Annual Report

and Accounts 2021

Primary statements

The primary statements are included at the beginning of the

annual financial statements and include note references to

underlying detailed notes.

Notes to the financial statements

The notes to the financial statements consist of insurance-

specific, financial instrument-specific and risk management

in the specific notes to which

they relate and are indicated by a

blue border and headings on a

shaded blue background.

CRITICAL ACCOUNTING

ESTIMATES AND JUDGEMENTS

The areas involving a higher

degree of judgement or

complexity, or areas where

assumptions and estimates are

We have maintained a combined

operating ratio within our target range,

despite soft market pricing

to maintain

06 Growing Our Footprint

07 Chair’s Letter

09 Market Context

11 Chief Executive Officer’s Review

27 Viability Statement

50 Governance Report

54 Audit Committee Report

57 Risk Committee Report

59 Nomination and Governance Committee Report

61 Remuneration Committee Report

64 Directors’ Remuneration Policy

82 Directors’ Report

85 Directors’ and Officers’ Responsibilities Statement

Financial statements

98 Notes to the Consolidated Financial Statements

151 Notes to the Parent Company Financial Statements

management group,

as market conditions allow, while

achieving growth across the

motor insurance cycle.

Our primary focus is maintaining

our profitability. We believe that

volume should be an output of

and not a target.

Our Knowledge

Our streamlined operating model

gives us flexibility in our business.

We outsource certain areas

where we can leverage partners’

size, scaleand expertise. This

means we alsobenefit from

aflexible poolofresources.

focus on high-quality underwriting and delivering

Which leads to…

years, which has resulted in consistent and

dipped over the past few years due to soft

of COVID-19. Due to the resilience of Sabre’s

sustainable profitability we have avoided more

severe volatility regardless of market conditions.

underwriting performance, controlled and

attractive long-term growth and reliable

The Group’s focus on long-term

profitability issupported by a

Robust capital position

Requirement (“SCR”) (being the level of net

solvency regime), although we tend to operate

well in excess of this, allowing maximum

operational flexibility and consistent returns

In practice, the reported position is generally

ahead of the preferred operating range. This is

between the period end (the point at which

Our focus on COR, prudent risk management

Reliable dividend flow

Sabre’s core business is fundamentally capital

growth, with the majority of capital generated

being returned to shareholders by way of an

ordinary and special dividend. Since IPO, the

Group’s dividend payout ratio has remained

above 98.4%

of earnings.

the business

– Real-time quote speeds

– Use of Application Programming

Interface (API) links to specialist

data websites

– Operating a scalable platform

Much like many of the recent entrants

to the UK insurance market, we hold a

small share of a large market, providing

plenty of opportunity to grow when

insurance market has historically shown

cyclicality, with periods of low prices

followed by significant upwards

corrections to premiums. We expect that

such pricing corrections are overdue, and

that when this happens there is

opportunity for significant growth.

Beyond our core operations, we continue

to investigate the value of engaging in the

– High quality underwriting will remain the bedrock

of our business, and we will continue to focus

primarily on maintaining a COR in our target range

and allowing volumes to flex

– This has been fully funded from existing

resources and we expect to benefit from 2022

– We continue to see opportunities to further

– We anticipate reviewing and potentially launching

one or two new adjacent products each year over

the medium term

– In late 2021 we expanded into motorcycle

insurance, through an exclusive underwriting deal

with MCE Insurance Ltd

– We have recently partnered with Freeway UK

Insurance Services Limited to expand our

presence in the taxi insurance market

– Any product launches will utilise our same pricing,

Semi-organic growth, through

bringing differentiated expertise

We have an increasing focus on medium-term

growth options but will not allow this to detract

our attention from our core business or ability

to generate a reliable flow of dividends.

These new partnerships demonstrate how we

leveraging our partners’ expertise

Our partner, MCE Insurance Ltd (“MCE”),

broker based in Northamptonshire. Established in

1975, they have grown into the UK’s number one

provider of motorcycle insurance, offering

experience for riders across the country.

Estimated size of the motorcycle insurance

Freeway UK Insurance Services Ltd

know the taxi business, understanding taxi

drivers and providing taxi insurance for

thousands of Uber drivers, hackney carriages,

private-hire vehicles and executive cars.

Estimated size of the taxi insurance

Prior to entering into an exclusive underwriting

We will work closely with MCE to incorporate

elements of Sabre’s pricing sophistication across

the book, enhancing competitiveness, profitability

of the product and future growth.

In February 2022, we increased our footprint in

motorcycle insurance through entering a

major motorcycle insurance broker. This increases

our resilience in the sector and enhances the

breadth of our coverage.

setting our expectation at an annualised gross

written premium of approximately £20m for 2022.

We intend to grow our taxi book in partnership

Chair's letter

Introduction

When I wrote last year’s statement I was extremely

hopeful that the worst of the COVID-19 pandemic was

behind us and that, during 2021, we would see a

return to some sort of normality. I couldn't have been

more wrong! However, at the time of writing this,

there does appear to be light at the end of the tunnel,

and the UK, partly thanks to its vaccination

programme, looks like returning to a “new normal” in

the very near future. Unfortunately, it looks like global

events will continue to dominate the headlines over

the coming months as the tragic war in Ukraine has

polarised the world. Although we operate solely within

detail elsewhere in this report but I particularly want

to thank all our staff for the way they continued to

work from home efficiently running all day-to-day

aspects of the business. Towards the end of 2021

and at the start of 2022 we successfully entered

two exciting new business partnerships, in

motorcycle and taxi insurance. We believe these

lines of business will help us to grow premium and

profits in the coming years . We also believe that

rates in the core car business will increase during

ratio (COR) within our preferred range of 70 to 80%.

Maintaining this discipline has contributed to a small

fall in revenue in 2021 and lower profits when

compared to 2020, but we continue to believe that

maintaining this discipline is important. As we move

into 2022 there is evidence from the first couple of

months that prices are increasing across the market

and, together with the new business lines we have

entered, we are confident that 2022 will see an

improvement in our premium income and profit.

The move into motorcycle insurance in partnership

with MCE in November 2021 and a new relationship

taxi partnership with Freeway, which we announced

and subsequent years. These partnerships are a key

core data analysis and claims management skills.

We have been able to add these new business lines

direct headcount.

our operating model.

The last two years have been very difficult for nearly

the time of writing we are expecting staff to be in

the office four days a week. This provides some

flexibility for them but also means that we will gain

from the many intangible benefits of having the

majority of people in the office for the majority of

the week. With a small team of around 150 people

in Dorking, all based in a single site, we believe

working in close proximity to each other, and of

course it is vital as a way of helping and mentoring

the more junior and new staff, and instilling in them

the positive Sabre culture.

ESG

The Board has spent a great deal of time on these

important areas and we have bought in some

specialist consultants to help guide our approach.

37 to 45.

At the end of October 2021 the chair of our Audit

Committee, Catherine Barton, resigned from the

board as she took up a new executive role which all

parties regarded as a potential conflict with Sabre.

director to take on the role of Audit Committee

Chair, and as part of this we are keen to increase the

diversity of the board.

Finally, I would like to thank our employees,

pricing algorithm, built upon

years of data collection and

We maintain a robust and

extensive claims management

counter-fraud expertise, to

ensure that we operate an

underwriting. This allows us to

price accurately across the UK

motor insurance market. Our

proprietary data is further

enhanced through the use of

third-party validation and

markets cautiously and only

when adequate margins can be

under all reasonably foreseeable

outcomes. Our target is to hold

140% to 160% of our SCR.

discipline in pricing and focusing

Exposure to large individual

claims is managed through

prudent use of reinsurance. In