(Reuters) - British motor insurer Hastings Group Holdings Plc (HSTG.L) reported higher claims costs due to icy weather and a slowdown in gross written premium growth in the first quarter, sending its shares down seven percent on Thursday.
Snow and icy weather conditions resulted in larger than expected claims costs, though the firm posted a 12 percent jump in first-quarter net revenue for the quarter, buoyed by an increase in its customer base, it said in a statement.
Gross written premiums rose 16 percent in the 12 months to end-March to 942 million pounds, but only 5 percent in the first quarter of 2018, to 226 million pounds. Analysts at RBC said the first-quarter premium rise was “below our expectations for growth”, though they reiterated their “sector perform” rating on the stock.
Hastings' shares were trading at 261 pence per share at 0724 GMT, the worst-performing stock in the FTSE mid-cap index .FTMC.
The weather system dubbed “the Beast from the East” brought rare snow and sub-zero temperatures to much of Britain in late February and early March.
The group said it remained confident of delivering a calendar year loss ratio just below or within the target range of 75 percent-79 percent.
The company’s net revenue came in at 184.5 million pounds ($257.17 million) for the quarter ended March 31, up 12 percent from 164.5 million pounds a year earlier.
Hastings offers insurance for private cars, homes, motorbikes, vans, and premium financing and ancillary products. It has made a headway in a competitive sector by focusing on selling motor insurance via price-comparison websites.
The insurer said it was on track to meet its targets for 2019, including achieving 3 million customers.
Reporting by Noor Zainab Hussain and Radhika Rukmangadhan in Bengaluru, Editing by Sherry Jacob-Phillips and Carolyn Cohn