Hastings takes £20m discount rate hit but pleases shareholders with preserved dividend
Insurer Hastings said today it wouldn’t be taking the knife to its dividend, despite this week’s cut to the discount rate that has hit many in the sector.
“We've taken the change in the Ogden [discount] rate in our stride,” said Hastings chief executive Gary Hoffman.
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Annual profits were up five per cent at the insurer, despite taking a £20m hit as a result of the ministry of justice’s decision to change the rate for calculating lump sum payments for personal injury claims.
Last week, regulators give the thumbs up to South African asset manager Rand Merchant Investment Holdings (RMI) taking a 29.9 per cent stake in Hastings – the largest slice a shareholder can take before making a formal takeover proposal.
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Hoffman said: "Our profitability and capital strength meant that, even after adjusting for the one-off change, our loss ratio and solvency positions were within our target ranges. Furthermore we made no change to our dividend plans with our final dividend of 6.6p making for a 56 per cent payout ratio, in line with our promised range.
"Looking forward we do not expect the rate change to materially impact our financial outlook for 2017."