The motor insurer has been cutting back on volumes to focus on profitability, with the result that premium income dropped 16% to £46mln in the four months to 30 April 2021.
Visibility for the rest of the year is unclear, the insurer added, due to regulatory, market and COVID impacts, though it expects underwriting profitability or the combined ratio to be within the target range of 70% to 80% – the more the number is below 100% the greater the profit.
Geoff Carter, chief executive, said: “Premiums in April were 14.6% higher than the same period last year, with the weekly run-rate increasing relative to 2020 towards the end of the month and into the first week of May.
“This is despite us being consistent with regard to our pricing discipline and against a backdrop of low quote volumes across the market.
“Looking forward, we remain confident that volumes will increase as the number of drivers and car sales increase.
“We also expect that – in due course – the FCA pricing review, changes to small bodily injury claims (“whiplash reforms”) and ongoing claims inflation will drive some competitors to increase prices materially.
“Our claims performance and organic capital generation was strong, and we remain confident of providing an attractive dividend for the year, possibly through the utilisation of our robust capital range.”