Hastings announce interim dividend proposed of 4.5p per share
The interim dividend proposed is £29.8m (30 June 2019: £29.8m), a payout of 4.5p per share (30 June 2019: 4.5p per share). Dividends continue to be satisfied by the Group's free cash, which comprises Retail free cash generated and dividends received from AICL.
During the period, the Group generated free cash of £57.0m (30 June 2019: £99.0m). The reduction in free cash generated is predominantly due to a reduced dividend from AICL in the current year, however the Board is confident the Group will continue to be cash generative. At 30 June 2020, the Group had distributable reserves of £1,232.0m.
Other financial highlights include:
5% growth in live customer policies ('LCP') to 2.96 million in the 12 months to 30 June 2020 (30 June 2019: 2.81 million) delivered through both the Group's continuing strong retention rate and an increase in new business competitiveness. UK car insurance market share increased to 8.1% (31 December 2019: 7.7%).
Gross written premiums up 3% to £514.9m for the six months ended 30 June 2020 (30 June 2019: £499.2m). The increase in LCP has been offset by a reduction in average premium primarily as a result of a change in the risk mix of business, and premium reductions to support customers during the COVID-19 pandemic in the second quarter.
Calendar year loss ratio has decreased to 75.6% (30 June 2019: 81.1%) due to a reduction of claims frequencies resulting from the Government lockdown. The lower claims frequencies have been partially offset by continued inflation in repair and third party credit hire costs, which have elevated further due to the impact of the Government's lockdown on the repair network.
Adjusted operating profit of £78.3m (30 June 2019: £59.7m, or £68.1m before the impact of the Ogden rate change) and profit after tax of £54.8m (30 June 2019: £38.2m). The increase in adjusted operating profit is predominantly driven by policy growth and the improvement in the calendar year loss ratio, offset by customer actions in light of COVID-19, including the waiving of fees, reduced policy adjustments and increased operating expenditure for IT enhancements to support colleagues working from home.
The Group's reserving position as at 30 June 2020 reflects the increased claims uncertainties caused by the pandemic.
Stable net debt of £239.4m as at 30 June 2020 (31 December 2019: £232.4m) reflecting the continued strength of the Group's continued free cash generation.
Strong solvency position, with Underwriting subsidiary achieving a post-dividend Solvency II coverage ratio of 151% (31 December 2019: 151%) and a pre-dividend Solvency II coverage ratio of 169%.
The Group continues to deliver, at pace, on its strategic initiatives. It has continued to invest in enhancing data, pricing and anti-fraud systems to enable the Group to select the best customers and offer them a better price. The Group's claims transformation initiatives continues to develop and progress, with the claims net promoter score increasing by 16 points in the last 12 months.
There have also been further increases in digital adoption with 950,000 mobile app downloads and a 45% reduction in customer service calls per LCP.
The Group continues to prioritise and make progress on its Environmental, Social and Governance ('ESG') Agenda, and, most recently, includes the integration of ESG considerations into its investment strategy and decision making.
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