Insurer Hastings crashes into reverse as claims inflation bites

Insurer Hastings got walloped on Thursday after it warned that insurance claims were oustripping premiums paid by drivers and homeowners.

The firm, backed by Goldman Sachs and South African giant Rand Merchant, said the loss ratio — the difference between claims paid and premiums earned — would be at the lower end of a 75%-79% range, spooking investors.

Shares fell up to 16% before staging a comeback to trade 8% lower on the day at 200p.

The group is aiming for three million customer policies by next year but analysts at Shore Capital said the slowdown “will not be reassuring for investors”.

Hastings’ average written premium inflation for the past nine months has been 2% and earlier this year it warned claims inflation would be nearer 5%.

Gross written premiums for the quarter were also underwhelming, flat lining at £253 million.