would allow it to benefit from increased price comparison website usage.

Insurance premiums across the industry have climbed about three or four per cent over the last couple of months, he said.

He added that Hastings would benefit by providing more competitive deals for the increased number of customers switching policies.

“Anything that increases premiums means more customers shop around, and our business model concentrates on price comparison websites (which) means that we are able to deploy our retail skills to win more business relative to others,” he said.

On the back of higher premiums, Hastings yesterday reported a 24 per cent increase in firstquarter net revenue to £164.5m, ahead of RBC Capital Markets’ forecast of £158m.

The insurance broker’s shares rose to a record high as it also reported a 26 per cent rise in gross written premiums to £214.7m, and an increase in market share in UK private car insurance to 6.7 per cent from six per cent.

Hastings provides products and services to UK car, bike, van and home insurance customers.

Berenberg analysts added: “Higher prices will likely lead to increased churn and greater use of price comparison websites among consumers, and therefore allow Hastings to increase its share of the UK motor market faster than previously forecast.”