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Why Hastings is an insurance Company Battling its Way to the Top

By Malcolm Stacey | Thursday 13 September 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello, Share Jumpers. Years ago, before useful comparison websites, I used to spend hours getting quotes for my car and house insurance. One outfit that was always among the cheapest was a new firm called Hastings (HSTG). It also seemed to be breaking away from the stuffy appearance of insurance firms in those days.

Sadly, I began to find cheaper alternatives as Hastings grew bigger. I’m not sure how much its policies cost these days, but I suspect they may not always be the cheapest because I use other companies instead. But it’s a great brand, with 1066 in its phone number and I’m happy to see that Hastings Group is bagging more custom and profits.

You may be surprised that Hastings Group was founded not in Hastings, but Bexhill on Sea. That’s one in the eye for Harold.

It sounds like rather a small firm, but it certainly isn’t. There are 2.7 million Hastings policies. That’s a year on year 6% increase. Adjusted operating half-year profit was up 22%, to £105 million, too. Debt has been slashed and this is a big cash earner.

Hastings has nearly 3,500 employees. It operates out of Bexhill, London and Leicester. Oh yes, and Gibraltar. It underwrites nearly all of its policies through its own company on the Rock. The P/E I have is 13.5, well below my rule of thumb limit of 20. The dividend yield is about 4%.

If you own a car or a home, you’ll know how cut-throat the insurance business is. You can nearly always negotiate a big discount because they’re so keen to get your business. To grow fast, a modern insurer needs a large workforce, a strong brand and a good reputation. Hastings has all three.

Unlike the Punter’s Return.

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