Sabre Insurance Group Stock

Okay. Good morning, everyone. Just give a few seconds for people to join. I think we're good to go.

Thank you very much for joining us and dialing in on this bright and sunny day. And I'm pleased to say bright and sunny is pretty much how we feel about the half year results actually. We think it's a good half year performance, and we're looking forward to explaining why and getting into some detail in the next half an hour or so.

Usual process, today myself and Adam will run through a few slides, and then we'll leave all the difficult questions to Trevor and Matt to pick up at the end. As we go through, you have the option to type questions into the Q&A box. Now we'll pick or at the end. Put your virtual hand up and Hanro will unmute you and introduce you into the call.

So this will be the presentation we'll run through. Fairly punchy. We're not going to drag this out too long. Run through the top highlights. Adam will run through the financial performance, a bit of a market update, a bit of a strategy update, restate our investment case and then the outlook. And we will, as ever, leave plenty of time for Q&A at the end.

So the highlights, I guess for me, strong growth, probably slightly more growth than we expected at this point and very confident in delivering against our current guidance of a profit slightly higher than last year. Probably impressively, we've done that ahead of a meaningful market turn in pricing as well.

Looking into the detail a little bit. So very confident in the full year profit projection. Half year probably underplays the progress. I know there's been some focus on the margin. To me, that's just maths. The margin will snap back into line, we're very, very confident, by the end of the year. Matt can explain why later.

Growth, we've been able to grow ahead of the market, so like I say, partly because we've been able to reduce our claims inflation assumption as we discussed in the full year and -- the full year results by coming back from high single-digit to mid-single-digit. That's allowed us to rebase slightly.

Importantly, we continue to write completely within our target margins on new business, and we're completely covering our forward-looking claims inflation, which we'll discuss later.

So financial results, 15% up on the top line. Profit before tax, pretty healthy at this point. Full year profit, as I mentioned, again, anticipated to be ahead of last year. All levers have been written within our target markets. We're not underpricing to grow by any stretch of imagination.

Strong solvency position, dividend is fairly mechanical, but hopefully an attractive dividend coming out the half year, virtually finished the share buyback.

And on strategy, good progress on Ambition 2030. First proof points coming through on Motorcycle. And we're also building in more customer enhancements by use of portals and looking at how chatbots can support customers going forward as well. So at this stage, very happy with where we are at the half year.

At that point, I will leave Adam to talk about the financial position in a bit more detail, and we'll come back and give a bit more context around some of those points. So Adam, if I can hand to you.

Great. Thanks, Geoff, and good morning, everyone. I'll take you through the financial performance for the first half of 2026 once the slides start to move forward. There we go.

So the first half reflects 2 important themes in the business. Firstly, we've delivered a strong and profitable growth with gross written premium increasing by 15.7% year-on-year to GBP 116 million.

Secondly, because insurance premium earns through the life of the policy, the value generated by that growth is not yet fully reflected in the period. As a result, profit before tax of GBP 23.9 million is slightly lower than the comparative period, but entirely in line with our expectations and supports our confidence in delivering a full year profit slightly ahead of 2025.

Our net insurance margin was 15.7%, reflecting a net loss ratio of 55.7% and an expense ratio of 29.9%. The loss ratio remains comfortably within our long-term expectations, whilst the expense ratio reflects lower earned premium from the reduced volumes written during 2025, together with continued investment in people and technology.

Importantly, the increase in premium written during 2026 is expected to earn through progressively over the remainder of the year, resulting in a lower expense ratio, and we expect the net insurance margin to return to within our target range of 18% to 22% for the full year.

Our solvency position remains very strong at 161.4% after allowing for the interim dividend and the ongoing GBP 5 million share buyback program. That strength has enabled the Board to increase the interim dividend in line with our dividend policy by 20% to GBP 4.1p per share.

This chart provides some additional context around the movement in net insurance margin. As a reminder, net insurance margin measures the proportion of net insurance revenue retained after claims and expenses, and is our key underwriting profitability metric.

The principal driver of the reduction from the 19.2% achieved in 2025 to 15.7% in the first half of 2026 is the expense ratio. The expense ratio increased to 29.9%, reflecting the lower earned premium generated from reduced 2025 volumes. Because our growth returned strongly in the first half of this year, there's a natural timing mismatch between writing the business and earning the associated revenue.

Alongside that, we've continued to invest in our people, systems and technology as we execute on Ambition 2030. As those higher premium volumes earn through during the second half, we expect the expense ratio to improve meaningfully, which, along with a strong loss ratio delivered through continued underwriting discipline, will allow the net insurance margin to return to within our target range.

Our core strategy remains unchanged. We continue to write business at target margins and fully cover expected claims inflation within our pricing. And as a reminder, for comparability with previous periods and many of our long-standing disclosures, all of the headline ratios shown here are presented on an undiscounted basis and do not include any benefit from IFRS 17 discounting.

This slide breaks down the loss ratio into current year and prior year, with the chart on the left showing the performance in 2026 to date and the chart on the right showing the full year 2025 comparative. The overall net loss ratio for the period was 55.7% compared with 54.1% in 2025.

The current year loss ratio was 66.5%. This is a little above the position at the end of 2025, but remains firmly within normal levels of volatility and is consistent with our usual approach to reserving. At the half year stage, there was always significant uncertainty around recently reported claims, so the current year position naturally includes the largest level of explicit margins.

The prior year loss ratio was a favorable 10.8%. That reflects continued release of explicit margins held against older claims reserves as those claims mature, together with some positive prior year development during the period.

There have been no unexpected adverse claims frequency or severity trends, and our assumption for claims inflation remains unchanged at a mid-single-digit level. Overall, the loss ratio remains fully consistent with the business being written at our target profitability levels.

Waiting for the slide to change. There we go. So this slide shows the underwriting performance across our 3 product lines. Motor Vehicle continues to be the key driver of profitability, delivering a net loss ratio of 52%, while written premium increased strongly. Policy count grew 16.5% year-on-year, demonstrating our ability to grow whilst maintaining underwriting discipline.

Motorcycle premium increased by more than 50% compared to the first half of last year, largely reflecting the continued success of Sabre Direct motorcycle. The product loss ratio is elevated at the half year stage, reflecting the effect of individually large claims and normal seasonality within what remains a relatively small portfolio.

Taxi performance improved significantly year-on-year, with loss ratio reducing to 48.2%. Whilst premium volumes remain deliberately constrained, this reflects the benefit of maintaining a disciplined approach in parts of the market where pricing remains unattractive.

Looking across the portfolio as a whole, the message is unchanged. We're growing where market conditions allow us to achieve target returns, and we remain willing to limit volume where pricing does not adequately compensate us for the risk.

And finally, turning to capital generation. The group continues to benefit from strong profitability and an efficient capital model, generating capital organically whilst maintaining a prudent balance sheet.

The Board has declared an interim dividend of 4.1p per share, up from 3.4p last year and in line with our stated dividend policy. Alongside this, the GBP 5 million share buyback announced at the full year results is now nearing completion.

After allowing for both the dividend and the buyback, our solvency coverage ratio stands at 161.4%, which is slightly above our preferred operating range of 140% to 160%. That provides substantial flexibility to support growth, invest in Ambition 2030 and continue to deliver attractive returns to shareholders.

As ever, our capital framework remains straightly forward. We prioritize underwriting discipline and capital generation, pay ordinary dividends in line with the policy and return surplus capital where appropriate.

And with that, I'll hand back to Geoff.

Thanks, Adam. So a brief market update. Where is the market pricing to start with? I would say slightly messy, would probably be my summary. I think it's pretty clear that more price is needed in the market. We're seeing evidence people are trying to push that price on. It's maybe not necessarily sticking. So struggling to get a really firm foothold to push on from.

So clear evidence market pricing needs to go up still. It's definitely stabilized. It's definitely stopped going down. It's definitely inching forward, but quite a lot more to go is our view.

We're pretty well positioned to come into this market. We've maintained our rating strength over the last couple of periods. We priced pretty strongly for claims inflation. So we still see forward-looking claim inflation of 6% or 7% from our current rating base. Clearly, if you've got a bit behind the curve, you may have more to catch up with on that, which we'll talk about in a second.

So where we are, we see growth coming towards us as the market does eventually get a good foothold and push on the pricing. We can probably increase prices less than the market, given our current price adequacy.

On claims inflation, not a lot of clear evidence yet or anything coming through from the current conflicts. We're looking both at our own data, and we're trying to look as far through the supply chain as we can for any early evidence of issues emerging. So far, not a lot, and we think our current 6% to 7% inflation probably covers where we are.

Probably some things to be cautious of around care inflation. You may have seen Andy Burnham talking about the need for care workers to be well paid. Clearly, that will knock through to NHS and potentially care for seriously injured individuals. So that's something to watch there as well. Trevor, I'm sure, can give some more detail at the end, if helpful.

Regulatory, probably about as stable as it's been for a very long time. No new market interventions. Government task force concluded that the market added work competitively, and there was no price profiteering going on. As a general rule, we look to maintain a very low regulatory burden anyway, low regulatory risk. We really make our money from underwriting, not from any of the things that might be seen as more controversial.

To summarize the pricing piece, this is -- thank you to Jefferies for this slide, this graph. This really shows where claims inflation has gone and where premiums inflation has gone. And I guess really, you'd want the premium line to be on top of the claims inflation line.

Similarly, other market commentators have spoken about the need for a 15-point increase over the next 2 years. I think some thought that might be 4% this year, maybe 12% next year, not a position I fully understand if you think you're heading into trouble one for 12 this year and 4 next year. So market still got some way to go.

As I mentioned, we're not seeing the need for this to come through to drive growth, and we don't need this price to hit our margins going forward. So maybe a little frustrating the market has not moved quicker, but we're still trading perfectly nicely through it.

A strategy update. So Ambition 2030, I guess a lot of people on the call will understand the intention of Ambition 2030. Very briefly, it's to move our profit up to around GBP 80 million by 2030 by 2 things. One is to increase our competitive position on core motor and to increase our general market presence on motorcycle.

On core motor, going pretty nicely. The base IT developments are all in place, further evolution to go over the next few years. The initial pricing tests are completed, and we're probably about to start to get into some slightly higher cadence and some slightly higher impact pricing tests as we come toward or through the end of this year and into next year.

On motorcycle, all the IT is in place. Motorcycle customer service is being done entirely online through a web chat and customer portal. Really interesting, we haven't seen any customer -- any meaningful customer demand for phone-based support here. Clearly, we do find out that it is required, but most things are sticking within the portal or the chat.

Motorcycle pricing, we continue to test and iterate our pricing, but our confidence grows increasingly on that, and we'll be quoting across the entire market probably as we go towards the end of this year.

Inherent within all of this is maintaining our expense base. We can't afford to get sloppy. We want to make sure we keep expenses controlled as we roll out this new strategy.

So what's going to become an enabler for us on 2030 is AI. This is something we spent a lot of time looking at as a business over the last 6 months or so. It's probably got 5 key areas where it's going to be an advantage to us.

The first one is the speed of coding on systems. That's our internal systems and potentially our, sort of, core infrastructure systems. Clearly, coding is much quicker, and that provides new opportunities to us going forward.

AI can support our fraud checks. So it gives another tool to try and find fraudsters. I would say that's a bit of an arms race. So as quickly as we're looking for AI to help us, we know there's a risk of AI-generated images, CCTV images and still images coming through. So there's a bit of an arms race in terms of how we keep on top of that one.

The actuarial team just outside my door here are getting very excited about the opportunity for AI to support some of the pricing decisions. We've got great data, great techniques, great people. AI gives us another tool to put on top of that as well. So that gives another boost to our strengths going forward.

We think AI is going to help on some customer interactions. So certainly, the chatbots at the moment is still manned by people. We see maybe AI having a role there going forward as well.

What I would say on that side of things is that for us, AI is all about enhancing people's jobs. We have no plans for redundancies whatsoever. We think as we grow, we hope we can hold our staff numbers, but we're certainly not looking to lose people as we go forward.

And the final box really is we've had a very tight focus on the risks of AI coming through. We've obviously seen things recently about AI bots breaking out of the sandbox to hack other companies. We're putting even more effort into the cybersecurity. That's both in terms of stopping hacks into us and the risk of leaking customer or company IP out as well. So lots of opportunities, but we're equally focused on what could be the downside if we are careless.

Investment case. Very brief, just one slide on the investment case. We think we have some pretty significant competitive advantages. We're a very focused pure motor insurer. I think we've got a long track record of delivering near market-leading margins and market-leading performance through all parts of the market cycle.

We have a mindset, which is perhaps unusual, that we're prepared to reduce volume when pricing is weak. We will always protect our margin and capital, and that will maximize our medium-term profitability.

We're now really in a position where we see the growth potential. So we've always said we can grow as market rates harden. That's really what we would expect to see going through the next 6 to 12 months, ability to grow further as market increases.

Clear medium-term growth plans through Ambition '30. Very low-risk balance sheet, no debt, reinsurance cover at quite a low retention limit to protect the volatility of the P&L and straightforward investment portfolio, nothing complicated. We make our money from underwriting, not from taking investment gambles.

Attractive income and capital returns, good dividend yield, ordinary dividend, a fairly straightforward dividend policy, and special dividends and buybacks are now part of our thinking as well where we end up with truly surplus capital.

Really, that means Ambition '30 is an evolution of what we do today, not a revolution. This is really building on our core strengths rather than taking a big swing by entering perhaps more risky new areas. This is really more of what we do today.

So outlook. As promised, we've kept this presentation pretty brief and punchy, and I'll keep this outlook and summary equally punchy. We expect for this year strong growth and confident -- we're very confident in the full year guidance. So to reiterate, profit higher than last year.

Net insurance margin to be back within the range by the end of the year, that's just maths. That will snap back in again. And Ambition 2030 currently on track with the early proof points coming through from the very strong growth in Sabre motorcycle.

Now at that point, we will pause, and we're happy to take any questions whatsoever. If you want to stick your hand up, Hanro will unmute you and we'll go from there.

Hanro, over to you.

First question is from Ivan from Barclays.

Go on, Ivan. Ivan, are you unmuted?

I am now. Thank you.

There we go. Okay.

So I've got 3 questions, please. The first one, just on the market outlook on pricing. I was just wondering if you could maybe share a little bit more color of how you think this is going to play out. I mean one obvious question, there may be a 15 points of price needed, but all the major players seem to still be generating good underwriting profit. So what will make them push prices up so much at the risk of losing volumes?

My second question is actually going to be on the loss ratio. So I think what you were talking about is the overall loss ratio is within expectations. But there's, of course, quite a bit of volatility between the current year loss ratio and the PYD. Just thinking into second half, I mean, should we expect the overall loss ratio to stay high because of current year loss ratio reducing or because of reserve releases stay high?

And I have a third question as well, please. And this is just on the capital generation. I think we have seen in the past that episodes of strong growth at the margins that Sabre generates bring quite a lot of new capital generation, which is not the case right now. Maybe you could help us on the -- on what's happening currently and what's your kind of outlook for the next 6 to 12 months there?

Yes, sure. No problem. I'll take the first one, Matt, you take the second, Adam, the third, if that's okay?

So in terms of pricing, I think pretty consistent view is that claims inflation is now mid-single-digit. I don't think it matters where your profits are at the moment. It's going to go backwards if you're not covering claims inflation on a forward-looking basis.

I haven't heard anybody say they don't think claims inflation exists. Everything I'm seeing from external commentators suggests our call on this is about right, that you need to be in that 10% to 15% range of price increase in the market to stay profitable. Clearly, bigger players probably have more reserves. There may be some synergy benefits coming through in some places. I think probably the most uncomfortable place to be will be the squeezed sort of middle, the mid-ranking insurers, where they're small and specialist. They can afford to be focused. Big means you've got some synergy and probably some other cost savings coming out. But I think, Ivan, there's not too much question that rates need to go up across the market more when, not if.

Matt, do you want to talk about the loss ratio evolution?

Yes. So the question is in 2 parts, Ivan. First of all, around prior year movements and then the current year movements. So on prior years, we would expect in the second half this year to continue to see the margins come off. That's inside the risk adjustments as the claims settle. So we expect some improvement from that. We don't anticipate the selected ultimates reducing further. So any further movement in the prior year loss ratio will be from the margin runoff.

On the current year loss ratio, we did see we had some large claims in Q1, less so in Q2, which is normal volatility in that top layer. We're writing the business -- we'll be writing the business at our target margins. Therefore, for the second half of the year, we expect the loss ratio for current year to reduce back more towards our target range. Therefore, during the second half of the year, the overall loss ratio to improve driven by the current year loss ratio coming down.

And Adam, can you take the question about capital generation and growth? Once you come off mute, that is.

I was about to get called out by that one. So on capital generation, I mean, I think what's happened in the first half of the year is sort of within reasonable bands of what's happening with earnings.

If you look at sort of where the starting point was versus what we've generated in the year and what's happened in the capital requirement, the capital requirement has grown as we've grown as a business, both in sort of the reserves we're holding and the premium we're writing.

We would expect a sort of similar trend to continue through the second half of this year. We have seen in the past that when premium grows fairly rapidly that we get a bit of a boost to capital versus earnings. That might happen, although in the first half of the year it hasn't happened as pronouncedly as in previous years, like 2023, for example.

So there's a few things to think about there. Generally, we sort of anchor capital generation on earnings and then take off a bit of the capital requirement improvement or increase rather. And I think that's probably the best way to think about it for now.

What does that mean in terms of our policy? Well, that's obviously exactly the same. So we think we can comfortably pay an ordinary dividend, 70% to 80% of profit after tax. We expect that there may be some surplus capital. We'll sort of decide what to do with that at the year-end. But as always, when I'm talking about solvency, there are quite a lot of moving parts. It's very hard to put a sort of good point estimate on it.

So I'm thinking about it sort of in the round. That's the way I would think about it. So very comfortable with what we've got, we're comfortable with what we think we're going to generate in the second half of the year to be able to deliver the kind of capital returns that the market is expecting. And we'll sort of see what happens over the next 6 months.

Thanks Ivan. Hanro, who is next?

Next person is Abid from Panmure.

Good morning, Abid. Give you a second to come off mute.

Morning. Can you hear me?

We can, loud and clear.

I hadn't realized you had to manually unmute as well. Let's see if I can.

That's a hint for everyone else coming to speak as well then.

So I have 3 questions, if I can, please. The first one was on the margin. I was wondering if you could help us bridge the half year net insurance margin back to the 18% to 22% range for the full year. Is it simply the mechanical premium earn-through or do we need some normalization on the loss ratio? I think from some of your comments, it's probably a bit of both. So just any more color on that.

And then the second question is on growth. So the motor vehicle policy count grew, I think, some 15% since the start of the year. I'm wondering, can it grow further if pricing remains where it is? Or do you need pricing now to increase from there? So just any color on that, please.

And then the final question is on the Motor Vehicle NIM. Could you share where that is for the half year? I think it might be slightly better than the group. So just any further detail on that would be helpful.

Okay. Thanks, Abid. I'll take the growth one. Matt, maybe you talk about the bridge and Adam will talk about the NIM. See how we go on that.

Growth, I think, Abid, I'm pretty confident we can carry on growing. The market has not turned in the first half dramatically, and we've managed to put on pretty good growth. The extent of growth in the second half will depend partly on that market movement, but I would be pretty confident we're going to see decent growth still coming through the second half of this year regardless.

Matt, do you want to talk about the bridge between half 1 and half 2 margin?

Yes. So as I mentioned before, we expect the current year loss ratio to improve in the second half of the year, which should help the margin improve back to our target range. As Adam mentioned during the presentation, the premium is expected to be higher in the second half of the year as well, which should help the expense ratio reduce as well, which contributes towards the margin.

The business we've been writing is in line with our targets. Therefore, as that earns through in the second half of the year, we expect that to be earning at that target loss ratio, which again helps us contribute, bring us back towards our target margin.

Is there anything you wanted to add to that, Adam?

No, that is completely right. So the expense ratio will be a chunk of the bridge, and the loss ratio will fill the gap essentially and hopefully get us to within our target range.

I've got to say, for a Chief Actuary, that's as wildly confident as you can hope to be.

Adam, do you want to be anything on the -- I think that was asked a bit as well, didn't it? Did I answer the NIM question, I think you did.

No, I think where Abid was coming from was if you look at it on a product basis what the margin might look like for Motor Vehicle. Now we don't calculate or disclose by product margins. We have a fixed cost base across the entire business. So it's not a number that we report.

However, I suppose if you were to add our normal expense ratio or the expense ratio achieved in the first half of the year to the loss ratio for say motor, that would take us to around an 82% combined across that product, which would equate to a margin in the sort of 18% to 19% range. And obviously, there's a lot more factors you could try and build into that if you were doing it properly. So I think we're pretty comfortable with the margins that we're achieving on Motor Vehicle, I suppose is sort of the key answer to your question there.

Thanks, Abid. Hanro, where are we going next?

Next up is Ben Cohen from RBC.

Ben?

I think you can hear me. I had 2 questions, please. The first was just in terms of the mix of where the growth in Motor is coming from. I guess, overall, it looks like your premium growth is really matching the number of policies that are growing. Does that have any implications in terms of the growth in terms of lower premium policies versus higher premium policies? Could you maybe talk about your competitiveness in different kind of subparts of the market?

And the second question was just in terms of the Motorcycle business. I think I took away that despite the fact that losses kind of increased in the first half of the year, on the first half of last year, that you're still quite confident with the new strategy that basically you're going to be moving that into profitability soon. Could you maybe just talk about how you think that is going to come through given that the loss ratios at the moment are running pretty high.

Yes, sure. I'll start with the Motorcycle one. I mean, I guess, in some ways, it's simply a function of quite low earned premium in there. If you have one large claim and not much earned premium, it has an outsized impact on the loss ratio. Clearly as we earn more premium through the second half of this year, that impact will naturally subside anyway. So we're pretty confident we're writing Motorcycle at the right margin. That will all come through as we get towards the year-end.

Matt, anything you want to add on Motorcycle?

Yes. I would say on Motorcycle with the half year where it is halfway through the peak season of the riding, we tend to see claims more weighted towards the half year from when they actually happened, therefore there's less development. So as the year goes on, these claims develop, we'll get more -- there'll be less volatility in those claims. Therefore, we can be more confident in the overall loss ratio. We saw something similar last year where we were at 100% loss ratio at half year on Motorcycle and by year-end, that improved down to roughly 70%.

And growth in motor, there's no great change actually, Ben. I think our mix is pretty similar. Clearly, bike is a lower premium that will start to impact the overall average premium number you might look at. We're not seeing any loss in our normal markets. Clearly, as we start to roll out Ambition 2030, that will be slightly lower average premiums. So you should expect to see that natural migration over time.

Matt, Adam, anything you want to add on that?

No, I think that's pretty clear.

I think all I'd say is that general mix for core motor is as expected. The pricing trials continue on a very gradual basis. And we are seeing that growth on Motorcycle from the Sabre Direct rollouts continuing.

Yes. Are they answering your questions, Ben? Okay.

Yes.

Thank you. Hanro, back to you.

It seems like the last question is from Carl from Berenberg, Geoff.

Okay. Carl, if you can unmute yourself. Perfect. I think you've gone back on mute again.

Can you hear me now?

Loud and clear.

Okay. Great. Most have been answered already, but I just had one on AI and whether you're seeing it being used a bit more frequently by customers or kind of just in fraud-related cases and it being used to kind of create some maybe elaborate claims, which perhaps you hadn't been seeing in the past that are kind of linked to these LLM models. And is that a trend that you're seeing at all?

Sure. Trevor, perhaps you can talk about that in a second. I think we can definitely see AI being used in -- I'm pleased to say we don't get all that many complaints, but you can definitely see AI being used to generate those letters, some of which don't make a lot of sense because it's quoting U.S. case law and all that sort of nonsense.

Trevor, in terms of where we are in terms of AI and claims we're seeing today?

Yes. So we are absolutely vigilant for it in terms of generation of images. We are still traditional in a lot of the things that we do in terms of inspecting vehicles physically, sending people out to take statements and actually go to the scene of accidents. So we're using those tools to help assist us in identifying potential fraud. And we're very front-loaded in terms of our fraud management.

I think I would echo what Geoff said around complaints. That's probably where it's most prevalent. You may also see that there's quite a lot of commentary in terms of how lawyers have been using AI, not so much in our space, but where they generate or where AI is generating reference to case law that simply doesn't exist. So we're being -- we're vigilant for it. We've given out a lot of training in terms of sort of the features to look out for. We're not seeing huge amounts of it, though.

And Trevor, perhaps since you're talking, do you want to talk about where we see claims frequency going at the moment? It's not really covering in the conversation. Might you want a minute on that?

Yes. So I think what I'd say is, having seen a period where claims frequency was improving, we're actually seeing sort of in the most recent periods, claims frequency easing back up again. There was potentially an expectation that as fuel prices went up earlier in the year that that would have had an impact on frequency. We've not seen that.

On the personal injury side, it's pretty flat. So again, it sort of fell around 2024, but we're not really seeing that come down any further. And I guess sort of linking frequency, we've obviously seen pressure around personal injury, particularly the low value in terms of severity and some of the changes that's come through that we've talked about previously. So we don't see sort of necessarily good guys coming through on frequency or severity and hence, our view really that mid-digit inflation needs to be thought about for single-digit.

Thank you. Carl, did that answer your question?

Yes. Very clear.

Okay. Thank you.

There's one question on the Q&A, which I've just spotted from Ivan as a follow-up, which is could we provide some color on reinsurance renewals, pricing, retention, how we should think about gross versus net premiums going forward?

Overall, reinsurance pricing, if we talk about across the market, reinsurance pricing on XOL have come down a bit in the last year or 2. I think probably the reinsurance market had priced pretty heavily for Ogden over the previous period, and there's a bit of a correction going on in the last year or 2 to bring some of those prices down a bit if you've got a decent performing portfolio.

Retention, I think our view is we have, as I think everyone knows, an XOL retention of just over GBP 1 million. Our general view is we should inflate that gently as the years go by. We're not looking for a sudden jump, but I think we'll just need to ease up our retention in future periods.

Gross versus net premiums going forward, Adam, do you want to say anything on that one?

I mean there's nothing really surprising expected on gross versus net premiums. We pay out reinsurance premium on an earned premium basis. So the current sort of net earned premium in any 6-month period reflects the prevailing rates at the time.

Okay. Thank you, Adam.

Unless there's anything else, I'll just pause for a second. No. Okay. In that case, thank you all very much for your time. Appreciate your time. Appreciate the questions. Anything you think of afterwards, I'm very happy to have calls later on today. We're around all today and most of the rest of the week. So thank you very much and speak to many of you soon. Thank you.

Okay. Good morning, everyone. Thank you very much to people who are joining us in the room and online. Welcome to our results presentation. I'm pleased to say we've got consistency in presenters. My colleagues there being gently fried by the giant screen just behind their head.

As normal, Adam and I will do the presentation, and then we'll leave all the difficult questions to Matt and Trevor to handle at the end. And Adam tells me it's our ninth annual results presentation now, and that's for the 3 of us. So I'll be getting a cake out for next year's one, I think.

So very briefly outline the agenda. We're going to run through the highlights. Adam will then run through the financial performance and our ESG credentials. I'm going to spend a few minutes going through our strategy, which we've tried to present in a slightly different way this year. I'll then look at the outlook and summary, and we'll leave plenty of time at the end for Q&A as ever.

So overall, I think as the title suggest here, we think we had a very good year last year. And as importantly, we've got very good momentum coming into this year as well in terms of premium. So we seem to have turned the corner from having to manage for margin into now we're back into a slight growth mode as well. For recent annual reports, I seem to have stood here with a doom-laden message to impart the Brexit or COVID or ogden discount or high inflation. Almost boringly, I don't have any of that for this year. The horizon seems as clear as it's been for quite some time. So hopefully, we can focus on our own numbers and what we think are some good things coming through both for the sector and us.

So touch on some of the highlights. Profit before tax, up almost 5% margin very comfortably within our range, an excellent net loss ratio across the portfolio at 54% for motor itself, or core motor vehicle, that's effectively 50%, which is probably as good or better than we would normally hope to achieve. Those results have been delivered against some pretty unattractive market conditions where we think the market has still continued to underprice against ongoing claims inflation for most of the last couple of years. We've maintained our pricing discipline. And as we say, we've seen return to growth in the last quarter, and that growth has carried on. We've mentioned in here that our premium was up by 5% to the end of February year-on-year. Very robust capital position still. Total dividend of 13.5p, and we've also announced another share buyback of GBP 5 million in addition to the 13.5p total dividend. So we delivered a good year in terms of numbers. We've also made really good progress, well up in terms of on-track with our timetable for Ambition 2030. Two big things this year. One is the launch of Sabre Direct Bike, which we'll talk more about later. And we've continued testing the differentiated price for our core motor product, which we think will drive the big volume as we go towards 2030.

So having sold most of his interest in Thunder, I'm now going to hand to Adam to run through the numbers and ESG.

All right. Thanks, Geoff, and good morning, everyone. So I'll take us through some of the key numbers from 2025 in a little bit more detail. So our results this year perfectly reflect Sabre's core strategy. As expected and in line with performance reported to date, we've allowed our premium to drop in unfavorable market conditions, ending at GBP 202.9 million of premium for the year. And since our last report in Q3, we have seen some momentum in premium in Q4. Our net insurance margin is now comfortably within our target range of 18% to 22% and at 19.2% reflects the continued discipline and control applied across the year. The net loss ratio has improved by 4.6 percentage points to 54.1%, in line with our long-term target and reflective of strong underwriting throughout soft market conditions. Our expense ratio is up by 1.9 percentage points, primarily due to the net earned premium having reduced and reflecting some cost inflation during the year. As a result of the improving margin as well as increased investment returns, our total profit before tax is up 4.9% to GBP 51 million. This has allowed us to declare an increased dividend per share of 13.5p, leaving us with solvency capital ratio slightly above our preferred range at 161.5% and around 154% after the proposed GBP 5 million share buyback. This chart shows the stabilization of our margin since the period of very high inflation. As a reminder, our net insurance margin is a function of both claims experience and expenses incurred as a proportion of insurance-related income, which is primarily premium but also includes installment income.

In this chart, the growing blue bars show improving margin. And we're now operating at a comfortable level and expect to maintain our net insurance margin within this target 18% to 22% range all the way through to 2030. For clarity, if comparing across peers, none of our headline performance ratios, including the net insurance margin, include any discounting benefit under IFRS 17.

So this slide breaks down the loss ratio into current and prior year performance with a comparison to last year. It shows the total claims cost divided by earned premium, net of the impact of reinsurance. The current year ratio reflects the book position for claims in 2025 and the prior year ratio reflects movements in the actual and expected ultimate claims costs for claims already on the books at the start of '25. Overall, the 4.6 percentage point improvement in net loss ratio has been driven to a return to prior year releases during the year with the amount for 2025 a little above our long-run expectation for the runoff of risk adjustment. Our current year loss picks naturally reflect the greater level of uncertainty attached to the most recent year due to the larger number of new and undeveloped claims and allows for above normal inflation in the short term. The current year will always carry a risk adjustment, which means the current year loss ratio is expected to be above the ultimate loss ratio achieved by that business.

This chart shows the relative contribution from our motor vehicle and other products during the year. Performance in motor vehicle has improved further in 2025, delivering a loss ratio of 50.5%. Motorcycle and Taxi remain much smaller with loss ratios impacted by the individually large claims reported at the half year stage, although both have shown much improved loss ratios in the last 6 months. As is demonstrated in the policy counts, we've allowed motor vehicle and taxi books to shrink in 2025, whilst market conditions were unfavorable, although we note that the motor vehicle book did return to policy count growth during the end of 2025 and throughout 2026 to date. Motorcycle policy count has grown as we've introduced more volume through our Direct brand, for which we're controlling the rate of growth as the product matures.

This slide shows how our capital was generated during the year with the total dividend for the year being slightly above the net of capital generated less the increase in capital requirement, reflecting very strong position coming into the year. Post dividend, the solvency coverage ratio was above our preferred operating range. So the Board has elected to propose a GBP 5 million share buyback subject to regulatory approval, which will take the post-buyback solvency coverage ratio at the end of 2025 to 154%, which is comfortably within our preferred operating range. The group's policy remains simple, to pay an ordinary dividend in the range of 70% to 80% of profit after tax and to consider paying a special dividend or utilizing buybacks to distribute excess capital, generally moving the post-dividend capital to within the group's range of 140% to 160%. Importantly, this is a genuine range and will be utilized in the right circumstances. In this case, considering the current share price and the comfort in the group's ability to generate future capital in the coming year.

So a quick update on our sustainability practices. We continue to monitor our progress towards our ambition to hit net zero by 2050, and we publish our net zero road map on our website. We've taken steps to minimize our direct emissions from operations. And our largest emissions space is the assets in which we invest, which currently we expect the related emissions to decrease naturally over time, but we'll consider taking active steps to manage this as we move towards 2050. Along with most of the industry, we carefully monitor risks and opportunities related to climate, both transitional and physical. We are well placed to support the transition to electric vehicles and having collected significant data over a number of years, which is aided by our willingness to cover almost all vehicles. And with that, back to Geoff.

Thanks, Adam. Okay. We're going to spend a few minutes just on a recap of our strategy, which, as I mentioned earlier, we've tried to set out in a slightly different way this year, just so you don't get completely bored in the room for hearing it for the ninth time. I guess the headline here is key to us. We think we are a high-margin business with good growth opportunities. As one of our shareholders once said, why would you not want to own someone who's got those characteristics. So we think we're a strong company in an attractive market. And as an underwriting focused business, we think we're also in the best subsector of that attractive market. So to pick on a few strengths, to state the obvious, motor insurance is a mandatory product for all U.K. drivers. That doesn't look like that's changing anytime soon. We can talk about autonomous vehicles and how that might impact later.

We specialize in high premium, high-margin policies. We don't really use the word nonstandard because we consider everyone is a writable policy providing they're paying the correct margin. And our premium is roughly twice that of the U.K. average.

Policies across the U.K. for car, van and motorcycle. We've got a very long track record of delivering the results, deep, accurate and relevant data, very consistent data-driven underwriting and expert claims handling. I think importantly, we've also got a very consistent, thoughtful and long-term approach to reserving, which avoids as many shocks as we can manage. What we try to put here, people often ask what is our -- what's the sort of secret to our success? What's the sort of KFC formula that we keep locked in, how do we do it? We don't have a KFC formula. So what we've tried to do here is unpack what would be in it if we did have one. And this also gives some context into why we are confident about Ambition 2030. This is the way we work. The top one here, I'll go from the top and work down to the right. One version of the truth. So that's consistency on the key assumptions across all departments. Now that might sound obvious, but that's not the way that a lot of insurance companies work. This is the first time I've ever worked out where you don't have at least a twice annual bust up between the pricing and then the reserve in actuary on who's got the best view of the loss ratio. So we have one version of the truth that we as a management team will buy into. Very high quotability. We quote for almost everything. That gives us really good access and insight into the market and what's going on with pricing and where we think opportunities might lie. Probably the really key thing is margin management. We have no premium targets in the business at all. The only targets we have are related to margin and profit. And that's a DNA that's like the sort of goes through the middle of the stiffer rock in the site, but everyone I think in the business would say the same thing. Every policy we underwrite, we validate both using automated tools and through sniff test from humans looking at those as well.

Similarly, claim screening. Every claim that comes in, while we try and deal with claims very quickly, very fairly, everything gets screened for fraud and accuracy, again, both using automated techniques and using human skills on that as well. Very fast feedback loops. Matt and Trevor are sitting incredibly close to each other as actuaries and Claims Director today, and that's about as close as they sit most days as well. So very fast feedback loops and things we're seeing in the claims environment into things we need to. Well, there you go. Someone's trying to phone us. I'll just pause for a few seconds. Looks like someone's getting a phone call in the presentation booth.

Anyone wants to know about West Ham result last night, I'm very happy, tremendous penalty victory. I think you'll find. Perhaps that's why I’'m not feeling very chirpy because of that today because of the result. Are we going to burst back? This is the first. So maybe I just describe why we're confident about how this is going to translate into Ambition 2030. So Ambition '30, as you know, has 2 key elements. One is to expand our motor quotability. The fact, you're right, people in the room have got it in the pack here. People online, I doubt you'll have access to presentation on the website if it's uploaded. So for core motor, the key thing here is we're looking to expand our competitive footprint. We already quote for everything in that expanded footprint today. So we're not trying to go into uncharted territory. We already underwrite policies in all elements of that expanded footprint just to a greater or lesser degree. What we're really doing here is expanding to change our margin to hit the optimum point between volume and margin in that extended footprint.

On motorcycle, the new rating structure we're putting in place, which we're doing on direct first, is really taking some of the skills and data that we're developing on car and applying that to motorbike as well. We've got a new pricing infrastructure that Matt and his team have put in place over the last 6 months, and that has been tested through last year, and we're now increasingly expanding our footprint for motorbike as we go through this year. So we'll see a fairly rapid ramp-up in our direct motorcycle distribution. Don’'t know who Daryl Legg is, but I do wish they’'d go away. There we go. Right, we’'re back. Good. I think I managed to cover that almost not seamlessly at all.

So we're in the bottom right-hand box on motorcycle. So we're saying there that we are put in place -- we have a new distribution in place for direct motor. New pricing infrastructure has got in place. That has been tested through last year and into this year. We're now increasingly confident in that new very sophisticated motorcycle set of rates and will increasingly open up our competitive footprint on bike as we go through this year. There are large amounts of cross-fertilization between car and bike. So if someone's injured handling a personal injury claim, makes no difference if they’'ve been hit by a bike or by a car. So a lot of the skills that we already have as a business can be exported straight into the bike product. So we're very confident our existing strengths translate directly into what we're trying to do on Ambition 2030. Okay.

Data advantage. Sabre has been doing high premium business for over 25 years in a very specialist footprint. That means we generated a vast volume of very accurate data. We produce over 200 million quotes a year at the moment, direct quotes. That's an extraordinary amount of data that we can capture on potential new business. People ask why we're confident going into this new footprint. And we're generating that many quotes, we have a really good starting point into that. We've underwritten about 6.5 million of vehicle years in the last 20 years. So while we have a relatively small policy base of, say, 200-odd thousand, we've underwritten a lot of policies. All of that data is complete and consistent and has been captured on one system. We don't have a multitude of legacy systems that we can't reconcile. We keep all our data on one system, so it's accurate, available and speedy.

The analysis, as we mentioned earlier, we have our pricing and reserving integrated. So we have a very robust view of pricing and how reserving is not going through the forward-looking pricing as well, much more integrated, I think, than most companies. And specialist underwriting data, we've built our rates off the data that we've obtained over 20 years, very difficult for someone to capture that data as we've discussed before, unless you've underwritten and you've taken the pain of the claims, you need to write the policy to understand how it's going to perform going forward.

Our growth tracks are completely on -- our growth plans are completely on track. So to a reminder, that's to make at least GBP 80 million by 2030. The core bits that we've done so far, we'll go through in the next couple of slides. On core motor, we're looking to become more efficient on our direct distribution. That really means looking to expand customer portals. We're looking to push more people on to a portal, more people on the portal, much cheaper to deal with, good for customers, good for us. Expand our market position, which we've spoken about, test and the rates. On motorcycle, that launched in half 1 last year we think we're in a unique position that, that product is serviced entirely online and customer service via chatbots. We think that's the first time that's been done in the U.K. Once we're happy and we fully embedded in the direct book, we'll then look to expand the motorcycle brokers. There's 3 or 4, maybe 5 large motorcycle brokers that we'll look at maybe towards the end of this year into 2027 once we fully bedded down the direct product first.

Here's how we're getting on so far. On core motor, the base IT systems are all in place to allow this to happen to allow Matt's team to start to roll out -- well, they have rolled out the pricing test and to continue to evolve those pricing tests. Good progress last year. We've learned a lot. It's left us more confident that we are definitely going to hit the ambition 2030 numbers. On motorcycle, all the IT is in place for that. Direct is going really well, as I mentioned. Customer service, we're looking to expand probably into AI-driven chat as well going forward. So at the moment, it's more of an old-fashioned online chat with individuals doing responses. We think over time, we can take that down an AI route as well. And motorcycle price, as I mentioned, we're expanding our quotability as we go through the rest of this year. Alongside all this, it's important that we maintain our expense base at a low level, and that's a large part of the work as well.

Automated vehicles. I guess impossible to do a presentation at the moment without talking about automated vehicles. I have to say it does look like a bunch of overhyped nonsense some of the stuff that we've seen in recent weeks, if I put it bluntly. We saw Admiral's slides last week to reference a competitor, and we could have crossed off their lower grandpa hours, and I think it feels like we're in a similar place. Near-term impacts feel massively exaggerated to me. True Level 5 autonomy. So Level 1, not much autonomy in the car, maybe a bit cruise control. Level 5, you can curl up in the back of the car and go to sleep. I think we're a very, very, very long way from Level 5 autonomy. We think cars with a meaningful degree of autonomous capability are going to be less than 5% of new car sales by 2035 is the best research we've seen on that. Importantly, the average car age in the U.K. is 10 years old and aging. And these people don't want to buy electric cars, particularly if you've got a good petrol car, you tend to try and hang on to it. So a material impact on the insurance market as and when a truly automated AV becomes a large part of the car park builds decades away, I would say. This is certainly not a near-term risk. And that assumes that the customer demand for full-time Level 5 autonomy in the first place. Personally, I would get bored to tears if my hour-long journey each way to work involve me just sitting there, feeling gently carsick trying to read a report. So I don't think that's at all certain. Clearly, everyone would like autonomy going up the M6 in the traffic jam. That makes all sorts of sense. The first and the last mile, I don't think makes so much sense for Level 5 autonomy.

The legislative framework requires individuals to ensure those vehicles and for us to recover from the manufacturer if we think the vehicle is at fault. And therein lies a really interesting question that there is no mechanism yet to capture that data from the manufacturer. So we need near real-time instant who was driving, was the vehicle in charge or we in charge, those mechanisms will need to go in place. Without that, there's going to be an enormous transition friction for the industry as we argue an arm wrestle with manufacturers.

And a bit of a throwaway comment, but no one is talking about autonomous motorbikes, which I guess is a way of saying there are other things out there to ensure as well. So even if our successes are sitting here in 30 years' time, I think the world will have developed, e-bikes are becoming bigger. There's all sorts of other personal transport modes coming through. We're not going to run out of things to ensure. So yes, I think automotive vehicles is definitely going to be a role for sort of robotaxis in the mall to zone 1, zone 2, maybe and in big cities, struggle to see that in the country, and I struggle to see personal individual vehicles being a massive significant part anytime soon.

Also, I guess, impossible to do a presentation without talking about AI recently. We've been using the elements of AI for many years. We have a very skilled, very dedicated team in Sabre. I guess we're looking at 4 main use cases for AI. Some of these are in place, some of them are in trials, some of them are being rolled out. One of those is coding support and pricing. So we already use machine learning techniques in our pricing. There's new tools coming through like Claude. All of those we're investigating do they add value to our pricing approach. We're going to enhance the skilled human efficiency. So if I take Trevor's team, for example, when a very thick medical report comes in, useful to get someone to scan that and pull out instantly the very big injuries. That allows us to put an even more accurate reserve on very quickly. So that's enhancing the human skills of claims handling. Chatbot development for direct customer service and preparing for possible medium-term distribution changes, which we'll talk about more in the next slide. We're also very thoughtful about the risks that get presented by AI. So advanced phishing. Phishing is one of the biggest cyber risks most businesses face. AI helps with that from the bad boys point of view. Unintended consequences, modified claims evidence can come through and regulatory change. I think my current favorite story here, and I have read about this, is the man who was trying to wire up his robo hoover or robo vacuum cleaner to his PlayStation controller and inadvertently gain control of the other 7,000 vacuum cleaners in the world, including access to the camera. But that sort of shows the thing that can happen. I've seen a demonstration recently where a firm demonstrated how they could access the car controls, but all they were able to do, all they did on that day, was to make the indicators go on and off and make the windows go up and down. They made it very clear they could have controlled a lot of other things had they wanted to.

If you wanna scare yourself, go and look at the common bits of electronics between a household appliance and a car. One of the risks here is someone doesn’'t try and hack a car at all. They try and hack a fridge freezer, and at the same time, they inadvertently hack a car. There’'s quite a lot we need to watch around automated vehicles, AI, and how this might roll out in the future. I think AI may impact the industry. We think if it’'s gonna impact anywhere, it’'s probably in distribution, not as a product manufacturer. As we mentioned earlier, if you haven’'t got any data, you still can't use AI to optimize it.

Distribution, I think different in the UK potentially compared to other European countries. The PCW solution works incredibly well for most customers in terms of a one-stop shop to compare the market. Customer interaction may evolve for some cohorts into people using AI-generated search rather than search engine optimization, generative engine optimization. And we're making sure we're positioned that we can open up our quotation systems wherever a customer wants to go. So if we do see a part of the population want to quote through AI, we'll be ready to accept those quotes on a direct basis. That does lead to some challenges. One of which is data accuracy. When we go live on a new comparison website, we spend an enormous amount of time making sure the data maps across correctly from the price comparison website into our systems, so we're pricing accurately. How is that going to work with an AI engine, which we know can hallucinate already some of the answers.

Customer understanding, if you've just said, go and buy me the best policy, what's going to happen when you try and make a claim and that policy wasn't the policy you thought you were buying, how is that going to flow through?

Payment processes, are you going to trust putting your credit card in and just say go and buy me a car insurance policy or holiday or anything else. So there's a customer issue there, the payment process issue. An interesting one could be product disaggregation. So at the moment, obviously, a lot of companies make a lot of money from cross-selling and upselling ancillary products. How will that work if you say, go and buy me a product with breakdown and personal accident and key cover attached to it if the AI agent can buy those products from different suppliers.

Regulation. How is the regulator gonna feel if someone hasn’'t signed a form, hasn’'t confirmed that they know what the policy is they’'re buying? But there's a whole bunch of stuff here that means this isn't going to happen very quickly, and there's some stuff to be worked through first. We think we're well positioned. We make the vast majority of our profits through underwriting, through a product manufacturer rather than distributor at heart. We're well used to partnering with a variety of distributors. We have over 1,000 brokers that we partner with. I'm having conversations on a weekly basis with what I might describe as the next generation of brokers who feel they are generating AI-enabled engines that they may embed into other sales processes. We're always happy to talk to people and understand how that might work for us. And where focus internally is to make AI complement to our existing skill set. So we see AI as an opportunity for us, not a threat, I would say.

Pricing. Well, I guess the simplest. I mean, thank you to Jefferies for letting us use this slide. We think the market has been underpriced and has been for quite some time. Listen to commentary recently, it feels like other people in the same opinion, and there's a lot of talk of pricing needing to move. We think if you look at this graph on the far right-hand side, there's a meaningful delta between where claims are and where premium is. We haven't allowed that to happen at Sabre. We have continued to fully cover claims inflation all the way through the last few periods, and that's what's helping us drive growth now.

Claims inflation. We think has actually moderated. We were -- last time we spoke, I think we were at high-single digit. We're now at mid-single digit. So what are the key drivers of claims costs? We still need to be careful about care costs and wage inflation, increasing complexity of car parts. So as autonomous vehicles roll out, frequency might come down, but severity will probably go the other way. These cars are very expensive to fix. Used car prices have stabilized and cost of compensation victims of uninsured drivers is still going up. There's some interesting stuff in the industry for things like e-bikes are not insured, but they do get picked up by the MIB, which we all have to contribute to. There's some interesting claims pressures coming through.

Claims frequency. We've seen a drop in frequency. We think it's settled. We don't think it's carrying on going down. We think it's reached a new level. Interesting question of is that because of increased safety? Or is it because people didn't want to claim because they've seen very high premium increases in '23 and chose not to put their NCB at risk or not? So they were self-insured for a period. If it is behavioral and people do start to claim again, you may see frequency tick back the other way again. So that's something that we're watching very closely. I guess we should touch on the current conflict in Iran, which obviously is awful for all the people involved. From our perspective, we think there may be some impact on gas -- anyway, there will be some impact on gas and energy prices if it goes on. That's not a first order issue for us, and it's not a significant issue for us. Very different to the situation in Ukraine, and we'll probably deal with that in Q&A in terms of some more background on why we think this feels so different. But we don't see that as dramatically changing our view of claims inflation in the near to medium term.

Regulatory developments, good news here. The U.K. government task force came out and basically said they felt the U.K. market performed well, was competitive and innovative and that the cost pressures driving premium have been formed by external factors. Similarly, the premium finance has taken a view, there's no market-wide intervention and they'll deal with outliers individually. We try and keep our APR very much in the middle of the pack. We have no wish to be taking advantage of customers or to be above the radar on that one.

So outlook and summary. Profit up really well. Ambition '30 on track. We've returned to growth. As we mentioned, we're growing into this start of this year at the end of February, the last numbers were quoting. And this year, we expect to grow premium and profit compared to last year. So growing the top and the bottom line this year with our margin remaining within our target range. What I would say is I think our staff have done a fantastic job this year. Some of them are sitting in the room today at the back there. So the pricing team has done a great job in terms of getting the developments moving. Claims doing a great job controlling costs. All the support team is doing a brilliant job this year for us to keep us moving to deliver on the core business and get Ambition '30 firmly on track as well.

At that point, I will pause, and we're now ready to take any questions at all. Abid, I think you were just about first there, if that’'s okay. While Abid’'s getting ready, I should say if you’'re watching online, if you put any questions into the webcast, they’'ll appear as if by magic beside me, apparently.

It's Abid Hussain from Panmure Liberum. I've got 3 questions, if I can. The first one on pricing. I think some of your peers said last week, some of the larger peers that they expect pricing to increase over the rest of this year. You said something similar this morning as well. I'm just wondering what does it actually take for pricing to move up? Because I know there's a long tail of insurers and whilst pricing should increase, what will it actually take for it to increase and to reflect that claims inflation? So that's the first question. The second one is on the new strategy rollout. Can you just give us some more color in terms of where you are on the car insurance bit of the rollout into the broader footprint? And when do you expect that to impact the bottom line? And then just finally on the Iran conflict, I think you said that there's no real read across from the Ukraine-Russia conflict. Can you just sort of talk to why there isn't any?

Of course. I’'ll take the first one, then maybe Matt and Trevor. Sorry, I mean, what does it take for prices to increase? Well, I guess, combined ratios going past 100% is always a bit of a mark. A lot of external surveys have combined ratio for the market going to 110% or so this year. It doesn’'t feel unrealistic with where pricing’'s being compared to where claims inflation is. I think what it takes is people to stop talking about it and start changing prices fundamentally. We’'ve put our money where our mouth is for the last 2 years. We’'ve taken the volume hit to make sure we price properly. We can only control our own destiny on that one.

It does feel like people are talking about it, and hopefully that translates into action. Matt, do you wanna say a thing a bit more on Ambition '30?

On Ambition 2030, the IHP rollout continues for brokers. During Q4 last year, we started our price testing on the expanded competitive footprint for car and van. It's currently in a test and learn phase, so kind of test learn and refine, and we continue to do that in this year and will continue through most of this year before rolling out more growth in that segment over the coming years.

And Trevor, jump in on Iran.

Yes. So I guess the similarities are that there's been an impact on energy or on oil and gas from both slightly different reasons. The Ukrainian invasion, that really caused problems to the supply chain. So we have the semiconductor issue, wiring harness issues, and that was really driving inflation. If you remember, new cars can be produced, so residual values on used cars were very, very strong, if not inflationary. And those factors all sort of very strongly fed into RPI. We don't see Iran and the surrounding areas as being those centers of manufacturing in the same way. The Suez, which is sort of obviously a main distribution route has been circumnavigated now for quite some time by a lot of the supply chains. They've also moved away from having a solar manufacturing zone post Ukraine. So at the moment, we're not seeing or foreseeing those same impacts that we saw before.

It's Ivan Bokhmat from Barclays. My first question would be on growth. I mean you're suggesting that in the first 2 months of the year, we're talking about 5% growth. If indeed, the market does accelerate and they're applying price and you've been ahead of that, maybe you can talk about how much can you accelerate? And separately, because the motorcycle now seems to have been fixed, the Direct brand rolled out, how much do you think that could contribute to growth? Because right now, it's about 5% of your top line. Could it double in absolute terms for the year? And my second question, well, I don't want to be picking up on what you said too much. But I think in your introduction, you suggested that the combined ratio and the loss ratio is as low or better than you've hoped. And yet your margin is in the middle of the range, sort of you can even say towards the lower end of it. I'm just wondering where you think improvements can come through the component of your combined ratio? Is it expenses? Do we need just to see more volumes going through? And maybe finally, just to pick up on the Iran point, I wanted to check. As we go back to the previous instances of fuel price shocks, do you notice any visible reduction in miles driven? And can that be somewhat of an offset in terms of frequency?

I’'ll take the sort of like more reverse order, and then you guys chip in, if that’'s okay. Yes, we would expect frequency to be an offset potentially to any claims inflation costs. It's hard to point directly at a comparative because we can't find a completely clean period where you only had fuel prices going on. But yes, I think I'm absolutely with you. If we do see fuel price go up, you would expect driving miles to come down, therefore, frequency too to fall as well. On the bike question, I think we always said that we thought bike would be realistically, maybe GBP 20 million. Didn't seem an unrealistic target. I think we'd still say that doesn't feel too mad to us. It's going really well. And if we can write more than that, we'll write more than that. If we hit our target margin at a certain volume, we'll stop there. But I don't think GBP 20 million sounds ridiculous at all. How much can we accelerate? That was on the car question, wasn't it? Matt, do you want to say anything more on that one?

We've covered the inflation in our ratings. So we're currently writing target margins for car. That means if the market does put significant rating above inflation, there's potential opportunity for us to grow slightly similar to what we saw in 2023 when the prices took off.

Yes, that's exactly right. So we don't have to cover delta. We think the industry needs to cover the delta and then it needs to cover forward-looking inflation of 5%. So we only need to cover the forward-looking element. There's no delta to fill for us. We think there is for probably most other people. So there is a chance of quite high growth coming through. The margin question, Adam, do you want to take that one?

Yes. I mean I guess motor, it probably wouldn't be necessary or desirable to get a loss ratio better than we currently have this year, which is around 50%. It can be a bit volatile year-on-year. So it could go up and could go down. But that's certainly comfy and I wouldn't look to see any massive improvements in motor into the future. Motorcycle and Taxi are clearly that bit higher. And I would hope they would come down more towards our target loss ratios as time goes on. The expense ratio has gone up this year. As I said, premiums lower. We've had a lower earned premium, and that's come through in this expense ratio. I expect that to continue to be the case for a while as we sort of have that earning catch-up relative to expense inflation. But I do see over the sort of average in 2030 period, certainly that, that expense ratio does improve as we start to get the benefit from leverage and keep a cap on our costs. So I mean, we've given ourselves a range of margin target because it allows what naturally happens in insurance, which is loss ratios to move about a bit, expense ratio is a bit more predictable. But I think we're not sort of calling a big move sort of up in our margin range. It's quite a comfortable place where it currently is, and we'll sort of see how the market develops and react accordingly to that.

What I would say just is we should also always be aware that while bike and taxi are small and growing accounts, a couple of large losses can have an outsized impact in any one period. So there's every chance we might, at some point, while they're still growing, get a bad year, followed by a really good year. We're looking through the middle and saying what does our rating strength and structure look like into the medium term. Ben, I think you were just about there. Come to you next in the room.

Ben Cohen at RBC. I had 2 things that I want to ask, please. Firstly, it was just about the mix in 2025 on the motor vehicle. It looks like the average premium was down sort of double digits, and you talked about putting through, I guess, mid- to high-single-digit claims inflation. Could you talk about what has happened on the other side that we've ended up with a pretty significant decline in average premium? And the second question was just on the reinsurance recoveries in the year. It looked like there was a big increase both in terms of receivables, but also just in the P&L. What drove that? And does that have any implications for the cost of your reinsurance going forward?

Sure. I'll take the first one, maybe Adam will take the second. I guess on average premium, it's really quite simple. We just become more competitive for cheaper premiums. So we’'re thinking of the world as a Venn diagram, that Venn diagram closes up a little bit, and we become more likely to convert a premium of GBP 800 than just the ones at GBP 1,000. Matt, anything to add?

Should I start on the mechanics of the reinsurance?

Yes.

Maybe you can give some content in terms of what’'s happening. We do have this sort of gross position and the net position. Clearly, the net position is what impacts our P&L. The gross position reflects the impact of large claim movements. It is generally very volatile, so we’'ll see years where that is very small and years where it’'s very big. In this year, the gross has moved out, and that'’s been swallowed by the reinsurance, and that’'s why the recoverability is that much bigger. In a one-year period, it doesn’'t tell you a huge amount about what’'s gone on other than that it's just quite a volatile number, which obviously is why the reinsurance program is there in the first place.

Do you guys wanna mention anything on the program itself?

Well, I think I’'d add we’'re not anticipating any adverse impact from that in terms of our reinsurance renewal.

Well, the market saw some pretty significant reinsurance premium reductions in January, probably over 10% across the piece. We have our renewal on the first of July, and we’'d be hopeful of something similar. That’'s not yet in our numbers. Definitely saw your hand. Keep going up there.

Yes. Amalie from Deutsche Bank. I just have 2. If I think about the solvency ratio, I mean, given sort of capital consumption in any given year and the growth that you want to achieve with Ambition 2030, how should I think about the solvency growth in a given year and that's sort of in terms of solvency points? And then I appreciate you spoke about autonomous vehicles and the impact on motor and motor bikes. But what about taxi? I would appreciate sort of any comments around that, in particular, given sort of the big companies testing taxis, for example, in Central London.

Yes. I'll take the second one, Adam, you can then take the much more difficult one on solvency. So taxis, I think absolutely, there must be an impact in a city that. Someone like Waymo, having done a bit of research on this fairly recently, is doing extensive mapping of the streets. So it's not just relying on cameras. It's actually mapping the routes, it's mapping. That would be an enormously expensive thing to do outside a fairly tight part of the city center. They're interesting. There's some behavioral stuff here. If you actually enjoy yourself, you see Waymo just step out in front of it and see what happens because it just stays there and doesn't do anything. They're not hard to bully as a car because they're programmed not to do anything dangerous. So it's going to be quite an interesting part there. If you're a black cab driver, you're going to get around a bit quicker when there's a Waymo waiting for you to move. So I do think it's going to have an impact. It must have an impact in city centers controlled. London is different to some of the grid systems in the States. It's much more difficult, intuitive how you get around. We'll see how that goes. Much longer to impact country towns, I would have thought on that sort of thing. Adam, is that giving you time to think a good answer on solvency?

Almost enough, yes. I think when we came out with the Ambition 2030 strategy in December 2024 and in the subsequent results, we were quite clear that one of the good things about this strategy is that it doesn't really use a huge amount of capital. We're still writing business at great margins. That business brings capital in and the capital requirement potentially catches up over time. We also said that the kind of 100% of earnings distributions that we had going up to that point were driven by very specific reasons, and we would normally expect that amount of sort of maximum distribution to be lower to maintain the capital at a decent pace and indeed, to look at the sort of dividend this year and it's in the high 80% of profit, which is a bit more sustainable. That remains the case over the long term. So this business should be capital generative. It should allow us to be able to distribute a good amount of that and sort of keep the flow of dividends going. What we've seen this year is a couple of things. One is the solvency capital requirement has increased as it will do, it will do it in kind of fits and spurts because it is a little bit volatile and depends on things like the settlement rate claims and all kind of things that aren't necessarily related to earnings. But over the long run, that's fairly predictable. We've also demonstrated that we're very happy to operate within that range. That's why the range is there because the capital position can be a little bit volatile. We've got this 140% to 160% range. 140% is the floor, not 160%. So this year, we came in, we paid -- we agreed the dividend. That was 161.5% of capital at that point. We then decided to propose a buyback, which took us down to 154%, which is a very, very comfortable place. There's no concerns on sort of capital constraints at that level. And it clearly indicates that we're looking to generate further capital through '26, as we write whatever we do during that year.

I'm Darius Satkauskas, KBW. Congratulations on a good set of numbers today. Two questions, please. So the first question is on your inflation expectations changed from 7% to 8% to 5%. I'm wondering if you can give us any color on how many months of sort of business written at that high inflation you've got in the back book that's to earn through? That's the first question. And the second question is I'm just sort of trying to reconcile the bigger picture. I understand the detail and everything. But if I step back, the industry is saying that the U.K. motor market is at its lows and the combined ratio is terrible and it needs to turn. And here we are with Sabre being competitive right at the bottom and growing. What am I missing? I get the detail, but why now is a good time to grow because everyone else is saying it's a terrible business, needs to improve and Sabre saying, well, it's a great business for us, we're writing it.

Yes, sure. I'll take the second one. I guess we've been feeling a bit lonely for the last 2 years, saying that the market has been in a terrible place and people should be pricing properly. And this is, I guess, a bit of a countercyclical impact to that. We've priced properly for the last 2 or 3 years. We've not let ourselves get into that delta. We've said going all the way back to our IPO, our strategy is if we're prudent and cautious on pricing, when the market starts to turn, we spin off some really good margins in business we've written, which goes to the first part of your question. And it means we have to put price up a lot less than the market at that point. So at the point everyone else I guess it's a bit of Warren Buffett thing. It’s the only way I compare myself to Warren Buffett in any way, shape or form, be greedy when everyone else is nervous on the flip side. So we stay very cautious and we thought the market was being too greedy on volume. We can now accelerate when the market is feeling pain. That's exactly what we expect to do as a business. Matt, do you want to -- there was a question about how many months we got in the bank, I think without giving away too much on pricing strategy there, clearly.

Yes. So at Q3, we talked about inflation being that down to mid-single digit. Therefore, you can assume that there's consideration given at that point. So we are now pricing and right now our expected loss ratio at that mid-single digit inflation number.

So I guess we got quite a lot of last year at the higher inflation number.

Andreas Van Embden, Peel Hunt. You mentioned in your annual report that there still appears to be poor value in ancillary products across the industry. I just wondered which products are you thinking of where you still see poor value? And my second question attached to that is, do you see any pricing pressure on the ancillary products, either for manufacturers or brokers in '25? And could that continue in '26?

Yes. I think the fair value rules should smooth some of this out. You have to be able to convince yourself as a business that you're providing fair value to any product that you sell. I do struggle a bit with some of the prices I see charged for maybe something like personal accident where you know it's been generated at Lloyd's and there's been quite a chain for distribution before it gets sold to the end consumer. So I do think some of those products, I suspect the FCA will have on their radar to say, are you sure you're providing fair value and the companies actually justify that those premiums. So yes, I haven't seen much on that so far. I think the focus has been on premium finance for the last year or so. I haven't seen a lot going on with other ancillaries. Anything else from up front there?

So just coming back on reserve releases and pricing for mid-single-digit claims inflation since 3Q. How should we think about reserve releases going forward then? I mean, '25 was quite a lot of release compared to, for example, '24 where you added a bit. So just maybe a bit of guidance on how we should think about that going forward?

Sure. Adam, do you want to -- or Matt, do you want to start?

Okay. I'll start. I mean I think I'll say the same thing that I say every year when asked that question is just that we should be reserving at a best estimate basis and then the releases that we get come through would be the runoff of the risk adjustment at the sort of normal risk adjustment rate. This year, the reserve release was a little bit more. So clearly, we've had some favorable development on those claims. It would be nice to have continued favorable development. But as I say, we reserve on a best estimate basis. Is that fair?

Sorry, Carl, you go first. You have.

Carl Lofthagen, Berenberg. I just had a quick one. On the -- kind of within your core market, motor market, are there any pockets of the nonstandard section where you're seeing maybe a bit more growth opportunities, whether that's sort of classic cars or sort of younger drivers or where you've maybe seen a bit more dislocation and you think it's -- there's some attractive room for growth.

Yes, we don't really target any individual sectors in that way. We don't really define a competitive footprint. It's important that we don't do individually our handwritten policies. So the ultra-high net worth classic car stuff, that's not really us that involves individual underwriting, as it's more system-driven pricing. Telematics has been astonishingly competitive through last year. That's not a market we're particularly focused on. We have taken our first steps back into telematics through a broker called MyFirst this year. So that's for the first time in a long time, we've taken a look at telematics, we're just feeling our way around that market. But that does feel very, very competitive to classically sold telematics at the moment. So I don't think, Matt, anything particularly to call out in individual pockets of the core market is we know where we're quoting and we think we know where we can amend our margin and pick up more business. Ivan, did I answer your question? What did you have for the further one?

Well, the follow-up would be just firstly, on the pricing rollout. I mean, forgive me if I'm being difficult, but we're talking about the impact being meaningful in 2027, but this was rolled out over a year ago or announced as a plan. I'm just wondering why it takes so long? Does it need a different market environment to properly deploy? Or it just feels like, especially now in a world where everything can be developed in about an hour with AI that is a very long lead. And secondly, also sort of related to new technology, I think something intriguing you said about the cyber risk in the motor insurance. Is it actually something that's covered for new cars? Would it be part of like a standard U.K. motor coverage?

Yes. Well, I mean, yes, I mean, things can be rolled out now. They can be broken in 1.5 hours, I guess, is the flip side of that. So until you've paid the claims or seen some claims with it, you don't really know whether you've got your prices completely accurate. So it'd be -- we could go bold. We could say we're completely confident we're going to roll this out and then we could be sitting here in a year's time going, we got that slightly wrong, and we've destroyed all our profits. So I think it's a cautious rollout and that would be the way we do it.

It's that test and learn approach that we'll do a little bit, we'll analyze it, understand what's going on and work out how we're going to find it to improve it going forward. As Geoff said, if we went big band and we got it wrong. It'd be quite painful. So we just need to be sensible, waiting for the long term, not the short term. It's Ambition 2030. Tying it all in 1 year would be a dangerous move.

Terrorism is a really interesting one. Terrorism is covered by the MIB primarily. You know, I think when’'s terrorism not terrorism? Someone’'s trying to hack their sort of robo hoover, and accidentally makes every Tesla turn left. Is that terrorism or just some horrible mistake that’'s happened? They’'re the sort of untested things in the industry. Be covered by our reinsurance. If it’s not terrorism, our reinsurance picks it up. If it is terrorism, the MIB pick it up. We’'re not exposed, I guess, is the key thing there.

And what about cyber? Like, a failure of car system because of a hack or something like this. Failure of, I don’'t know, some central depository.

Well, Trevor, you might wanna answer that one. You’'re probably slightly more technical on that.

One incident that’'s covered by our reinsurance is one incident. If it’'s, as Geoff says, if it’'s declared a terrorist incident, then that goes into the central fund of the MIB. Is it covered? Yes. But there are policy conditions to ensure that you take in all the updates, et cetera, that get pushed out by the manufacturers.

Okay. Anything else? I’'m conscious we are probably at time. Thank you very much for bearing with us during whatever was going on with the screen earlier. I’'m still very happy to talk about the West Ham result if you wanna hang around afterwards. So thank you for your time, and thank you, online as well. Thanks a lot.