Untitled

Annual Report and

Accounts 2022

Keeping our

customers on

the road

Strategic Report

02 Introduction

03 The Sabre journey

04 Our Investment Case

06 Chair’s Letter

08 Market Context

10 Chief Executive Officer’s Review

13 Our Values

14 Our Strategy

16 Our Business Model

17 Key Performance Indicators

19 Principal Risks and Uncertainties

29 Viability Statement

31 Section 172 Statement

35 Chief Financial Officer’s Review

38 Responsibility and Sustainability

50 FCA Consumer Duty

Corporate Governance

52 Chair’s Governance Letter

53 Board of Directors

56 Governance Report

62 Audit Committee Report

65 Risk Committee Report

67 Nomination and Governance

Committee Report

69 Remuneration Committee Report

72 Directors’ Remuneration Policy

78 Annual Report on Directors’

Remuneration

88 Directors’ Report

91 Statement of directors’

responsibilities in respect of the

financial statements

Contents

Financial Statements

93 Independent Auditor’s Report

100 Consolidated Profit or Loss Account

101 Consolidated Statement of Comprehensive Income

102 Consolidated Statement of Financial Position

103 Consolidated Statement of Changes in Equity

104 Consolidated Statement of Cash Flows

105 Notes to the Consolidated Financial Statements

163 Parent Company Statement of Financial Position

164 Parent Company Statement of Changes in Equity

165 Parent Company Statement of Cash Flows

166 Notes to the Parent Company Financial Statements

170 Financial Reconciliations

173 Shareholder Information

174 Directors, Advisers and Other Information

SABRE ONLINE:

sabreplc.co.uk

Check Sabre’s financial results

for the year

Hear from Sabre’s

Chair, Andy Pomfret

Find out about how our values

underpin our strategy

Strategic Report Governance Financials

Sabre Insurance Group plc Annual Report and Accounts 2022

Introduction

We are a motor insurer based in the UK, with a track record of market-leading

underwriting performance across the cycle and a diverse, multi-channel

distribution strategy.

We are rising to

meet the challenge.

Sabre Insurance Group is a UK-based motor insurer,

providing fairly priced policies to a wide range of

customers with a particular focus on those who are less

well served by mass-market insurers. We benefit from

our pricing expertise, experience and vast historical

data in the more ‘specialist’ areas of the market.

2022 presented a fresh challenge to the insurance

market, with rapid inflation requiring immediate

adjustments to pricing and significantly increasing

claims costs. Sabre’s agile model and tightly controlled

feedback loops allowed fast and accurate re-pricing

of policies, limiting the impact of inflation and providing

a strong base from which the business can grow.

Key financial highlights

The business returned to growth in 2022

due to the introduction of motorcycle

business and the expansion of our taxi

insurance product. The combined

operating ratio was high by historic

standards, a result of the rapid increase

in inflation during the year and strain

generated through the rapid growth

ofthe two new products.

161%

Pre-dividend solvency

coverage ratio

154%

Post-dividend solvency

coverage ratio

4.5p

Dividend per share

£171.3 m

Gross written premium

£12.8m

Profit before tax

96.0%

Combined operating ratio

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

The Sabre journey:

How we support our customers

CHOOSING THE RIGHT POLICY

Most customers will find the right policy for them

by entering their details into a price comparison

website and choosing their policy based on a

comprehensive list of quotes from a number of

insurers. We aim to provide a fair price for almost

everyone who requests a quote, meaning that

we can service customers others can’t reach.

BUYING A SABRE POLICY

We sell policies directly to customers through

our brands Go Girl and Insure2Drive, and

through insurance brokers, meaning that our

policies often sit behind well-known household

names. This diverse distribution network allows

us to provide our policies to the largest possible

customer base, and gain the direct customer

insights through operating our own brands.

BEING A SABRE CUSTOMER

Whether you buy a policy through

Sabre’s direct brands or through a

broker, you can be assured of excellent,

expert customer service. Our direct

brands are managed through a

specialist, UK-based call centre while

our network of brokers operate to the

quality expected by some of the UK’s

largest customer brands.

YOU’RE IN SAFE HANDS

Sabre is a successful and profitable

Group, with a very robust balance sheet.

The Group holds considerably more

capital than that which is required to

meet its expected liabilities, and

operates a low-risk model, meaning that

you can be assured that we will be there

when you need to make a claim.

IF THE WORST HAPPENS

Sabre’s dedicated claims handling team are

experts in their field, targeting fast, fair claims

payments. We will thoroughly investigate claims

we believe to be fraudulent, to ensure that honest

customers continue to get the best deal possible.

We operate a ‘zero backlog’, transparent culture,

as we understand that no customer should be left

in the dark when making a claim.

RENEWING YOUR POLICY

Sabre has always priced renewals the

same as new policies as we feel this is only

fair to the customer and trust in our

bespoke fully-automated pricing model.

Our purpose

To provide motor insurance, available to the

widest possible range of drivers, based upon a

fair, risk-based pricing model that is consistent

across all customers. Generate excess capital

andreturn this to shareholders, or reinvest in

thebusiness in order to increase future returns.

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Our Investment Case

A Resilient Business

Sabre operates a highly disciplined approach to underwriting,

targeting a combined operating ratio below 80%. This is a target

margin high above industry norms and means that even in years

where costs are significantly greater than expected, the Group

has been able to deliver an underwriting profit.

Importantly, our underwriting discipline means that we have taken

pricing action early where market conditions change, meaning

that future claims costs are fully covered and underwriting

performance is expected to recover quickly from the one-off

shock caused by the unexpected, rapid inﬂation in 2022.

Motor insurance is a compulsory purchase for motorists.

As a specialist provider, primarily in non-standard markets,

Sabrehas a defensive position.

The Group is required to hold excess capital, which is known

asits Solvency Capital Requirement (“SCR”). In addition,

theGroup prefers to hold net assets, on a regulatory basis,

atbetween 140%-160% of this requirement. This means

theGroup holds a significant excess of assets over liabilities,

providing a strong balance sheet able to withstand the most

extreme foreseeable shocks.

A resilient

business

modelin an

uncertain world

Sabre’s business is positioned

toperform well in the current

environment. The Group possesses

anumber of competitive strengths

which have enabled a long-term track

record ofmarket-leading underwriting

performance, reliable cash generation

and attractive growth where market

conditions are favourable.

Whilst rapid and unexpected inflation

in 2022 reduced profits in the

short-term, the Group’s sharp focus on

underwriting means that we expect a

strong recovery into 2023 and beyond.

Chief Executive Officer’s

review on page 10

Our business model

on page 16

Group Solvency Capital Ratio

(%)

100

160

180

120

140

200

220

240

Pre-dividend solvency capital ratio

Post-dividend solvency capital ratio

2022

2021

2020

2019

2018

2017

Preferred operating range – Higher

Preferred operating range – Lower

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Attractive and diversified markets

that offer significant growth

opportunities

Sabre’s market share of c. 303k policies represents a very small share of the total motor insurance

market, leaving considerable scope for market share growth when market conditions become

favourable. This growth is expected to be generated in each of our three main business areas:

Motor vehicle – Our core historic market, in which we exercise high-quality underwriting to

achieve market-leading margins

Taxi – A market we expanded into in 2022, having linked with an expert partner, allowing for

rapidgrowth into the sector

Motorcycle – We entered this market at scale in 2021 and expect to grow our footprint

andcontinue to enhance the quality of underwriting as we gain experience in the sector

Reliable Dividend Flow

Sabre’s core business is fundamentally capital-generative. Some capital is used to fund future growth,

while the majority of capital generated by the Group has historically been returned to shareholders by

way of an ordinary and special dividend. Since IPO the Group’s dividend payout ratio has remained

above 98.4% of earnings.

2022 has been a challenging year for the industry and for Sabre, with unprecedented levels of inﬂation

impacting in-year earnings. However, the Group has continued to pay a dividend to shareholders,

equivalent to 111% of 2022 profit after tax.

Low-Risk and Capital-Light

The Group manages risk in order to reduce volatility in the result and limit the amount of regulatory

capital required to be held, while balancing this against maximising

earnings generation.

While the Group holds significant financial investments, these are invested in relatively low-risk

and capital-light assets, primarily government-backed assets and highly rated corporate bonds.

These assets are the fuel used to power the Group’s exceptional target underwriting returns,

rather than being a major source of income. In this way investment volatility is reduced and

Management’s focus remains fully on generating and protecting underwriting returns.

Reinsurance is used to limit exposure to individual large claims. Sabre purchased cover from

reinsurers such that for any claim over £1m, the amount above £1m is met by the reinsurer.

Thisreduces year-on-year volatility and the capital that the Group is required to hold.

Optimised for Growth

The Group operates a technologically-focused approach to underwriting excellence, and is constantly

optimising pricing opportunities while deploying best-in-class underwriting and claims teams.

We will consider entering new partnerships or executing acquisitions where we see good value

opportunities in areas which would complement our operations, bringing differentiated experience

(such as the MCE and Freeway relationships).

Risk Committee report

on page 65

Principal risks and

uncertainties on

page 19

Risk Committee report

on page 65

Principal risks and

uncertainties on

page 19

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Our purpose

To provide motor insurance, available to

the widest possible range of drivers, based

upon a fair, risk-based pricing model that

is consistent across all customers. To

generate excess capital and return this

toshareholders, or reinvest in the business

in order to increase future returns.

ANDY POMFRET

Chair

Introduction

I introduced my statement last year on the hopeful note that the worst

of the COVID-19 pandemic was behind us and was looking forward to

returning to a “new normal” in the near future. While, happily, I had

been proved right in my optimism in that regard, we had only just

started to see the emergence of the tragic war in Ukraine and were

yetto see or understand the full impact on the economy both here

inthe UK and around the World. I suggested that events would have

abearing on already stretched supply chains and rising inﬂation,

however the extent to which costs were impacted created a shock

tous and across the motor insurance industry.

Motor insurance is in itself, of course, about estimating the costs

attached to a policy, which may not come to pass for several years

after a policy is sold. So, a rapid and unexpected increase in costs

would inevitably have an immediate impact on our earnings, as was

the case in 2022. This, along with the natural strains generated

through running-in the motorcycle and taxi businesses, led to a result

for the year which was, by Sabre’s high standards, disappointing.

However, the Group’s clear strategy ensured that appropriate actions

were taken to limit the impact and provide a solid base from which

theGroup can grow.

Strategy

Our strategy remains to price every risk appropriately to maintain

atarget combined operating ratio across the Group. This has the

advantage of not only generating strong profits and a robust balance

sheet in normal circumstances, but also of providing significant

headroom to absorb one-off shocks to profitability such as that

experienced in 2022. While the Group’s profitability may have

suffered, the Group nonetheless generated a positive underwriting

result against an industry backdrop where many, or perhaps most,

competitors endured underwriting losses.

It is our view that despite some recent price increases, motor

insurance remains materially under-priced in the UK, as was the case

throughout 2022. Given our pricing discipline, we have seen market

share reduce in the motor line as our price increases have continued to

outpace the industry – although we expect to benefit from that when

industry pricing corrects. Despite this, we have grown the business

year-on-year, achieved through the Group’s motorcycle product and

the significant expansion of its taxi business, both of which we

discussed in detail in last year’s report. I expect that in the coming

years these will contribute meaningfully to profit, having been a slight

drain in 2022.

Principal

risks and

uncertainties

on page 19

Chair's letter

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Inflation and the cost of living

I have already discussed how inﬂation has impacted our underwriting

performance during the year through increasing the cost of claims.

Theeffects of rapid, significant increases in inﬂation have been much

wider-reaching, and we have been mindful of this as we have made

strategic and operational decisions during the year. As outlined in this

report we have supported our people through appropriate “cost of

living” allowances and bonuses.

We have considered the needs of our customers throughout. We are

obliged to raise our policy prices in line with inﬂation – that is core to

our strategy and in line with our values – however, we have continued

to be mindful of vulnerable customers and have sought to support our

customers through both quick and efficient services and ensuring that

we fulfil our consumer duty in respect of all products, in particular

where we provide premiums on finance.

Of course, the current economic environment also impacted our

balance sheet, with the value of bonds held across our portfolio

subject to significant decline. However, we have matched our asset

and liability position, meaning that there was little impact on our

regulatory balance sheet and, as we generally hold all of our bonds

until maturity, we do not expect to realise any losses as a result.

Consequently, we should see a gradual increase in the yield across

ourinvestment portfolio over time.

Result and dividend

The results of the business are covered in some details in the rest of

the Report and Accounts, and in particular in the CEO’s and CFO’s

reports. So, I will avoid duplicating the points here.

I am encouraged that the Management Team identified issues early

and took assertive corrective action. This positions us well for a rapid

recovery and future success.

In spite of profit falling below our expectations, we have recognised

that the Group ended the year with a strong balance sheet and excess

capital. Our dividend policy is to distribute 70% of profit after tax by

way of an ordinary dividend and, in addition, to pay a special dividend

comprising any further capital in excess of that which we consider

required to keep our regulatory capital within our preferred range of

140% to 160%. I am pleased to note that we have declared a total

dividend of 4.5p in respect of 2022. Less the interim dividend of 2.8p

already paid, this means that we will distribute a further 1.7p by way

ofa special dividend.

Outlook

Set against a challenging year, our outlook is positive. We took decisive

pricing and reserving action when rapid inﬂation took hold, and as such

expect an improvement to our loss ratios into 2023. We have also

taken significant pricing action on the motorcycle and taxi lines, which

includes not only price increases but also enhancements to the

sophistication of underwriting, which means we expect improvements

in the loss ratios across those lines. It is our hope and expectation that

the early signs of industry-wide price increases seen towards the end

of 2022 continue, and allow for a meaningful recovery of the Group’s

motor market share.

ESG

The Board continues to spend a great deal of time on these important

areas. The result of our work is highlighted in the Responsibility and

Sustainability section Pages 38 to 49.

The Board

I would like to thank Ian Clark for stepping in as interim chair of the

Audit Committee at the end of 2021. I am pleased to confirm that we

have recruited a new Non-executive Director, Alison Morris, to the

Board and that she has been appointed as Chair of the Audit

Committee. We are currently undergoing a process to recruit an

additional Non-executive Director to the Board. We remain aware of

the benefits of bringing increased diversity to the Board and are keen

to increase diversity where possible.

Finally, I would like to thank our employees, customers, suppliers,

Management and other stakeholders who have continued to support

us in 2022. I look forward to continuing to develop and grow the

business for their, and our shareholders, benefit.

ANDY POMFRET

Chair

13 March 2023

We took decisive pricing

and reserving action when

rapid inflation took hold”

“

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Context

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and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility and

Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Cyclicality in the UK motor insurance market

The UK private motor insurance market has historically exhibited

pricing cyclicality driven by competitive dynamics, as well as social,

economic and regulatory factors.

In times of lower competitive intensity, price levels tend to rise.

However, pricing increases typically enhance industry profitability,

resulting in industry participants reducing prices to increase volumes

and new entrants joining the market.

This increased competition can cause prices to fall, which can reduce

underwriting profitability across the industry and may, in turn, lead

market participants to reduce volumes or seek to exit the market,

reducing competitive intensity and leading to prices rising again.

The pricing cycle can also be impacted by regulatory changes,

such as pricing interventions or restrictions on claimant activity.

Current market conditions

Since December 2018, average motor insurance premiums have

decreased by 2.4% across the industry, whereas we believe that the

costs associated with claims have increased significantly, with inﬂation

in claims costs at approximately 5% per year in 2018, increasing to

inﬂation at approximately 12% per year in the last quarter of 2022.

Clearly, the compound impact of inﬂation has not been met by industry

price increases. Despite some evidence that prices have increased in

recent months, we do not consider that these increases are sufficient

to cover current levels of inﬂation or to compensate for historic

inﬂation. Therefore we consider that the market remains ‘soft’,

although prices are potentially entering a ‘hardening’ part of the cycle.

Historically, pricing has corrected following ‘soft’ periods, creating

‘hard’ market conditions.

In 2022, we introduced significant price increases in order to meet

thesudden, unexpected increase in the level of overall cost inﬂation.

Having taken this action, Sabre can continue to make more modest

increases reﬂecting current inﬂation with no significant additional

upward adjustment. As such, we expect to increase in

competitiveness as market prices fully correct to reﬂect inﬂation.

This is core to our strategy. As the gap between premium pricing

andthe costs of servicing policies increases, we expect the potential

pricing correction to become more substantial.

Drivers of cost inflation

In previous years, we have described why claims cost inﬂation was

significantly ahead of wider economic inﬂation. Now, we continue to

see evidence that claims costs across the motor insurance industry

are rising, but against a backdrop of wider economic inﬂation. Key

elements of inﬂation include:

– The costs of car parts

– The costs of hire vehicles and extended hire periods

– Care costs for seriously injured people

– The increased frequency of thefts, and the value of vehicles stolen

– Industry levies, such as that paid to the Motor Insurance Bureau

andinto the Financial Services Compensation Scheme

– Wage inﬂation

Will cost inflation increase or decrease?

It is not possible to predict exactly how cost inﬂation will develop;

however, we have identified several factors which will impact costs

going forward:

– There is some indication the costs of car parts will continue to rise

– Used car prices are showing some evidence of stabilisation

– The cost of hire vehicles is impacted by the time taken to carry out

repairs. If part availability increases, costs could reduce

– Care cost inﬂation, which is largely driven by wage inﬂation for care

workers, could rise significantly as the potential pool of care staff

from the EU decreases

– The total impact of whiplash reforms enacted in 2021 remains

uncertain

– We expect industry levies to continue to rise in line with increases in

the expected costs of compensating the victims of uninsured drivers

What does cost inflation mean for Sabre?

Cost inﬂation is factored into our policy pricing – we charge an amount

based on what we expect to pay out over the period of that policy

(generally 12 months), factoring in our prudent view of inﬂation. As all

of the inﬂationary factors are market-wide, we expect that market

price increases will reﬂect this inﬂation, but as discussed earlier, this is

likely to come in ‘jumps’ as the market transitions from ‘soft’ to ‘hard’.

As we saw in 2022, sudden unexpected increases in inﬂation can

negatively impact profitability. Similarly, lower than expected inﬂation

can be beneficial to earnings.

Market Context

Underlying

market

conditions

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility

and Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Current

market

issues

Political and regulatory

In our previous Annual Report and Accounts, we commented that the

environment, in so far as it relates to motor insurance, had rarely been

so tumultuous. We cited the introduction of whiplash reform in 2020

and the run-up to the FCA’s pricing practices legislation which came

into force on 1 January 2022. By comparison, 2022 has seen a period

of ‘bedding-in’ of these rules, as insurers have adapted to operating in

the new environment. We have seen adjustment to market pricing as a

result of the FCA’s pricing practices review, which effectively stopped

insurers charging more for renewed business than for an equivalent

new customer (known as ‘price walking’ – a practice Sabre did not

employ). We still consider the impact of whiplash reforms to be

uncertain. Whilst we have seen some reduction in the frequency of

certain types of claim, the overall impact on costs of personal injury

claims has not yet settled, with a firm precedent yet to be set. We

continue to be cautious on this.

Wider uncertainty has been a feature of 2022’s political landscape,

with several changes within the government casting a long shadow

over the legislative agenda. We have seen relatively little impact of this

on those issues directly related to motor insurance, notwithstanding

the overall impact on the economic environment discussed later.

There continues to be continued regulatory focus on Consumer Duty,

and on policing recently enacted rules such as the pricing review.

Wehave complied fully with all current requirements, none of which

required significant strategic or operational change within the business.

We present a statement of compliance on page 50 of this Report.

Economic

During 2022, economic issues moved from a rather technical subject

toan everyday talking point impacting everyone’s lives in a meaningful

way. For Sabre, and much of the insurance market, the two significant

economic factors remain inﬂation and interest rates. Inﬂation has been

discussed at some length throughout this Report, with costs rising across

the claims spend and operational costs, such as salaries and maintenance

of the Group’s IT network. The increase in interest rates has contributed

to the yields on low-risk assets increasing considerably. This means that

the market value of these assets reduces – meaning purchasers of those

assets can generate better returns. A consequence of this is that the

market value of Sabre’s investments has reduced. This has little

real-world impact, as these assets are all bonds which the Group holds

tomaturity, meaning the cash ﬂows from these bonds are known at

purchase and are not affected by temporary reductions in their value.

Theimpact on the Group’s regulatory balance sheet strength is also small,

as while the value of the Group’s asset portfolio has declined, the Group’s

liabilities have been discounted to reﬂect the time value of money – and

the impact of this discounting is inherently linked to risk-free yields.

Social

2022 saw a shift in social dynamics, with the realisation that it is

unlikely that wage inﬂation will meet increasing household costs,

andthat the difference could be significant. With a potentially material

impact on the spending power of households, all companies must

consider the impact that their actions will have on society, as well

asthe impact that this societal change will have on them. Sabre has

always aimed to price its policies fairly, not exploiting any group of

customers while fairly reﬂecting increased costs. This is underlined in

the Group’s adherence to the robust Consumer Duty rules with which

we will continue to comply with fully. Selling a product that is

effectively compulsory, rather than being reliant on discretionary

spend, means that Sabre has historically shown great resilience during

periods where customer spending power has reduced. In addition, the

Group’s exceptionally strong controls over claims spend has mitigated

increases in fraudulent behaviour, which is sometimes a feature of a

challenging economic environment.

We do our best to support customers in financial difficulty, whilst

providing easy access to fairly priced insurance for everyone.

Technological

Technological change continues apace, not only in the means of

propulsion in vehicles switching from internal combustion to electric,

but in the way that insurance is developed, marketed and sold to

consumers. We continue to invest in cutting-edge pricing techniques,

such as machine learning, as well as partnering with some of the most

technologically advanced distributors within the insurance market,

ensuring that our policyholders get the fairest price and enjoy the best

possible customer experience.

COVID -19

From an operational perspective, the impact of COVID-19 is now

minimal. The new ways of working introduced during the pandemic

have been implemented in various forms as ‘business as usual’, with

ahybrid working model and far greater use of teleconferencing being

just two examples. The motor insurance market appears to have

settled, in terms of traffic volumes, but supply chains continue to be

under pressure not just from the fallout from COVID-19, but also Brexit

and now the war in Ukraine. Motor insurance pricing appears to be

showing some adjustment to post-COVID conditions, with price

increases reﬂecting the return to ‘normal’ behaviours.

Sabre’s business model is designed to

withstand, adapt to, and thrive within

a changing environment.

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility

and Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

Reﬂecting on my Review in the 2021 Annual Report, I was struck by

the sense of optimism as we looked into 2022. We had remained

consistent in our strategy of margin over volume, meaning that Sabre

started to emerge from the trough of a cyclical soft market and

on-going Pandemic issues with strong foundations in place. However,

our industry – and many others – have since been impacted by the

unforeseen, once-in-a-generation geopolitical event and subsequent

extraordinary period of inﬂation.

The impacts of the rapid increase in inﬂation were as significant for

motor insurance as the impact of the pandemic. While we addressed

the inﬂationary impacts early and assertively – ahead of many of our

peers – this backdrop has still led to a disappointing performance by

our own standards. We do believe that our prompt action restricted

some of the potentially very significant financial impacts from the

rapid, unprecedented inﬂation, and we believe that Sabre will recover

fairly rapidly towards our target levels of performance whilst still being

able to capitalise on some exciting growth opportunities.

Looking back on 2022

The market backdrop has made 2022 a frustrating year. In the early

stages of the year we saw market price increases emerging, which

webelieve was in response to the FCA pricing review. However, this

encouraging positive trend was interrupted by events out of our control.

At the start of Q2 the unfortunate events in Ukraine led to the now

well-publicised but unexpected and rapid increase in underlying cost

inﬂation. We, along with the rest of the market, were then faced with

acombination of challenges, either directly due to the conﬂict or

asaresidual consequence from either the pandemic or Brexit.

Theseincluded:

– Inability to source parts for repairs, driving extended repair times

andconsequent increases in car hire costs

– Lack of new car supplies driving up used car prices – dramatically

increasing the cost of theft and total losses

– Severe shortage of staff in the car repair and healthcare industries

resulting in cost increases

– The need to reﬂect increased healthcare costs across all open

claimreserves

– The fact that polices over the past 12 months had been priced

against claims inﬂation assumptions which proved to be too low

– Other increases in overhead costs across the Group’s operations

This required a one-off adjustment to our reserves and an increase

inour (by market standards) already high claims inﬂation assumption.

Delivered growth and profitability despite

challenging market conditions. Well-positioned

torecover margins, whilst growing further, thanks to

assertive rating and response and focused strategy.

Principal

risks and

uncertainties

on page 19

Chief Executive Officer's Review

GEOFF CARTER

Chief Executive Officer

£171.3 m

Gross written premium

£12.8m

Profit before tax

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Insurer hosted pricing has been a feature of the market for broker-

based insurers for several years, being introduced to speed up rate

deployments by avoiding ‘software house’ rate change processes.

Wehave deliberately waited until now to carry out this initiative – as

we had no interest in rapid price changes to manage volumes – and

bywaiting we have seen costs and implementation challenges reduce

significantly. Following implementation, we will be able to begin the

roll-out of more complex rating models that have been developed by

our pricing team.

Our existing direct administration platform has served us well for many

years, but lacks customer self-service functionality. Our ambition

following roll-out is to transition the vast majority of customer

interactions online, and invest the operational savings into pricing.

Market – Continuing uncertainty

There are still areas of ongoing uncertainty and opportunity.

Coming into early 2023 we have maintained a prudent view of claims

inﬂation, with a current forward-looking assumption of 8% to 10%.

Forclarity, this is on top of our relatively high assumptions in previous

years, so others may experience higher cost inﬂation from a lower

assumed base. There are reasons to suspect some elements may

soften as the year develops, such as used car prices or parts

availability, but there is limited evidence of this so far. Conversely,

carecosts may inﬂate further, and it feels unlikely that repair costs

willreduce dramatically.

We will maintain a cautious approach here – we were amongst the

first to spot adverse trends developing and will apply equal rigour

tospotting opportunities.

The recent Court of Appeal decision on mixed injury cases, and

subsequent ABI-facilitated decision to seek leave to appeal to the

Supreme Court, means there is a risk of an elongated period of

uncertainty for the total costs of small injury claims. We will maintain

our conservative view on the benefits of these reforms pending clarity.

We believe the 1 January 2023 motor reinsurance renewals (ours was

at 1 July 2022) resulted in average increases in the range of 15% to

20% across the broader market. We will monitor developments and

reﬂect any likely cost changes in reinsurance in our pricing.

Throughout, we have stuck rigorously to our underlying philosophy

that to ensure long-term success, volume must be an output not a

target. We have continued to have focus on ensuring all polices are

priced correctly for the current environment. In order to meet rises in

the cost of claims, we have increased prices by nearly 30% in 2022,

and by over 50% since January 2020.

In 2022 we continued to expand our position in the motorcycle and taxi

insurance markets through partnerships with MCE and Bennetts, and

Freeway Insurance respectively. We regularly review new business

opportunities but have a very high hurdle for returns before committing

resources to them. These partnerships increase our long-term growth

opportunities while maintaining margin discipline.

We saw benefits, in premium growth terms, from our new motorcycle

and taxi partnerships in 2022. In some ways the timing was slightly

unfortunate, in that we did not expect these to generate a significant

contribution to profit in the first year, but did not anticipate the

concurrent profit challenges on our motor book in the initial year of these

relationships as well as the claims inﬂation impacts on these portfolios.

While we knew elements of the motorcycle book required extensive

re-underwriting and pricing to get to a sustainably profitable level, the

scale of this was greater than anticipated and so the product

performed below expectations. However, our re-underwriting efforts

have to date been successful and the product is now on a firm

pathway to profitability in 2023. In conjunction with MCE insurance,

we have since launched an innovative subscription (pay-by-mile)

product for motorcyclists.

The taxi portfolio got off to a slightly slower than assumed start as

ourpartner needed to re-platform their administration systems and

they share our philosophy of writing for profit not volume in a difficult

market. This re-platforming exercise is now complete and we

focussing on capitalising on the growth opportunities ahead as rates

inthis market increase.

The overall impact of reduced ‘core’ motor volume meant these

first-year products were a greater than planned proportion of our

totalbusiness – putting additional pressure on the overall loss ratio.

Given the extraordinary market challenges the business had to operate

within, I am pleased with the motor loss ratio of 61%, and the progress

we have made in setting up motorcycle and taxi for a sustainable,

profitable, future.

Looking forward

Whilst the previous section is perhaps a little downbeat, that is not

atall how we feel as a business as we look ahead to 2023.

We anticipate that 2022 loss ratios across the market will be seen,

inretrospect, as a speedbump rather than the start of a trend.

At the end of 2022, we were writing new business across the portfolio

at around our target COR, with significantly improved expected loss

ratios for bike and taxi.

Our very early call on inﬂation and immediate pricing actions to

correctthis, regardless of the effect on volumes, means we anticipate

a relatively rapid bounce back towards our target normal levels of

profitability through 2023 and into 2024, albeit that inﬂation will

providesome overhang in 2023.

Whilst some encouraging signs of market price increases started to

emerge towards the end of 2022, we expect that the market will still

need to implement further substantial increases to achieve

underwriting profitability, and while the timing is uncertain, we expect

this will provide attractive opportunities for organic growth. Indeed,

this is supported by our volumes in the most recent weeks of 2023,

which have been encouraging.

The irrational pricing decisions of some market participants means our

motor premium at the end of 2022 was a little less than planned,

which will clearly impact both 2023 earned premium and consequently

our expense ratio.

In 2022 we reviewed numerous new partnership opportunities,

however we always have a very high hurdle before we commit

resources and are especially wary of distraction in what is still a

complicated market. We will continue to review potentially attractive

additional distribution routes going forward, but our primary focus is on

our current portfolios.

For our core motor product, we currently occupy less than 1% of the

market. We believe this position will provide additional medium-term

growth opportunities.

New developments

It is extremely pleasing that we are making great progress with the

deployment of two important new initiatives – insurer hosted pricing

and re-platforming our direct administration system. Both of these

areon schedule to be rolled out in Q3 this year, and are being

implemented entirely by our own teams without any consultancy

support or spend.

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Sabre Insurance Group plc Annual Report and Accounts 2022

During the recent periods

we have remained

focused on supporting

customers both through

the COVID-19 challenges

and the emerging cost

ofliving crisis.

People

Our people have shown considerable commitment during the recent

challenging years, for which we are extremely grateful, and we have

sought to reciprocate. We maintained full employment during the

pandemic and have continued to pay the annual Christmas and

performance bonuses. Additionally, we paid all staff an £800 cost

ofliving allowance over the winter period.

We continue to enjoy excellent engagement scores, and very low

levels of turnover.

During 2022 we have been actively recruiting in anticipation of

futuregrowth opportunities, which has also created a need for

severalpromotions.

Customers

During the recent periods we have remained focused on supporting

customers both through the COVID-19 challenges and the emerging

cost of living crisis. We have ensured our processes are appropriate for

customers who may find themselves in vulnerable circumstances.

In addition, we stepped in to offer cover to customers of MCE

Insurance following the previous underwriter being placed into

administration and policies cancelled.

Environmental, social and corporate governance

(“ESG”)

We have continued to make excellent progress in this important area.

Full details of our environmental and social reporting are contained in

the Sustainability and Responsibility report. We have enhanced our

corporate values, including a key value measure of ‘Fair to the Planet’.

Alongside this we have taken several significant steps to improve our

impact on the environment, including a full refurbishment of our head

office. This investment will significantly enhance the working

environment for our people, and help us take further steps towards

ournet-zero ambitions. We have also continued to support a number

of charities.

Summary

While 2022 was a challenging year in terms of result, I am delighted

that we have maintained extremely firm foundations whilst delivering

growth and underwriting profit. We have demonstrated our strong

solvency position and proposed a special dividend – and have

positioned ourselves well for growth as many competitors seek to

address their own performance. I believe our 2022 performance will

look creditable in market terms and rebound quicker than many others.

We anticipate that market price changes, as well as our own

development initiatives will support organic growth.

I very much hope to be able to report strong progress along these

lines next year.

GEOFF CARTER

Chief Executive Officer

13 March 2023

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Sabre Insurance Group plc Annual Report and Accounts 2022

Our Values

Sabre’s

values

underpin

our strategy

A FAIR and FOCUSED business

Fair to the planet

We recognise that all organisations, big and small,

havearesponsibility to act in the best interests of our environment

and society as a whole. We have set out a road map to net zero,

which includes making changes now to minimise the impact of

our business on climate change. We believe that companies can

be a force for good, and through our Charity Committee we

support local organisations who we believe make a real

difference to people’s lives. Further information on our climate

commitments can be found on pages 44 to 49 and a summary

ofour charitable programme can be found on 43.

Fair to partners

We enjoy excellent working relationships with all of

ourpartners, including our brokers, key suppliers and

outsourced operations. Through the challenging period

ofthe last two years, we have worked closely with our

partners to assist in their continued success. Further

information on how we work with our partners can be

found on page 44.

Fair to customers

At the core of our business sit our customers. Fair treatment

of our customers is ingrained in the DNA of our business,

be it through provision of high-quality insurance at a fair

price for (almost) everyone, fast and efficient handling of

claims or high-quality customer administration through our

UK-based call centre. Further information on how we work

with our customers can be found on page 39.

Fair to employees

Sabre’s greatest asset is the talented group of individuals

who keep the business running every day, from the pricing

and product teams generating our cutting-edge policies,

through to the expert claims team achieving fair customer

outcomes while robustly managing fraudulent claims.

Westrive to place the right people in the right roles at the

right time, while maintaining a happy and safe working

environment. Further information on how we work with

ouremployees can be found on pages 40 to 42.

Focused on our strategy

Our strategy is simple, clear and well understood by our

stakeholders. This is discussed in detail on page 14, but can

bedistilled further into one thing: focus. Focus on profitability

through obsessive management of our pricing and rigorous

discipline. Focus on long-term growth by engaging in the right

development projects at the right time, drawing on our core

strengths. Focus on attracting and retaining top talent to

achieve all of this. And, more recently, focus on the wider needs

of stakeholders, through our sustainability and responsibility

programme, which is discussed in detail on pages 44 to 49.

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1. Disciplined

Underwriting

Sabre operates a sophisticated,

actuarially-driven pricing

strategy utilising an agile

proprietary module. Each risk

is individually modelled and

priced using Sabre’s advanced

pricing algorithm, built upon

years of data collection and

expert analysis.

We maintain a robust and

extensive claims management

operation, combined with

counter-fraud expertise, to

ensure that we operate an

efficient, transparent and

fairprocess.

We hold a unique and extensive

catalogue of claims data,

compiled from more than 19

years of successful, consistent

underwriting. This allows us to

price accurately across the UK

motor insurance market. Our

proprietary data is further

enhanced through the use

ofthird-party validation

andenrichment.

We enter new, complementary

markets cautiously and only

when adequate margins can be

achieved with an acceptable level

of pricing certainty.

2. Risk

Management

We seek to maintain a

conservative approach to

riskmanagement, through

focusing on allowing

acceptable underwriting risk

while minimising other risks

within the business.

We maintain sufficient capital to

allow operational resilience and

meet regulatory requirements

under all reasonably foreseeable

outcomes. Our target is to hold

140% to 160% of our SCR.

We manage our underwriting risk

through maintaining absolute

discipline in pricing and focusing

on our core strength of

underwriting UK motor business.

Exposure to large individual

claims is managed through

prudent use of reinsurance. In

exchange for a proportion of our

income, a panel of high-quality

reinsurers takes the cost of any

individual loss over £1m.

We keep our operations simple,

which makes the monitoring of

key risk issues straightforward.

We hold considerable invested

assets to back our underwriting,

but do so in very low-risk, primarily

government-backed, assets.

3.Controlled

Growth

Throughout its history, Sabre

has grown where market

conditions allow, without

compromising profitability.

The UK motor insurance market is

historically cyclical, with periods of

low pricing (‘soft’ market) followed

by market price increases (‘hard’

market).

Sabre aims to underwrite at

a broadly consistent margin,

irrespective of market conditions.

As claims costs are generally

inﬂationary, we will increase

our prices year-on-year to cover

that cost.

Sabre becomes more

competitive when the insurance

market hardens.

We aim to enter any market

upturn from a position of

strength, where we are able to

grow without generating excess

operational or capital strain.

Volume is an output from

disciplined underwriting, and we

will not allow it to become a target.

We develop complementary

products cautiously and enter

intonew markets where we

areconfident that we can apply

Sabre’s abilities in pricing and

claims handling.

4. Operations

Non-core operations are

outsourced, while expertise

isretained in-house.

Generally, volume-dependent

administrative tasks are

outsourced, allowing maximum

operational ﬂexibility.

Our team consists of talented

people making good decisions

every day. We invest in our

people, making sure that they

have the appropriate training and

skills to work well consistently

and apply Sabre’s core values

ineverything they do.

As we grow, further automation

will allow staff costs to remain

relatively stable.

5. Distribution

Brokers account for

approximately 71% of the

gross written premium in

2022, with the remainder

being sold through our

directbrands, Insure2Drive

and GoGirl.

The vast majority of motor

insurance policies originate

through price comparison

websites.

Broker relationships allow

ustoleverage their well-

established brands, customer

relationships and retail pricing

capabilities, as well as providing

privileged access to certain

customer groups.

Operating our own direct

brands ensures that we can

offer our products to those

customers not served by

traditional brokers, while

allowing us a direct line of

sightto customer and price

comparison site data.

Our

Strategy

Our key

business

principles

Strong returns

and cash

generation

Market-leading

underwriting

performance

Controlled

and attractive

growth across

the cycle

These principles

manifest in our five

strategic priorities:

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Estimated size of the

female insurance

market in the UK:

c.304k

live policies

Hailey’s car insurance was

due to be renewed next

month, and she was worried

that her renewal premium

would be too expensive.

Hailey’s

story

Case study

Hailey was 20 years old, had passed her driving test last year and

had recently had an accident, all of which Hailey expected would

contribute towards a higher premium.

Hailey used a price comparison website to compare the different

prices in the market. To Hailey’s surprise, Go Girl Insurance came

upwith the cheapest price, which she thought was very reasonable

given her previous accident and limited driving experience. Although

she was unfamiliar with the brand, Hailey decided to buy the Go Girl

Insurance policy.

After almost a year of trouble-free driving, Hailey was involved in an

accident where she drove into the rear of a third party. She was very

shaken up by this accident and knew that she was at fault. Hailey

reported this accident to Go Girl Insurance immediately, as she

wanted to get her car fixed as soon as possible and knew it can

takea long time for these things to resolve.

After receiving the notification that Hailey had been involved in an

accident, Go Girl’s expert claims department contacted Hailey. After

making sure that Hailey was okay, they requested some information

to gain a better understanding of what had happened. Go Girl’s

claims handlers quickly put the wheels in motion to send an

engineer out to look at Hailey’s car.

The damage suffered meant that Hailey’s car was deemed a “total

loss” as engineers were unable to repair the vehicle for less than the

cost of a replacement. Go Girl Insurance contacted Hailey to discuss

her options and Hailey decided that she would like to be paid the

pre-accident value of the vehicle so that she could start looking for a

new car as soon as possible. Hailey was very worried that she was

going to be offered an extremely low value and that Go Girl

Insurance would take a long time to pay out the money.

Go Girl Insurance calculated the value of Hailey’s vehicle and made

an offer to Hailey within four days of the accident date. Hailey was

over the moon with Go Girl Insurance’s valuation of the vehicle.

Hailey accepted the offer from Go Girl and the money was paid into

her account the next day. It was only five days in total from the day

of the accident to the date that Hailey received the money.

Really helpful and

fast service

My car was written off … I was

covered by Go Girl. They offered

a cheaper premium than anyone

else and were extremely helpful

with my claim. It was dealt with

quickly and after I was informed

my car would be written off I

received the money quickly too.

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Sabre Insurance Group plc Annual Report and Accounts 2022

Our Business Model

Indirect

distribution

The Group has

established a broad

network of almost

1,000 insurance brokers

across the UK over

the course of more

than20 years.

Direct

distribution

Go Girl

Launched in 2011

toappeal to young

female drivers.

Insure2Drive

Launched in 2010

asageneral motor

insurance product.

DriveSmart

Launched in 2022,

short-term, ﬂexible

policies sold direct

tocustomers.

Price

Comparison

Websites

(“PCWs”)

PCWs are websites that

enable customers to

obtain and compare

quotes from a wide

variety of insurers and

brokers. We work with

all of the major PCWs.

In-house

Pricing and Claims

management

The Group has a streamlined operating

model, with certain functions where

the Directors believe the Group has

significant expertise (such as pricing

and claims management) being

maintained in-house and certain core

functions outsourced to third-party

providers, whom the Directors believe

can improve efficiency and provide

scale optionality.

Partners

Customer support

Telephone sales and phone and email

based customer support for the direct

brands are outsourced to Right

Choice, a specialist motor insurance

broker based in the UK.

FNOL and repair management

First Notice Of Loss and repair

management are outsourced to the

Innovation Group, which provides

support to the insurance, ﬂeet,

automotive and property industries.

Information technology

The Group uses a cloud-based

infrastructure as a service provider,

such that the Group’s IT infrastructure

is hosted by a third party on virtual

servers with state of the art security

and no single point of failure.

Price distribution

Policy prices are distributed to brokers

via a number of specialist software

houses. These software houses

typically provide brokers with sales

and administration systems, as well

as enabling brokers to access policy

prices set by the Group.

Specialist Distribution

We distribute our motorcycle and taxi

products primarily through established

brokers, who bring valuable insight

into the sector.

Strong cash

generation

Our underwriting discipline and

streamlined operating model give

us confidence that we can deliver

our target dividend pay out ratio

ofa minimum of 70% of profit

after tax.

Premium growth

We anticipate high single-digit

growth in gross written premium

across the insurance cycle, while

maintaining our target combined

operating ratio.

Maintaining expertise

We continue to refine our

underwriting model to drive

increasingly accurate, customer-

focused pricing. We aim to retain

and develop superior levels of

expertise in underwriting and

claims management at all levels

within our business.

Strong balance sheet

Our focus on profitability allows

us to deliver value to shareholders

while maintaining a strong balance

sheet, operating with an excess

regulatory capital target, of 140%

to 160% of our SCR.

Our inputs Our channels Our operating model Value creationHow we manage risk

Analysis

and pricing

expertise

Strong broker

relationships

Proprietary

data

Experienced

senior and

operational

team

Long-standing

management

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Claims experience

Dealing with our customers

both fairly and quickly while

focusing on the identification of

fraud and effective management

of injury claims.

Proprietary

dataset

Extensive dataset,

compiled from more than

19 years of underwriting

experience.

Proprietary and agile

pricing model

Disciplined, actuarially

driven pricing strategy

utilising a proprietary

and agile model.

Underwriting

discipline

Maintaining price

discipline throughout

the insurance cycle.

Sabre Insurance Group plc Annual Report and Accounts 2022

2022 171.3

2021 169.3

2020

173.2

2022 27.3

2021 28.3

2020 26.7

2022 96.0

2021 79.4

2020 75.3

2022 68.7

2021 51.1

2020 48.6

Key Performance

Indicators

How our KPIs link to Sabre’s strategy

Sabre’s strategic priorities are outlined on page 14

of this report.

The most fundamental of these is underwriting

profitability, and as such Sabre’s KPIs focus on

measures of profitability – specifically loss ratio,

expense ratio, combined operating ratio and

adjusted profit after tax. As the Group is focused

on managing risk, maintaining an appropriate

solvency coverage is important, so solvency

coverage ratio is considered a KPI.

The Group monitors its growth, and intends to

grow when market conditions allow, as such

thelevel of gross written premium forms a KPI.

Effective deployment of capital is also considered

an overarching element of Sabre’s strategy, which

is measured through return on tangible equity.

PERFORMANCE

For performance

on all our KPI's

please see

CFO’s review

pages 35 to 37

Gross written premium

£’m

Net Loss Ratio

Expense Ratio

Combined Operating

Ratio %

£171.3 m 68.7% 2 7. 3 % 96.0%

Denition

The Group’s gross written

premium (“GWP”) comprises all

premiums in respect of policies

underwritten in a particular

financial period, regardless of

whether such policies relate

inwhole or in part to a future

financial period. The ability to

underwrite policies and generate

premium is a key measure of

the Group’s implementation of

its strategy, and the Directors

believe this measure is an

appropriate quantification of

how successful the Group is

at achieving its strategy.

Denition

Net loss ratio measures net

insurance claims, less claims

handling expenses, relative

to net earned premium

expressed as a percentage.

Net claims incurred is equal to

gross claims incurred less claims

recovered from reinsurers. Net

earned premium (“NEP”) is

equal to Gross Earned Premium

(“GEP”) less reinsurance

premium ceded during the same

period in respect of which NEP

is measured. GEP is equal to the

sum of GWP and the movement

in the unearned premium

reserve for a particular period.

Denition

The Group’s expense ratio is

ameasure of total expenses

(which comprises commission

expenses and operating

expenses), and claims handling

expenses, relative to NEP,

expressed as a percentage.

Denition

The Group’s COR is the ratio

oftotal expenses (which

comprises commission

expenses and operating

expenses), and net insurance

claims relative to NEP,

expressed as apercentage.

Aim

To maintain growth in GWP

when this can be done without

compromising the underwriting

profitability or broader efficiency

of the Group.

Aim

To maintain our underwriting

discipline such that our loss ratio

remains broadly consistent,

contributing to a COR of 70%

to80%.

Aim

To minimise operating

expenditure within the business

and optimise the efficiency with

which we do business in order

to allow for achievement of a

COR of 70% to 80%.

Aim

Sabre seeks to achieve a COR

of70% to 80% on all business

underwritten. Accordingly, the

loss and expense ratios need to

be managed to ensure they

contribute to the preferred

level of profitability.

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Sabre Insurance Group plc Annual Report and Accounts 2022

2022 10.1

2021 30.1

2020 39.8

2022 12.4

2021 29.2

2020 36.0

2022 12.8

2021 37.2

2020 49.1

2022 161.4

2021 207.9

2020 203.1

How our KPIs link to Directors'

remuneration

Executive Directors’ and senior management’s

remuneration is based on both financial and

non-financial measures, with a primary focus

onthe financial performance of the Group.

Thisisachieved through a ‘profit pool’ whereby

participants are entitled to a maximum bonus

equal to a percentage of the Group’s adjusted

profit before tax, which is then modified according

to performance against individual performance

goals. The Group’s Long-Term Incentive Plan is

underpinned by measures which include return on

tangible equity and solvency coverage ratio. Each

of the KPI’s either contribute towards the Group’s

profit or report the Group’s resultant capital

position and are therefore aligned with this

remuneration approach.

PERFORMANCE

For performance

on all our KPI's

please see

CFO’s review

pages 35 to 37

Adjusted profit after tax

£’m

Solvency coverage ratio

Return on tangible

equity

Profit before tax

£’m

£10.1m 161.4% 12.4% £12.8m

Denition

The Group’s adjusted profit

after tax measures profit

fromoperations, net of tax,

adjusted to offset the effect

ofamortisation of intangible

assets and exceptional expenses

excluding tax which do not relate

to the Group’s underlying

performance (such as fees

incurred in connection with

acquisitions or capital markets

transactions).

Denition

The Group is required to

maintain regulatory capital at

least equal to its SCR. The SCR

is calculated based upon the

risks presented by the Group’s

operations and the various

elements of its balance sheet.

The Group’s solvency coverage

ratio is the ratio of the Group’s

regulatory capital in a particular

point in time to its SCR for the

same period, expressed as

apercentage. Solvency

coverage ratio is stated before

the final dividend declared in

respect of 2022.

Denition

The ability to generate profits

while maintaining capital at an

appropriate level is an important

part of the Group’s strategy,

and the Directors believe that

Return on Tangible Equity is

an appropriate quantification of

how successful the Group is in

achieving this strategy. Return

on tangible equity is measured

as the ratio of the Group’s

adjusted profit after tax to its

average tangible equity over the

financial year, expressed as

apercentage.

Denition

Profit before tax as presented

inaccordance with UK-adopted

international accounting

standards, comprising

International Accounting

Standards (“IAS”) and

International Financial Reporting

Standards (“IFRS”) and the

requirements of the Companies

Act 2006.

Aim

This is a function of Sabre’s

other KPIs and we intend to

deliver sustainable profit growth

over the medium term.

Aim

To maintain a post-dividend

solvency ratio in the range of

140% to 160%, taking into

account specific foreseeable

requirements for capital.

Aim

To make efficient use of the

capital available to the business

and achieve broadly consistent

returns year-on-year.

Aim

Through careful management

of expenses and skilled

underwriting, we intend to

deliver sustainable profit growth

over the mediumterm.

RECONCILIATION

TO IFRS MEASURES

A reconciliation

between IFRS

and non-IFRS

measures is

given on pages

170 to 172.

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Principal risks and

Uncertainties

Risk management

Managing risk effectively is core to

Sabre’s strategy, and is integral to

delivering sustainable long-term growth

for its investors. The Board is responsible

for prudent oversight of the Group’s

business and financial operations,

ensuring that they are conducted in

accordance with sound business

principles and with applicable laws and

regulations, and to ensure fair customer

outcomes. This includes a responsibility

to articulate and monitor adherence to

the Board’s appetite for exposure to all

risk types. The Board also ensures that

measures are in place to provide

independent and objective assurance

on the effective identification and

management of risk, and on the

effectiveness of the internal controls

inplace to mitigate thoserisks.

The Board has set a robust risk management strategy and framework

as an integral element in its pursuit of business objectives and in the

fulfilment of its obligations to shareholders, regulators, customers,

employees and suppliers.

The Group’s risk management framework is proportionate to the

risksthat we face. Our assessment of risk is not static; we continually

reassess the risk environment in which the Group operates and ensure

that we maintain appropriate mitigation in order to remain within our

risk appetite. Management recognises that risks must be identified,

monitored and mitigated appropriately, to ensure their negative impacts

on the Group are minimised. Whilst accepting that some elements of

risk are core to the operation of the Group, it is important to identify and

accept only the risks which generate a positive return for the Group.

Todo this, risk is managed in the first line of defence by Management,

is reviewed and challenged by the second lines of defence – the Risk

and Compliance functions and the third line of defence – Internal Audit.

Further information regarding the management of risk by the Group can

be found in the Risk Committee Report on pages 65 and 66.

The Board recognises that it is both necessary and desirable for the

Group to assume and accept an adequate level of risk in pursuing its

strategy, but notes that this must be maintained within acceptable

limits. TheGroup generally is risk-averse and operates the business to

take advantage of its good utilisation of its operational resources and

its strong ability to price risks at a consistently profitable level. The

Group does not tolerate risks which impact the Group’s key objectives

of the preservation of capital and the reliable and consistent

performance of the Group. Whilst developing its risk appetite,

Management considers its stakeholders, including customers,

employees, regulators, shareholders and suppliers.

The Group has adopted a straightforward risk appetite reﬂective of its

continued strategic focus on generating returns through underwriting

activity whilst limiting exposure to all other areas of risk.

The Group’s risks are summarised on the followingpages:

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Underwriting

Sabre acknowledges that accepting underwriting risk is core to its

business. Sabre does, however, aim to ensure that the only material

risk accepted by the Group is ‘pure’ pricing risk and that this risk is

keptwithin an acceptable tolerance. Underwriting risk is managed

inparticular with reference to the Group’s pricing and claims

management activity, and through prudent use of reinsurance.

Pricing

Pricing is based on the clear objective to achieve a positive margin

atall stages of the insurance cycle such that the target combined

ratiois better than 80%, although ideally it will be closer to 75%. It is

recognised that some new products may take some time to achieve

the target combined ratio. Sabre will tolerate a lower level of written

premiums if market competition conditions dictate prices that are

lower than those required by Sabre. The volume of business will

beconstrained by pricing policy to remain within:

– the Solvency II capital requirement; and

– the operational capacity available to effectively manage and service

the business and the consequent claims volumes arising there from.

Reserving

The Group sets reserves at an Actuarial Best Estimate (“ABE”) of

expected total claims cost, plus an appropriate risk margin/adjustment.

Risk margin is defined as the amount carried in excess of the case

reserves and claims incurred but not reported (“IBNR”); it is a buffer

against volatility.

As the Group recognises that the reserves held in respect of incurred

claims require a significant degree of judgement, when setting these

itaims to:

– hold reserves in accordance with the appropriate accounting or

regulatory framework.

– calculate its reserves on a consistent basis over time.

Insurance

Risk area

Risk appetite

Reinsurance

The Board will determine the levels of risk retention (reinsurance

limits) based on an assessment of the risk frequencies (with

reference to the capital model and any other relevant analysis)

andwill determine the acceptability of the reinsurer based on a

strong credit quality and a diversification of the exposure amongst

apanel of reinsurers. Advice from the reinsurance broker will also

beconsidered.

In general terms, Sabre will operate a reinsurance strategy that is

prudent and defensive by maintaining an attachment point (excess

over which the cost is picked up by the reinsurer) that is lower than

the theoretical optimum level so as to protect against higher than

predicted frequencies of large losses and thus a greater than

predicted impact to net claims cost.

Claims management

Sabre’s claims management function is designed to minimise

anyrisk associated with claims handling. Sabre manages this risk

primarily through providing strong controls, authority levels, rigorous

review processes and a robust internal claims training programme

and ensuring that under-resourcing within the claims team is not

reached. Sabre outsources only those operations which are deemed

as routine, and are therefore low-risk.

Product development

All material product developments have a project risk assessment

completed, ensuring that related risks are identified and where

possible mitigated.

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In general, the Group attempts to minimise operational risk across the

business through close monitoring of key risk areas including IT and

systems, people, regulatory exposure, outsourcing, financial crime,

taxation and accounting. The Group aims to comply fully with all

applicable laws and regulation, including General Data Protection

Requirements (“GDPR”). Supply chain management is seen as key

toensuring operational risk is minimised, particularly where processes

are outsourced to a third party. The risk of fraud or error is considered

to be pervasive across all business areas, and as such all processes are

developed in such a way as to minimise exposure to such risks.

IT systems and infrastructure

Sabre has a zero-tolerance approach to risk with regard to the security

of sensitive customer and Group data, and considers maintaining the

integrity of the Group’s policy and claims data as paramount. As such,

the Group is prepared to invest in the ongoing enhancement of IT

security protocols throughout the business. Sabre recognises that

cyber threats evolve and the Group has implemented mechanisms

tocontinually monitor for cyber threats to the business. This is

complemented by continual training for our employees to ensure all

methods of cyber-attack are kept front of mind when dealing with

customer data.

Outsourced operations

The Group outsources various business services/activities such as

management of financial investments, elements of claims handling

and information technology services. Sabre have consistent

monitoring and elements of executive reporting in place to ensure

our material outsourcers maintain their required level of performance.

New material outsourcers undergo an initial assessment process

which promotes good decision makingand enables Sabre to support

the business and protect its customers. 

The aim of this process is to minimise the following risks:

– Customer detriment

– Financial damage

– Reputational weakness/harm

– Failure to meet legal and regulatory requirements

– Insufficient Data security controls

– Inadequate contractual protection

Sabre is willing to accept the risk of working with third parties and

material outsourcers for core business activities.

Operations

Risk area

Risk appetite

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Sabre Insurance Group plc Annual Report and Accounts 2022

Financial crime

Sabre dedicates considerable resource to the monitoring and rebuttal

of fraudulent claims, although this is done having considered the

commercial financial benefits of pursuing and investigating potentially

fraudulent activity. We will not tolerate any breach of financial crime

laws and regulations (e.g. bribery, corruption, and money laundering,

sanctions, or tax evasion facilitation) that apply to our business and the

transactions we undertake. We do not tolerate transactions with any

sanctioned individuals. We allow commercial transactions with

politically exposed persons (PEPs) insofar as they meet our general

underwriting acceptance criteria.

Taxation

Sabre always seeks to pay the correct, fair amount of tax. If in doubt,

Sabre will generally take the lower risk/higher-tax approach, where

thedifference is not significant. In the case of significant technical

challenges with regard to taxation, Sabre will engage appropriate

external tax specialists. Sabre’s taxation strategy is published on the

Group’s website and approved by the Board on an annual basis.

Processes are designed to minimise the risk of error in the Group’s

reporting and payment of both direct and indirect taxes. Sabre takes

azero-tolerance approach to deliberate facilitation of tax evasion in any

country and has procedures in place to prevent it. We also expect the

same from our employees and third parties providing services for or

onour behalf.

Accounting

Sabre maintains straightforward and transparent accounting systems

and invests in sufficient resources within the Finance Team to ensure

the accuracy and consistency of financial reporting. Sabre has zero

tolerance for material inaccuracies in financial reporting, whether

generated through fraud or error.

Capital management

The Group’s primary capital requirement is to ensure that the Group’s

assets outweigh its liabilities at all times, that these liabilities can be

met through sufficient liquid reserves and that this is the case under all

reasonably foreseeable scenarios. This will generally be achieved by

the Group adhering to its SCR. The Group’s policy is to ensure that at

all times and under all reasonably foreseeable scenarios, the Group’s

net assets on a Solvency II basis exceed its SCR. This applies equally

to any regulated subsidiary of the Group. It is the current view of

Management and the Board that this is achieved through maintaining

an SCR of at least 140% at all times. All material decisions and all

distributions of capital will be made having considered the impact

onthe Group’s solvency capital ratio.

Investment management

The Group’s investment approach is to maintain good liquidity; to

preserve capital and to invest in low-risk stable investments that

attract a yield that is sufficient to provide a reasonable return on

therequired capital. Proper regard is given to the credit standing

ofcustodians and counterparties. Investment guidelines are set to

ensure that the Group’s investment manager adheres to the Group’s

investment policy, which expands upon these core guidelines. Sabre

has no tolerance for loss of invested assets through fraud or error.

TheGroup has no tolerance for entering into transactions with

legally prohibited counterparties.

Resilience and nancial standing

The Group considers its resilience from both an operational and

capital perspective. Aside from managing current and projected

capital to within appropriate levels, we assess our operations

throughout the business to identify processes which are key to

thebusiness and for which failure of such processes would cause

significant harm to either the business or its customers. Where such

processes are identified, we ensure that sufficient controls and

continuity plans are in place to mitigate the risk. We also carefully

manage the Group’s exposure to material counterparties and set

robust levels of liquidity for the Group.

Counterparty

Sabre minimises counterparty risk where possible and monitors

thestability and performance of brokers closely. Sabre would refuse

to do business with a broker were it to appear to display evidence

offinancial distress, rather than accept an increased risk of default,

however Sabre does acknowledge that in allowing brokers credit

terms, there will always be some residual degree of counterparty

default risk. Sabre does accept a degree of default risk on its direct

instalment policies, however the rate of default must remain

acceptable in the context of the interest rate gains on such policies.

The Group aims to hold all material exposures with strongly rated

counterparties and to diversify such exposure where possible.

Primarily, this relates to the Group’s management of its exposure

toreinsurers.

Finance and

Capital

Risk area

Risk appetite

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Governance

The Group aims to operate a simple governance structure, with clear

reporting lines and direct accountability. Sabre complies fully with the

Senior Managers Certificate Regime and Solvency II (“SII”) rules

which provide for an adequate framework to manage the Group’s risk

in this regard. In following these rules, the Group ensures those setting

the strategy are fit and proper and that the Board is sufficiently diverse

and effective. Sabre will obey the spirit and letter of the laws and

regulations which applies to it, including the UK Corporate Governance

Code. Where it does not comply with the UK Corporate Governance

Code, a full explanation will be provided.

Governance and

Compliance

Risk area

Risk appetite

Compliance

Sabre aims for complete compliance with all rules and regulations,

whilst minimising the cost to the business of non-value adding

regulatory activities. Key regulatory measures, such as:

– Solvency II

– Senior Managers and Certification Regime

– Insurance Distribution Directive

– FCA Fair Value

– FCA General Insurance Pricing Practices

– FCA Vulnerable Customers Guidance

– FCA / PRA Operational Resilience

– FCA Consumer Duty

are monitored closely by the Board. Sabre ensures adequate time

and resources are dedicated to the resolution of upcoming and

emerging regulatory issues to ensure there is minimal risk of

non-compliance. Sabre will obey the spirit and letter of the laws and

regulations which applies to it, notably regarding compliance, set by

the Prudential Regulatory Authority (“PRA”) and Financial Conduct

Authority (“FCA”).

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Sabre Insurance Group plc Annual Report and Accounts 2022

Economic disruption

The Group operates solely within the UK, and as such is subject

torisks pertaining to the economic and political stability within the

country. In the past year, both national and global events have resulted

in high interest rates, high inﬂation and some political uncertainty, all of

which are factored into the Group’s risk management framework.

Climate and ESG

Sabre recognises that the size and nature of climate-related risks is

changing globally and within the UK. The impact of this is assessed

with regard to both the Group’s insurance products and the

operations of the Group itself. Furthermore, we continue to see risks

attached to other societal factors, such as lack of diversity. We see

risk not only in the effectiveness of the Group’s operations and

profitability, but also in the increased legal and regulatory

requirements, and stakeholder expectations.

Macro Risks

Risk area

Risk appetite

Risk area

Risk appetite

People

People are central to Sabre’s business, and management are mindful

of the need to maintain a safe and comfortable work environment.

Sabre manages employees in a manner which minimises the risk of

dissatisfaction through the payment of fair wages and the provision of

a healthy work-life balance. Sabre vets new employees and carries out

continual random background checks on employees. Sabre complies

with the spirit and letter of the laws and regulations which applies to

itregarding its employees.

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Key elements Description Mitigation

Pricing

Change from

prior year:

Failure to price risks effectively can result

inworse-than-expected loss ratios or

significant unexpected changes in volumes

ofbusiness written. This includes appropriate

estimation of the increasing cost of claims,

through both historic trends, such as repair

costs, and emerging considerations such

asclimate change andthe impact of

legalreforms.

The Group operates a highly sophisticated

pricing model which is built upon fully tested

scientific principles. The model is updated

only when sufficient data has beencollected

and analysed tosupport such a change.

Management continually monitors the market

for pricing developments, but prioritises

maintenance of strong margins over the

volume of business written. Expected

behavioural changes, such as a reduction

inmiles driven due to travel restrictions,

areprojected and built into theGroup’s

pricing models.

We consider the impact in the changing

profile of physical risks related to climate

change in pricing our policies.

Changes in the costs of claims settlements

which could relateto climate change are

captured in our normal-course reviews

ofpolicy pricing. The pricing of all new

products is carefully assessed and

closelymonitored by the Chief Actuary

andhis team.

Claims

management

Change from

prior year:

A consistent approach to the management

ofclaims is essential for the accurate pricing

of policies based upon claims experience

andis key to limiting the indemnity cost of

such claims.

The Group ensures that all claims employees

are appropriately trained in the ‘Sabre Way’ of

managing claims, ensuring a fair outcome for

both the claimant and the Group. Sabre uses

outsourced specialists to deal with the first

notification of loss and as such this ensures

that the projected volume of claims which

will be handled by the business is not in

excess of the capacity of skilled claims

handlers available to the claims team.

Assessment of Principal Risks and Uncertainties

The Directors confirm that they have undertaken a robust assessment of the principal risks

and uncertainties, and emerging risks that the Group faces – this includes those that

threaten the business model, future performance, solvency or liquidity of the Group.

Set out in the following table is an overview of the principal risks the Board believe could

threaten the Group’s strategy, performance and reputation, and the actions Management

take to respond to and mitigate those risks.

All such risks are appropriately captured in the existing risk management framework.

Particular risk issues considered by the Board during the year include:

– increase in interest rates and inﬂation

– the implementation of new products – motorbike and taxi

– IFRS 17 implementation

– changes regarding Consumer Duty

– the impact of climate change on Sabre’s business and operations

– cyber security

– increased cost of living and the impact on customers and employees

Having given both new and evolving risks due consideration, the Directors continue to

consider insurance activity to present the most material risk to the Group, in particular the

estimation risk of reserving and the ability to price premiums correctly.

At the time of writing this report, the war in Ukraine was continuing. Although Sabre is a

UK-based business, global issues, such as those in Ukraine, have a significant impact on the

Group. The Group has reviewed the impact on its risk profile from the crisis and has updated

the individual risks accordingly, notably increases in inﬂation and energy costs, and supply

chain issues.

The following table shows the main risk categories and the way Sabre assesses and

controlsthem:

Insurance

CHANGE

Increase Decrease No change

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Key elements Description Mitigation

Reserving

Change from

prior year:

Inappropriate estimation of the ultimate cost

of claims incurred can lead to corrections in

future periods which could have a detrimental

impact on the Group’s capital position and

profitability. Further, incorrect reserving can

lead to errors in the pricing of new policies due

to a poor view of the profitability of business

already written. Estimates made in relation to

inﬂationary, or potentially inﬂationary, factors

such as legal reform, and climate change are

equally relevant to reserving.

There is a consistent and cautious approach

to reserving with a risk margin held above the

actuarial best estimate. The Group’s actuarial

function analyses and projects historic claims

development data and uses a number of

actuarial techniques to both test and forecast

claims provisions. In addition, the External

Auditors assess the adequacy of the

Group’sreserves.

Large losses

Change from

prior year:

A small number of random very large claims

could have a significant impact on the

short-term profitability and capital position

ofthe Group.

Reinsurance is purchased on an excess-of-

loss basis to limit the impact of large

individual losses and catastrophic events.

Reinsurance

Change from

prior year:

Should reinsurance become unavailable at an

acceptable cost, the Group’s profit would

become considerably more volatile and its

capital position would suffer.

The Group ensures that pricing decisions are

taken on the basis that the gross loss ratio

should be preserved in the long term, such

that reinsurers achieve satisfactory returns

through their relationship with Sabre. This

ensures the greatest possible appetite for

reinsurers to renew with Sabre. Sabre

maintains an open and transparent

relationship with all reinsurers on its panel.

Key elements Description Mitigation

IT systems

and

infrastructure

Change from

prior year:

The Group operates bespoke IT systems and

is reliant on the accurate recording, storage

and recall of data. Failure of these systems

could result in the business being unable to

price or process new business, or manage

claims effectively. IT systems are supported

by a third party and hosted in external data

centres. This creates a dependency on

thesesuppliers.

The Group operates a small number of key

systems which are overseen by a highly

experienced team of bespoke systems

specialists. A robust backup and recovery

plan is in place toensure continuity of

systems in the event of local system failure.

The Group has sought to avoid any identifiable

single points of failure, and maintains

continuity solutions for all keyservices.

IT systems

and cyber

security

Change from

prior year:

Loss of data, including personal data, could

lead to significant financial or reputational

detriment. Theft of the Group’s intellectual

property could impact the ability of the Group

to compete in the market. This is an area of

increasingly complex regulation, including the

GDPR.

The Group addresses issues such as the

GDPR proactively, establishing working

groups which report to the Executive

Committee where required. The Group takes

a zero-tolerance approach to the risk of loss

of personal data or its own intellectual

property and has a framework of system-

level and other operational controls to

ensureit is appropriately safeguarded.

The Group’s remote working capability has

been implemented in such a way that the ﬂow

of data is unchanged, with employees having

limited, remote access to virtual machines.

The Group has continual vulnerability

scanning in place and permanent remediation

plans, as and when required.

Outsourcing

Change from

prior year:

The use of outsourced functions in routine

operations, such as customer services,

exposes the Group to the practices and

procedures prevalent at the outsourced

operation.

The Group monitors its outsourced

operations closely, throughregular audits and

monitoring of key performance metrics.

Distribution

Change from

prior year:

Whilst the Group accesses the market

through brokers throughout the UK,

muchofits business is written through

arelatively small number of large brokers.

It is therefore particularly exposed to the

failure of those brokers.

The Group monitors its exposure to its broker

partners on a continual basis and continually

reviews the financial stability and solvency

ofits larger brokers.

OperationsInsurance

CHANGE

Increase Decrease No change

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Finance and Capital

Key elements Description Mitigation

Interest rate

Change from

prior year:

The Group invests primarily in government-

backed securities and other fixed-interest

securities and is therefore exposed to the

impact of interest rate movements on the

value of these investments. The valuation

and creditworthiness of such assets can be

impacted by macro-economic factors, such

as political uncertainty and economic factors.

The investment portfolio is relatively

short-term, limiting the impact of interest rate

movements on the valuation of invested

assets. The maturity profile of these

investments is designed to match the pattern

of outgoing claims payments, such that on a

Solvency II basis the impact of any

movement in interest rates is mitigated by a

converse movement in the value of claims

liabilities, which are discounted on the

regulatory balance sheet.

The appointment of an investment manager

ensures that investment decisions are made

on the basis of the most up-to-date and

relevant information.

Counter

Party

Change from

prior year:

The Group is exposed to counterparty default

risk in four main areas: investment assets,

amounts due from customers, amounts

duefrom brokers and amounts due from

reinsurers. Failure to recover funds due from

counterparties could result in write-offs

which would reduce profit and damage the

Group’s capital position. Similarly, excess

exposure to poorly rated counterparties can

increase Sabre’s capitalrequirement.

The creditworthiness of the Group’s

counterparties has been considered in the

context of the economic uncertainty. We

have not identified any material deterioration

in the quality of our financial assets and

receivables.

The Group invests primarily in government-

backed securities and a diverse selection of

highly-rated corporate bonds, which carry a

very low risk of default.

The Group operates a robust programme of

credit control and performs due diligence on

broker partners as relationships are entered

into and continually through the life of those

relationships.

The financial security of reinsurers is

considered when selecting panel members

and reviewed on a regular basis.

Liquidity

Change from

prior year:

Inadequate monitoring of liquidity could

resultin the inability to meet liabilities as

theyfall due.

The Group maintains sufficient cash reserves

at all times to meet its best estimate of

short-term liabilities and monitors this

position continually. Whilst the Group

considers its investment portfolio to consist

of actively traded assets and therefore liquid,

it ensures that the maturity of its investment

portfolio is matched to its ongoing cash

requirement.

Key elements Description Mitigation

Capital

management

and solvency

position

Change from

prior year:

If the Group fails to maintain adequate

solvency capital, this could result in

regulatory intervention which may limit

profitability or the ability of the Group to

distribute capital. Some issues impact

primarily on the solvency position but do

notaffect the trading result of the Group.

The Group has strong governance in place to

monitor its solvency position on a continual

basis, including forecast solvency and

scenario testing, primarily as part of the

Group’s Own Risk and Solvency Assessment

(“ORSA”) process. The Group ensures that

key elements of judgement, such as

reserving, are reviewed by the Audit and

RiskCommittees and undergo appropriate

independent scrutiny.

Financial

crime

Change from

prior year:

Financial crime, whether internal or external,

could result in material loss of assets and

significant reputational risk. Financial crime

can include misappropriation of assets or

fraudulent activity designed to misrepresent

the financial performance or position of

theCompany.

Ownership and management of operational

risks sit with the first line business functions.

Whilst substantial internal controls are in

place to mitigate the risk of financial crime,

the Group considers its culture and ‘tone

from the top’ to be key in raising awareness

of external crime and limiting the risk of

occurrence of internal financial crime.

Taxation

Change from

prior year:

Sabre is liable for a number of taxes in the UK

including corporation tax, insurance premium

tax, value added tax and payroll taxes. The

Group would be subject to sanction or

penalties if these taxes are misreported due

to error or poor judgement.

The Group’s operations are straightforward,

entirely within the UK, and the Group does not

operate any form of tax avoidance. Where

areas of complexity are identified, or new

material transactions are entered into, the

Group will engage external tax advisors. The

Group’s annual corporation tax calculations and

returns are reviewed by external tax advisors.

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Sabre Insurance Group plc Annual Report and Accounts 2022

People

Key elements Description Mitigation

Employees

Change from

prior year:

The quality of our employees is central to the

success of Sabre, and the potential loss of

employees or the inability to recruit quality

and diverse employees may have an adverse

impact on the performance of the Group.

The Group seeks to attract, retain and

develop its employees by:

– Creating a hardworking and enjoyable work

environment

– Induction process

– On the job training

– Appraisals

– Annual pay reviews

– Benefits and discounts

– Community involvement/initiatives

– Employee roundtables with the CEO

– Appointment of a Non-executive Director

who is responsible for engagement with

employees

Governance and Compliance

Macro Risks

Key elements Description Mitigation

Compliance

Change from

prior year:

The Group is subject to the PRA and FCA

regulatory regimes, including prudential

regulation by the PRA and FCA. This

regulation dictates elements of the Group’s

operational activity such as the manner in

which customers are treated and the

recruitment and development of employees.

The FCA continues to focus on fair market

pricing which, whilst well managed through

the Group’s risk appetite, nonetheless

increases conduct risk for the Group. Failure

to comply fully with prevailing regulation can

lead to monetary or other sanctions which

may impair the Group’s ability to function.

Recent FCA policy statements on GI Pricing

Practices and Value Measures Reporting will

result in the Group having to demonstrate it

understands its target market and how fair

value will be delivered to the end consumer.

The FCA Consumer Duty which comes into

effect on the 31 July 2023 will mean the

Group has a regulatory responsibility to

deliver good outcomes for retail customers.

The Group has an extremely low appetite for

accepting any risk other than that which

relates to the underwriting of its insurance

policies, and therefore its decision-making

reﬂects this in relation to conduct risk and

other regulatory matters. The Group operates

a risk management framework which is

approved by the Board. The Group monitors

legal and regulatory developments in the UK

and closely monitors its exposure to

regulatory risk. The Group culture ensures

the interests of our customers and their fair

treatment are paramount. The Group’s Head

of Compliance reviews and monitors

operational activity to ensure regulatory

requirements are adhered to. The Group

engages with the PRA and FCA regulators on

all relevant consultations. The Group in

accordance with regulatory requirements has

appointed a Non-executive Director to be the

Consumer Duty Champion. The Group’s

Head of Compliance is overseeing the

implementation of FCA Consumer Duty

requirements across the business.

Legal

Change from

prior year:

The Group operates within the UK and is

therefore primarily subject to the requirements

of UK law. Further to those regulatory and data

protection laws (discussed separately), the

Group is exposed to employment law,

Companies Act legislation and taxlaw.

Non-compliance with laws can result in

financial sanctions or impair the Group or the

Group’s Directors’ ability to operate effectively.

The Group has established a robust risk

andcontrol framework and sets the

clearobjective to minimise the risk

ofnon-compliance with all laws and

regulations. A review of all new material

contracts is undertaken.

Key elements Description Mitigation

Inﬂation

Change from

prior year:

Cost inﬂation is currently high across the UK

and global economy. In general, the costs

related to insurance claims have experienced

inﬂation of 7% to 8% for several years, but we

saw this increase to c.12% during 2022. We

expect this wider inﬂation to not only increase

pressure on claims costs further but also to

impact the Group’s wider expense base.

In setting insurance premiums and in

calculating the expected cost of claims used

for setting the Group’s insurance liabilities,

Sabre uses an up-to-date assessment of the

current inﬂationary environment. We expect

market pricing to adapt to this increasing cost

base and therefore any price rises applied

should have a low impact on our

competitiveness in the medium-term. We will

continue to monitor and model the changes in

costs and adjust our prices accordingly.

Climate

change

Change from

prior year:

The risk of climate change could have a

negative impact on the earnings or financial

position of the Group. For example, there

could be an impact on the cost of claims in

the long-term due to an increase in the

number of extreme weather events or the

transition to electric vehicles. Further

information on this can be found in the

Responsibility and Sustainability section

ofthis report on pages 38 to 49.

The Group has appointed the Chief Financial

Officer to oversee the management of this risk

and its impact on the Group is reviewed at

least annually at the Group’s Risk Committee.

We have sought to integrate the consideration

of climate risks within the Group’s decision-

making processes and continue to improve the

clarity and usefulness of our disclosures

around climate change. Further information on

the Group’s considerations relating to the

environment and climate change can be found

on pages 44 to 49 of this report.

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Sabre Insurance Group plc Annual Report and Accounts 2022

Viability Statement

The Board considers the Group’s financial status and viability on a

regular basis as part of its programme to monitor and manage risk. In

accordance with provision C.2.2 of the UK Corporate Governance Code

2018, the Directors have assessed the Group’s prospects and viability

for the three-year period to 31 December 2025, taking into account the

Group’s current position and the potential impact of the principal risks.

The assessment period of three years has been chosen as it is in line

with our business planning horizon. This is consistent with the time

horizon projected for most scenarios assessed through the Group’s

ORSA process. The cyclical nature of the motor insurance market

means that projecting for periods longer than three years creates

material uncertainty; however, we do review longer-term strategic

developments and emerging risks over longer time periods.

Assessing viability

In making their assessment, the Board took into account the potential

impact of the principal risks that could prevent the Group from

achieving its strategic objectives. The assessment was based on the

Group’s ORSA process, which brings together management’s view of

current and emerging risks, with scenario-based analysis and reverse

stress testing to form a conclusion as to the financial stability of the

Group. Consideration was also given to a number of other individual

risks and events. In the Board’s estimation these events would not

plausibly occur to a level of materiality that would endanger the Group’s

viability. The assessment also included consideration of any scenarios

which might cause the business to breach its solvency requirements

which are not otherwise covered in the risk-based scenario testing.

Conclusion

Based on the consolidated financial impact of the sensitivity analysis

and associated mitigating internal controls and risk management

actions, as described in detail for each principal risk, the Directors

concluded that the Group will be able to operate within its solvency

capital appetite and maintain sufficient liquid investments and cash

reserves to meet its funding needs over the viability period.

Consideration of long-term viability

The assessment of principal risks facing the Group and robust

downside sensitivity analysis leads the Board to a reasonable

expectation that the Group will remain viable, continue in operation

and meet its liabilities as they become due over the viability period

through to 31 December 2025.

The impact of inflation

The current economic environment is one of unexpectedly high

inﬂation, of an uncertain persistency, along with volatile investment

markets and higher interest rates than in the preceding few years.

Wehave considered the impact of this on the 2022 result as well as

the Group’s performance and position across the planning horizon.

Impact on the 2022 financial position and result

The immediate impact of the rapid rise in inﬂation during H1 2022 was

twofold. Firstly, the cost of claims already incurred was deemed to be

greater than previously expected, which led to an increase in the

associated claims liabilities. Secondly, the expected cost of claims not

yet incurred on policies already in-force increased, meaning that the

achieved loss ratios in the current year is worse than expected. Both of

these are natural consequences of the estimation involved in selling a

product for which the true cost cannot be known for a number of years.

These contributed to the Group’s high (by historic standards) loss ratio,

however the headroom with which the Group usually operates meant

that an underwriting profit was achieved and hence capital strain

waslimited.

The high interest rates and devaluing of UK-based assets during 2022

had a direct impact on the bonds held within the Group’s investment

portfolio, which are held at market value. The Group’s investment

portfolio consists of diverse, highly rated bonds, predominantly

government-backed. As the Group operates a ‘buy and hold’ strategy,

market value movements are taken through ‘other comprehensive

income’ and unwind during the life of the bond, meaning that the

overall returns are unaffected by short-term market value movements.

The Group’s Solvency II balance sheet was largely unaffected by the

reduction in market values as this was offset by an increase in discount

rates applied to claims liabilities.

The Group’s expected credit loss (“ECL”) provision has also remained

stable throughout the year, but Management is continuously monitoring

the credit quality of the counterparties to which it is exposed.

The Group continuously assessed its SCR during 2022. The Group

achieved a solvency coverage ratio of 161% at year end, in line with

the target ratio of 140% to 160% and did not drop below this range

throughout the year. Refer to Note 2 of the financial statements for

detail on capital management.

The liquidity position of the Group is outlined in Note 6 of the Financial

Statements. The short-term liabilities of the Group remain adequately

covered by the liquid assets. We continue to monitor the liquidity of

our assets and the financial markets, to ensure cash outﬂows are

appropriately matched. All of the Group’s cash and cash equivalents

are invested in highly liquid money markets and bank deposits.

Short-term impacts

We have taken appropriate pricing action to ensure, as far as is

possible, that policies written today will achieve the Group’s target loss

ratios. However, we expect there to be a tail consequence of the rapid

inﬂation into 2023, which means that 2023’s expected loss ratio is

likely to remain above historic norms, albeit improved from 2022.

A second-order impact of high inﬂation is on the volumes of business

written by the Group. Where Sabre seeks to meet the costs of claims

through increasing prices, generally it does so ahead of the rest of the

insurance market, creating short-term pressure on volumes. While we

expect overall market pricing to correct, the nature and extent of such

a correction is uncertain, and as such the level of premium written by

Sabre could remain somewhat suppressed during 2023.

Medium and long-term impacts

While we expect inﬂation pressures to decrease during 2023 and

beyond, we do consider there to be considerable uncertainty in the

level and persistency of inﬂation over the medium-term. We will

continue to price our policies cautiously to allow for elevated levels

ofinﬂation and will maintain a low-risk, diversified balance sheet to

mitigate volatility in the investment markets.

Viability due to inflation

The Group and its operating entity have considered various stress

scenarios related to inﬂation. These risk scenarios indicate that the

current economic environment will not change the viability status of

the Group and its operating subsidiary. The Group trades from a robust

capital position and is expected to remain well capitalised under all

reasonable financial and operational stress scenarios.

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Sabre Insurance Group plc Annual Report and Accounts 2022

The impact of climate change

We discuss the impact of climate change in detail on pages 44 to 49 of

this report. We have assessed the short, medium and long-term risks

associated with climate change. Given the geographical diversity of

the Group’s policyholders within the UK and the Group’s reinsurance

programme, it is highly unlikely that a climate event will materially

impact Sabre’s ability to continue trading. More likely is that the costs

associated with the transition to a low-carbon economy will impact the

Group’s indemnity spend, as electric vehicles are currently relatively

expensive to fix. We expect that this is somewhat, or perhaps

completely, offset by advances in technology reducing the frequency

of claims, in particular bodily injury claims which are generally far more

expensive than damage to vehicles. These changes in the costs of

claims are gradual and as such reﬂected in our claims experience and

fed into the pricing of our policies. However, if the propensity to travel

by car decreases overall this could impact the Group’s income in the

long term, but this is not expected to be material within the viability

period of three years. We do not consider it plausible that such a

decrease would be as severe as the scenarios that we have modelled

as part of our viability testing exercise.

Scenarios modelled and link to principal risks

This table shows some of the key scenarios modelled as part of our

viability testing exercise, and the risks to which they most closely

relate. Some detail on the types of stresses modelled in each scenario

is given below:

– Reserve strengthening: An instantaneous 20% increase in net

reserves

– Reinsurer failure: The instantaneous failure of the reinsurer with

which we hold the largest recoverable position

– Significant short-term drop in premium: A 50% drop in premium

fora period of three months

– Increase in expenses: A 25% inﬂation in operational expenditure

– Above-expected claims costs: 10% increase in net loss ratio

– Investment valuations: A 25% decrease in the market value of the

corporate bond portfolio

We have also modelled worst-case scenarios which combine

theseevents.

Scenario

Risk category

Reserve

strengthening

Reinsurer

failure

Short-term

signicant drop

in premium

Increase

in expenses

Above-expected

claims costs

Investment

valuations and cash

ow

Underwriting

Pricing

Reserving

Reinsurance

Claims management

Product development

IT systems and infrastructure

Counterparty

Outsourcing

Financial crime

Taxation

Accounting

Capital management

Investment management

Resilience and financial standing

Governance

Compliance

People

Climate change

Economic disruption

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Sabre Insurance Group plc Annual Report and Accounts 2022

Section 172 Statement

Fair, risk-based

pricing and

reliable returns

Our purpose

To provide motor insurance,

available to the widest possible

range of drivers, based upon a

fair, risk-based pricing model that

is consistent across all customers.

To generate excess capital and

return this to shareholders, or

reinvest in the business in order

toincrease future returns.

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Sabre Insurance Group plc Annual Report and Accounts 2022

Section 172 (1) Statement

This section of the Strategic Report

describes how the Directors have had

regard to the matters set out in section

172 (1) (a) to (f), and forms the Directors’

statement required under section

414CZA of the Companies Act 2006.

Stakeholders and our Board

Sabre aims to provide high-quality motor insurance at a fair price,

whilemaking attractive returns for its shareholders under any market

conditions. This can only be achieved through engagement with, and

consideration of, all stakeholders including our employees, customers,

suppliers and regulators.

Stakeholder engagement

The Board recognises that the needs and relevance of different groups

of stakeholders can vary over time, and as such the Board seeks to

understand the needs and priorities of each stakeholder as part of

itsdecision-making. This is integral to the way the Board operates.

Page 33 of the Strategic Report sets out who our stakeholders are and

how our strategy impacts them. We further discuss how we engage

with our key stakeholders, and our own employees, on pages 38 to 40

of the Strategic Report.

Listening to the needs of stakeholders

Our Board interacts with stakeholders through direct engagement as

well as through information provided by Management.

Key engagement activities include:

– Appointing a Non-executive Director to be responsible for direct

employee engagement, which involves meeting with employees at

all levels within the business throughout the year in order to discuss

their concerns, ambitions, and views on the business

– Review and assessment of the results of annual employee surveys

– Engaging with shareholders: at the regular Management roadshows,

attendance at investor conferences and through meetings with

theChair

– The Board and Management allow time for informal discussions

with shareholders before and after the Group’s Annual General

Meeting. This is an opportunity to interact with smaller, non-

institutional shareholders

– Regular supervisory meetings between individual Board members

and the Group’s regulatory supervisory team, which facilitates wider

discussion of the issues facing the insurance industry as a whole, as

well as Company-specific matters

– Reports from Executive Management to the Board on customer

service, including complaints root-cause analysis and whether

customer service metrics have been met

Embedding stakeholder interests within our culture

Through informed discussion at Board level, our Executive Team

carries forward stakeholder consideration into and throughout the

business. Sabre operates a culture of openness and transparency, with

management at all levels working amongst their operational teams,

ensuring that the tone from the top is well embedded in the day-to-day

operations of the Company.

Ensuring stakeholder interests are taken into account

The Board take their responsibilities under Section 172 of the

Companies Act very seriously. The Board is aware that the Directors

ofthe Company must act in good faith, and in ways that promote the

success of the Company for the benefit of its members, and in doing

so have regard to:

– the likely consequences of any decision in the long term

– the interests of the Company's employees

– the need to foster the Company's business relationships with

suppliers, customers and others

– the impact of the Company's operations on the community and

theenvironment

– the desirability of the Company maintaining a reputation for high

standards of business conduct

– the need to act fairly as between members of the Company

This table demonstrates where further information on how the Board

has met these responsibilities is disclosed:

Long-term results Our strategy p14

Chair’s Letter p6

Market Context p8

CEO’s Review p10 to 12

Business Model p16

KPIs p17 to 18

Principal Risks and Uncertainties p19 to 28

CFO’s Report p35 to 37

Viability Statement p29 to 30

Audit Committee Report p62 to 64

Risk Committee Report p65 to 66

Employees Business Model p16

CEO’s Review p10 to 12

Employees section of the CSR Report p40 to 42

Board Principal Decisions p34

Chair’s Governance Letter p52

Remuneration Committee Report p69 to 71

Directors’ Remuneration Report p78 to 87

Employee Designated NED p60

Stakeholders Strategy Operations p14

Strategy Distribution p14

Strategic Priorities p14

CEO’s Review p10 to 12

Business Model p16

CSR Report p38 to 49

Community and

environment

CEO’s Review p10 to 12

CSR Report p38 to 49

Directors’ Report p88 to 90

Reputation Strategy Report p14

CEO’s Review p10 to 12

Governance Report p56 to 61

Fairness for

shareholders

Strategy Report p14

Governance Report p56 to 61

Remuneration Committee Report p69 to 71

Directors’ Remuneration Report p78 to 87

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Sabre Insurance Group plc Annual Report and Accounts 2022

How s.172 is applied across our

stakeholders

Shareholders

Underwriting performance

Delivering consistent and attractive returns on capital.

Risk management

Minimise volatility in result and maximise available capital.

Growth

Increasing value and absolute returns over time.

Operations

Enhancing operational efficiency and minimising cost.

Distribution

A ﬂexible distribution model allows protection of bottom line throughout

the market cycle and responds to emerging customer demand.

Employees

Underwriting performance

Stable business model allows for long-term, rewarding careers.

Risk management

Job security in a supportive, culturally sensitive environment.

Growth

Over time, internal opportunities to develop and grow with the business.

Operations

Skills-based operations allow for fulfilling employment. Conformity

with best practice.

Distribution

Broker-led distribution retains technical skills in-house.

Customers

Underwriting performance

Providing a quote for almost all potential customers, based upon

theexpected cost to us in providing that policy, irrespective of the

individual’s shopping or behavioural habits.

Risk management

Certainty that cover will be honoured and that the Group will retain the

means to settle any claims which fall due. Comfort that we operate in

line with all applicable laws and regulations.

Growth

Over time, scale benefits allow lower prices without sacrificing margin.

Operations

Efficient, consistent service from our claims and front-end

administrative units, along with effective operational controls to allow

for fast, accurate transactions.

Distribution

Obtaining a Sabre quote is easy, whether through a broker’s branch,

price comparison website or direct through our brands, meaning

almost everyone has access to a Sabre policy.

Partners

Underwriting performance

Cash-positive business makes Sabre a reliable counterparty.

Risk management

Certainty of liquidity to meet debts as they fall due.

Growth

Become an increasingly valuable trading partner over time.

Operations

Make timely, accurate payments to all suppliers.

Distribution

Fair, consistent terms with our distribution partners.

Regulators

Underwriting performance

Only underwriting business that will meet our target margins and

generate appropriate regulatory capital.

Risk management

Maintaining capital headroom. Minimising conduct risk and ensure full

compliance with legal and regulatory landscape.

Growth

Growing when the market allows, without sacrificing profitability or

capital security.

Operations

Ensuring accurate, timely reporting and close monitoring of regulatory

risk areas.

Distribution

Broker audits and on-boarding processes ensure a fully compliant

customer journey.

Society

Underwriting performance

Providing access to insurance to as wide a group as possible, reducing

the risk of uninsured drivers.

Risk management

Financial stability and strong balance sheet present lowest possible

systemic risk.

Growth

Increasing employment in the local community, while monitoring our

impact on the environment.

Operations

Ensuring efficient use of resources and managing the Group’s impact

on our local environment.

Distribution

Making our product available as widely as possible, at a fair price to all.

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Sabre Insurance Group plc Annual Report and Accounts 2022

Key Board decisions during

thefinancial year ended

31December 2022

The Board recognises the importance

ofmaking decisions in a manner

whichensures that all of the Group’s

stakeholders are treated consistently and

fairly. This can be demonstrated through

the below key decisions, which were

made by the Board during the financial

year ended 31 December 2022.

Inflation and economic uncertainty

The war in Ukraine, mixed with other local and global factors, created

an environment of significant economic uncertainty and high inﬂation.

The high-inﬂation environment presented a number of challenges:

– The Board was satisfied that the Group’s low-risk approach to

investments and asset-liability matching sufficiently mitigated the

risk of asset volatility on the balance sheet. The Board reviewed the

Group’s investments to identify any bonds which were exposed to

the conﬂict in Ukraine, or linked to Russia. None were identified

– Directly, costs incurred in servicing insurance contracts (claims

costs) increased significantly and unexpectedly. The Board acted

toensure the financial stability of the firm by challenging

Management’s assessment of future claims costs within the

Group’s claims reserves

– The Board supported Management’s actions to increase policy

pricing in line with inﬂation. While this would inevitably lead to

increased costs to consumers, the Board considered the potential

downsides of under-pricing policies to be far more significant

– The Board approved an £800 ‘cost of living’ allowance paid to all

staff in instalments from Q3 2022, to help ease the burden of

increased energy and food costs

– The Group’s reinsurance programme was renewed on expiring

terms, significantly limiting the impact of volatility in the costs of

long-term care

Dividend

The Group’s dividend policy states that an ordinary dividend will be

paid based on 70% of the year’s profit after tax, with the potential

foradditional capital to be distributed by way of a special dividend as

appropriate. The Board assesses whether to pay a special dividend on

an annual basis once the result for the year is known. This decision is

made primarily based upon the financial position of the Group, as

demonstrated through its SCR coverage ratio, as well as projected

capital needs and the wider economic and market backdrop. The

Board considers this to meet the overriding need of all shareholders,

customers, staff and our regulators, for the Company to remain a

solvent, viable trading entity under all reasonably foreseeable

circumstances. The Board also makes a secondary consideration

ofthe expectation of shareholders, understanding that many of the

Group’s investors hold stock in order to benefit from the strong

dividend ﬂow.

During 2022, the Board made the decision to pay a full ordinary and

interim dividend in line with the Group’s policy, as well as a special

dividend reﬂecting the distribution of excess capital in line with the

expectations of most shareholders. While the interim dividend was

paid in line with the Group’s policy, the Board noted that the

distribution was in excess of the level of capital generated during the

first half of 2022. However, having reviewed the strength of the

balance sheet and detailed capital modelling prepared by Management,

the Board was satisfied that such a distribution was appropriate and in

line with the expectations of the Group’s stakeholders.

Strategy

The Group’s strategy is well documented within this report, and has

changed little in the past two decades. This Board does continually

review the Group’s strategy against its best understanding of the

needs of key stakeholders. In September 2022, the Board held its

annual ‘Strategy day’, at which the existing strategy was assessed

primarily against the needs of shareholders, customers, staff and

ourregulators. The Board concluded that the needs of our key

stakeholders were well met through the current strategy. The Board

considered whether continued market softness should drive a change

in strategy, however concluded that the current, focused approach was

likely to give the best long-term result for shareholders as well as the

best prices for customers and the best level of customer service. The

Board considered that the entry into motorcycle and expansion into taxi

insurance would bring useful resilience to the Group’s result, once the

products had fully bedded-in, but that the motor business should

remain the Group’s key priority and most likely area of material growth.

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Sabre Insurance Group plc Annual Report and Accounts 2022

In my 2021 report, I highlighted the

strong basis for growth that had

beenset through prudent underwriting

and cautious management throughout

the pandemic. This year, the same

caution has allowed Sabre to

generateunderwriting profit despite

unprecedented economic challenges.

When the impact from the invasion of Ukraine fed through into rapid

inﬂation in the UK economy, it was clear that all insurers would face

asignificant headwind in profitability. An insurance product by nature

reﬂects the insurer’s best guess of the total cost of claims attaching

tothat policy, which may not be fully realised for years after the policy

has expired. So, a rapid increase in costs will inevitably mean that

policies already sold will achieve less than planned profit margins,

andclaims already recorded but not settled would cost more than

expected, leading to deterioration in prior-year reserves. This event

occurred after an already extended period of under-pricing in the motor

insurance market. Sabre was not immune to the effects of this, but

was well-placed to face into the challenge because:

– While the motor insurance market had been systemically under-

priced for several years, Sabre had met increasing costs of claims

with policy price increases, meaning that the Group was on the

‘front foot’ when further pressures emerged.

Principal

risks and

uncertainties

on page 19

Chief Financial Officer’s Review

High target

margins allow

headroom for

unexpected

events

ADAM WESTWOOD

Chief Financial Officer

Highlights

2022 2021

Gross written premium £171.3m £169.3m

Net loss ratio 68.7% 51.1%

Expense ratio 27.3% 28.3%

Combined operating ratio 96.0% 79.4%

Adjusted profit after tax £10.1m £30.1m

Profit after tax £10.1m £30.1m

Solvency coverage ratio (pre-dividend) 161% 208%

Solvency coverage ratio (post-dividend) 154% 164%

Return on tangible equity 12.4% 29.2%

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– Sabre’s core margins were sufficient to absorb deterioration and still

generate an underwriting profit.

– Sabre is an agile business with short feedback loops and a sharp

focus on motor insurance costs. As soon as we identified the impact

of rapidly increasing inﬂation, pricing action was taken. The effects

of this pricing action show through the second half of 2022 and

should support a strong recovery into 2023 and beyond.

Beyond the core motor book, we saw rapid growth in the motorcycle

and taxi lines during 2022, having entered into material partnership

arrangements in November 2021 and February 2022 respectively.

Given the infancy of these lines of business we did not expect a

significant contribution to profit in the first year, however we had

planned to absorb this through increased volumes in the core motor

book. Such increased volume did not materialise in 2022, a direct result

of Sabre’s decisive pricing action set against the wider industry’s slow

response to inﬂation – the Group again trading volume for resilience

and long-term profitability. The introduction of less profitable bike and

taxi business set against lower than expected volumes in motor

therefore had a clear negative contribution to the Group’s net loss ratio.

The expense ratio has decreased year-on-year, to 27.3%, which has

resulted from an increased net earned premium and continued tight

control of costs.

The Group’s profit before and after tax reﬂects the combined operating

ratio for the year of 96.0%. The year-on-year decrease in profit is

almost entirely attributable to the increase in net loss ratio.

The Board have announced a special dividend of 1.7p, bringing the

total distribution in respect of 2022 to 4.5p. This is reﬂective of the

Board’s confidence in the strength of the Group’s uncomplicated

balance sheet. Return on tangible equity was 12.4%, the reduction

from the prior-year a result of the Group’s lower profit.

Revenue

2022 2021

Gross written premium £171.3m £169.3m

Gross earned premium £178.2m £165.9m

Net earned premium £153.2m £145.4m

Other technical income £1.8m £2.1m

Customer instalment income £3.3m £3.9m

Interest revenue calculated using the effective

interest method

£1.4m £1.2m

Fair value (losses)/gains on debt securities through OCI (£14.2m) (£5.6m)

The trend of reducing overall premium for the last few years has

reversed, with the Group increasing written premium year-on-year.

Beyond the headline figure, the motor line did not grow during 2022 as

anticipated, due to persistent market under-pricing in an extraordinary

inﬂationary environment. However, the motorcycle line generated

significant additional income of £23.1m (2021: £3.2m), while taxi

contributed £13.3m (2021: £1.5m) to the top line.

Other sources of income remained proportionate to the amount of

business written through the Direct channel, which had become

proportionately smaller during 2022 due to the introduction of the

motorcycle and taxi lines, both of which are sold exclusively

throughbrokers.

Investment income, which reﬂects the effective interest across

theGroup’s ‘buy and hold’ bond portfolio, increased a little as

reinvestments were made at higher returns. We expect the yield to

continue to increase in the current environment as bonds gradually

mature and are reinvested at higher rates. We have included a

breakdown of investments by maturity on page 139.

While market value losses have been recorded across the bond

portfolio, we do not expect these losses to crystalise as the bonds are

held to maturity and will pull to their par value. The Group does not

hold any non-cash financial investments outside of this portfolio and so

is not exposed to movements in equity or property markets.

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Operating expenditure

2022 2021

Gross claims incurred £125.9m £105.0m

Net claims incurred £112.8m £81.0m

Current-year loss ratio 67.9% 56.0%

Prior-year loss ratio 0.8% (4.9%)

Financial year loss ratio 68.7% 51.1%

Net operating expenses £41.8m £41.2m

Expense ratio 27.3% 28.3%

Combined operating ratio 96.0% 79.4%

The year’s underwriting result is best explained in terms of the

current-year loss and prior-year loss ratios, and the expense ratio,

which together make up the combined ratio, and split between motor,

bike and taxi. Given the infancy of the bike and taxi lines, their impact

on prior-year losses is negligible.

2022 2021

Motor Motorcycle Taxi

All lines

Net earned premium £132.9m £15.1m £5.2m £153.2m £145.4m

Net claims incurred,

excluding claims

handling expenses £81.7m £17.9m £5.6m £105.2m £74.2m

Current-year loss ratio 60.4% 118.0% 112.8% 67.9% 56.0%

Prior-year loss ratio 1.1% 0.4% (6.0%) 0.8% (4.9%)

Financial year loss ratio 61.5% 118.4% 106.8% 68.7% 51.1%

The underwriting result can be considered in the context of three key

numbers: the prior-year loss ratio, the current-year motor loss ratio and

the motorcycle and taxi loss ratios. Taking each in turn:

– The prior-year motor loss ratio, which is usually negative and reﬂects

the run-off of margins on previously incurred but not settled claims,

was positive in 2022, which means that reserve strengthening was

inexcess of any margin run-off. This strengthening was required to

reﬂect the increase in expected costs due to the high-inﬂation

environment. This should not be required in future periods

(notwithstanding further rapid unexpected inﬂation) as claims recorded

since this adjustment inherently reﬂect the new cost environment.

– The current-year motor loss ratio has increased by c.4% against the

same in 2021. This increase is a result of inﬂation generating

increased costs on policies which were written prior to March 2022,

along with normal volatility in the current-year result.

– In-year performance for motorcycle and taxi business has been

slightly disappointing, with significant pricing action taken during the

year, which we anticipate to bring these loss ratios down materially

in 2023.

The Group’s expense base has remained well under control, despite

inﬂationary pressures – although we expect these to feed through as

contracts are renewed over the next few years. Such increases are

factored into our current policy pricing. The reduction in expense ratio

is largely due to increasing net earned premium year-on-year.

Taxation

In 2022 the Group recorded a corporation tax expense of £2.6m (2021:

£7.1m), an effective tax rate of 20.7%, as compared to an effective tax

rate of 19.0% in 2021. The effective tax rate approximates to the

prevailing UK corporation tax rate. The Group has not entered into any

complex or unusual tax arrangements during the year.

Earnings per share

2022 2021

Basic earnings per share 4.06p 12.09p

Diluted earnings per share 4.03p 11.9 8 p

Basic earnings per share for 2022 of 4.06p per share is proportionate

to profit after tax. Diluted earnings per share is similarly proportionate

to profit after tax, taking into account the potentially dilutive effect of

the Group’s share schemes.

Cash and investments

2022 2021

Government bonds £87.2m £86.2m

Government-backed securities £80.8m £83.9m

Corporate bonds £61.3m £64.6m

Cash and cash equivalents £18.5m £30.6m

The Group continues to hold a low-risk investment portfolio and cash

reserves sufficient to meet its future claims liabilities. This has resulted

in a stable yield across the portfolio. As most assets are held to

maturity, the yield achieved by the portfolio lags changes in market

yield, with funds generally being reinvested on maturity.

Insurance liabilities

2022 2021

Gross insurance liabilities £257.4m £232.5m

Reinsurance assets £106.3m £103.6m

Net insurance liabilities £151.1m £128.9m

The Group’s net insurance liabilities continue to reﬂect the underlying

profitability and volume of business written. The slight relative increase

in gross insurance liabilities against 2021 was a result of additional

large claims being recorded against the continued relatively slow

settlement of personal injury claims. The level of net insurance

liabilities held remains broadly proportionate to the volume of business

written, and reﬂects inﬂationary increases in the cost of claims.

Leverage

The Group continues to hold no external debt. All of the Group’s capital

is considered ’Tier 1’ under Solvency II. The Directors continue to hold

the view that this currently allows the greatest operational ﬂexibility for

the Group.

Dividends and solvency

The Directors have proposed a total final dividend of 1.7p per share in

respect of 2022. The total amount proposed to be distributed to

shareholders by way of dividends for 2022 is therefore 4.5p per share,

including the ordinary interim dividend of 2.8p per share already paid.

The total ordinary dividend due to be paid according to the Group’s

policy is entirely covered by the interim dividend, therefore the entire

final dividend is considered ‘special’ according to the Group’s policy.

Excluding the capital required to pay this dividend, the Group’s SCR

coverage ratio at 31 December 2022 would be 154% This is consistent

with the Group’s policy to pay an ordinary dividend of 70% of profit

after tax, and to consider passing excess capital to shareholders by

way of a special dividend.

ADAM WESTWOOD

Chief Financial Officer

13 March 2023

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Sabre Insurance Group plc Annual Report and Accounts 2022

Our

Customers

Our

Partners

Our

Community

Our

Environment

Our People

Our

Shareholders

A responsible

and sustainable

business

Operating Sabre as a responsible

and sustainable business is a key

element of our long-term strategy.

We have developed a framework

for our actions which forms an

important reference point when

directing the Group’s activities. We

are committed to doing our part in

building a sustainable future.

Our responsibility and

sustainability framework:

Responsibility and Sustainability

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Sabre’s business is built around the customer, with a goal

to provide access to fairly priced motor insurance for

almost everyone. We want our customers to experience

high-quality customer service and peace of mind.

Pricing

We price all of our policies based upon our estimate of the ultimate

cost to us of providing that policy including paying claims,

administrative expenses and taking a consistent margin regardless

ofthe premium level. Each uniquely priced policy is based upon our

view of the risks presented by it, considering both the person and the

vehicle insured. This assessment is based on our bespoke fully-

automated pricing model, using our experience represented by many

years of claims data. Because we seek to offer premiums to almost

everyone, we have generated a deep pool of data, which allows us to

provide the best possible, risk-adjusted prices.

Our Customers

Customer experience

We strive to ensure an easy, efficient service to all of our customers

however they reach us. This could be through our extensive broker

network, or directly to us through our own brands, Go Girl and

Insure2Drive. This includes providing a straightforward sales process

andknowledgeable, well-staffed UK-based call centre.

Claims

Most of our business is sold online or through our network of brokers,

which means our first contact with customers is often when they

make a claim. We understand this can be a stressful process and

seekto make it as easy as we can, to provide a ‘no hassle’ service

forhonest customers and third parties. Where we believe individuals

are making false or exaggerated clams we will defend our position

robustly to allow us to continue offering competitive premiums to all

ofour customers. We engage with excellent partners, with whom we

agree a strong suite of service-level parameters, which are monitored

regularly, to ensure customers receive great service at all touch points

– whether by our own team or outsourced partners.

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Our people are core to the success of the Group, and

weseek to create a positive and collaborative working

environment for all of our employees. Sabre’s culture

provides our employees with an open, honest and

professional working environment which recognises the

importance of a healthy work/life balance. The Group

operates from a single site in Dorking, Surrey and as at

31December 2022 employed 153 people. We are pleased

to say that over 52% of our employees have been with the

Group for ten or more years, which is an increase from

51% last year.

Employee policies & Code of Conduct

Policies are in place to support and develop our employees. Examples

ofthese include policies addressing equal opportunities, acceptable

behaviour, ﬂexible working, and health and safety. The policies and

practices are consistent with the Group’s values and support the

long-term success of the business through supporting its employees.

During 2022 all employee policies were reviewed to ensure that they

were fit for purpose. All employee policies are available through the

employee portal which allows for easier access and greater transparency.

The Company has a Code of Conduct, which outlines expected

behaviours of employees. It further requires all employees to

understand the definition of, and the harms related to harassment.

Training related to expected employee conduct is required to be

completed annually, and by all new joiners.

Employee survey

Since 2018 the Group launched an annual Satisfaction Survey to all

employees to monitor the culture of the Group. In 2022 the all-

employee Satisfaction Survey was issued again to assist with

understanding how employees are feeling about their work and the

Company. All employees are encouraged to provide feedback, this

assists the Company with increasing engagement, productivity and

retention. As a consequence of previous surveys, the new benefits

platform was introduced as was the hybrid working model. The

response rate to the survey this year was 57% (2021: 63%) and

showed that our employees feel valued, foresee themselves working

here in a years’ time and reaching their full potential.

Remuneration

Sabre provides remuneration to its employees through salaries,

bonuses, benefits, pensions and all-employee share plans as detailed

below:

Salaries

All employee salaries are reviewed annually. During the review, a

benchmarking exercise is completed comparing roles within the

insurance industry to those in the Group, to ensure fair salaries for

current employees.

Bonus

Employees are also eligible to receive a performance-related annual

bonus as a reward for achieving the objectives and tasks set during

their appraisals. During the year 100% of eligible employees received

aperformance-related bonus. During the year the Company also paid

each employee a net Christmas bonus of £1,000.

Our People

Communication with employees

Sabre encourages internal communication through a two-way dialogue

between the Leadership Team and employees. Throughout the year

we have:

– hosted regular ‘CEO lunches’, where Geoff Carter hosts a lunch with

teams across the Group

– held ‘Listen & Learn’ sessions, where Karen Geary, the Non-

executive Director responsible for employee engagement hosted

Q&A sessions with employees

– continued to use ‘Ask Sabre’, an email facility, which allows

employees to raise questions regarding the business

– held employee-wide presentations at Full Year and Half Year by

Geoff Carter to update employees on the Group’s financial results

and answer any questions they may have in relation to the result

announcements to the market

– operated a Company Suggestions Box which is a facility to post

suggestions anonymously

– completed an Employee Satisfaction Survey, this is sent yearly to all

employees to allow them a safe space to provide feedback

anonymously to the Leadership Team

– held twice yearly appraisals for all employees. These are held in a

one to one setting with the employee and manager

– operated a dedicated Whistleblowing Hotline through which

employees can report any concerns anonymously and provided

annual training and regular reminders regarding whistleblowing

In addition to the above, during 2022 we implemented the below to

further support our employees:

– introduced an Employee Portal, which allows employees an element

of self-service as well as a communication function

– overhauled the employee appraisal process to increase transparency

for employees regarding performance and development

– streamlined HR processes and implemented a new employee

database

– introduced Happiness Surveys, a survey sent monthly to all

employees to score their happiness from one to ten to help monitor

employee morale and wellbeing

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Benets

The Company operates a generous benefits package including

holidays, pensions, private healthcare, salary extras employee portal,

eye tests, yearly ﬂu jabs, performance bonus, a life assurance policy,

and support towards professional qualifications.

During 2022, Sabre implemented a formal hybrid working model

whereby all employees are able to work from home for a maximum

oftwo days per week. This model allows employees to retain the

benefits of working from home, which were highlighted during

COVID-19 lockdowns, while maintaining a collaborative, primarily

office-based culture.

During 2022, the Group introduced free private health insurance to its

employees: this covers not only the medical side but also employee

health and wellbeing. This is offered through incentives to exercise

more, a selection of discounted gym memberships, dietary advice,

free workshops such as how to stop smoking to mental health advice

to promote a healthier lifestyle. All of the incentives are rewarded with

lifestyle points which can be exchanged for instant discounts, from

free cups of coffee to discounted spa breaks. The year also saw the

introductions of our salary extras platform; this provides employees

with discounts for a number of supermarkets, retailers or days out,

which is especially helpful during the cost of living crisis. Through the

platform employees can apply for an interest free technology loan with

an additional discount of 5.5%.

As part of Sabre’s commitment to contributing towards a greener

environment, the Group offers an electric car scheme for employees.

Electric cars do not release direct emissions into the environment,

resulting in a greener and economic way to commute to the workplace.

There is a further benefit of purchasing an electric vehicle through a

salary sacrifice scheme as it generates tax savings for the employee.

The Group also offers a cycle to work scheme to all employees, this

has a tax saving benefit to the employee and they can typically save

between 24-42% of the cost of a bike and or accessories.

Pensions

The Company operates a pension scheme with a maximum matching

employer contribution of up to 10% (grade dependent) for all new

employees and also continues to operate a non-contributory policy

scheme for eligible employees. 98% of employees participate in a

Company pension.

– Foundation Certificate in People Management, Chartered Institute of

Personnel and Development

– Chartered Management Accountant Qualification, Chartered

Institute of Management Accountants

– Mental Health First Aider, St John Ambulance

– Mental Health Champions, St John Ambulance

– First Aid Qualification, St John Ambulance

All of these qualifications are paid for by the Group, employees are

further supported through the provision of study leave.

Employee wellbeing

The Group invests significantly into employee wellbeing, whether this is

overall mental health, the physical or emotional health or the economic

health of our people. The Group constantly strives to provide support and

resources to create an open and collaborative environment in which to

work. This is supported by our mental health champions and first aiders.

Number of Mental Health First Aiders:

Number of Mental Health Champions:

Cost of Living Support

The significant increase in the cost of living, experienced by many in 2022

impacted wellbeing across the Group. To help support our employees

with the sudden increase in the cost of living, the Group awarded a cost

of living allowance to be paid to all employees (outside of the Executive

Team) over the five months from October 2022 to February 2023. Also,

Sabre arranged financial wellbeing seminars to inform employees around

all aspects of financial wellbeing from debt management, savings

accounts, mortgage rates explained as well as a separate session which

looked at the options around retirement and pensions. The sessions were

split by age group and were specific to the individual’s needs. Over 29%

of employees attended a financial wellbeing seminar.

All-employee share plans

Sabre operates two all-employee share plans, which allow employees

an easy and cost-effective route to become shareholders in the Group.

At the time of listing, employees were granted free shares in Sabre,

without performance conditions through the Company’s Share

Incentive Plan (“SIP”) and Long-Term Incentive Plan (“LTIP”). The

finaltranche of these LTIP awards vested in 2020. The SIP has been

exercisable since December 2020, and in December 2022 the shares

became exercisable without attracting tax. In 2019, the Group expanded

the SIP, allowing employees to purchase Partnership shares to a

maximum of £1,800 a year, with the Group matching shares purchased

through the plan at a 1:3 ratio. In 2022 23% participated in the SIP.

In 2022, the Group launched its fifth Save As You Earn (“SAYE”) grant,

allowing employees to purchase shares in the Group at a reduced rate.

The Group allows employees to contribute the monthly maximum

monthly contribution of £500, in line with the maximum allowed under

the Plan, and provides the maximum discount of 20% when the option

price is set. The 2022 SAYE grant saw 32% of employees participate.

As at 31 December 2022, 48% of employees were participating in one

of the Company’s SAYE grants.

Training

The Group operates a compulsory e-training programme for all

employees, which focuses on the Company’s needs and includes

topics such as anti-bribery and corruption, whistleblowing and modern

slavery. The Group offers ongoing training to all employees and

external courses for newly promoted employees where appropriate.

During 2022 the Group provided training for 20 of its managers,

through a two-day course provided by an external provider. The

content was bespoke, covering topics from effective appraisals, time

management as well as effective communication. The Group

recognises the importance of investing and nurturing its people to

create effective managers who can inﬂuence their teams and

contribute towards the Group’s success. It is planned to hold a

Women’s Leader Training Event in early 2023, which has been

designed to better equip our female employees with the tools to

navigate challenges within the workplace and to develop the critical

leadership skills to effectively guide, inﬂuence and mentor others.

During 2022, the Company supported employees with the

followingqualifications:

– Foundation Insurance Test, Chartered Insurance Institute

– Diploma in Insurance, Chartered Insurance Institute

– International Certificate in Financial Services Risk Management,

Institute of Risk Management

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Inclusivity, diversity and equality

The Group is committed to the elimination of unlawful and unfair

discrimination and values the differences that a diverse workforce

brings to our organisation. We encourage inclusivity, diversity and

equality among our workforce, whilst eliminating unlawful

discrimination. During the recruitment and interview process we

ensure fair, non-discriminatory and consistent processes are followed,

and Sabre has a policy of (where practical) advertising all roles

internally to allow employees to progress and develop. Sabre also

supports working parents through shared parental leave, enhanced

maternity and paternity leave and where possible embraces ﬂexible

working for our employees.

Equality, diversity and inclusivity policy

Sabre’s equality, diversity and inclusivity policy aims:

– to promote equality, fairness and respect for all our employees

– to ensure that the Group does not discriminate against an individual,

specifically due to their age, disability, gender reassignment,

marriage and civil partnership, pregnancy and maternity, race,

religion or belief, sex and sexual orientation

– to avoid all forms of unlawful discrimination

Sabre provides compulsory diversity and inclusiveness training

annually to all employees. There is an assessment at the end of each

training, which must be passed before completion, thus ensuring a

level of understanding is reached. These modules are designed to help

employees and enable them to understand how their attitudes and

behaviour towards each other can have a negative or positive impact

on the workforce as a whole.

The Group operates a Religious Holidays Policy, for employees

whowish to observe special religious holidays or festivals. All

employees, whatever their religion or belief, will be treated equally

inthis and all respects.

Gender pay gap

Whilst Sabre has fewer than 250 employees, and therefore is not

required to submit a formal statement on its gender pay gap, Sabre

has committed to publish its Gender Pay Gap Report on an annual

basis. Sabre believes that by publishing this information, the Group is

ensuring accountability with regard to gender pay. Sabre’s Gender Pay

Gap Report is available on the Group’s website: https://www.sabreplc.

co.uk/about-us/corporate-governance/gender-pay-gap-report-2022

Sabre has reviewed employee salaries and can confirm that those

employees with the same job titles and similar length of service are

paid similar amounts, as illustrated in the Company’s Gender Pay

Gap2023.

Sabre’s approach to Data Protection

Sabre has GDPR Oversight Committee (the ‘Committee’) which is

chaired by our Data Protection Officer. The Committee meets regularly

to review GDPR compliance. The Committee is attended by

representatives from across the business, including Compliance and

Risk, and the Executive Team. A standing agenda for the meeting

ensures that all breaches are reviewed, emerging risks considered, and

any further actions or training is identified. The Data Protection Officer

reports to the Chair of the Risk Committee, and provides the Risk

Committee with a regular update regarding GDPR and any breaches

orissues relating to GDPR.

Employees are trained, at least annually, on data protection legislation

and the Company’s requirements when handling data. This includes

online training courses, which include a marked assessment on

completion to ensure understanding. Additional ad-hoc training is

provided to update on any specific changes or points of interest.

Number and % of women on the Board

Female 38%

Male

63%

As at 31 December 2022

Female 29

Male

As at 31 December 2021

Total

100%8

Total

100

3/8

38%

Number and % of women on the Executive Team**

Female 20%

Male

80%

As at 31 December 2022

Female

20%

Male

80%

As at 31 December 2021

Total

100%5

Total

100%

1/5

20%

Number and % of women on the Leadership Team**

Female 33%

Male

67%

As at 31 December 2022

3/9

33%

Female

29%

Male

71%

As at 31 December 2021

Total

100%9

Total

100%

Number and % of women in senior roles (reporting to members

of the Leadership Team)**

Female 39%

Male

61%

As at 31 December 2022

Female

35%

Male

65%

As at 31 December 2021

Total

100%23

Total

100%

9/23

39%

Number and % of women working for Sabre

Female 42%

Male

58%

As at 31 December 2022

Female

43%

Male

57%

As at 31 December 2021

Total

100%151

Total

100%

151

64/151

42%

**Includes directors of subsidiaries

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Since 2019, Sabre has operated a Charity Committee

toprioritise and plan fundraising events throughout the

year. Our chosen charities are St Barnabas & Chestnut

Tree House. Sabre has continued to support them and

anumber of other charities throughout the year.

St Barnabas House offers palliative care to people in the local

community, both at the hospice and in the comfort of the patient’s own

home. Chestnut Tree House is a children’s hospice caring for over 300

children and young adults with progressive life-shortening conditions.

This year has continued to see the effects of COVID-19 but as

restrictions eased Sabre were able to start hosting charity events once

more. A staff party which saw employees gather for food, cocktails

and music was well supported. A rafﬂe was held at the event to raise

money for St Barnabas & Chestnut Tree House. Sabre continued to

support both local and national charities throughout 2022. Dorking

Foodbank being a local charity in which both monetary and food

donations were made in December.

By the end of the financial year, Sabre and its employees had raised

£6,385 for St Barnabas & Chestnut Tree House. The total donations by

the Group and its employees amounted to £23,713, of which £2,316

was raised by employees (2021: £1,010) and £21,397 donated by

Sabre (2021: £22,180).

£23,713

Total donation to charity

Our community

Charities we supported in 2022:

African Revival

Breast Cancer Research

Children in Need

Easy Surrey Domestic Abuse Services

Insurance against Dementia

MacMillan

Prostate Cancer UK

St Barnabas & Chestnut Tree

Stem4

Stockport Children’s Charity

The Special Lioness

Ukraine Humanitarian Appeal

Young Minds

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Our Environment

Outsourced operations

We engage in several key outsourcing arrangements. In each case,

wehave developed a fair set of measurable service levels and fee

structures designed to deliver best value for both parties. We conduct

regular reviews of our key outsourced operations to ensure that they

reach the expected levels of employee and customer welfare as well

as meeting any regulatory requirements.

Our relationships with partners are designed to be

mutually beneficial, fair, and in the best interests of

allstakeholders.

Suppliers

We select our suppliers based upon the value that they can bring to

the business and consideration of their core business principles. We

consider material suppliers not only in economic terms, but against

their governance and environmental credentials.

Commercial terms with our suppliers are negotiated in order to deliver

the best value to our shareholders, while also ensuring partners can

earn a reasonable profit and sustain a mutually beneficial ongoing

relationship. We seek to ensure that all of our suppliers are paid the

correct amount, on time.

Brokers

Approximately 71% of our premium income was sourced through

brokers in 2022. Our philosophy when entering into business with

brokers is simple: we will provide a fair and sustainable price, available

to as many of their customers as possible. In return, they commit to

treat their customers fairly, to collect the correct premium from the

customer and pass it to us, and to make best efforts to ensure that

thepolicy details provided to us are correct.

We aim to offer fair terms to all brokers, reﬂecting their long-term

profitability to us. We therefore do not offer scheme discounts or other

incentives, which might demonstrate preferential treatment in favour

of a particular broker.

Our broker on-boarding and audit processes give us the comfort that

our brokers are providing customers with a good quality of service

while adhering to our high standards.

Our Partners

Our consideration of the environment falls into two,

equally important, categories. Firstly, we must assess,

andwhere possible, mitigate the risks of the changing

environment on our business. Secondly, we must consider

the impact of our business, both directly and indirectly,

on the environment, in particular the impact of

greenhouse gas emissions and their contribution

toclimate change.

We recognise that stakeholders are increasingly interested in both

ofthese issues and as such we look to ensure that we continually

review and enhance our efforts and disclosures in these areas, with

particular reference to guidance and rules issue by our stakeholders,

including the recommendations of the Task Force on Climate-Related

Financial Disclosures (“TCFD”) and various statements made by our

regulators, and the Streamlined Energy and Carbon Reporting

(“SECR”) requirements.

During 2022, we worked with Mazars to assist with our carbon

footprint analysis and climate-related risk assessment.

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Governance over climate change

The Board takes the ultimate responsibility for identifying and

mitigating risks in relation to climate change, and in minimising the

Group’s negative impact on the environment. The Board will consider

the impact on the Group's carbon footprint and any other climate-

related factors when assessing material strategic or tactical decisions.

Climate-related risks and opportunities form a standard agenda item

for the Group's Risk Committee, with a summary fed back to the

Group's Board. A member of the Board, Adam Westwood (CFO), has

been tasked with taking responsibility for the climate-related strategy

and subsequent implementation and reporting. Adam has received

training from a specialist team at Mazars, to assist him in this role.

Climate-related risks and opportunities are a standing agenda item

forboth the Board and Risk Committee and, where appropriate

willinclude updates as to goals and targets set within our net-zero

roadmap and any other relevant metrics as they are developed. Further

detail on the activities of the Board and Risk Committee can be found

in the Governance section of this report on pages 56 to 91.

The Management team takes a collegiate approach to the

implementation of the Group's climate goals, with the CFO taking

responsibility for leading the overall project. Climate-related targets,

including progress towards the Group’s net-zero target, are included

within Management's (including Executive Directors’) performance

objectives, which feed directly into remuneration. The CFO is assisted

by the Group's Head of IT and Facilities in monitoring and improving the

Group's operational carbon footprint. Information about climate change

is disseminated throughout the Group through the Sustainability

Forum, an employee-run Group responsible for assisting the CFO

indeveloping and implementing climate initiatives. The Group’s

Environmental Policy forms part of the core induction pack and

additional training is delivered as and when necessary.

Strategy for climate change

Climate-related risks and opportunities have been identified and,

where appropriate, incorporated into the Group's risk register.

Theshort, medium and long-term aspects of each risk have been

considered. These risks are summarised in the table below.

Each of these risks has a varying impact of the long, medium and

short-term. We define long-term risks as those impacting beyond a

five-year time horizon, medium-term one to five years and short-term

anything impacting within one year. Although most risks apply from

now, with increasing likelihood and severity across subsequent time

horizons, we have noted where we believe there may be a more

significant step-up in the risk.

Risk/opportunity Description

Physical

operational

Primary time

horizon:

medium-term

The physical risks generated by climate change relate to a

changing weather system prevailing over the environment

in which we operate. This could include an increase in

temperature but is more likely to manifest in an increase in

the number and severity of extreme weather events, such

as ﬂooding, windstorms, snow and hail.

Operationally, such a change in the weather could impact

the ability of employees to attend the office or for the office

or other equipment to be able to be used in the ‘normal’ way.

There is the related risk of failure of key IT infrastructure

due to extreme weather events in the vicinity of the related

hardware. We have assessed this risk under a number of

scenarios and concluded there is a low probability of such

events occurring until at least 2090. We do not consider any

of our key locations to be exposed to high-impact weather-

related events and therefore no preventative action is required.

Physical

liability

Primary time

horizon:

medium-term

It appears clear that an increased number of unpredictable

extreme weather events will increase the overall cost of

claims. While this has much lower potential to have a

material impact than in, for example, home insurance,

nonetheless this could have a bearing on the cost of claims

over time. Our base case scenario is that such events will

increase in frequency, but this increase will be slow and

over a long period of time, and hence will be reﬂected in

policy pricing across the market in the same way as any

other inﬂationary factor. The more significant risk is that

of a more immediate, unexpected and un-priced weather

event (such as extreme hail), which could cause significant

damage very quickly. We primarily manage this risk through

our insurance pricing mechanisms, including short

feedback loops between our claims and pricing teams.

Transitional

market

reduction

Primary time

horizon:

long-term

The transitional risks (i.e. the impact of moving to a

low-carbon economy) are complex.

We see the transition as impacting the Group in the

following ways:

– An increase in the number of vehicles powered by

electricity (or other alternative fuels) as opposed to

traditional internal combustion engines

– The move away from cars towards mass-transit

– A move to car-sharing or using cars for a smaller number

of journeys

– The introduction of ‘low/ultra-low/no emission zones’

– Increased social stigma attached to using a petrol/diesel car

– Increased costs of traditional fuel

– Introduction of additional carbon taxes

– Change to the costs in repairing electric vehicles as

compared to petrol cars.

We expect that the number of private cars which require

insurance (and hence Sabre’s core market) will reduce over time.

This could inhibit the Group's ability to grow and hence requires

strategic consideration. Sabre’s competitiveness and policy

count are monitored by management, and shifts in types of

insured vehicle are closely monitored by the pricing team.

Risk/opportunity Description

Transitional

market change

Primary time

horizon:

medium-term

We expect that that there will be a greater demand for

policies which appeal specifically to owners of electric

vehicles (the transitional market change risk). We also

expect that the cost profile of repairs will change, and hence

there is a potential liability cost related to transitional market

change. We note that the developments of potential new

markets presents both a risk and an opportunity.

Litigation

Primary time

horizon:

long-term

There is a chance that the transition to a low-carbon economy

or the occurrence of physical risks could lead to litigation risk.

For a Group such as Sabre, which could be seen as

‘contributing’ to the climate problem, we could find ourselves

directly litigated against for those impacted negatively by,

forexample, rising sea levels. Perhaps more likely (but still

unlikely) is that litigation is taken in order to stop us being

ableto undertake our normal-course of business.

There is also a potential litigation risk attached to

investments which could generate valuation downgrades.

While there is little direct mitigation available, the

management team ensure that they remain up to date with

regard to legal and regulatory developments in this area.

Investments

Primary time

horizon:

long-term

Sabre has an investment portfolio spread across corporate

bonds, gilts and government-backed assets. Each individual

investment is exposed in some way to the physical and

transitional risks related to climate change. Each investment

is also an indirect exposure to the carbon footprint of the

counterparty.

Given the short-tail nature of our investments (average

duration c.2 years) the risks attached are far lower than they

may be within other large investors, nonetheless we must

consider the risk attached to each investment as we enter into

it in order to remain alert to our true exposure to climate-

related risks. We have designed our investment guidelines

tolimit exposure to particularly damaging industries.

The impact of climate-related risks and opportunities on Sabre's

business, strategy and financial planning has been assessed and

understood, as outlined above. Strategic decision-making takes

potential future climate-related risks and opportunities into account,

along with the wider stakeholder considerations outlined elsewhere

inthis report.

The Board takes climate-related risks and opportunities into

consideration when considering the allocation of capital. ESG

credentials are considered within the Group's investment portfolio,

although given the short-term nature of investments held this is

relatively light-touch in respect of investments currently held, with

greater consideration given to the evolution of the portfolio towards

the Group's net-zero target.

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The resilience of the Group's strategy with respect to climate-related

risks has been assessed, with the assistance of a specialist team

fromMazars.

Sabre’s exposure to risks associated with climate change has been

quantified and stressed under several different scenarios, covering

theexposure from investments and insurance liabilities. We have

considered each of the above risks in developing our scenario analysis.

We have previously assessed the risks related to physical liability on a

quantitative basis, as explained in our findings noted below. This year,

we have enhanced our analysis through a detailed review of our

physical operational risk, also discussed below.

Our key findings, which are consistent with those identified in our

previous analysis, were that:

1. Sabre’s investments are in cash or short-term (less than five years)

fixed interest bonds. Cash carries very little risk from climate change as

it is liquid and is not tied up with carbon-intensive activities. Assuming

these bonds are held to maturity, then the key investment risk that

Sabre carries is if one of the issuers of the bonds default. Sabre’s

portfolio is well diversified, and all securities are with carriers with

credit rating BBB or above. Furthermore, Sabre’s portfolio is not

materially exposed to the key sectors exposed to the largest degree of

direct climate change risk. In summary we do not believe that Sabre’s

investment portfolio is materially exposed to the risk of climate change.

2. Sabre’s insurance portfolio is a core part of our profit before tax.

Sabre provides cover for numerous perils and the key perils exposed to

the risk of climate change risk are ﬂood and windstorm. Over the past

12 years windstorm and ﬂood claims have been less than 1% of

Sabre’s GEP. Insurance policies are annual contracts that can be

repriced as the understanding of risks develops. If a policy generates

high claims in one year, Sabre can intervene by declining a renewal or

increasing the premium for the next year. Sabre’s portfolio carries

some climate-related risk; however, historically claims from climate-

related perils have been low and the risk can be managed by

monitoring loss ratios. Therefore, Sabre’s risk from climate-related

perils on our insurance portfolio is low.

3. Sabre’s ﬂood capital requirement makes up less than 2% of our total

SCR. If Sabre’s ﬂood SCR was uplifted by 20%, this would cause less

than a 1% increase in Sabre’s total SCR. Therefore, Sabre’s SCR could

tolerate some increase in climate capital requirements.

With regard to physical operational risk, we have considered the

exposure of the Group’s head office, outsourced customer service

location and two key data centres to heatwaves, heavy precipitation

and a rise in sea level. Along with this, we have considered our insured

risks by postcode, and so have enhanced our physical liability risk

analysis through this exercise. We have considered this in the context

of three Shared Socioeconomic Pathways (‘SSP’s), being:

– SSP 1 “sustainability pathway”, generally the best-case scenario

where warming is below 1.5oC by the end of the century after a

brief overshoot. This is consistent with the Paris Agreement target

– SSP2 “middle of the road pathway” approximately in-line with

Nationally Determined Contribution emissions levels, thereby

representing our current path

– SSP5 “fossil fuelled development pathway”, generally the worst-

case scenario with emission levels and warming projected to be

veryhigh

Across the UK, there is a clear upward trend for all extreme heat

indicators. Compared to baseline results, for both heatwave frequency

and duration, the initial increase is slow before rapidly increasing

towards 2090. Heatwave frequency increases consistently across

allpostcodes covered. Extreme precipitation indicators show less

consistent trends across the UK, with ﬂuctuations under SSP2 and

SSP5 particularly evident. 62 of our insured postcodes are included

inthe ‘severe’ sea level rise category, however the percentage risk

category varies greatly. For Sabre’s four operational sites, only one

isatrisk from sea-level rise, albeit at ‘moderate’ risk by the year 2100.

This analysis has confirmed that there is no raised level of short

ormedium-term operational risk in respect to climate change, and

hashighlighted that exposure to climate-related events should be

considered when making long-term decisions about the Group’s

operational structure. It has also confirmed that there is no immediate

concern regarding concentration risk of insured vehicles within

high-risk zones.

Managing climate-related risks

A formal risk management process, including a risk register, is in place

which fully considers climate-related risks and opportunities. The risk

as a standard agenda item during 2022 for the Management Risk and

Compliance Forum. Where relevant, the Group's policies are adapted

to reﬂect climate-related risks. Identified climate-related risks are

integrated into the Group's overall risk register and risk management

process. Further information on the Group’s risk management

processes is provided in the Principal Risks and Uncertainties section

of this report on pages 19 to 28 of this report.

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Our investments

When Sabre diversified from gilts into corporate bonds, we introduced

a ‘climate-friendly’ term to our investment agreement whereby ‘green’

assets should be purchased in favour of less ‘green’ assets where the

assets provide similar returns and profiles. In 2022, we introduced a

further restriction on investment into certain organisations whose

activities were not consistent with our ESG outlook. The Company’s

Investment Committee monitors the ‘green’ credentials of the

investment portfolio through regular reporting by our investment

manager, Goldman Sachs Asset Management.

Our inﬂuence over entities in which we hold corporate bonds is

limited, and we do not hold any equity investments in any entities not

directly controlled by the Group. As such, we can exert inﬂuence only

through our investment choices as described above.

Our product

The provision of motor insurance, our core operation, is generally

environmentally light on a direct basis i.e. excluding any consideration

of the environmental impact of the vehicles we insure. Most of our

policies are sold online, and administered remotely. However, there are

elements of our product offering which can generate a positive impact

on the environment. Importantly, we underwrite a significant number

of policies for electric and hybrid vehicles. We are happy to take these

policies on, and believe that in having done so historically we are able

to better price these risks accurately.

Our metrics and targets

The Group uses its suite of pricing and policy performance information

to monitor the impact of climate risks on the business, such as sales

volumes, types of vehicles insured, claims frequency and severity and

the incidence of severe weather events (which remain immaterial). The

primary physical liability risks are therefore monitored and addressed

through our normal pricing and reserving processes, while longer-term

transitional risks are addressed through monitoring the volumes of our

product sold and projecting these volumes into the future. These targets

are therefore in line with our wider corporate objectives of maintaining

our combined operating ratio within our target range through an

appropriate response to liability risks while growing the business across

the insurance cycle. We do not consider it to be possible, appropriate

orstrategically relevant at this time to set more specific targets with

respect to climate-related risks and opportunities, beyond those which

are disclosed below.

The Group has significantly enhanced quantitative climate-related

disclosures, with the addition of Scope 3 emissions, stated

retrospectively from 2019 onwards. Emissions are contextualised

withreference to the Group's employee numbers and gross written

premium. We have also taken the opportunity to enhance the accuracy

of previously reported figures where possible, and derive a consistent

basis for year-on-year comparison.

The greenhouse gas (‘GHG’) emissions data for the Group is set out

adjacent, alongside prior years. We are pleased to see the continued

decline in our GHG emissions.

We believe our operational activities are consistent with a scenario

well-below 2°C, however we have not fully aligned with science-based

targets at this stage. We have not set out specific targets with regard

to our activities as a holder of invested assets beyond the long-term

goal of net-zero emissions across the portfolio by 2050. We expect to

reduce emissions across the portfolio in a controlled manner over time,

but must remain somewhat reactive to the net-zero aspirations of

investee (and potential investee) entities.

The emissions data is measured in tonnes of carbon dioxide equivalent

(“tCO

e”) and covers:

i. Scope 1 emissions being direct emissions resulting from

combustion of fuel and operation of facilities

ii. Scope 2 emissions being indirect emissions from purchased grid

electricity and other energy for own use

iii. Scope 3 emissions, being other indirect emissions which occur in

the Group’s value chain

Tonnes of CO

e/year 2022 2021 2020

Scope 1 – 41.8 60.5

Scope 2 42.9 42.8 54.2

Operational footprint 42.9 84.6 114 .7

Scope 3, excluding insured emissions 22,673.0 23,673.0 20,280.0

Total footprint, excluding insured emissions 22,715.9 23,757.6 20,394.7

Number of FTE

employees 154 142 151

Operational footprint per employee 0.28 0.59 0.76

Gross written premium £171m £169m £173m

Operational footprint per £m GWP 0.25 0.50 0.66

Building energy usage (KWh) 200,237 201,683 232,607

* Full-time equivalent (“FTE”)

The footprint is calculated in accordance with the GHG Protocol and

Carbon Trust (“CT”) guidance on calculating organisational footprints.

Activity data has been converted into carbon emissions using

published emissions factors or appropriate estimation techniques.

Separately, for the first time in 2022, we report an estimated footprint

related to our insurance operations, in line with the Partnership for

Climate Accounting Financials (“PCAF”) guidelines. This is not

currently included within our assessment of Scope 3 emissions.

Thetotal relevant carbon emissions across our insured vehicles

isestimated to be 50,391 tCO

e/yr as at 31 December 2022

(2021:54,621 tCO

e/yr).

GHG emissions have been reported by the three WBCSD/WRI

Scopes. Scope 1 includes direct GHG emissions from sources that are

owned or controlled by the Company such as natural gas combustion

and Company-owned vehicles. Scope 2 accounts for GHG emissions

from the generation of purchased electricity, heat and steam

generated off-site. Scope 3 includes all other indirect emissions such

as waste disposal, business travel and staff commuting. The most

significant element within Scope 3 emissions is the investment

portfolio, which contributed 11,223 tCO

e/yr to 2022 emissions (2021:

14,760 tCO

e/yr). For the first time we disclose separately the

weighted average carbon intensity across the portfolio, which was

39.6 tCO

e/$MM as at 31 December 2022 (2021: 45.4 tCO

e/$MM).

All emission sources have been reported on as required under the Large

and Medium-sized Companies and Groups (Accounts and Reports)

Regulations 2008 (as amended). The reporting period is in line with

theCompany’s financial year, which is the same as the calendar year.

Inorder to provide the most accurate estimate of our GHG emissions,

primary (actual) data has been used where it is available, up to date

andgeographically relevant. Secondary data in the form of estimates,

extrapolations and industry averages has been used when primary data

is not available. We expect that, as we and our counterparties improve

the quality of record-keeping and reporting on GHG emissions, the use

of primary data will increase. Given that secondary data is calculated

with a considerable degree of conservatism, we expect that increased

quality of reporting will reduce the reported levels of GHG emissions.

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We have set a more immediate goal of 31 December 2030 for the

Group to report operational carbon neutrality. This, effectively, is

the reduction of the Group's Scope 1 and 2 emissions to zero or,

where this is not possible, temporary use of targeted carbon

offsetting. We have set out our net-zero roadmap, which is

published on the Group’s website (www.sabreplc.co.uk/about-us/

corporate-governance/sustainability). Management targets set for

2022 and beyond include the achievement of specific activities in

relation to this plan. Our baseline position against which the

roadmap has been set is 2019, the last full year not impacted by

COVID-19 and related disruption to normal working practice. In our

last Annual Report and Accounts, we detailed a number of actions

which had been carried out since 2019. In 2022, we made further

progress through:

– Maintenance and review of our solar panel estate, increasing

efficiency by c.25%

– Commencement of a full building refurbishment which includes

areplacement of the air conditioning system and windows,

which will contribute to a significant reduction in emissions

– Implementation of tighter restrictions on our investment portfolio

Our roadmap is a ‘live’ document, which will constantly evolve as

we continue to interrogate our activities and the available solutions.

Statement of consistency with TCFD

recommendations

In preparing the Responsibility and Sustainability section of the

Annual Report, we have made disclosures consistent, or partially

consistent where noted, with those recommended by the TCFD

and intend to achieve full consistency with the recommendations

as a consensus view of sufficient and complete disclosure

becomes clear. In particular, we note certain areas of potential

inconsistency below. All of the relevant disclosures are made within

this section of the Annual Report. The Company has considered

the consistency of these disclosures against the TCFD’s Guidance

for All Sectors and Supplemental Guidance for Insurance

Companies, and considers them to be consistent.

The Group remains at an early stage in its journey with respect to

gaining a full understanding of the impact of climate change on the

business. Steps have been taken to ensure that consideration of

both the effects of climate change and the Group’s impact on the

environment is embedded within the Group’s culture at all levels.

As such, we expect our understanding and the related disclosure to

evolve over the coming years. We note the following areas in which

we intend to enhance disclosure in future periods:

– Metrics and Targets 4a: Organisations should disclose the

metrics used by the organisation to assess climate-related risks

and opportunities in line with its strategy and risk management

process

– Metrics and Targets 4c: Organisations should describe the

targets used by the organisation to manage climate-related risks

and opportunities and performance against targets

Sabre has introduced additional climate-related metrics, such

asweighted average carbon intensity, across the investment

portfolio and insurance-related emissions. The Group currently

has not set specific short-term targets for each of these metrics,

beyond an overall objective to reach ‘Net Zero’ as set out in

theGroup’s Net Zero Roadmap, which can be located at

https://www.sabreplc.co.uk/about-us/corporate-governance/

sustainability/. Note that this roadmap does not form part of our

TCFD disclosure.

– Strategy 2b: The organisation’s disclosures should reﬂect a

holistic picture of the interdependencies among the factors that

affect their ability to create value over time

We have now extended our analysis to cover insured risks and

operational risks with regard to climate change. While this goes

some way to ensuring consistency with this objective, we note

that a holistic statement about the interdependencies of these

factors along with their impact on value creation should be

enhanced and disclosed in more detail in future reports.

How we decide what to measure

Our disclosures are designed to provide information that we

consider will be useful and relevant to stakeholders. We aim

toidentify the issues that are most important to them and

consequently also matter to our own business. Our management

team with appropriate Board Committee oversight, choose what

we measure and publicly report in this section. ’Materiality’ is

considered to be the threshold at which issues become sufficiently

important to our investors, us and other stakeholders that they

should be publicly reported. We are also informed by stock

exchange listing and disclosure rules. We know that what is

important to our stakeholders evolves over time and we plan to

continue to assess our approach to ensure we remain relevant

inwhat we measure and publicly report.

Our route to net zero

We have continued to adjust our ways of working and our working

environment to minimise our negative impact on our environment.

The Group has assessed its carbon footprint and concluded that it

is appropriate to set a target for net-zero emissions. The target has

been set having considered the Group's current footprint along with

an assessment the level of inﬂuence held by the Group and

expected societal trends.

We have set our goal to achieve net-zero emissions by 31 December

2050. This reﬂects the need for significant change to occur within

the Group's supply chain, societal moves towards low-carbon

transport and a reduction in the carbon footprint of key investable

assets, such as government-backed securities. We have set our

targets, which are absolute as opposed to intensity-based, with

reference to 2019 as a base year. Performance indicators relate

primarily to the completion of activities driving our net-zero roadmap,

rather than the resultant quantitively-measured reduction at this

stage, although we will continue to monitor Scope 1, 2 and 3

emissions against our expected reductions over time.

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Our Shareholders

We aim to operate a responsible and sustainable

business, while continuing to deliver our core strategy.

Weengage frequently with our shareholders, who support

our efforts to operate a fair and inclusive workspace while

minimising any negative impact on our environment.

Over recent years, shareholder expectations have increased

significantly as to the level of disclosure required in this area, and

amove from passively reporting our status to actively evolving the

business in order to show continuous improvement across all areas.

Inorder to achieve this, we appointed the Chief Financial Officer to

establish our ESG framework, and to ensure that sufficient, accurate

and timely information is provided to stakeholders.

The table below lists the TCFD’s 11 recommendations and where they are addressed within this report.

Recommendation

Where addressed and whether consistent with

TCFD requirements

Governance

a. Describe the board’s oversight of climate-related risks

andopportunities.

Risk Committee report, page 65

Consistent

b. Describe management’s role in assessing and managing

climate-related risks and opportunities.

‘Managing Climate-Related Risks’, Page 24

Consistent

Strategy

a. Describe the climate-related risks and opportunities the

organization has identified over the short, medium, and long term

‘Strategy for Climate Change’, Page 45

Consistent

b. Describe the impact of climate-related risks and opportunities on

the organization’s businesses, strategy, and financial planning.

‘Strategy for Climate Change’, Page 45

Partially consistent

c. Describe the resilience of the organization’s strategy, taking into

consideration different climate-related scenarios, including a 2°C

or lower scenario

‘Strategy for Climate Change’, Page 45

Consistent

Risk management

a. Describe the organization’s processes for identifying and

assessing climate-related risks.

‘Managing Climate-Related Risks’, Page 24

Consistent

b. Describe the organization’s processes for managing climate-

related risks.

‘Managing Climate-Related Risks’, Page 24

Consistent

c. Describe how processes for identifying, assessing, and

managing climate-related risks are integrated into the

organization’s overall risk management.

‘Managing Climate-Related Risks’, Page 24

Metrics and targets

a. Disclose the metrics used by the organization to assess

climate-related risks and opportunities in line with its strategy

and risk management process

‘Our Metrics and Targets’, page 48

Partially consistent (see above)

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3

greenhouse gas (GHG) emissions and the related risks

‘Our Metrics and Targets’, page 48

c. Describe the targets used by the organization to manage

climate-related risks and opportunities and performance

againsttargets

‘Our Metrics and Targets’, page 48

Partially consistent (see above)

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility

and Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

FCA Consumer Duty

Sabre recognises the importance of a

firm’s culture and purpose in its ability

tobe able to deliver good outcomes

forcustomers.

The FCA introduced their Consumer Duty policy statement which

setsthe standard of care that firms should give to customers in retail

financial markets. It is designed to ensure firms put consumers at the

heart of their business and focus on delivering good outcomes for

customers. The Consumer Duty consists of a new Principle, three

cross-cutting rules and four outcomes.

Governance

Sabre has put in place a robust governance process:

– in September 2022 the Board approved the Company’s

implementation plan and appointed Karen Geary, Independent

Non-executive Director, as Consumer Duty Champion.

– the Head of Compliance meets individually each month with

theCompany Chair, Consumer Duty Champion and the Chair

of the RiskCommittee.

– consumer Duty is reported on at the Company’s Leadership,

Executive and Risk Committees during the year.

Implementation

Regulatory requirements come into force on the 31 July 2023 in

respect of new and existing products. A thorough implementation

programme is in place:

– a framework has been built that will provide the Board with

assurance that customers will be receiving good outcomes.

– the Company’s Head of Compliance is responsible for ensuring

theregulatory requirements are fully implemented.

– a detailed gap analysis to identify any policies and processes across

the business which require alignment has been conducted.

– our products are designed to meet the demands and needs of our

target market and deliver fair value to the end consumer.

Monitoring

Monitoring and training will be key to assuring customers are receiving

good outcomes:

– all employees will complete annual mandatory training on Consumer

Duty and this along with existing training in other key regulatory

areas will support the delivery of good customer outcomes.

– management Information will be used to determine the value,

benefits and outcomes received by the customers of our products.

FCA Consumer Duty

Principle 12

A rm must act to deliver good outcomes for retail customers

3 Cross-Cutting Rules

A rm must act in good faith towards retail customers

A rm must enable and support retail customers to pursue their nancial

objectives

A rm must avoid causing foreseeable harm to retail customers

4 Outcomes

Product and Services

Price and Value

Consumer Understanding

Consumer Support

Products Governance Monitoring

Training Management Information

Processes

Consumers

Strategic Report Governance Financials

About Sabre Chair’s letter Market

Context

CEO Review Our Values Our Strategy Business Model KPIs Principal risks

and Uncertainties

Viability

Statement

Section 172

Statement

CFO Review Responsibility

and Sustainability

FCA

Consumer Duty

Sabre Insurance Group plc Annual Report and Accounts 2022

52 Chair’s Governance Letter

53 Board of Directors

56 Governance Report

62 Audit Committee Report

65 Risk Committee Report

67 Nomination and Governance Committee Report

69 Remuneration Committee Report

72 Directors’ Remuneration Policy

78 Annual Report on Directors’ Remuneration

88 Directors’ Report

91 Statement of directors’ responsibilities in respect of the financial statements

Corporate

Governance

Strategic Report Governance Financials

Sabre Insurance Group plc Annual Report and Accounts 2022

Annual General Meeting

Sabre’s Annual General Meeting will provide shareholders with the

opportunity to vote on the resolutions put to them and, for those

shareholders who attend, to ask questions of the Directors, including

the Chairs of the Committees. The Notice of Meeting will be sent to

shareholders and the result of the Annual General Meeting votes on

allresolutions will be published on the Group’s website.

We look forward to engaging with you and to meeting shareholders at

our forthcoming Annual General Meeting, which will be held at 9:30 am

on Thursday 25May 2023 at the Group’s offices at OldHouse,

142South Street, Dorking, RH4 2EU.

ANDY POMFRET

Chair

13 March 2023

ANDY POMFRET

Company Chair

Dear Shareholders,

This report explains Sabre’s governance framework, how Sabre

applies the provisions of the UK Corporate Governance Code and

includes the committee reports from the Audit, Risk, Nomination

andGovernance, and Remuneration Committees.

The Board is committed to high standards of corporate governance

and has workedto ensure application of all of the main principles of

theUK Corporate Governance Code. The Group’s strategy, culture

andpurpose are aligned and discussed at every Board meeting.

The Board consists of eight Directors who have the appropriate

balance of skills, experience, independence and knowledge of the

Group to oversee the strategy, review management performance

andset the Group’s values and standards to ensure that its obligations

to its shareholders and other stakeholders are met. All of the Non-

executive Directors who serve on the Board are independent, and

further information about our Directors and theexperience they bring

to the Group is set outon pages 53 to 55 ofthis Annual Report.

During the year, we welcomed Alison Morris as a Non-executive

Director, who was subsequently appointed Chair of the Audit

Committee. Further information regarding the process for this

appointment can be found in the Nomination and Governance

Committee Report, on pages 67 to 68. Ian Clark, who was appointed

Chair of the Audit Committee on an interim basis, stepped down from

this role and remains Chair of the Risk Committee. We recognise that

Ian has served as an Independent Non-executive Director of Sabre

Insurance Group since its listing, but that he has also served as an

Independent Non-executive Director of Sabre Insurance Company

Limited, the Group’s operating subsidiary company since 2014, and

therefore will no longer be seen as independent, as defined in the

UKCorporate Governance Code from May 2023. However, Ian’s

contribution to the Group and knowledge of the insurance industry

issignificant, and therefore I have asked him to remain as a Non-

executive Director of Sabre Insurance Group for at least a further year,

whilst the Board searches for an additional Non-executive Director.

The Board has begun this search, and in the meantime Ian will remain

as Chair of the Risk Committee and will stand for re-election as a

Non-executive Director at the Group’s Annual General Meeting.

Chair’s Governance Letter

Chair's Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Strategic Report Governance Financials

Sabre Insurance Group plc Annual Report and Accounts 2022

KEY

Audit Committee

member

Nomination and

Governance

Committee

member

Remuneration

Committee

member

Risk Committee

member

Chair of

Committee

2022

Board Gender Diversity

Female 3/8 (37.5%)

Male

5/8 (62.5%)

2021

Female 2/7 (28.5%)

Male

5/7 (71.5%)

Chair and Non-executive Directors’ Tenure

<3 years 3 (50.0%)

3-6 years

2 (33.3%)

6 years plus

1 (16.6%)

Senior

Independent

Director

Non-executive

Director

responsible

forEmployee

Engagement

N I

* On appointment as Company Chair

Independent

Board of

Directors

As at 31 December 2022

Directors’ skills and experience matrix

Skills and experience

Number of

Directors

% of the

Board

Boardroom Experience

(outside of Sabre) – Chair, CEO,

NED, Audit, REM, NOM

6 75

ESG Experience 6 75

Financial Expertise 6 75

HR Expertise 3 37.5

International Experience 6 75

Innovation Expertise 3 37.5

Insurance Industry Experience 7 87.5

IT/Digital Expertise 3 37.5

Cyber Expertise 2 25

Legal Expertise 1 12.5

Marketing Expertise 3 37.5

Operation Expertise 3 37.5

Regulatory Experience 6 75

Risk Management Expertise 5 62.5

GEOFF CARTER

Chief Executive Officer

Appointment

Geoff Carter was appointed Director andChief Executive Officer of

Sabre Insurance Group plc in September 2017 (when the Company

was incorporated) and has been a Director of Sabre Insurance

Company Limited since 2015, when he joined as Chief Operating

Officer, and became Chief Executive Officer in May 2017.

Skills and experience

Prior to joining the Group, Geoff wasChief Executive Officer of Tesco

Underwriting Limited and has over 20years’ experience in managing

insurance operations. Prior to that, Geoffwas employed by Ageas

Insurance UK asManaging Director ofAgeas Insurance Solutions

Limited and spent seven years at Churchill Insurance. He is a

Chartered Insurer and holds aMaster of Business Administration from

Sheffield Business Schooland a Postgraduate Diploma inMarketing

from the Chartered Institute of Marketing. Geoff is also a Director of

the Motor Insurance Bureau and active in ABI committees.

ANDY POMFRET

Company Chair

Appointment

Andy Pomfret was appointed Non-executive Director and Senior

Independent Director of Sabre Insurance Group plc in February 2018

and Chair of the Company inSeptember 2020.

Skills and experience

Andy has extensive experience of working in the financial services

sector and with UK listed companies both as anExecutive and

Non-executive Director. After qualifying as an accountant with KPMG,

he spent 13 years with Kleinwort Benson as a corporate financier,

venture capitalist and finance director of the investment management

and private banking division. In 1999 he joined Rathbone Brothers plc

as Finance Director, and then served as Chief Executive Officer from

2004 until 2014. In2003,he started his non-executive career, joining

the board of Beazley plc where he chaired the Audit and Remuneration

Committees and was theSenior Independent Director. Duringthe last

eight years Andy has been a Non-executive Director of a number of

public and private companies, including Sanne plc, Aberdeen New

ThaiInvestment Trust plc, and Miton UK MicroCap Trust plc. He was

afounder member of the Prudential Regulation Authority Practitioner

Panel and he holds an MA from Queens’ College, Cambridge.

Strategic Report Governance Financials

Chair's Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

RI RII E IA RN N

ADAM WESTWOOD

Chief Financial Officer

Appointment

Adam Westwood was appointed Director and Chief Financial Officer

ofSabre Insurance Group plc in September 2017 (when the Company

was incorporated), has been a Director and Chief Financial Officer of

Sabre Insurance Company Limited since September 2016. Adam

joined Sabre as Financial Controller in 2014.

Skills and experience

Adam is a qualified chartered accountant, having joined Ernst &Young

LLP’s insurance audit team in2006 and qualified as a chartered

accountant in 2009. Adam has over 15years’ experience of the

insurance sector and holds a BSc (Hons) degree in Physics and

Business Studies from the University of Warwick.

IAN CLARK

Non-executive Director

Appointment

Ian Clark was appointed a Non-executive Director in September 2017

(when the Company was incorporated) and has been a Non-executive

Director of Sabre Insurance Company Limited since May2014. Ian is

Chair of the Risk Committee.

Skills and experience

A chartered accountant, Ian has a strong finance background and

significant recent and relevant accounting experience as well as

extensive knowledge of the UK insurance market. Ian was a partner

inDeloitte and its predecessor firms between 1990 and 2014, where

he led the Strategy and Corporate Finance practice for the insurance

sector. Ian is a Non-executive Director at Aviva Insurance Limited,

acharity trustee of African Revival and the Worshipful Company of

Insurers and is Chair of Mighty Quin Consulting Limited, a company

through which he provides strategic advice within the

insuranceindustry.

KAREN GEARY

Non-executive Director

Appointment

Karen Geary was appointed as Non-executive Director of Sabre

Insurance Group plc in December 2020 and is the Non-executive

Director responsible for employee engagement and the Board’s

Consumer Duty Champion.

Skills and experience

Karen brings over 20 years of executive leadership experience across

start-up and listed blue-chip organisations, as well as international HR

and business transformation experience across a variety of industries,

particularly in Europe and the US. Karen is a former FTSE100 HR

director with an extensive track record in the technology industry.

Between 1998 and 2013, Karen was with The Sage Group plc, where

she built and led the HR function as Group HR Director and from 2004

was a member of the Executive Committee. Subsequent to this Karen

held senior positions with a US-based software business, followed by

a FTSE 100 software company which she originally joined as

Non-executive Director and Chair of the Remuneration Committee.

In addition to her role at Sabre, Karen also holds external appointments

as a Non-executive Director and Chair of the Remuneration Committee

of National Express Group plc and as a Non-executive Director and

Chair of the Remuneration Committee of PageGroup plc. Her previous

non-executive roles include MicroFocus plc and ASOS plc.

* Ian was deemed independent during the financial year ended 31 December

2022, and the Board recognises that he will lose his independence with effect

from May 2023, having served nine years on the Sabre Insurance Company

Limited Board.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

RA INA N NR I RI RISI

ALISON MORRIS

Non-executive Director

Appointment

Alison Morris was appointed as Non-executive Director of Sabre

Insurance Group plc in May 2022. Alison is the Chair of the Audit

Committee.

Skills and experience

Alison is a chartered accountant and brings extensive recent and

relevant experience of the financial services sector as well as detailed

and specialist knowledge of accounting and auditing practice and the

audit market. Alison was a partner in PwC’s financial services audit

practice from 1994 until the end of 2019. She has led external audits and

internal audit projects across the financial services sector in the FTSE

100 and FTSE 250 and held a number of leadership roles within PwC,

including sitting on the executive management team which led their

audit practice. She is a Non-executive Director and Audit Committee

Chair of Paragon Banking Group plc and of M&G Group Limited, part of

the M&G plc group. Until recently she was Non-executive Director and

Audit Committee Chair of Vanquis Bank Limited, part of the Provident

Financial Group plc. Alison holds an MA in Economics with International

Studies from the University of St Andrews.

REBECCA SHELLEY

Senior Independent Director and Non-executive Director

Appointment

Rebecca Shelley was appointed aNon-executive Director of Sabre

Insurance Group plc in October 2017 and became Senior Independent

Director in September 2020. Rebecca is Chair of the Company’s

Remuneration Committee.

Skills and experience

Rebecca brings extensive commercial and financial services

experience to the Board, as well as her background of market-facing

roles at listed companies. Having been Investor Relations and

Corporate Communications Director atNorwich Union plc from

1998-2000, Rebecca moved to Prudential plc in 2000, starting as

Investor Relations Director, and then became Group Communications

Director with a seat on their Group Executive Committee. From 2012

to 2016, Rebecca was the Group Communications Director of Tesco

plc and a member of their Executive Committee. During this time she

held positions on the board of the British Retail Consortium and was a

trustee ofthe Institute of Grocery Distribution. Most recently Rebecca

spent three years at TP ICAP plc as Group Corporate Affairs Director,

and was a member of the Global Executive Committee.

She holds a BA (Hons) in Philosophy and Literature from the University

ofWarwick, and has an MBA in International Business and Marketing

from Cass Business School. Rebecca isalso a Non-executive Director

at Hilton Food Group and Liontrust Asset Management.

MICHAEL KOLLER

Non-executive Director

Appointment

Michael Koller was appointed aNon-executive Director of Sabre

Insurance Group plc in September 2020.

Skills and experience

Michael brings extensive experience ofworking in the financial

services sector with both Swiss and UK listed companies, in particular

insurance and reinsurance businesses. Michael was with Prudential

plc, where he was Group Risk Director and a member of the subsidiary

board Audit and Risk Committees. From 2008 to 2011, Michael was

Chief Risk Officer atAviva Europe, where he was also amember of

the European Executive Board. Michael was Group Chief Actuary at

Partner Re in 2007–2008 and spent 2005–2007 as Chief Regulatory

Officer at Swiss Re. Prior tothis, Michael spent 11 years in a number

of different roles at Swiss Life including serving as a Chief Risk Officer

on the Executive Board. Michael is currently a Non-executive Director

at Sanitas AG inSwitzerland and is Chief Risk Officer for Amlin AG

Zurich. Alongside his executive roles, since 1995, Michael has lectured

at the Federal Institute of Technology, Zurich (ETHZ) asa titular

professor of mathematics. He holds a PhD in Mathematics fromETHZ.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Board Committees

Each Committee has a set of Terms of Reference, which are agreed by the Board and approved annually. Theyare all available in the Governance

section of Sabre’s corporate website at www.sabreplc.co.uk

The key responsibilities of each Committee are set out below.

Audit Committee

To monitor the integrity of the

Group’s accounts, and the

adequacy and effectiveness of the

systems of internal control.

To monitor the effectiveness and

independence of the internal and

external auditors

Risk Committee

To monitor and review the

effectiveness of the risk

management and compliance

framework and internal controls.

Nomination & Governance

Committee

To keep under review the

composition, structure and size of,

and succession to, the Board and

its Committees.

To provide succession planning for

the Executive Team and the Board,

leading the process for all Board

appointments.

To evaluate the balance of skills,

knowledge, experience and

diversity on the Board.

Remuneration Committee

To set remuneration for all

Executive Directors and the Chair.

To oversee the Company’s

Remuneration Policy and practices

and take these into account when

setting the policy for Directors’

remuneration.

Oversight of wider employee

reward policies.

Chief Executive Officer

Responsible for the day-to-day running of the Group’s business and performance, and the development and implementation of strategy.

Executive Team

Supporting the Chief Executive Officer in developing the Group’s strategy and its implementation.

The Audit Committee report can

be found on page 62.

The Risk Committee Report can

be found on page 65.

The Remuneration Committee

Report can be found on page 69.

The Nomination and Governance

Committee Report can be found

on page 67.

The Board is collectively responsible for setting the Group’s strategic

aims and providing the leadership to put them into effect through the

management of the Group’s business within the Group’s governance

framework. It does this by setting the Group’s strategy andensuring

that appropriate standards, controls and resources are in place for the

Group to meet its obligations, and also by reviewing Management’s

performance. This includes ensuring that the Group has a Code of

Conduct, which sets out the Group’s policy of conducting all business

affairs in a fair and transparent manner and maintaining high ethical

standards in dealings with all relevant parties. The Code of Conduct

isavailable at www.sabreplc.co.uk/about-us/code-of-conduct

In order to ensure there is a clear division of responsibilities between the

Board and the running of the business, the Board has a formal Schedule

of Matters and Matters Reserved for the Board, which confirms what

decisions are reserved for the Board. These documents are reviewed on

an annual basis and include the Group’s strategic aims; objectives and

commercial strategy; governance and regulatory compliance; structure

and capital; financial reporting and controls; internal controls and risk

management; major capital commitments; major contracts and

agreements; shareholder engagement; remuneration of senior

executives; material corporate transactions; and any changes to

theSchedule of Matters and Matters Reserved for the Board.

Governance Report

Chair

The Chair is responsible for the leadership of the Sabre Insurance Group plc Board (the ‘Board’) and for ensuring that it operates effectively through

productive debate and constructive challenge.

Governance Framework

Shareholders

The Board

The Board is responsible for providing leadership to the Group. It does this by setting strategic priorities and overseeing their delivery in a way that is

aligned with Sabre’s culture and enables sustainable long-term growth, while maintaining a balanced approach to risk within a framework of effective

controls and taking into account the interests of a diverse range of stakeholders. Decisions and matters which are reserved for the Board, are

contained in the Board’s Schedule of Matters and Matters Reserved for the Board.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

The Board and Leadership

The Group Directors and details of their experience and the date of

their appointment are set out on pages 53 to 55.

As at 31 December 2022, the Board consisted of eight Directors:

TheGroup Chair, two Executive Directors, and five Non-executive

Directors. The independence of the Non-executive Directors is

reviewed annually in accordance with the criteria set out within

Provision 10 of the Code, and it is confirmed that all of the Group’s

Non-executive Directors remained independent as at 31 December

2022. It is noted that Andy Pomfret, Group Chair was considered

independent on appointment. Board Directors recognise the need and

importance of acting with integrity, and do so in their roles as Directors

of the Group. All of the Directors bring strong judgement to the

Board’s deliberations. During the year the Board was of sufficient size

and diversity that the balance of skills and experience was considered

to be appropriate for the requirements of the business.

Board meetings

The Board meets at least six times a year with supplementary ad-hoc

meetings as required. There is a planned cycle of activities, managed

through the Schedule of Matters and Matters Reserved for the Board,

and a formal agenda is prepared for each Board and Committee

meeting. Minutes and a follow-up list of matters arising from each

Board and Committee meeting are maintained, and reviewed at every

meeting. In addition to this, verbal updates are provided by each

Committee Chair at the following Board meeting.

Company Secretary

The Company Secretary acts as Secretary tothe Board and to its

Committees, apart from the Risk Committee which is minuted by

theHead of Compliance. Theappointment or removal of the Company

Secretary is a matter for the Board as a whole. The Company Secretary

assists the Chair in ensuring that the Board and the Group have the

appropriate policies, processes, information, time and resources

theyneed to fulfil their duties and in order to function effectively

andefficiently. Anneka Kingan has been the Group’s Company

Secretary since 2018.

Division of responsibilities

The Chair is primarily responsible for leading the Board, setting its agenda, promoting a culture of openness and debate and monitoring its

effectiveness. The Chair is supported by the Senior Independent Director, who acts as a sounding board and serves as an intermediary for

theother Directors. Neither the Chair, nor the Senior Independent Director, are involved in the day-to-day management of the Group. Save for

the Schedule of Matters and Matters Reserved for the Board, the Chief Executive Officer (with the support of Management) is responsible

for proposing the strategy to be adopted by the Group, running the business in accordance with the strategy agreed by the Board and

implementing Board decisions. The Board has approved the clear division of responsibilities between the Chair, Chief Executive Officer

andSenior Independent Director, as shown in the table below. The division of responsibilities is reviewed annually.

Chair

– Sets the Board agenda primarily focusing

on strategy, performance, value creation,

culture and stakeholders

– Ensures the Board has an effective

decision-making process, demonstrating

objective judgements and constructive

challenge

– Ensures the Board has an appropriate

balance of skills, knowledge, experience

and diversity

– Leads the induction and development

plans for new and existing Board

members

– Communicates with major shareholders

and ensures the Board understands their

views

– Ensures the Board receives accurate,

timely and clear information

– Leads the annual Board evaluation

Senior Independent Director

– Supports the Chair in the delivery of his

objectives

– Acts as a sounding board for the Chair and

serves as an intermediary for the other

Directors

– Is available to shareholders if they have

concerns that cannot be resolved through

the normal channels

– Works with the Chair and other Directors

and shareholders to resolve significant

issues where necessary

– Leads the annual performance evaluation

of the Chair

Chief Executive Officer

– Runs the Group’s business and delivers its

commercial objectives

– Proposes and develops the Group’s strategy, in close

consultation with the Executive Team, the Chair and

the Board

– Implements the decisions of the Board and its

Committees

– Ensures operational policies and practices drive

appropriate behaviour, in line with the Group’s

culture

– Leads the communication programme with key

stakeholders, including employees.

– Ensures Management provides the Board with

appropriate information and necessary resources

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Non-executive Directors

Along with the Chair and Executive Directors, the Non-executive

Directors are responsible for ensuring the Board and its Committees

fulfiltheir responsibilities. It is the Non-executive Directors’ role to

provide constructive challenge, strategic guidance, offer their

respective specialist advice and hold Management to account. The

Non-executive Directors combine broad business and commercial

experience, in particular in the financial services and insurance sectors,

with independent and objective judgement and they provide

independent challenge to the Executive Directors. The balance

between Non-executive and Executive Directors enables the Board

toprovide clear and effective leadership across the Group’s business.

Board Committees

In order to provide effective oversight and leadership, the Board has

delegated certain aspects of its responsibilities to the following

committees of the Board (“Committees”):

– The Audit Committee

– The Risk Committee

– The Nomination and Governance Committee

– The Remuneration Committee

The Terms of Reference of these Committees are approved by the

Board, reviewed annually and are available on the Group’s website

atwww.sabreplc.co.uk/about-us/corporate-governance

The Committee Reports are set out on pages 62 to 87.

Board and Committee meetings

The attendance of Directors at Board and Committee meetings held

inthe financial year ended 31 December 2022 is illustrated in the table

across the page. During the year, the Board reviewed and amended

the membership of its Committees. As a consequence of this review,

Alison Morris upon her appointment to the Board joined the Audit and

Risk Committees, and the Nomination and Governance Committee

later in the year. Following this, and subsequent to approval by the

PRA and FCA, Alison became Chair of the Audit Committee with

effect from 25 August 2022. During the year, Karen Geary was

appointed to the Risk Committee, and subsequently Andy Pomfret left

the Risk Committee. In addition, following the appointment of Alison

to the Audit Committee, Andy Pomfret left the Audit Committee.

Itisnoted that Andy had only been appointed to these committees

ona short term basis, following the resignation of Catherine Barton,

Non-executive Director, in November 2021, and while the Board

sourced and appointed a suitable additional Non-executive Director.

Details of the membership of each Committee can be found in each

relevant Committee Report.

Attendance by Directors at scheduled Board and Committee

meetings(number attended/number required to attend)

Director Board

Audit

Committee

Risk

Committee

Nomination

Governance

Committee

Remuneration

Committee

Geoff Carter 6/6 – – – –

Ian Clark 6/6 5/5 5/5 3/3 –

Karen Geary 6/6 – 5/5 3/3 4/4

Michael Koller 6/6 4/5 – 3/3 3/4

Alison Morris

4/4 3/3 3/3 – –

Andy Pomfret

6/6 3/3 1/1 3/3 –

Rebecca Shelley 6/6 – 5/5 3/3 4/4

Adam Westwood 6/6 – – – –

* Alison Morris joined the Audit and Risk Committees with effect from the

24May 2022 and joined the Nomination and Governance Committee with

effect from 1 October 2022.

** Andy Pomfret left the Risk Committee with effect from 27 January 2022 and

the Audit Committee with effect from 24 May 2022.

Decisions at Board meetings are taken by a majority vote of the

Directors and in the case of an equality of votes the Group’s Articles of

Association (“Articles”) provide that the Chair has a second or casting

vote. The Board considers that no single Director can dominate or

unduly inﬂuence decision-making. During the year, the Chair and the

Non-executive Directors met without the Executive Directors, and the

Non-executive Directors met without the Chairpresent.

Diversity

The Board recognises that it is vital that it is diverse in its make-up to

ensure creative and innovative thinking, improved decision-making and

that it leads to better outcomes for the Group. Diversity is a key factor in

reviewing the Board’s composition and recommending appointments.

When recruiting, the Board requires that executive search agencies

provide diverse shortlists, and ensures that all Board appointments are

based on merit. As at 31 December 2022, the Board has three female

Directors out of eight, which is the equivalent to 37.5% of the Board

being female. Further information on Sabre’s approach to diversity and

inclusion can be found on page 42 of this report.

The activities of the Board during the year are set out below and the

reports from each of these Committees are set out on pages 62 to 87

of this Annual Report.

During the financial year ended 31 December 2022, the Board

scheduled and formally met six times, during which it reviewed,

discussed and approved:

– the financial performance of the Group

– the 2021 Annual Report and Accounts, including the Committee

reports, Viability and Going Concern Statements and the RNS of the

results for the financial year which ended on 31 December 2021

– the Notice of Meeting and Proxy Form for the 2022 Annual General

Meeting

– the 2022 Half-Year Results, Q1 and Q3 Trading Statements

– the Group’s strategy, including the continued development of the

motorcycle and taxi insurance products

– the payment of the dividends, including the final dividend for the

financial year which ended on 31 December 2021, and an interim

dividend for the financial year which ended on 31 December 2022

– the results of the Group’s 2021 Board Effectiveness Review, and the

external review of the Board for 2022

– the 2023 budget

In addition, the Board and the Committees regularly received updates,

reports and presentations from other senior employees including

theChief Actuary, the Claims Director, the Chief Risk Officer, the

Company Secretary, the Head of IT, the Head of Compliance and

theHead of HR.

During the financial year ended 31 December 2022, the Board met an

additional two times to discuss the Half Year Trading Update and Half

Year Results.

Effectiveness

The Board is structured to provide the Group with an appropriate

balance of skills, experience, knowledge and independence to enable

it to discharge its duties and responsibilities effectively. Given the

nature of the Group’s business, insurance, actuarial and accounting

experience as well as experience of the financial services sector is

clearly of benefit and this is reﬂected in the composition of the Board

and its Committees.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Induction and ongoing professional development

The Board has a thorough induction programme for Directors to

participate in upon joining the Board. This programme is monitored

bythe Chair and is the responsibility of the Company Secretary.

Depending upon their qualifications and experience, the programme

includes presentations and briefings, meetings with Board Directors,

senior Management, external advisers, andvisits to the Group’s office

in Dorking,Surrey.

The ongoing professional development of the Directors has been

reviewed by the Board and its Committees. The Chair reviews and

agrees the training and development needs with each of the Directors

during each year. Directors have the opportunity to highlight specific

areas where they feel their skills or knowledge would benefit from

development as part of the Board evaluation process, and are

encouraged to continue their own professional development through

attendance at seminars and conferences. Directors confirm annually

that they have received sufficient training to fulfil their duties.

Information and advice

Directors are provided with appropriate documentation at least a week

in advance of eachBoard and Committee meeting. TheGroup uses an

online platform to distribute its Board and Committee papers securely

and efficiently, which maximises information security and has minimal

environmental impact. AllDirectors have access to the advice and

services of the Company Secretary for information and guidance, and

she is responsible for ensuring that all Board procedures have been

complied with. Directors may also obtain independent professional

advice at the Group’s expense if they believe it is required in the

furtherance of their duties. No such advice was sought by any

Directorduring the year.

Time commitment

As part of the appointment process and their annual review the

Non-executive Directors each confirm that they are able to allocate

sufficient time to the Group to discharge their responsibilities

effectively and Directors are expected to attend all scheduled Board

meetings, relevant Committee meetings, the Annual General Meeting

and any general meeting of the Group.

The other public company commitments of the Chair and the other

Directors are as indicated in their biographies on pages 53 to 55.

EachDirector is required to seek permission from the Chair and the

Board before accepting additional commitments. This is to ensure

thatadditional appointments are not a conﬂict of interest and that the

Director will have sufficient time to continue in their role at Sabre. The

Board is satisfied that the Chair and each Non-executive Director are

able to allocate sufficient time to enable them to discharge their duties

and responsibilities effectively.

Accountability

The Board, through the Audit Committee, reviews the Group’s

financial and business reporting and maintains the Company’s

relationship with its auditors, the details of which are set out in

theAudit Committee Report on pages 62 to 64. Through the Risk

Committee, the Board receives reports regarding the Company’s

riskmanagement, compliance and internal control systems,

theeffectiveness of the Group’s systems of risk management

andinternal controls. Further details of this are set out in the Risk

Committee Report on pages 65 to 66.

Anti-bribery and corruption

As part of Sabre’s commitment to preventing bribery and corruption,

the Group has an Anti-Bribery and Corruption Policy, which is reviewed

and approved annually by the Risk Committee. The Policy is designed

to prevent and prohibit bribery, in line with the Bribery Act 2010. The

Group will not tolerate any form of bribery by, or of, its Directors,

employees, agents or consultants or any person or body acting on

itsbehalf, and no such incidents occurred in the 2022 financial year.

Thepolicy covers:

– the main areas of liability under the BriberyAct 2010

– the responsibilities of the Directors, employees and associated

persons acting for, or on behalf of, the Company

– the consequences of any breaches ofthe policy

Modern slavery

Sabre annually considers the2015 Modern Slavery Act. Sabre has a

zero-tolerance approach to any form of slavery and human trafficking

and confirms to the best of its knowledge that there is no slavery or

human trafficking within its supply chain. The Group’s Modern Slavery

Statement isreviewed and approved by the Board on an annual basis

and can be found on the Group’s website www.sabreplc.co.uk/

about-us/corporate-governance/modern-slavery-statement

Whistleblowing arrangements

The Group has a Whistleblowing Policy, which enables and

encourages employees to report in confidence any possible

improprieties in either financial reporting or other matters to an

externalhotline. The Group’s Whistleblowing Policy is reviewed

andapproved by the Audit Committee on an annual basis.

Performance evaluation

The Board recognises the importance of evaluating annually the

performance and effectiveness of the Board, its Committees, the

Chair and individual Directors. During theyear a formal annual review

of the performance of the Board, its Committees, the Chair and

individual Directors was completed. This year the process consisted

ofan externally facilitated exercise sponsored by the Chair and

assisted by the Company Secretary. The review concluded that the

Board was effective and to continue being so, it was agreed to

introduce an additional strategy day during the year. It was further

agreed that alongside the existing formal meetings between Non-

executive Directors and Executive Directors outside of the meeting

cycles, there would be an increase in the informal contact between

theNon-executive Directors and Executive Directors.

Appointment of Directors

The Articles provide that Directors may be appointed by the Board or

by the Group by ordinary resolution. A Director appointed by the Board

may only hold office until the next Annual General Meeting of the

Group following their appointment and is then eligible for election

bythe shareholders. The Board, through the Nomination and

Governance Committee, hasreviewed and adopted the Code

recommendation that all Directors should be subject to annual

re-election (in compliance with Code Provision 18). During 2022, all

ofthe Directors stood for election or re-election at the Annual General

Meeting, and were successful in their appointment or reappointment.

Further details regarding the terms of appointment and remuneration

for the Executive Directors and Non-executive Directors are set out

inthe Annual Report on Directors’ Remuneration (on pages 78 to 87)

andtheir service contracts and terms of appointment are available for

inspection inaccordance with the Code at the Group’soffice and at

the Group’s Annual General Meeting.

Conicts of interest

The Board has established a procedure to deal with Directors’ conﬂicts

of interest which complies with the Group’s Articles andthe provisions

in section 175 of the Companies Act 2006. Schedules of a Director’s

actual or potential conﬂicts are compiled based on disclosures made

by the Director. These are updated and reviewed on an annual basis in

addition to conﬂicts or potential conﬂicts being considered at the

beginning of Board meetings.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Remuneration

Details of the Directors’ remuneration and thework of the

Remuneration Committee asrequired by the Large and Medium-sized

Companies and Groups (Accounts and Reports) Regulations 2008

(asamended) can be found in the Annual Report on Directors’

Remuneration on pages 78 to 87. Although the Company does not

formally engage with its employees on executive remuneration, the

Board engages with employees via the designated Non-executive

Director for workforce engagement. During the year Karen Geary

replaced Ian Clark as the Non-executive Director for workforce

engagement. Karen regularly meets with employees, and provides

feedback on her meetings to the Board. This process does not

currently include an active two-way dialogue with the employees

onexecutive pay but this approach is being kept under review.

Relations with shareholders

Through this Annual Report and, as required, through other periodic

announcements, the Board is committed to providing shareholders

with a clear assessment of the Group’s position and prospects. The

Board recognises the importance of engaging constructively with

shareholders and, during the year, the Chief Executive Officer and the

Chief Financial Officer continued to engage with shareholders through

investor presentations, conferences and roadshows, ensuring they

areup to date with their views. These views are regularly shared with

the Board, and theChair and the Senior Independent Director remain

available to meetshareholders separately to discuss any issuesor

concerns they may have. During the year the Group Chair also met

with the Group’s shareholders. In addition to these meetings, the

Group keeps shareholders informed primarily by way of theAnnual

Report, Half Year Results, Trading Statements and the Annual General

Meeting. This information and other significant announcements of the

Group will be released to the London Stock Exchange and will be

available on the Group’s website www.sabreplc.co.uk/investors/

regulatory-news

Major shareholders

The holdings of our major shareholders can be found on page 89 of

this Annual Report.

Share register

The share register is managed on the Group’s behalf by Equiniti,

whocan be contacted at Aspect House, Spencer Road, Lancing,

WestSussex BN99 6DA or by telephone on 0371 384 2030 or,

ifdialling internationally, on+44121 415 7047.

Annual General Meeting (‘AGM’)

Notice of the Group’s AGM for the 2022 financial year will be sent to

shareholders at least 21 clear days before the meeting. The AGM will

provide shareholders with the opportunity to vote on the resolutions

put to shareholders and, for those shareholders who attend, to ask

questions of the Board of Directors, including the Chairs of the

Committees. The result of the voting on all resolutions proposed at the

AGM will be published on the Group’s website, post the conclusion of

the meeting. Further information on the Group’s AGM can be found

onpage 90.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Statement of Corporate Governance

Compliance with Code provisions

The Board is committed to the high standards ofcorporate governance

across the Group and supports the principles laid down in the UK

Corporate Governance Code (the ”Code”), asissued by the Financial

Reporting Council. The Board considers that the Company

wascompliant with most of the principles and provisions of the Code

during the financial year ended 31 December 2022. It notes that during

the year, prior to the appointment of Alison Morris as a Non-executive

Director, Andy Pomfret sat on both the Audit and Risk Committees,

which is non-compliant with Provision 25 of the Code. Andy’s

appointment to both committees allowed there to be sufficient skills

and experience on both the Audit and Risk Committees, following the

resignation of Catherine Barton, as a Non-executive Director in late

2021. Andy left the Risk Committee in January 2022 when Karen

Geary joined it, and left the Audit Committee when Alison joined the

Board and the Committee, ensuring that the Committees were

compliant with the Code for the remainder of the year. The Board

notesthat it did not engage with employees regarding executive

remuneration pay levels, and therefore is not compliant with Provision

41 of the Code, but notes that the Board does regularly engage with

employees through the appointment of a Non-executive Director

responsible for employee engagement, who meets regularly with

employees and provides feedback to the Board on employee views.

Itwould be this mechanism that the Company would use to seek

engagement with employees regarding executive remuneration

paylevels.

To ensure the Group remains compliant with the principles of the

Code, the Board reviews and addresses its training and development

needs by attending various seminars and teach-ins from advisers

atBoard meetings, and in 2022 completed an external Board

Effectiveness Review, which evaluated the performance of the

Board, its Committees, and the Company Chair.

Composition, Succession and Evaluation Section

J. Appointments to the Board should be subject to a

formal, rigorous and transparent procedure, and an

effective succession plan should be maintained for Board

and senior management. Both appointments and

succession plans should be based on merit and objective

criteria and, within this context, should promote diversity

of gender, social and ethnic backgrounds, cognitive and

personal strengths.

Governance Report

(Pages 56 to 61)

Nomination and

Governance

Committee Report

(Pages 67 to 68)

K. The Board and its committees should have a

combination of skills, experience and knowledge.

Consideration should be given to the length of service of

the Board as a whole and membership regularly refreshed.

Governance Report

(Pages 56 to 61)

L. Annual evaluation of the Board should consider its

composition, diversity and how effectively members

work together to achieve objectives. Individual evaluation

should demonstrate whether each Director continues to

contribute effectively.

Governance Report

(Pages 56 to 61)

Audit, Risk and Internal Control Section

M. The Board should establish formal and transparent

policies and procedures to ensure the independence and

effectiveness of internal and external audit functions and

satisfy itself on the integrity of financial and narrative

statements.

Audit Committee

Report (Pages 62

to 64)

N. The Board should present a fair, balanced and

understandable assessment of the Company’s position

and prospects.

Audit Committee

Report(Pages 62

to64)

O. The Board should establish procedures to manage risk,

oversee the internal control framework, and determine

the nature and extent of the principal risks the Company

is willing to take in order to achieve its long-term strategic

objectives.

Principal Risks and

Uncertainties

(Pages 19 to 28)

Risk Committee

Report (Pages 65

to 66)

Remuneration Section

P. Remuneration policies and practices should be designed

to support strategy and promote long-term sustainable

success. Executive remuneration should be aligned to

Company purpose and values, and be clearly linked to the

successful delivery of the Company’s long-term strategy.

Remuneration

Committee Report

(Pages 69 to 71)

Q. A formal and transparent procedure for developing

policy on executive remuneration and determining

Director and senior management remuneration should be

established. No Director should be involved in deciding

their own remuneration outcome.

Remuneration

Committee Report

(Pages 69 to 71)

R. Directors should exercise independent judgement and

discretion when authorising remuneration outcomes,

taking account of Company and individual performance,

and wider circumstances.

Remuneration

Committee Report

(Pages 69 to 71)

Principles of the Code

Board Leadership and Company Purpose

Section of the

Annual Report

A. A successful Company is led by an effective and

entrepreneurial Board, whose role is to promote the

long-term sustainable success of the Company,

generating value for shareholders and contributing to

wider society.

Governance Report

(Pages 56 to 61)

B. The Board should establish the Company’s purpose,

values and strategy, and satisfy itself that these and its

culture are aligned. All Directors must act with integrity,

lead by example and promote the desired culture.

Strategic Report

(Pages 2 to 50)

C. The Board should ensure that the necessary resources

are in place for the Company to meet its objectives and

measure performance against them. The Board should

also establish a framework of prudent and effective

controls, which enable risk to be assessed and managed.

Directors

Remuneration

Policy (Pages 72

to77)

Principal Risks and

Uncertainties

(Pages 19 to 28)

D. In order for the Company to meet its responsibilities to

shareholders and stakeholders, the Board should ensure

effective engagement with, and encourage participation

from, these parties.

Governance Report

(Pages 56 to 61)

E. The Board should ensure that workforce policies and

practices are consistent with the Company’s values and

support its long-term sustainable success. The workforce

should be able to raise any matters of concern.

Responsibility and

Sustainability

(Pages 38 to 49)

Division of Responsibilities Section

F. The chair leads the Board and is responsible for its

overall effectiveness in directing the Company. They

should demonstrate objective judgement throughout their

tenure and promote a culture of openness and debate. In

addition, the chair facilitates constructive Board relations

and the effective contribution of all Non-executive

Directors, and ensures that Directors receive accurate,

timely and clear information.

Governance Report

(Pages 56 to 61)

G. The Board should include an appropriate combination

of executive and Non-executive (and, in particular,

independent Non-executive) Directors, such that no one

individual or small group of individuals dominates the

Board’s decision-making. There should be a clear division

of responsibilities between the leadership of the Board

and the executive leadership of the Company’s business.

Governance Report

(Pages 56 to 61)

H. Non-executive Directors should have sufficient time to

meet their Board responsibilities. They should provide

constructive challenge, strategic guidance, offer

specialist advice and hold management to account.

Governance Report

(Pages 56 to 61)

I. The Board, supported by the Company Secretary,

should ensure that it has the policies, processes,

information, time and resources it needs in order to

function effectively and efficiently.

Governance Report

(Pages 56 to 61)

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

The Audit Committee (the “Committee”)

The Committee comprises of at least three Non-executive Directors

ofthe Group, all of whom are considered to be free of any relationship

that would affect their impartiality incarrying out their responsibilities

and were independent as required under Provision 17 ofthe UK

Corporate Governance Code (the “Code”). Members of the

Committee are appointed by the Board, on the recommendation

oftheNomination and Governance Committee andthe Chair of the

Committee. The Committee is chaired by Alison Morris, who has

significant, recent and relevant financial experience. During the year

Alison took over as Committee Chair from Ian Clark, who also has

significant, recent and relevant financial experience.

The Company Chair (when not a member of the Committee), Chief

Executive Officer, Chief Financial Officer and Chief Actuary are invited

toattend meetings, unless they have a conﬂict of interest. Inaddition,

the External Audit Partner, the Internal Audit Partner, the Company

Secretary and Head of Internal Audit are invited to attend part or all of

the Committee meetings, providing there is no conﬂict of interest. Other

relevant people from the Group may also be invited to attend all orpart

of a meeting to provide deeper insight intothe Group and its issues.

TheBoard considers that the membership of the Audit Committee

isappropriate and has skills and competencies relevant to the role

oftheCommittee and the insurance sector.

Either immediately prior to the meeting orimmediately after the

meeting, theCommittee meets with either the External Audit Partner

or the Internal Audit Partner. These private meetings alternate at each

meeting and give the External parties access tothe Committee

members. The Committee Chair also meets regularly with both

Internal and External Audit Partners outside of the Committee

meetings, and is available to shareholders at the Group’s Annual

GeneralMeeting.

The Chair of the Committee reports to subsequent meetings of

theBoard and the Company Secretary acts as Secretary to the

Committee. Annually, the Committee reviews its effectiveness.

ALISON MORRIS

Audit Committee Chair

Audit

Committee

Report

Committee meetings in 2022

JAN FEB MAR APR MAY JUN

JUL AUG SEP OCT NOV DEC

Committee Members

Date of Appointment to

the Committee Attendance

Alison Morris (Chair)

(joined the Committee with effect from May 2022)

(Chair with effect from August 2022)

May 2022 3/3*

Ian Clark

(Chair until August 2022)

April 2020 5/5**

Michael Koller September 2020 4/5

Andy Pomfret

(left the Committee with effect from May 2022)

3/3

* Two as Committee Member and one as Committee Chair

** Four as Committee Chair and one as Committee member

Committee Members

The membership as at the date of thisreport together with such members’ appointment dates

and attendance record for the year ended 31December 2022are set outbelow:

Meeting occurred

No meeting took place

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Roles and responsibilities

The Committee, in line with its terms of reference, meets at least

three times a year, andas and whenrequired. The terms of reference

of the Committee can be found on the Group’s website www.

sabreplc.co.uk/about-us/corporate-governance and are reviewed

bytheCommittee on an annual basis.

In accordance with its terms of reference the Board has delegated to

the Committee responsibility for overseeing key areas of responsibility

which include the following:

External audit – this includes considering and making

recommendations to the Board on the appointment of the external

auditors (including approving the remuneration and terms of

appointment) as well as reviewing the external auditor’s annual audit

plan and the results therefrom, reviewing the quality and effectiveness

of the audit, approving the policy on non-audit services carried out by

the external auditors and reviewing auditor independence. The

Committee is responsible for managing the relationship with the

Group’s external auditor, PwC, on behalf of the Board. Overall

effectiveness of the external audit process is dependent upon

communication between the Group and the auditor, which allows each

party to raise potential accounting and financial reporting issues as and

when they arise, rather than limiting this exchange to only during

regularly scheduled meetings.

Financial and narrative reporting – thisareaof responsibility

includes monitoring the integrity and compliance of the Group’s

financial statements and for providing effective governance over the

Group’s financial reporting, as well asreviewing significant financial

reporting issues and judgements made in connection with them.

Internal audit – the Group has a formal process of internal audit, and

in2018 appointed BDO to run the Group’s internal audit programme.

BDO performs audits on arolling basis across the Group over a

three-year period. The reports are made available to the Committee,

the Chief Executive Officer, Chief Financial Officer, Chief Risk Officer,

the Company Secretary, and relevant members of Management. BDO

re-confirm their independence on an annualbasis. The primary

objective of the function is to systematically and objectively assess: (i)

the effectiveness of the business controls over the Group’s operations,

financial reporting, risk and compliance areas and (ii) the adequacy of

these systems of control to manage business risk and safeguard the

During the financial year ended 31 December 2022, the Committee

reviewed:

– the accounting issues and significant judgements related to the

financial statements;

– the appropriateness of key accounting judgements including the

adequacy of insurance liabilities;

– the appropriateness of the Group’s accounting policies;

– the process and stress testing undertaken to support the Group’s

viability and going concern statements;

– recommended to the Board the Group’s Annual Report and Accounts;

– the appointment of the external auditor and their plan for the audit of

the Group’s financial statements, which included key areas of scope

of work, keyrisks on the financial statements, confirmation of

auditor independence and the proposed audit fee;

– the transition plan presented by the incoming external auditor, with

particular focus on any divergence in risk assessment or approach

from that which was presented by the outgoing external auditor;

– the effectiveness of the incoming external auditor informally during

the year, ahead of a formal assessment following completion of the

first year-end audit, which will be carried out in 2023;

– the Group’s system of controls and its effectiveness using

information drawn from a number of different sources including

Management, and independent assurance provided by internal audit

(throughits annual audit plan) and the external auditors;

– reports from the Group’s outsourced internal audit and reviewing

and approving their fees; and

– the Committee’s annual effectiveness report responses and

concluded that the Committee was effective.

Furthermore, the Committee approved:

– the external audit fees and the policy on non-audit services carried

out by the Group’s external auditors;

– and recommended to the Board, whichagreed to recommend to

shareholders, theappointment of PwC as the Group’s externalauditor.

It is noted that the shareholders of the Group approved the

appointment at the Annual General Meeting, held in May 2022;

– the Committee’s terms of reference and confirmed that the

Committee had sufficient resources to enable it to complete

itsresponsibilities;

– and confirmed to the Board that the Annual Report and Accounts,

taken as a whole, are fair, balanced and understandable and provide the

necessary information for the shareholders to assess the Group’s

position and performance and its business model and strategy.

Group’s assets and resources. The Committee reviewed and approved

the internal audit role and risk-based internal audit plan, and received

updates on the internal audit activity. During the year, the effectiveness

of Internal Audit was reviewed, and it was concluded that it remained

effective. This review incorporated a questionnaire along with ongoing

informal feedback and discussion at the Committee.

Internal controls – this includes reviewing the effectiveness of the

Group’s system of internal controls and ensuring timely action istaken

by Management to address matters arising from the internal audit

assessments.

Reserves review – the establishment of insurance liabilities in respect

of reported and unreported claims is the most significant area of

judgement within the financial statements. The Committee maintains

oversight of the reserving process and assumptions used in setting the

level of insurance liabilities, which are assessed by the Group’s

actuaries on a quarterly basis.

Whistleblowing – reviewing arrangements bywhich employees may

in confidence raise concerns about possible improprieties regarding

financial reporting and other matters. The Committee receives any

whistleblowing reports and reports matters raised to the Board.

2022 and the Committee

The Committee was in place throughout the financial year ended

31December 2022, and met five times through the period. The Audit

Committee was chaired by Ian Clark, until the appointment of Alison

Morris who joined the Committee with effect from 24 May 2022 and

became Chair on 25 August 2022. Andy Pomfret left the Committee

with effect from 24 May 2022. The Committee is required to be

chaired by an individual who has appropriate financial expertise, as

required by the Code, and the Board considers that Alison has the

appropriate financial expertise, as Alison is a qualified accountant with

significant financial services and director experience. All members of

the Committee attended all of the meetings, apart from Michael Koller

who missed one meeting.

The Chief Executive Officer and the Chief Financial Officer both

attended all of the Committee meetings, as did the External Audit and

Internal Audit Partners. All meetings were minuted by the Company

Secretary. The Committee Chair also held regular individual meetings

with members of Management, the Group’s External and Internal

Audit Partners, and the Company Secretary and Head of Internal Audit.

The Board is comfortable that the make-up of the Committee ensures

that it is fully able to fulfil its duties.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

3. Parent Company Investment in Subsidiary

The Committee reviewed Management’s valuation of the investment

in subsidiary held by the Group’s parent company, having noted the

significant reduction in the Group’s market capitalisation during the

year. The Committee considered the assumptions made in the

discounted cash ﬂow model used to support the valuation within

theaccounts, as well as the disclosure made on pages 167 and 168

ofthe financial statements.

4. Internal controls

During the year, the Committee reviewed the adequacy and

effectiveness of the controls that underpin the Group’s financial

reporting control framework which is part of the wider internal controls

system and addresses financial reporting risks. The key procedures,

which the Directors have established include: an annual budgeting

process with periodic forecasting; reporting of financial and solvency

capital information to the Board on a monthly basis; reporting on specific

matters including updated key risks, investments and taxation; liquidity

monitoring; and an anti-bribery and corruption policy. The Committee

also considered Management’s processes and controls foridentifying

and responding to the risk of fraud, and considered the second line of

defence review of controls and reports from Internal Audit. Any control

weaknesses that these procedures identify are monitored and

addressed in the normal course of business. The Committee noted

thatthere were no fraud-related events or actions to suggest that fraud

might have a material impact on the financial statements.

5. Going concern and viability

The Committee considered the going concern assumptions and

viability statement in the 2022 Annual Report and Accounts, valuation

of assets and impairment reviews and clarity of disclosures. In

assessing the viability of the Group the Committee considered the

liquidity and capital position of the Group over the period to 31

December 2025 under a range of scenarios which had been selected

to reﬂect the key risks faced by the Group. Further information on this

can be found in the Viability Statement on page 29. In assessing the

going concern of the Group, the Committee considered the financial

forecasts and liquidity for a period of one year from the date of the

approval of this Annual Report.

6. Fair, balanced and understandable

The Committee reviewed and concluded that the Annual Report and

Accounts taken as a whole were fair, balanced and understandable

and provided sufficient information to enable the reader to assess

theGroup’s position, performance, business model and strategy.

Key Matters considered by the Committee during

the year:

The Committee pays particular attention to matters it considers to be

important by virtue of their impact on the Group’s results, the internal

control environment or the level of complexity, and matters of

judgement or estimation involved in their application to the

Consolidated Financial Statements. The main areas of focus for

theyear were:

1. Valuation of insurance liabilities

The Committee agreed with management’s assessment that the most

significant area of estimation within the financial statements continues

to be the estimation of insurance liabilities. This comprises an estimate

of the ultimate cost of claims incurred at the date of the Statement of

Financial Position, both reported and not yet reported, along with an

estimate of the associated reinsurance recoveries. The Committee

reviewed the Group’s policy to hold sufficient reserves to meet

insurance liabilities as they fall due, plus a risk margin reﬂective of

theuncertainty within such calculation. The Committee specifically

considered the impact of recent high levels of inﬂation on the level

ofinsurance liabilities held.

The Committee reviewed the Chief Actuary’s annual and quarterly

reserving reports and challenged the appropriateness of the process,

key judgements and assumptions supporting the projection of the best

estimate claims expense. The Committee reviewed Management’s

rationale for the level of risk margin recorded within the claims

reserves, which was set at 8% of outstanding claims reserves as at

31December 2022 (2021: 10%). The Committee also discussed such

matters with the Group’s external auditor. The Chair of the Committee

met with the Group’s Chief Actuary without other members of

Management present. TheCommittee noted the inherent uncertainty

associated with the estimation of claims costs, in particular with

reference to the changes in the legal environment and the impact of

historically high levels of claims inﬂation. The Committee concluded

that the insurance liabilities presented in the financial statements were

fairly stated.

2. Implementation of accounting standards

The Committee reviewed the proposed implementation and key

judgements associated with the upcoming implementation of IFRS 17,

including consideration of the classification and measurement of

insurance assets, liabilities and transactions. The Committee also

considered the appropriate level of disclosure required in the 2022 Annual

Report and Accounts related to the implementation of the new standard.

7.Task force for Climate-Related Financial Disclosures

(“TCFD”)

The Committee reviewed the disclosures made in accordance with the

TCFD recommendations as part of its review of the Annual Report

andaccounts.

External auditor appointment

PwC were appointed as external auditor in accordance with the plan

set out in the prior Annual Report and Accounts, and have presented

their first audit opinion in respect of the year ended 31 December

2022. Resolutions regarding the appointment of PwC and their

remuneration were contained in the Notice of Meeting for the 2022

Annual General Meeting and both resolutions, were approved by

100% of shareholders.

Non-audit work carried out by external auditors

The Committee reviewed and approved apolicy regarding non-audit

work and fees which requires all non-audit work proposed to be

carried out by the external auditors to be pre-authorised by the

Committee or, ifrequired urgently between Committee meetings,

theChair of the Committee, inorder to ensure that the provision of

non-audit services does not impair the external auditor’s independence

or objectivity. The total fees for non-audit services must not exceed

70% of the average audit fees billed to the Group by the external

auditor in the past three years. During 2021, EY and its subsidiaries

charged the Group £379,000 for audit and audit-related services, and

received atotal fee during the financial year of £459,000. Their work

ended with effect 25 May 2022. From their appointment on 25 May

2022 PwC and its subsidiaries charged the Group £440,000 (2021:

n/a) for audit and audit-related services, and received atotal fee during

the financial year of £519,000 (2021: n/a). A summary of fees paid to

each external auditor is set out inNote 8.4 to the Consolidated

Financial Statements. In the financial year ended 31December 2022,

the external auditors didnotundertake any material non-audit work

forthe Group.

On behalf of the Audit Committee

ALISON MORRIS

Chair of the Audit Committee

13 March 2023

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

The Risk Committee (the “Committee”)

The Committee comprises of at least three Non-executive Directors

ofthe Group, all ofwhom are considered to be free of any relationship

that would affect their impartiality in carrying out their responsibilities

and are considered independent as required under Provision 17 of the

Corporate Governance Code (the “Code”), or in the case of the

Group’s Chair considered independent on appointment. Members of

the Committee are appointed by the Board, on the recommendation

ofthe Nomination and Governance Committee and the Chair of

theCommittee.

The Committee is chaired by Ian Clark, who has significant, recent

andrelevant risk experience. The Chief Executive Officer, Chief Risk

Officer and Chief Financial Officer are invited to attend meetings,

unless they have a conﬂict of interest. In addition, the Company

Secretary, the Head of Compliance and the Data Protection Officer are

invited to attend part or all of the Committee meetings, providing there

is no conﬂict of interest. Other relevant people from the Group may

also be invited to attend all or part of a meeting to provide deeper

insight into the Group and its issues.

Either immediately prior to the meeting or immediately after the

meeting, the Committee meets with either the Chief Risk Officer,

theHead of Compliance or the Data Protection Officer. These private

meetings alternate at each meeting and give the Chief Risk Officer,

Head of Compliance and Data Protection Officer access to the

Committee members. The Committee Chair also meets regularly with

these individuals outside of the Committee meetings, and is available

to shareholders at the Group’s Annual General Meeting. The Chair of

the Committee provides an update of the Committee’s activities at

subsequent meetings of the Board. The Head of Compliance usually

acts as Secretary to the Committee, as the Company Secretary is also

the Chief Risk Officer. Annually, the Committee reviews its

effectiveness, which is then reported to the Board.

IAN CLARK

Risk Committee Chair

Risk Committee

Report

Committee meetings in 2022

JAN FEB MAR APR MAY JUN

JUL AUG SEP OCT NOV DEC

Committee Members

Date of Appointment

tothe Committee Attendance

Ian Clark (Chair) April 2020 5/5

Alison Morris

(joined the Committee with effect from May 2022)

May 2022 3/3

Karen Geary January 2022 5/5

Rebecca Shelley April 2020 5/5

Andy Pomfret

(left the Committee with effect from January 2022)

November 2021 1/1

Committee Members

The membership as at the date of thisreport together with such members’ appointment dates

and attendance record for the year ended 31December 2022 are set outbelow:

Meeting occurred

No meeting took place

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Principal risks and uncertainties – details of the Group’s principal

risks and uncertainties are set out on pages 19 to 28 together with

information about the management and mitigation of such risks.

Compliance –reviewing the Group’s compliance policies and

procedures to ensure that the Group complies with relevant regulatory

and legal requirements

Data protection – the appointment and removal of the Group’s Data

Protection Officer, review how the Group meets its obligations under

the Data Protection Act, review all reports from the Data Protection

Officer and Management’s responses to the findings and

recommendations.

Remuneration – the Committee provides advice to the Remuneration

Committee regarding the weightings to be applied to performance

objectives relating to the Executive Team’s management of risk

throughout the year.

2022 and the Committee

The Committee was in place throughout the financial year ended

31December 2022, and met five times through the period. The Chief

Executive Officer and the Chief Risk Officer attended, partially or fully,

all of the Committee’s meetings. The Chief Financial Officer, the Head

of Compliance and Data Protection Officer attended certain meetings

during the year. All meetings were minuted by either the Head of

Compliance or the Company Secretary. The Committee Chair also held

regular individual meetings with the Chief Risk Officer and the Head of

Compliance. Upon her appointment to the Board, Alison Morris joined

the Committee with effect from 24 May 2022. Andy Pomfret left the

Committee with effect from 27 January 2022. The Board is

comfortable that the make-up of the Committee ensures that it is fully

ableto fulfil its duties.

During the year, the Committee addressed its responsibilities by:

– confirming that Management had fulfilled their obligations regarding

the management of the Group’s risks;

– reviewing reports from the Chief Risk Officer regarding risk

management, including the procedures and plan relating to the

management of risk across the Group;

– reviewing and approving the risk management framework and risk

appetite, the corporate risk registers and the Group’s principal risks

and uncertainties;

– reviewing reports from the Head of Compliance regarding

compliance across the Group, including progress against the

Compliance Monitoring Plan;

– approving the Group’sCompliance Manual;

Role andresponsibilities

The Committee has a planned cycle of activities, managed through a

schedule of matters, to ensure that it addresses its responsibilities in

the current financial year. The terms of reference of the Committee

canbe found on the Group’s website at www.sabreplc.co.uk/

about-us/corporate-governance and are reviewed by the Committee

on an annual basis. The Committee meets at least three times a year,

inline with its terms of reference, and as and when required.

The Board has delegated to the Committee responsibility for ensuring

that the Group has robust processes and procedures in place for the

identification and management of risk. This includes the monitoring

and reviewing the Group’s risk management and compliance

frameworks, and their controls, and ensuring that there is adequate

processes for the identification, evaluation and mitigation of the risks

faced by the Group. The Committee reviews the effectiveness of the

Group’s risk management, compliance management and internal

control systems, and reports to the Board on these areas. In

conducting its reviews, the Committee focuses on material risks,

including the determination of the nature and extent of the principal

risks, and controls in the context of reports it receives regarding risk

management. These include reports from the Chief Risk Officer, the

Head of Compliance and the Data Protection Officer.

The Committee leads the process for:

Risk management – this includes reviewing and monitoring the

effectiveness of the procedures for the identification, assessment

andreporting of risk as well as setting, and monitoring adherence to,

arisk appetite that defines the nature and extent of the risks that the

Group is facing and should be willing to take in achieving its strategic

objectives. It also includes oversight of the processes by which

risk-based capital requirements, and the Group’s solvency position,

aredetermined and monitored. The Committee further advises the

Board on the Group’s overall risk appetite, tolerance and strategy, and

oversees and advises the Board on its risk strategy and current risk

exposures. In addition to this, the Committee is responsible for the

appointment and removal of the Group’s Chief Risk Officer and

reviewing their reports and Management’s responses to the findings

and recommendations.

Risk controls – these are in place and are designed to mitigate the

risks that the Group faces, rather than to eliminate the risk of failure

toachieve business objectives. The Risk Committee ensures timely

action is taken by Management to address matters arising from the

risk and compliance assessments.

– reviewing reports from the Group’s Data Protection Officer;

– confirming that the Chief Risk Officer, Head of Compliance and Data

Protection Officer had fulfilled their obligations regardingtheir roles;

– reviewing regulatory correspondence;

– reviewing and recommending to the Board the Group’s ORSA;

– reviewing the Committee’s terms of reference;

– reviewing the annual Committee’s evaluation responses and

concluded that the Committee was effective; and

– confirming that the Committee had sufficient resources to enable

itto complete its responsibilities.

Specific discussions were had by the Committee on:

– Cyber security

– Inﬂation

– UK economic distress

– FCA’s Retail Pricing Review act and its impact on the Group

– FCA Consumer Duty – for further information on this, please see

page 50

Sabre’s approach to Data Protection

Sabre has a GDPR oversight Committee which is chaired by the Data

Protection Officer, and meets regularly to review GDPR compliance.

The meeting is attended by representatives of all areas of the

business, including Compliance and Risk. The standing agenda for

themeeting ensures that all breaches are reviewed, emerging risks

considered and any follow through training required is identified.

Our employees are trained, at least annually, on data protection

legislationand the Group’s requirements when handling data. This

includes online training courses which include a marked assessment on

completion to ensure understanding. Additional ad-hoc training is provided

to update on any specific changes or points of interest. Reporting of data

protection risks are initially reported to our Data Protection Officer who

reports to Ian Clark,Chair of the Risk Committee.

On behalf of the Risk Committee

IAN CLARK

Chair of the Risk Committee

13 March 2023

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

The Nomination and Governance Committee

(the “Committee”)

The Committee comprises of at least three Non-executive Directors

ofthe Group, all of whom are considered to be free of any relationship

that would affect their impartiality incarrying out their responsibilities

and were independent as required under Provision 17 ofthe UK

Corporate Governance Code (the “Code”). However, for the financial

year ended 31 December 2022, all of the Non-executive Directors of

the Group sat on the Committee. The Committee is chaired by the

Group Chair, Andy Pomfret, unless there is a conﬂict of interest.

The Chief Executive Officer and Company Secretary may also be

invited to attend meetings, unless this presents a conﬂict of interest.

The Committee Chair meets regularly with the Chief Executive Officer

outside of the Committee meetings, and is available to answer

shareholder questions at the Group’s Annual General Meeting.

The Chair of the Committee reports to subsequent meetings of the

Board and the Company Secretary acts as the Secretary to the

Committee. Annually the Committee reviews its effectiveness.

Roles and responsibilities

The Committee has a planned cycle of activities, managed through

aschedule of matters, to ensure that it addresses its responsibilities

inthe current financial year. The terms of reference of the Committee

canbe found on the Group’s website at www.sabreplc.co.uk/

about-us/corporate-governance and are reviewed by the Committee

on an annual basis. The Committee meets at least twice a year, inline

with its terms of reference, and as and when required.

The Committee leads the process for:

– reviewing the size, structure and composition of the Board;

– overseeing succession planning for the Directors and other senior

executives, taking into account the challenges and opportunities

facing the Group, and the skills and expertise needed on the Board

inthe future;

– reviewing the leadership needs of the organisation, both executive

and non-executive, with a view to ensuring the continued ability of

the organisation to compete effectively in the marketplace;

– reviewing the Group’s policy on diversity, setting measurable

objectives for board diversity and preparing a policy on how to

promote Board diversity;

ANDY POMFRET

Nomination and

Governance Committee

Chair

Nomination and

Governance

Committee Report

Committee meetings in 2022

JAN FEB MAR APR MAY JUN

JUL AUG SEP OCT NOV DEC

Committee Members

Date of Appointment to

the Committee Attendance

Andy Pomfret (Chair) February 2018 3/3

Ian Clark September 2017 3/3

Karen Geary December 2020 3/3

Alison Morris

October 2022

0/0

Michael Koller September 2020 3/3

Rebecca Shelley October 2017 3/3

* Alison was appointed to the Committee with effect from October 2022.

Committee Members

The membership as at the date of thisreport together with such members’ appointment dates

and attendance record for the year ended 31December 2022 are set outbelow:

Meeting occurred

No meeting took place

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Process followed for the appointment of the Non-executive Directors during 2022

Candidate requirements

The Committee reviewed the experience and skills of the existing Board directors, and considered what additional skills would be beneficial

for the Board to enable it to drive the business forward. From this a skills criteria list for the candidates was drawn up.

Appointment of an external search agency

Several external search agencies were considered, and the Committee appointed Ridgeway Partners, an independent external search

agency, with no other connection to the Group, to find the suitable candidates. It was felt Ridgeway Partners was the most appropriate

agency, as they had worked with the Group on its past two Non-executive Director appointments, therefore understanding the Group and

Board dynamics well.

Search process

Ridgeway Partners produced a long list of candidates, which were reviewed by members of the Committee, and a short list of candidates

were interviewed by several Board Directors, including the Chair, the Senior Independent Director, and also the Chief Executive Officer and

Chief Financial Officer.

Appointment of new Non-executive Director

All interviewers provided feedback on the candidates to the Committee, which discussed the merits of each candidate against the skills

criteria list. From this discussion, the Committee proposed to the Board that Alison Morris be appointed to the Board. Following Alison’s

acceptance of her appointment, the Committee reviewed which committees it would be appropriate for her join and appointed Alison to

theAudit and Risk Committees with immediate effect, and the Nomination and Governance Committee later on in 2022.

During the financial year which ended on 31 December 2022

theCommittee:

– approved the Nomination and Governance Committee Report in the

Annual Report for the year ended 31 December 2021;

– reviewed and recommended the election and re-election of

Directors at the Group’s 2022 Annual General Meeting;

– reviewed the ongoing professional development of Committee

members and the induction of new Directors;

– discussed the balance of skills and experience on the Board and

considered if any changes were necessary;

– reviewed the talent development and succession plans for the

Executive Team and senior managers;

– reviewed and approved the Committee’s terms of reference and

schedule of matters;

– reviewed the annual Committee’s evaluation responses and

concluded that the Committee was effective;

– identifying, evaluating and recommending candidates to join the Board;

– appointing the Group’s Senior Independent Director;

– making recommendations to the Board regarding the make-up of the

Group’s Committees; and

– making recommendations regarding the election and re-election of

the Directors by shareholders.

Diversity

The Committee recognises the importance of diversity, and has

ensured that the Group has and maintains a Diversity Policy (for

furtherinformation on diversity at Sabre, see page 42), however,

whenrecruiting, the Committee ensures that Board appointments are

basedon merit regardless ofgender, social and ethnic backgrounds.

2022 and the Committee

The Committee was in place throughout the financial year ended

31December 2022, and met three times. All Committee members

attended all of the meetings held during their period of appointment

tothe Committee. The Chief Executive Officer attended partially or

fully, all of the Committee’s meetings, and the Company Secretary

attended and minuted each meeting. The Board were comfortable

thatthe make-up of the Committee ensures that it is fully ableto

fulfilits duties. During the year, the Committee agreed to appoint an

additional Non-executive Director to the Board after the resignation

ofCatherine Barton. To do this, the Committee employed Ridgeway

Partners, an external search consultancy, to source suitable

candidates. The process was led by Andy Pomfret, with the

Committee reviewing the potential candidates and several Board

Directors interviewing the final shortlist of potential candidates.

TheCommittee recommended to the Board that Alison Morris

beappointed as Non-executive Director with effect 1 May 2022.

Following her appointment and subject to her receiving regulatory

approval, the Committee agreed that Alison Morris would be

appointed as Audit Committee Chair. Regulatory approval was

received in August 2022, and upon which, Alison was appointed

asAudit Committee Chair.

– confirmed that the Committee had sufficient resources to enable

itto complete its responsibilities;

– discussed environmental, social, governance and diversity issues

faced by the Group; and

– appointed Karen Geary as the Non-executive Director responsible

foremployee engagement with effect 1 April 2022. During the year

Karen was also appointed as the Group’s Consumer Duty Champion.

On behalf of the Nomination and Governance Committee

ANDY POMFRET

Chair of the Nomination and Governance Committee

13 March 2023

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

On behalf of the Board, I am pleased to present to you the

Remuneration Committee’s Report for the year ended 31 December

2022. Sabre’s Executive Team responded swiftly to unprecedented

economic conditions through immediate, appropriate action, in order

topreserve the future profitability of the business, while laying a solid

foundation for growth. The Company has continued to return capital

toshareholders in-line with the Group’s dividend policy.

This report has been prepared in accordance with the Directors’

Remuneration Reporting Regulations for UK incorporated companies

set out in Schedule 8 of the Large and Medium-sized Companies and

Groups (Accounts and Reports) Regulations 2008 (asamended) and

the principles of the UK Corporate Governance Code.

The report is presented in the following sections:

– Remuneration Committee Report and the Remuneration Committee

Chair’s Annual Statement

– The Company’s Directors’ Remuneration Policy (the “Policy”)

– The Annual Report on Remuneration

The Policy was approved by shareholders at the Company’s Annual

General Meeting in 2021, and the Remuneration Committee Report,

the Remuneration Committee Chair’s Annual Statement and the

Annual Report on Remuneration, which sets out the remuneration

outcomes for 2022 is subject to an advisory shareholder vote at the

2023 Annual General Meeting.

The Remuneration Committee (the “Committee”)

The Committee comprises of at least three Non-executive Directors of

the Company, all ofwhom are considered to be free of any relationship

that would affect their impartiality in carrying out their responsibilities

and are independent as required under Provision 17 of the UK Corporate

Governance Code (the ‘Code’). Members of the Committee are

appointed by the Board, on the recommendation of the Nomination and

Governance Committee and the Chair of the Committee. Members of

the Committee do not have any personal interests in the topics

discussed at the Committee, except as shareholders in the Company.

No Director is involved in the decisions setting their ownremuneration.

The Company Chair and the Chief Executive Officer are invited to attend

meetings, unless they have a conﬂict of interest, for example the

discussion of their own remuneration. All meetings are minuted by the

Company Secretary, unless there is a conﬂict of interest. Other relevant

people from the Company may also be invited to attend all or part of a

meeting to provide deeper insight into the Company and its issues.

REBECCA SHELLEY

Remuneration

Committee Chair

Remuneration

Committee Report

Committee meetings in 2022

Jan FEB MAR APR MAY JUN

JUL AUG SEP OCT NOV DEC

Committee Members

Date of Appointment to

the Committee Attendance

Rebecca Shelley (Chair) October 2017 4/4

Michael Koller September 2020 3/4

Karen Geary December 2020 4/4

Committee Members

The membership as at the date of thisreport together with such members’ appointment dates

and attendance record for the year ended 31 December 2022are set out below:

Meeting occurred

No meeting took place

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

The total fees paid to Deloitte in relation to the remuneration advice

provided to the Committee during the year were £17,000 excluding

VAT (2021: £48,750). Fees were charged on a time and materials

basis. During the year the wider Deloitte firm also provided corporate

tax advisory services to the Group. The fees paid for this work are not

included in these totals.

2022 and the Committee

The Committee was in place throughout the financial year ended

31December 2022, and met four times through the period. The

Remuneration Committee was chaired by Rebecca Shelley and all

Committee members attended all of the meetings held, apart from

Michael Koller, who was unable to attend one meeting. Each meeting

was minuted by the Company Secretary. The Chief Executive Officer

and the Company Secretary either partially or fully attended all of the

Committee meetings. The Committee Chair also held regular individual

meetings with the Chief Executive Officer and theCompany Secretary.

The Board is comfortable that the make-up of the Committee ensures

that it is fully able to fulfil its duties.

During 2022, the Committee considered its effectiveness during

theyear and confirmed that the Committee continued to perform

effectively, and had access to sufficient resources to enable it to

complete its responsibilities.

During the year, the Committee addressed its responsibilities by:

– approving the prior-year Directors’ Remuneration Report

– reviewing and approving the application of the 2021 Remuneration

Policy to the financial year ended 31 December 2022

– reviewing and approving the payment of bonuses under the 2021

Short Term Incentive Plan (“STIP”), including approving 50% of

thevested award being deferred to the Company’s Deferred

BonusPlan (“DBP”)

– setting the award levels and the financial, non-financial and individual

performance conditions for the awards made under the 2022 STIP

and ensuring that they contained objectives relating to ESG

– setting the grant levels and underpins for the awards under the

2022LTIP

– reviewing and approving any changes to the salaries of the

ExecutiveTeam

– reviewing remuneration across the Company to ensure that

arrangements continue to align with our strategy, our key principles

around remuneration and culture

TheCommittee Chair meets regularly with the Chief Executive Officer

and the Company Secretary outside of the Committee meetings and is

available to shareholders to answer their questions at the Company’s

Annual General Meeting. The Chair of the Committee reports to

subsequent meetings of the Board, and the Company Secretary acts

asSecretary to the Committee. Annually, the Committee reviews

itseffectiveness.

Roles and responsibilities

The Committee, in line with its terms of reference, meets at least

twice a year, and as and when required. The terms of reference of the

Committeecan be found on the Company’s website www.sabreplc.

co.uk/about-us/corporate-governance and are reviewed by the

Committee on an annual basis. The Committee has a planned cycle of

activities, managed through a schedule of matters, to ensure that it

addresses its responsibilities in each financial year.

The Board has delegated to the Committee responsibility for ensuring

that the Executive Team is appropriately incentivised to deliver

sustainable growth to shareholders over the long term. The

Committee supports this objective by structuring and deploying

remuneration in a cost-effective manner, embedding a clear link

between pay and performance in the Group’s remuneration

framework. The Committee is responsible for setting the

Remuneration Policy for the Executive Directors, the Executive Team

and the Company’s Chair, including pension rights and any

compensation payments. It is also responsible for reviewing all share

incentive plans and setting and approving the achievement of their

performance conditions, as well as reviewing all employee pay

arrangements periodically. The fees of the Non-executive Directors are

approved by the Company Chair and the Executive Directors.

Committee advisers

For the financial year that ended on 31 December 2022, the Committee

appointed Deloitte LLP (“Deloitte”) to provide advice regarding

remuneration. Advisers from Deloitte may attend the Committee

meetings as appropriate, and provide advice on executive remuneration,

best practice and market updates. Annually the Committee evaluates

the support provided by its advisers. During the year the Committee

reviewed the performance of Deloitte, who were subsequently

reappointed to advise the Committee for a further year. Deloitte is a

founding member of the Remuneration Consultants Group and

voluntarily operates under their Code of Conduct in relation to executive

remuneration consulting in the UK. As such, the Committee is satisfied

that the advice provided by Deloitte is independent and objective.

– reviewing and approving the feesof the Chair

– reviewing the Company’s SAYE and SIP employee contribution

levels

– approving the Company’s SAYE 2022grant

– reviewing and approving the Committee’s terms of reference

– reviewing and publishing the Company’s Gender Pay Gap Report

Executive remuneration in 2022

The Group has a well-defined strategy, whereby the profitability of

business written is prioritised under all market conditions. During

2022, following an extended period where market-wide premium

increases continued to lag claims inﬂation, the entire market

experienced sudden, unexpected inﬂation across the entire cost base,

including current and expected claims expenditure. By nature this

impacted in-year profitability, however management took immediate,

appropriate pricing action to ensure that the impact was limited

primarily to the 2022 result. This robust pricing action, taken against a

backdrop of pervasive under-pricing in the market, meant that volumes

in the motor vehicle book remained supressed during 2022 although

overall volumes grew following the launch of the new Motorcycle and

Taxi portfolios.

The Remuneration Committee discussed and approved the

remuneration outcomes in respect of 2022 shortly after the year end,

and made no amendments to the performance conditions for the

annual bonus award or the outstanding LTIP awards. Following the

implementation of the Company’s new Remuneration Policy at the

2021 Annual General Meeting, the annual bonus for 2022 was based

on a profit pool of 2% of Profit Before Tax (“PBT”), subject to the

achievement of a minimum level of £35m PBT. The Chief Executive

Officer and Chief Financial Officer both delivered good performances

against their individual and the Company’s strategic objectives, and the

Committee was able to review extensive evidence of delivery across

these combined objectives. However, as the minimum level of £35m

PBT was not achieved there was no payment of the STIP in respect of

the 2022 financial year. Further details on bonus outcomes can be

found pages 79 to 80.

Performance under the 2020 Long Term Incentive Plan (‘LTIP’) was

measured against Relative TSR (50% weighting) and EPS targets

(50% weighting) over a three-year period. Performance against the

TSR and EPS targets was below threshold and no payment will be

made against either element of the LTIP, therefore the LTIP awards

willvest at 0%. Further information on the 2020 LTIP can be found

onpage 81.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Overall, the Committee considered that the outcomes under the 2022

STIP and the 2020 LTIP are a fair reﬂection of the overall performance

of the Company and the Executive Directors, and are considered

appropriate in the context of the broader stakeholder experience. As

such the Committee has determined that no discretionary adjustments

were required. The Committee is satisfied that the Policy operated as

intended during the financial year, and did not exercise discretion in

respect of the Policy or its operation during the year. Further details

and the performance conditions for the awards made under the

Company’s LTIP and STIP can be found on pages 79 to 81.

Wider considerations regarding reward

When considering the remuneration arrangements for the Executive

Directors, the Committee continues to take into account remuneration

throughout the Group and regularly examines the average employee

salary, pension and share plan contributions. The Committee is aware

of the importance of having an engaged, motivated and fairly paid

workforce. To support this the Committee receives regular updates on

remuneration of the Company’s employees. The Committee and

Company were cognisant of the increased cost of living. To help

support our employees with the increase in the cost of living, the

Group paid a Cost of Living Allowance of £800 to all employees

(outside of the Executive Team) over the five months from October

2022 to February 2023 and arranged financial wellbeing seminars to

inform employees around all aspects of their financial wellbeing from

debt management, savings accounts and mortgage rates explained,

aswell as a separate session which looked at the options around

retirement and pensions.

During the year the Company reviewed and increased the starting

salaries for trainees, and the Company confirms that the Real Living

Wage is paid to all full-time employees. As in prior years, during the

year the Company gave employees pay rises during the year, within

arange of 3.5% and 4.4% (excluding specials) and at an average of

4.1% (excluding specials), paid an employee performance bonus to all

employees, and a Christmas bonus of £1,000. In addition, the Group

introduced free private health insurance to its employees, which also

provides discounted gym memberships, dietary advice, and free

workshops promoting a healthier lifestyle and good mental health,

andpaid employees outside of the Executive Team the Cost of Living

Allowance, as discussed previously in this report. Also introduced was

a salary extras platform, which provides employees with discounts

fora number of supermarkets, retailers or days out, and a technology

loan scheme.

Statement of shareholder voting

The following table shows the results of shareholder voting relating

to the approval of the Remuneration Policy and the approval of the

Remuneration Report at the 2022 Annual General Meeting.

2021 Annual General Meeting resolution to approve the

Directors’ Remuneration Policy

Total number

of votes

% of votes

cast

For (including discretionary) 200,920,076 94.75

Against 11,14 0,79 0 5.25

Total votes cast (excluding withheld votes) 212,060,866 100

Votes withheld 7,930,125 n/a

Total votes cast (including withheld votes) 219,990,991 n/a

2022 Annual General Meeting resolution to approve the

Directors’ Remuneration Report

Total number

of votes

% of votes

cast

For (including discretionary) 217,6 81,16 9 99.85

Against 318,601 0.15

Total votes cast (excluding withheld votes) 217,999,770 8 7. 2 0

Votes withheld 5,611 n/a

Total votes cast (including withheld votes) 218,005,381 n/a

Shareholder engagement

Sabre and the Remuneration Committee are committed to maintaining

an ongoing dialogue with shareholders on issues of remuneration to

ensure an open and transparent dialogue. We continue to welcome

any feedback you may have, via the Company Secretary, who can be

contacted at anneka.kingan@sabre.co.uk. During 2023, I will meet

with shareholders to discuss the development of a new Remuneration

Policy, which will be put to shareholder vote in 2024.

I look forward to your support on the resolutions relating to

remuneration at the Company’s Annual General Meeting in May 2023.

On behalf of the Remuneration Committee

REBECCA SHELLEY

Chair of the Remuneration Committee

13 March 2023

The Company continues to operate a SAYE Plan where employees can

make a monthly contribution of up to £500 and a SIP where for every

three shares an employee purchases the Company matches with one

free share. It is the Committee’s intention that both the SAYE Plan and

SIP will remain in place for the financial year ending 31 December

2023. During 2022, the free shares granted at the Company’s IPO

under the Company’s SIP award, became available for employees

toexercise tax-free.

While the Group currently has fewer than 250 employees and so is

notrequired to submit a formal statement on its gender pay gap, our

intention is to be transparent. As such, in 2019 the Committee made

acommitment to release the Company’s Gender Pay Gap Report.

TheCommittee ensures that the report is updated annually, and it

isavailable on the Company’s website

https://www.sabreplc.co.uk/about-us/corporate-governance.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Principle How the Committee has addressed this

Clarity

Remuneration arrangements should

betransparent and promote effective

engagement with shareholders and

theworkforce.

The Committee is committed to providing clear and transparent disclosure of Sabre’s executive

remuneration arrangements. As part of the Remuneration Policy review undertaken in 2020 and 2021,

we consulted extensively with shareholders in order to ensure their feedback was fully considered.

Further information* – Karen Geary was appointed as the designated Non-executive Director for

workforce engagement during 2022, replacing Ian Clark who had served in the role since 2020.

Karen actively engages with employees and feeds back to the Committee and the Board on her

meetings in order to provide insight on employees’ views.

Simplicity

Remuneration structures should avoid

complexity and their rationale and

operation should be easy to understand.

In designing the remuneration framework the Committee sought to avoid complexity by ensuring

compensation arrangements are straightforward and easily understood.

Sabre’s remuneration framework comprises fixed pay, an annual bonus and a LTIP and is well

understood by both participants and our key stakeholders.

Risk

Remuneration arrangements should

ensure reputational and other risks

from excessive rewards, and

behavioural risks that can arisefrom

target-based incentive plans, are

identified and mitigated.

The Committee is satisfied that the remuneration structure does not encourage excessive risk taking

and incorporates a number of features that align remuneration outcomes with risk. These include

deferral under the bonus plan, the two-year post-vesting holding periods under the LTIP and personal

shareholding guidelines that apply both in-employment and post-employment. Furthermore, the

Committee has the discretion to reduce variable pay outcomes where appropriate, and malus and

clawback provisions apply to both the annual bonus and LTIP awards.

Further information* – The Risk Committee reviews the Executive Team’s management of risk

during the year and advises the Remuneration Committee as appropriate, prior to the Committee

approving any awards of payment of bonuses.

Predictability

The range of possible values of rewards

to individual Directors and any other

limits or discretions should be identified

and explained at the time of approving

the policy.

The Remuneration Policy outlines the threshold, target and maximum levels of pay that Executive

Directors can earn in any given year over the three-year life of the approved Remuneration Policy.

Actual incentive outcomes will vary depending upon the level of achievement against specific

performance measures and underpins.

Proportionality

The link between individual awards, the

delivery of strategy and the long-term

performance of the Company should

be clear. Outcomes should not reward

poor performance.

The Committee is comfortable that the Remuneration Policy does not reward poor performance

and that the range of potential payouts are appropriate and reasonable.

The Committee has discretion to adjust incentive outcomes where they are not considered to

appropriately reﬂect underlying performance. Furthermore, payments made under the incentive

plans are subject to the achievement of performance measures and underpins which are directly

linked to the Group’s strategy and KPIs.

Alignment of culture

Incentive schemes should drive

behaviours that are consistent with

Company purpose, values and strategy.

The performance measures for the annual bonus and the award of RSAs are directly linked to the

Group’s strategy, objectives and values.

* This further information was not included in the original policy, but is included to provide further information and transparency regarding how the Committee has

addressed the requirements under the UK Corporate Governance Code.

The Directors’ Remuneration Policy (the‘Policy’)

The Director’s Remuneration Policy was approved by shareholders at

the 2021 Annual General Meeting (‘AGM’), and will be in place for the

financial years which ended on 31 December 2021, 31 December

2022 and the year that will end on 31 December 2023. In line with the

requirement to seek approval of the Directors’ Remuneration Policy

every three years, it is expected that the Company will return to

shareholders to seek approval of a Directors’ Remuneration Policy

atthe 2024 AGM. The current Directors’ Remuneration Policy is

provided in this section for shareholder information and is available on

the Company’s website at www.sabreplc.co.uk/about-us/corporate-

governance/remuneration-committee/

The Executive Directors’ remuneration consists of five main

components: a base salary, benefits, employer pension contributions,

a performance-related annual bonus STIP and Restricted Share

Awards made under the Company’s LTIP.

Directors are also entitled to participate in both the all-employee share

plans on the same basis as other Group employees. Detail in relation to

each of these elements is set out in the Policy Table on pages 72 to 77.

In designing the Company’s Remuneration Policy, the Committee has

been guided by the three following principles:

1 Cost-effectiveness

Sabre intends to pay no more than is necessary to attract, retain and

incentivise high-calibre management, while also aligning the interests

of employees with those of shareholders and, where appropriate,

other key stakeholders.

2 Pay for performance

Performance-related pay will, potentially, make up a significant

proportion of the Executive Directors’ remuneration packages and will

be assessed based on stretching targets.

3 Long-term alignment

There will be an appropriate balance of remuneration to the delivery

oflonger-term performance targets. In determining the Company’s

Remuneration Policy, the Committee has taken into account the

relevant regulatory and governance principles.

The following table summarises how, in designing the Company’s

Remuneration Policy and its implementation, the Committee has

addressed the principles set out in Provision 40 of the UK Corporate

Governance Code.

Directors’ Remuneration Policy

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Sabre Insurance Group’s Directors’ Remuneration Policy as set out in

this report (the “Remuneration Policy”) was approved by shareholders

at the Company’s Annual General Meeting on 14 May 2021, with a

vote of 94.75% in favour. The Committee intended the policy to be

simple and clear, linking the Company’s strategy and performance

with the Directors’ remuneration, reﬂecting the insurance industry’s

cyclical nature and compliance with corporate governance best practice.

The Remuneration Policy was developed taking into account the

Committee’s requirements that it:

– be simpler and more transparent

– reward performance against a balanced mix of financial and

non-financial performance metrics, which reﬂect the interests of

allstakeholders

– reﬂect that, although the business is cyclical in nature, the focus

ofthe Executive Team is to protect the dividend and to deliver

attractive returns to shareholders. We consider that a Remuneration

Policy that offers a narrower, but more predictable, range of

performance and reward outcomes is more aligned to Sabre’s

positioning as an ‘income stock’

– more closely align the remuneration of the Executive Team with the

business’s profit generation at different parts of the insurance cycle,

rather than achievement against the annual budget

– encourages long-term share ownership and aligns with the creation

of shareholder value

– mitigates risk by ensuring the Committee has the ability to apply

discretion to ensure that the award levels are appropriate, and

thatthe Committee has the ability to apply clawback and/or malus

ifrequired

– complies with corporate governance best practice

Remuneration Policy Table

Salary

To attract, incentivise and retain Executive Directors of a high calibre, and to reﬂect their responsibilities and experience.

Operation Maximum opportunity Performance measures

Base salaries will be reviewed at least annually, taking into

account the scope and requirements of the role, the

performance and experience of the Executive Director and the

individual’s total remuneration package.

Account will also be taken of remuneration arrangements at

Sabre’s peer companies (and other companies of an equivalent

size and complexity), for other Group employees, and the

impact of any base salary increases on the total remuneration

package.

Any salary increases are normally effective from 1 April, each

year, in line with the broader workforce.

The Committee has decided not to set an overall maximum

monetary opportunity or increase. However, the Committee

intends that Executive Directors’ salary increases will normally be in

line with salary increases offered to the wider employee population.

There are specific circumstances in which the Committee could

award increases outside this range which may include:

– a change in the Executive Director’s role and/or responsibilities

– performance and/or development in role of the Executive Director

– a significant change in the Group’s size, composition and/or

complexity

– a significant change in market practice

Where an Executive Director has been appointed to the Board at a

below-market starting salary, larger increases may be awarded as

their experience develops, if the Committee considers such increases

to be appropriate.

n/a

Benets

To provide a benefits package to recruit and retain Executive Directors of a high calibre and to promote the wellbeing and health of the Directors, enabling them

to focus on the Company.

Operation Maximum opportunity Performance measures

The Committee’s policy is to provide Executive Directors with

competitive levels of benefits, taking into consideration the

benefits provided to Sabre’s employees and the external market.

Benefits currently include (but are not limited to) life insurance

and private medical insurance.

If an Executive Director is required to relocate as a result of his/

her duties the Company may provide the Executive Director

with additional benefits such as assistance with relocation,

travel, accommodation or education allowances or professional

tax advice, along with any associated tax liabilities.

As the costs of benefits are dependent on the Executive Director’s

individual circumstances, the Committee has not set a maximum

monetary value.

However, in approving the benefits paid, the Committee will

ensure that they do not exceed a level which is, in the

Committee’s opinion, appropriate given the Executive Director’s

particular circumstances.

n/a

Pension

To provide a pension package for the Executive Directors.

Operation Maximum opportunity Performance measures

The Group may make employer pension contributions to a

registered pension plan (or such other arrangement the

Committee considers has the same economic effect) set up for

the benefit of each of the Executive Directors.

Alternatively, an Executive Director may be awarded some/all of

the contribution as an equivalent cash allowance in lieu of

pension contributions.

Prior to 2022, for incumbent Executive Directors, pension

contribution levels would not exceed 17% of an individual’s salary,

less employer national insurance contribution.

From 1 January 2022, the maximum pension contribution for

incumbent Executive Directors was aligned with the average

employee company pension contribution (currently 7.5% of salary).

For any new Executive Director appointments, the maximum

pension contribution will be aligned with the average employee

company pension contribution (currently 7.5% ofsalary).

n/a

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Short Term Incentive Plan (“STIP”) – Annual Bonus and Deferred Bonus Plan (“DBP”)

To incentivise and reward the delivery of annual corporate and/or individual financial and non-financial targets, and to align the interests of Executive Directors

with shareholders through the deferral of a portion of the bonus into shares.

Operation Maximum opportunity Performance measures

The Committee will use a bonus pool for each financial year of

the Company.

Annual bonus outcomes will be determined by the Committee

after the end of each financial year.

In exceptional circumstances the Committee may use its

discretion to adjust the formulaic outcome of the performance

targets to reﬂect corporate and individual performance during

the year.

The Committee may defer a proportion of any bonus award (no

more than 50%) into a share award under the DBP. DBP awards

will normally vest on the second anniversary of grant (or such

other date as the Committee determines on grant).

Malus and clawback provisions will apply (see page 76).

The maximum bonus opportunity

for Executive Directors is 150%

of base salary.

Use of a bonus pool funding approach. The bonus pool

is calculated as a percentage of PBT, subject to a

minimum level of PBT being achieved. The size of the

pool will be capped at 2% of PBT in any financial year.

70% of the bonus to be based on financial objectives,

with 30% based on non-financial objectives.

Long Term Incentive Plan (“LTIP”) – Restricted Share Awards (“RSA”)

To incentivise and reward delivery of the Group’s longer-term strategic objectives for the business and ensure alignment with shareholders.

Operation Maximum opportunity Performance measures

Awards are structured as conditional rights or nil-cost awards or

nil-cost options, to receive free shares on vesting.

Shares will normally vest after three years, subject to continued

employment and the Remuneration Committee’s assessment,

with an additional two-year holding period, meaning that shares

are not released until five years from award grant.

If the Company does not meet one or more of the underpins at

the date of vesting, then the Committee would review whether

or not it was appropriate to reduce the number of shares that

vest under the award.

The Committee’s general discretion to adjust vesting levels,

depending on performance and unforeseen circumstances, and

any other appropriate reason will also apply.

Dividend equivalents in respect of the value of dividends which

would have been received during the vesting period and any

holding period may be paid in shares or in cash in respect of the

number of shares which vest.

Malus and clawback provisions will apply (see page 76).

The maximum awards are 75% of

base salary for the Chief

Executive Officer and 60% of

base salary for the Chief Financial

Officer.

RSAs are subject to one or more underpins over a

period of three financial years commencing with the

year in which the awards are granted. These underpins

are designed to ensure that an acceptable threshold

level of performance is achieved and that vesting is

therefore warranted. The underpins applying to each

award will be determined by the Committee each year

and the Committee may use different performance

underpins for each award, if deemed appropriate.

Underpins will be set taking into account the business

strategy and to ensure that failure is not rewarded.

Underpins may include financial measures such as the

maintaining of a minimal solvency ratio or a capital return

measure. Non-financial measures may also be used,

including those related to risk or regulatory matters.

Vesting of awards will also be subject to overarching

Committee discretion.

All-Employee Share Plans

To align the Executive Directors with the wider workforce.

Operation Maximum opportunity Performance measures

Executive Directors are eligible to participate in any all-

employee share plans in place, which are operated in line with

HMRC requirements.

These are currently a share acquisition and free share plan,

known as the UK Share Incentive Plan “SIP”), and a savings-

related share option plan, known as the Save As You Earn

(“SAYE”) Plan.

Participation in the Group’s

all-employee share plans will be

subject to any applicable

maximum limits as set by HMRC.

n/a

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Shareholding guidelines

To align the interests of the Executive Directors and shareholders to the success of the Company.

Operation Maximum opportunity Performance measures

The Executive Directors are expected to build and maintain a

shareholding equivalent to at least 200% of their base salary.

This should be achieved within a reasonable timeframe from

the adoption of this Policy or their appointment.

Shares which may be used to satisfy this requirement include

all beneficially-owned shares and vested share awards subject

to a holding period.

To support the implementation of this measure, Executive

Directors are required to retain 50% of any share awards

vesting (after settling any tax liability) until the 200%

requirement is met.

Post-cessation of employment, the Executive Directors are

expected to maintain a minimum shareholding of 200% (or their

actual shareholding if lower) for a period of two years. This

arrangement will be administered through a nominee account.

The post-employment guideline applies to shares from

incentive awards that have been granted from the date of the

adoption of this Policy.

n/a n/a

Non-executive Directors’ fees

To attract Non-executive Directors of an appropriate calibre and with sufficient experience to ensure the effective management of the Company.

Operation Maximum opportunity Performance measures

Fee levels will be reviewed (though not necessarily increased)

annually. Fees will be set with reference to the time

commitment and responsibilities of the position, and any

increases reﬂective of any increases given to the wider

employee population.

Additional fees may be paid for additional responsibilities (such

as chairing a Board Committee, membership of a Committee,

or acting as the Senior Independent Director), or for an

increased time commitment during the year.

Each Non-executive Director will be entitled to be reimbursed

for all reasonable costs incurred in the course of his/her duties,

including travel and accommodation expenditure, along with

any related tax liabilities.

The fee for the Chair will be determined by the Committee.

Fees for Non-executive Directors will be determined by the

Chair and the Executive Directors.

Total fees will not exceed the limit set out in the Company’s

Articles of Association.

There is no prescribed maximum

fee or annual increase.

n/a

Prior arrangements

The Board reserves the right to make any remuneration payments

and/or payments for loss of office (including exercising any discretions

available to it in connection with such payments) notwithstanding that

they are not in line with the Policy set out on the prior pages where the

terms of the payment were agreed (i) before the Policy came into

effect; or (ii) at a time when the relevant individual was not a Director of

the Group and, in the opinion of the Committee, the payment was not

in consideration for the individual becoming a Director of the Group. For

these purposes ‘payments’ includes the Committee satisfying awards

of variable remuneration and, in relation to an award over shares, the

terms of the payment are ‘agreed’ at the time the award is granted.

Selection of performance conditions

For the STIP, the Committee believes that a mix of financial and

non-financial targets is most appropriate. Strategic and personal

objectives may be included where appropriate to ensure delivery of

key business milestones. Targets are set by the Committee taking into

account internal and external forecasts.

For the LTIP, under which it is proposed to grant awards of restricted

shares, awards will be subject to performance underpins. The underpins

selected by the Committee will be based on measures considered to be

most reﬂective of the overall financial stability and performance of the

Company, and therefore aligned with shareholder value creation.

Terms common to the DBP and LTIP

Awards under the DBP and LTIP may:

– be granted as conditional share awards or nil-cost options or in

suchother form that the Committee determines has the same

economic effect

– have any performance conditions applicable to them amended or

substituted by the Committee if an event occurs which causes the

Committee to determine an amended or substituted performance

condition would be more appropriate and not materially less difficult

to satisfy

– incorporate the right to receive an amount (in cash or additional

shares) equal to the value of dividends which would have been paid

on the shares under an award that vests up to the time of vesting (or,

where the award is subject to a holding period, the end of that

holding period). This amount may be calculated assuming that the

dividends have been reinvested in the Company’s shares on a

cumulative basis be settled in cash at the Committee’s discretion be

adjusted in the event of any variation of the Company’s share capital

or any demerger, delisting, special dividend or other event that may

materially affect the current or future value of the Company’s shares.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Malus and clawback

Malus and clawback provisions apply to all awards granted under the

STIP and LTIP. These provisions may be invoked at the Committee’s

discretion at any time prior to the third anniversary of the grant of a

cash bonus or DBP award, or to the fifth anniversary of the grant of

anLTIP award. In these circumstances, the Committee may reduce or

impose additional conditions on an award or require that the participant

returns some or all of the value acquired under the award.

The Committee has the discretion to invoke these provisions where

there has been:

– a material misstatement of any Group member’s audited accounts

– a corporate failure

– intervention from a regulator

– an error in assessing the relevant performance conditions or the

information or assumptions on which the award was granted

orvested

– misconduct on the part of the Executive Director

– serious reputational damage to, or a material failure of risk

management by, a member or business unit of the Group

Within the period beginning on:

– in the case of LTIP awards, from the grant of the award and ending

on the fifth anniversary of the date of grant

– in the case of STIP (cash bonus and DBP awards), the start of the

financial year in respect of which the award is granted and ending

onthe third anniversary of the date of grant

The Board will retain the discretion to calculate the amount to be

recovered, including whether or not to claw back such amount gross or

net of any tax or social security contributions applicable to the award.

Remuneration policy for new Executive Directors

The Committee intends to set any new Executive Director’s

remuneration package in line with the Policy outlined earlier in this

section. In recognition of the changes in the corporate governance

environment, the Committee will align the Company’s pension

contributions for any newly appointed Executive Director with those of

the average employee. For the financial year ended 31 December 2021,

the average Company employee pension contribution was 7.5%, and

while this Policy is in place, 7.5% is the maximum pension contribution

to be given to an Executive Director, with effect 1 January 2022.

When determining the design of the total package in a recruitment

scenario, the Committee will consider the size and scope of the role,

the candidate’s skills and experience and the market rate for such a

candidate, in addition to the importance of securing the preferred

candidate. In some circumstances, the Board may be required to take

into account common remuneration practices in another country and,

ifapplicable, may consider awarding payments in respect of relocation

costs. In line with the Policy, in relation to annual bonus and LTIP

awards, maximum variable remuneration will not exceed 225% for the

Chief Executive Officer and 210% for the Chief Financial Officer as of

a percentage of salary.

In the event that Sabre wishes to hire a candidate with unvested

long-term incentives accrued at a previous employer, which would be

forfeited on the candidate leaving that company, the Committee retains

the discretion to grant awards with vesting on a comparable basis to

the likely vesting of the previous employer’s award. The LTIP Rules

have been drafted to permit the grant of recruitment awards on this

basis to an individual (which will not be counted towards the annual

LTIP limit and which will be subject to such vesting schedules and

performance conditions (if any) as the Committee may determine). If it

is not possible or practical to grant recruitment awards under the LTIP,

the Committee may rely on the provisions of Listing Rule 9.4.2 to grant

the awards. For internal candidates, LTIP awards granted in respect of

the prior role would be allowed to vest according to their original terms,

or adjusted if appropriate to take into account the appointment.

For the appointment of a new Chair or Non-executive Director, the fee

would be set in accordance with the Policy. The length of service and

notice periods would be set at the discretion of the Committee, taking

into account market practice, corporate governance considerations and

the skills and experience of the particular candidate at that time.

Service agreements and exit payment policy

In line with the UK Corporate Governance Code Provision 18, all

Directors are subject to re-election annually at the Company’s Annual

General Meeting.

Director Date of appointment Notice period

Geoff Carter 21/11/2017 12 months

Adam Westwood 21/11/2017 12 months

Andy Pomfret 28/02/2018 3 months

Ian Clark 04/10/2017* 3 months

Karen Geary 07/12/2020 3 months

Michael Koller 01/09/2020 3 months

Alison Morris 01/05/2022 3 months

Rebecca Shelley 04/10/2017 3 months

* Ian Clark was appointed to the Sabre Insurance Group plc Board as a

Non-executive Director upon its IPO, but had been a Non-executive Director of

Sabre Insurance Company Limited since May 2014.

Shareholders may inspect the Executive Directors’ contracts or the

Non-executive Directors’ letters of appointment at the Company’s

registered office, and these contracts and letters of appointment are

also available for shareholders to review at the Company’s Annual

General Meeting.

Both Geoff Carter and Adam Westwood have written service

contracts with the Company with no fixed end date, but which are

terminable by either the Company or the Executive Director on not

less than 12 months’ notice.

In the event notice is given to terminate an Executive Director’s

contract, the Company may make a payment in lieu of notice equal to

the value of the Executive Director’s salary for the notice period. Any

such payments may be made, at the Committee’s discretion, as a lump

sum or in instalments, subject to mitigation by the Executive Director.

Itis the Committee’s intention that the service contracts for any new

Executive Directors will contain equivalent provisions. In the event that

an Executive Director leaves the Group, entitlement they have to any

variable pay will be determined in accordance with the relevant

incentive plan rules.

The Chair and each of the independent Non-executive Directors have

anotice period of three months and may receive fees in respect of any

notice period.

Short Term Incentive Plan (“STIP”) – Annual Bonus

and Deferred Bonus Plan (“DBP”)

Executive Directors will not have any automatic entitlement to a

bonusfor the financial year in which they leave the Group. Where

anExecutive Director leaves the Group, as a result of their ill-health,

injury, disability or redundancy, or their employing company or

business is sold out of the Group, or in such other circumstances as

the Committee determines (but excluding gross misconduct), (known

as “Good Leaver Reasons”), the Executive Director will typically

remain eligible for their annual bonus award, which will normally be

time prorated to reﬂect the proportion of the financial year served.

Anysuch bonus may be paid out in such proportions of cash and share

awards as the Committee considers appropriate. For other leavers,

rights to awards under the annual bonus will be forfeited.

Unvested DBP awards will normally lapse when an Executive Director

leaves the Group. However, if an Executive Director’s departure is a

Good Leaver Reason, as set out above, their award will normally vest

on the original vesting date, although the Committee has the discretion

to allow awards to vest earlier if the Committee considers it appropriate.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Long Term Incentive Plan (“LTIP”) – Restricted Share

Awards (“RSAs”)

Unvested LTIP awards, including RSAs following the amendment of

the plan rules at the Annual General Meeting, will also normally lapse

when an Executive Director leaves the Group. However, if the

Executive Director’s departure is as a result of a Good Leaver Reason,

their LTIP awards will normally vest (and be released from any

applicable holding period) on the original timetable set, although the

Committee has the discretion to accelerate the vesting and release

ofawards.

The extent to which unvested LTIP awards vest in these

circumstances will be determined by the Committee, taking into

account the extent to which the relevant performance conditions

orunderpins have, in its opinion, been satisfied (over the original

performance period, where the vesting of the award is not being

accelerated) and, unless the Committee determines otherwise, the

proportion of the performance period that has elapsed at the time the

Executive Director leaves.

If an Executive Director leaves the Group holding vested LTIP awards

which are subject to a holding period, these awards will normally be

released at the end of the original holding period, unless the

Committee allows the holding period to be shortened. However, if the

Executive Director is dismissed for gross misconduct, all his or her

LTIP awards will lapse.

If an Executive Director dies, their DBP and LTIP awards will normally

vest (and be released from any holding periods) as soon as reasonably

practicable after their death. The extent to which unvested LTIP awards

vest in these circumstances will be determined by the Committee in

the same way as for other Good Leaver Reasons described above.

The Committee reserves the right to make any other payments in

connection with a Director’s cessation of office or employment where

the payments are made in good faith in discharge of an existing legal

obligation (or by way of damages for breach of such an obligation) or

by way of settlement of any claim arising in connection with the

cessation of a Director’s office or employment. Any such payments

may include but are not limited to paying any fees for outplacement

assistance and/or the Director’s legal and/or professional advice fees

inconnection with his cessation of office or employment.

Change of control

In the event of a change of control of the Company, LTIP and DBP awards

will normally vest and be released early. The proportion of any unvested

LTIP awards which vest will be determined by the Committee, taking into

account the extent to which it determines that any performance

conditions and underpins have been satisfied at the time, and, unless the

Committee determines otherwise, the proportion of the performance

period that has elapsed. DBP awards will normally vest in full.

Alternatively, the Board may permit an Executive Director to exchange

their awards for equivalent awards of shares in a different company

(including the acquiring company). If the change of control is an internal

reorganisation of the Group or in other circumstances where the

Committee considers it appropriate, Executive Directors may be

required to exchange their awards.

If other corporate events occur such as a winding-up of the Company,

demerger, delisting, special dividend or other event which, in the opinion

of the Committee, may materially affect the current or future value of

the Company’s shares, the Committee may determine that awards will

vest and be released on the same basis as for a change of control.

Consideration of shareholder views and

employment conditions

The Committee will consult with major shareholders prior to any

significant changes to the Policy and will continue to value their

viewswhen deciding on future executive remuneration strategy. In

developing and reviewing the Remuneration Policy, the Committee

was mindful of the views of the Company’s shareholders and

remuneration arrangements for employees.

The Committee proactively sought feedback from shareholders when

developing the Policy, and seeks feedback from shareholders when

considering any significant changes to remuneration for the Executive

Directors. The Committee took on board the feedback received from

shareholders during the consultation regarding the Remuneration

Policy implemented in 2021, and modified the proposals in response

to the feedback received.

In setting the Policy, the Committee was led by the same principles

which determined all employee remuneration: cost-effectiveness, pay

for performance and long-term alignment. These principles evidence

themselves in all employee remuneration as follows:

– Cost-Effectiveness – As with the Directors, in setting

compensation across the Group, Sabre intends to pay no more than

is necessary to attract, retain and incentivise high-calibre individuals,

setting remuneration competitively but not excessively

– Pay for Performance – Many full-time Group employees are eligible

to participate in some form of share-based incentive. Key individuals

below Board level have been invited to participate in the LTIP, in

order for there to be alignment between senior management and

the Executive Directors’ objectives

– Long-term Alignment – In line with our philosophy of encouraging

our workforce to be investors in the Group, all eligible employees

were offered an award of free shares under the SIP. The Company

operates both a SAYE Plan and a SIP to further facilitate employee

investment in the Group and their long-term alignment

Although the Committee did not formally engage with the workforce

on the alignment of executive remuneration with the wider company

pay policy, the Board engages with the Company’s employees via the

designated Non-executive Director responsible for employee

engagement. Karen Geary was appointed to this position by the Board

during 2022, taking over from Ian Clark. Karen leads on ensuring

effective engagement with the workforce and regularly feeds back to

the Committee and the Board following her meetings with employees.

This process does not currently include an active two-way dialogue

with the workforce on executive pay but this approach is being kept

under review.

The Committee appreciates the importance of an appropriate

relationship between the remuneration levels of the Executive Directors,

the Executive Team, managers and other employees withinthe Group.

As such, when reviewing and determining pay for Executive Directors,

the Committee takes into account the level and structure of

remuneration, as well as salary budgets, for other employees in the

Group. Moreover, as a result of the implementation of the all-employee

share plans referred to above, many of the Group’s employees are Sabre

shareholders and therefore have the opportunity to express their views

through the same means as any other shareholder.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Single figure of remuneration (audited)

The table below sets out the total remuneration received by Executive Directors and Non-executive Directors in respect of the financial year

ended 31 December 2022.

£’000s

Salary/fees

Taxable

benets

Pension

Total xed

pay

Short term

incentive

Plan

Long term

incentive

Plan

Other

Totalvariable

Pay

Total

Remuneration

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Executive Directors

Geoff Carter 454 439 3 3 30 66 487 508 0 224 0 – 9 1 9 225 496 733

Adam Westwood 275 258 2 2 20 22 297 282 0 113 0 – 1 – 1 113 298 395

Executive Director total 729 697 5 5 50 88 784 790 0 337 0 – 10 1 10 338 794 1,128

Non-executive Directors

Andrew Pomfret 155 150 – – – – 155 150 – – – – – – – – 155 150

Ian Clark

81 73 – – – – 81 73 – – – – – – – – 81 73

Karen Geary

64 60 – – – – 64 60 – – – – – – – – 64 60

Michael Koller 62 60 – – – – 62 60 – – – – – – – – 62 60

Alison Morris

45 n/a – – – – 45 n/a – – – – – – – – 45 n/a

Rebecca Shelley 82 80 – – – – 82 80 – – – – – – – – 82 80

Non-executive Director total

489 423 – – – – 489 423 – – – – – – – 489 423

Total 1,218 1,120 5 5 50 88 1,273 1,213 0 337 0 0 10 1 10 338 1,283 1,551

1 Taxable benefits include private medical insurance and payment in lieu of holiday not taken.

2 As an element of pension is received as cash in lieu, the amount awarded is reduced below the allowed percentage to reﬂect the additional national insurance cost

borne by the Group.

3 Awards made under the STIP are paid for performance over the relevant financial year. Details of the performance targets and performance against the targets for the

2022 STIP awards are detailed on pages 79 to 80. Details of the performance targets and performance against the targets for the 2021 STIP awards are detailed in the

Annual Report and Accounts for the year ended 31 December 2021. Consistent with the terms of the 2021 Remuneration Policy, 50% of the bonus earned in relation to

the financial year ended 31 December 2022 is deferred into the Company’s shares for two years, with the balance payable in cash. These shares will be held in the

Sabre Group Employees’ Share Trust and are not subject to any further performance conditions.

4 Awards made under the LTIP are conditional awards, and paid for performance over the period 1 January 2020 to 31 December 2022. The awards for the LTIP 2020 did not meet

the performance conditions, and therefore did not vest. Details of the performance targets and performance against the targets for the 2020 LTIP awards are detailed on page 81.

5 The Company operates a SIP which is open to all employees. ‘Other’ is the value of matching SIP shares attributable to the year. The Company offers a 1:3 match for

Partnership Shares purchased by employees. In 2021, Geoff Carter participated in the SIP up to the maximum extent permitted by HMRC. Adam Westwood did not

participate in the SIP in 2021. The calculation for value is based on the shares bought by the Company on behalf of the individual and the share price as at 31 December

2021 of £1.838. In 2022, Geoff Carter and Adam Westwood participated in the SIP up to the maximum extent permitted by HMRC. The calculation for value is based

on the shares bought by the Company on behalf of the individual and the share price as at 31 December 2022 of £1.064.

6 Comprising STIP, LTIP and any other relevant variable remuneration.

7 Comprising of total fixed pay and total variable pay and other remuneration as set out in footnote 6.

8 Ian Clark was appointed Audit Committee Chair on an interim basis between 25 November 2021 and 25 August 2022, and his fee is prorated in line with the time served

in the position during the 2022 financial year. In addition, with effect from 1 April 2022, Ian Clark stopped being the Non-executive Director responsible for employee

engagement and again his fee was prorated in line with the time served in the position during the 2022 financial year.

9 With effect from 1 April 2022, Karen Geary became the Non-executive Director responsible for employee engagement and her fee was prorated in line with the time

served in the position during the 2022 financial year.

10 Alison Morris joined the Board with effect from 1 May 2022 and became Audit Committee Chair with effect from 25 August 2022. Her fee was prorated in line with the

time served in the positions during the 2022 financial year.

This section of the Directors’ Remuneration Report sets out the

remuneration paid to Sabre’s Directors in respect of the year which

ended on 31December 2022 (the “2022 financial year”).

In line with the Large and Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008 (as amended in 2013)

thefollowing parts of the Annual Report on Directors’ Remuneration

are audited:

– the single total figure of remuneration for each Director, including

pension entitlements, STIP and LTIP outcomes for the financial year

ended 31December 2022

– share plan awards granted during the financial year ended

31December 2022

– payments to past Directors and payments for loss of office

– Directors’ shareholdings and share interests

All other parts of the Annual Report on Directors’ Remuneration

areunaudited.

Annual Report on Directors’ Remuneration

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Base salary

The annual salary paid to the Executive Directors with effect from 1

April 2022, is shown in the tablebelow.

Base salary Annual salary (£) with effect 1 April 2022

Geoff Carter £458,496

Adam Westwood £280,000

In late 2021, the Committee reviewed Executive Director salaries for

the 2022 financial year, taking into account the individual’s role and

experience and pay for the broader employee population. The

Committee decided to increase Geoff Carter’s salary by 4%, which

was below the average increase given to employees across the Group.

The Committee decided to increase Adam Westwood’s salary by 8%

to reﬂect the significant increase in his experience, his development

and his performance, since his salary was set at IPO four years ago.

Details of the salaries that will apply in 2023 are provided on page 86

and 87.

Pension

In late 2021, the Committee reduced the Executive Directors’ pension

allowance to align with the average employee rate with effect 1 January

2022. During the 2022 financial year, Geoff Carter and Adam

Westwood received pension contributions of 7.5% of their base salaries

respectively, in line with the average employee rate. Details of the

pension contributions that will apply in 2023 are provided on page 86.

Short Term Incentive Plan (‘STIP’)

Framework and outcomes for the nancial year ended

31December 2022

For the financial year ended 31 December 2022 the Executive Directors

were eligible to participate in the Company’s STIP, which was based on a

bonus pool funding approach, calculated as 2% of PBT, subject to a

minimum hurdle of £35m PBT being achieved. For 2022 the maximum

annual bonus opportunity was 150% of salary for Geoff Carter and 150%

of salary for Adam Westwood. The STIP was based 70% on achievement

against financial targets (PBT) and 30% achievement against non-financial

targets, split equally between non-financial Company-wide objectives,

including strategy, customer, ESG, people, the development of the

business, risk and compliance, and individual non-financial objectives.

Performance measure Weighting

Profit before tax 70%

Non-financial Company-wide objectives, including strategy, customer and

partners, ESG, people, development of business, risk and compliance

15%

Non-financial objectives relating to the individual 15%

PBT performance for the 2022 financial year was £12.7m, therefore the minimum hurdle was not met and the profit pool was not available for

distribution to the Executive Directors. The Committee reviewed the Company and individual performance in the year, and determined not to

exercise its discretion to override the target threshold of £35m or to adjust bonus outcomes.

The non-financial targets set for the Company, the non-financial individual personal targets for Geoff Carter and Adam Westwood and the

Committee’s assessment of their performance against them are detailed on the following page, with as much clarity as possible while protecting

Company competitive advantages and respecting contractual confidentiality. The non-financial targets for the Company were determined by the

Committee to have been achieved at 90%, and the non-financial individual performance objectives detailed below for both Geoff Carter and

Adam Westwood were determined by the Committee to have been achieved at 93.75% and 91.87% respectively. However, as the PBT

performance threshold for the 2022 financial year was not reached, awards under the STIP did not vest.

Non-financial Company-wide objectives

The Committee believes that responsibility for the wider business objectives is shared equally amongst the Executive Team, and a consistent score

will be given unless specific examples of over/under performance by any one individual are identified. Taken holistically, the Committee considered a

score of 75% against these objectives to be appropriate.

Non-nancial measure

Weighting

as a % of

total bonus

opportunity Performance Commentary on performance

Actual bonus

payable as a %

of total bonus

opportunity

Strategic Focus

Maintaining focus on retaining a Combined Operating

Ratio (‘COR’) position within target range and

optimising volumes as market dynamics play out

following the implementation of the FCA pricing

reforms and anticipated hardening market.

15% 75% Maintained firm focus on the Company strategy, as evidenced

by early call regarding inﬂation and corrective action on pricing

and reserving which is intended to protect the COR delivery

into the future.

However, the Committee noted that this was not able to

mitigate the impacts of such a rapid increase in inﬂation in the

year that the inﬂation hit.

n/a

Customer and Partners

Maintain a high-quality service in direct and

outsourced processes, ensuring customers are dealt

with fairly.

Clear evidence of high-quality service through KPIs on internal

and external outsourced functions.

Progress made with further enhancements in identifying

vulnerable customers and modifying processes appropriately.

Environmental, Social and Governance

Continue to enhance our approach to ESG

requirements, with an increased focus on

environmental impacts and stakeholder expectations.

Strong progress made in ESG, notably the implementation of

the Task Force on Climate Related Financial Disclosures

(‘TCFD’). Further information on the Company’s ESG Strategy

can be found on pages 44 to 49.

People

Maintain Sabre’s position as a great place to work,

ensuring colleagues have an appropriate work/life

balance, are able to develop in their careers and strive

to ensure Sabre’s success and ensure a successful

return to primarily office-based working.

During the year there have been continued enhancements for

employees, as discussed in the ‘Our People’ Report on pages

40 to 42. Management have continued strong engagement

and communication with employees through the year, and the

positive impact of this has been seen in employee polls.

Development of the Business

Ensure that the new material product areas

(Motorcycle and Taxi) are embedded effectively into

the business operations and perform in line with

expectations.

The Motorcycle and Taxi products are now fully embedded

into the Company’s Claims and Financial processes. It is noted

that the Motorcycle product required further focus to get it to

a sustainable profit level, and both products are now writing

within profitability targets.

Risk and Compliance

Comply with existing and emerging regulatory

requirements, and successfully manage risk and

compliance across the Group.

The Company has a good relationship with its regulators and

has made strong progress on meeting the requirements of the

Operational Resilience and Consumer Duty regulations. The

Company received a positive audit on its work relating to the

implementation of the FCA’s Pricing Principals Requirements.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Non-financial objectives relating to the individual

Geoff Carter

Weighting as a % of

personal/strategic

bonus opportunity Commentary on performance

Actual

performance

Objectives

Ensure progress of the agreed strategic developments

initiatives, with a specific focus on ensuring the business

maintains strong underwriting foundations alongside

medium term growth opportunities.

25% Maintained firm focus on the Company strategy, as evidenced by

early call regarding inﬂation and corrective action on pricing and

reserving. However, the Committee noted that this was not able

to mitigate the impacts of inﬂation in the year that the inﬂation hit.

It was agreed by Management to sacrifice volumes, to protect the

long term interest and success of the business.

90%

Ensure Executive Team continued effectiveness and

positive engagement with the board.

25% The Board considered that the engagement between Management

and the Board had remained strong throughout the year, notably their

fast responses regarding the corrective action to deal with inﬂation.

100%

Ensure the business effectively embeds new product areas

(Motorcycle and Taxi) and specifically build relationships

with new key partners to ensure mutually beneficial

developments.

25% The Motorcycle and Taxi products are now fully embedded into

the Company’s Claims and Financial processes. It is noted that

the Motorcycle product required further focus to get it to a

sustainable profit level, and both products are now writing within

profitability targets.

100%

Ensure positive relationships are maintained with key

stakeholders, specifically including the PRA, covering

analysts and key investors.

25% The Company has a good relationship with its regulators and has

made strong progress on meeting the requirements of the

Operational Resilience and Consumer Duty regulations. The

Company received a positive audit on its work relating to the

implementation of the FCA’s Pricing Principals Requirements.

Geoff has also maintained good relations with the Company’s

analysts, and presented at a number of investor conferences.

85%

Total % of personal/strategic objectives 100% 93.75%

Adam Westwood

Weighting as a % of

personal/strategic

bonus opportunity

Actual

performance

Objectives

Continue to progress IFRS 17 implementation project to

include sign-off on key judgements, draft accounts and

disclosures, and external assurance where necessary.

25% Strong progress with implementation on track and limited

external support required

95%

Further enhance automation within Finance, in both

transactional processing and reporting.

25% The Finance Team continue to increase their efficiency with further

enhancements being made to the Team and increasing levels of

automation, including IFRS 9 analysis and journal postings,

segmental reporting by product line and the implementation of

Employment Hero, enhancing the automation of payroll reporting.

85%

Maintain strong relationships with analysts and investors,

ensuring that guidance is clear and well understood.

25% The Company has a good relationship with its regulators and has

made strong progress on meeting the requirements of the

Operational Resilience and Consumer Duty regulations. The

Company received a positive audit on its work relating to the

implementation of the FCA’s Pricing Principals Requirements.

Adam has maintained good relations with the Company’s

investors and analysts, with regular dialogue throughout the year.

90%

Continue the development of a carbon-neutral roadmap for

the Company, which includes a staged transition and

ambitious yet achievable targets.

12.5% Strong progress made in ESG, notably the implementation of the

Task Force on Climate Related Financial Disclosures (‘TCFD’).

Further information on the Company’s ESG Strategy can be

found on pages 44 to 49.

100%

Ensure financial accounting and reporting for new product

areas (Motorcycle and Taxi) is effectively implemented.

12.5% Both products are now fully embedded in the financial processes

and are working as required.

95%

Total % of personal/strategic objectives 100% 91.87%

Committee Chair’s commentary on Executive

Directors’ personal performance

Sabre is predominantly a technical underwriting and claims

management business. The Company strategy is therefore centred on

maintaining a COR between 70% and 80% throughout all market

conditions, treating volume as an output not a target. The strategy

does not currently envisage material product development, merger

and acquisition activity or territorial expansion, although during the year

the Company expanded its product lines to include motorcycle cover.

As such, the Committee considers the effective implementation of the

strategy to be characterised by the quality of ongoing pricing, claims

management and underwriting activity, and primarily assesses

Executive performance against these measures.

As outlined in this Report, 2022 was a challenging year for motor

insurers, with the unexpected rapid increase in inﬂation having

increased the costs associated with policies already written and

therefore impacted the Group’s COR. This, along with the first-year

performance of the motorcycle and taxi lines generated a reduction

inprofit year-on-year, albeit with the business having returned to

growth for the first time since 2017. Within this context, the

Committee considers the 2022 results to be acceptable and in the

market context, creditable. Management identified the increasing

levels of inﬂation quickly, and took rapid, appropriate action in

response, allowing the Group to expect a return to higher levels

ofprofitability in the coming year.

The Committee believes that the annual bonus outcomes are a

fairreﬂection of Company performance in the year and the overall

shareholder experience, and therefore has not exercised its discretion

to adjust the awards.

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Long Term Incentive Plan (“LTIP”)

Vesting of awards under the LTIP in the nancial year ended 31 December 2022

Shortly prior to Admission, shareholders approved the introduction of the Sabre 2017 LTIP. The third award under the 2017 LTIP was granted in 2020

based on performance over three years up to 31 December 2022. Under the plan an award of 125% of salary was made to Geoff Carter and 100%

of salary to Adam Westwood. The LTIP was based 50% on Relative TSR targets and 50% on EPS growth targets.

The range of targets set and performance against the targets is detailed below:

Financial measure

Weighting as a

% of total LTIP

opportunity Threshold Target Maximum

Actual

Performance

Actual LTIP

payable as a

%of total LTIP

opportunity

Relative TSR vs. FTSE 250, excluding investment trusts and

companies in the extractive industries

50% Median Straight-line

vesting

Upper quartile Below

Threshold

Earnings Per Share (“EPS”) 50% 48.6p 54p 59.4p 32.13p 0%

The Committee reviewed the formulaic outcomes of the LTIP and chose not to use any discretion to amend the vesting outturn. Based on the

performance of the awards against their performance conditions, the awards granted under the 2020 LTIP should not vest.

Granting of awards under the LTIP in the nancial year ended 31 December 2022 (audited)

In line with the Company’s 2021 Directors’ Remuneration Policy, both Geoff Carter and Adam Westwood were granted awards (75% and 60%

of salary respectively) under the Company’s LTIP during the financial year ended 31 December 2022. The awards were granted in the form of

restricted shares awards (as conditional awards), and in line with the Remuneration Policy, the awards will vest after three years from the date

ofgrant, followed by an additional holding period of two years from the date of vesting.

Awards were made subject to the following underpins:

– Maintaining a solvency ratio in excess of 140%

– Achieving a Return of Tangible Equity in excess of 10%

– No material regulatory censure

– Overall Committee discretion

If the Company does not meet one or more of the underpins at the date of vesting, the Committee will review whether or not it would be

appropriate to reduce the number of shares, including to zero, that vest under the award. Vesting of awards will also be subject to the

Committee’s overarching discretion in order to ensure that outcomes reﬂect the underlying performance of the Company and the broader

stakeholder experience.

Details of the LTIP awards granted on 7 April 2022:

Executive Director Basis of award Face value

Shares over which

conditional awards

were granted

Performance

underpin

Period over which

underpin assessed

Geoff Carter 75% of salary £343,947 145,802 Subject to the underpins

detailed above

1 January 2022 to

31 December 2024

Adam Westwood 60% of salary £167,9 9 8 71,216 Subject to the underpins

detailed above

1 January 2022 to

31 December 2024

1 The number of shares granted was calculated on the average share price of the five working days immediately preceding the date of grant of £2.359 as conditional

awards.

External appointments

Neither of the Executive Directors currently holds a paid external

appointment. All appointments must first be agreed by the Board and

must not represent a conﬂict with their current role.

Payments to past directors and payments for loss of

office (audited)

As disclosed in the 2021 Annual Report and Accounts, Catherine Barton

resigned from the Board in November 2021 and a payment of £5,833

was made to her in the 2022 financial year in line with the three months’

notice period in her letter of appointment. No other payments were

made to past directors or in respect of loss of office during the year.

Sourcing of shares and dilution limits

The terms of the Group’s share plans set limits on the number of newly

issued shares that may be issued to satisfy awards. In accordance with

guidance from the Investment Association these limits restrict overall

dilution under all plans (the LTIP, the DBP, the SAYE Plan, the SIP and

any other employee share scheme adopted by the Group) to under 10%

of the Company’s issued share capital over a ten-year period.

Furthermore, the LTIP and DBP set a further limitation that not more

than 5% of the Company’s issued share capital may be issued in any

ten-year period on discretionary plans. As at 31 December 2022 Sabre

was operating within these limits.

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responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Vested share awards and outstanding share awards granted during the 2022 financial year (audited)

Details of awards granted during the year are detailed below.

Long Term Incentive Plan (“LTIP”)

Director

Holding on 1

January

2022

Granted

during the

Year

Option price

(£)

Exercised

during the

year Lapsed

Market

price at

exercise

date (£)

Holding on

31 December

2022 Date of grant

Share price

on date of

grant (£) Vesting date

Gain on

vesting (£)

Geoff Carter 2019 183,575 0 n/a n/a 183,575 n/a 0 11 April

2019

2.894 n/a n/a

2020 193,819 0 n/a n/a 0 n/a 193,819 23 April

2020

2.804 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2022 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

2021 126,539 0 n/a n/a 0 n/a 126,539 21 May

2021

2.613 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2023 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

2022 0 145,802 n/a n/a 0 n/a 145,802 07 April

2022

2.359 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2024 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

Total 503,933 145,802 n/a n/a 183,575 n/a 466,160 – – – n/a

Adam

Westwood

2019 86,388 0 n/a n/a 86,388 n/a 0 11 April

2019

2.894 n/a

2020 91,208 0 n/a n/a 0 n/a 91,208 23 April

2020

2.804 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2022 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

2021 59,548 0 n/a n/a 0 n/a 59,548 21 May

2021

2.613 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2023 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

2022 0 71,216 n/a n/a 0 n/a 71,216 7 April 2022 2.359 At a date agreed by the Committee, which is after the release of the results for

the year ended 31 December 2024 and the third anniversary of grant. An

additional two-year holding period applies to these awards, once vested.

These are conditional share awards.

n/a

Total 237,14 4 71,216 n/a n/a 86,388 n/a 221,972 – – – n/a

Deferred Bonus Plan (“DBP”) – Granted related to the 2022 nancial year

Director

Number of shares

granted during the

year

Share price used at

date of grant

(£)

Face value of

award at grant

(£) Date of grant Release date

Geoff Carter 47,5 5 7 2.359 112,187 7 April 2022 7 April 2024

Adam Westwood 24,008 2.359 56,635 7 April 2022 7 April 2024

1 The share price of £2.359 represents the average share price of the five working days immediately prior to the date of the grant and the award is a conditional award.

2 Represents 50% of the 2021 STIP award that was deferred into shares.

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Sabre Insurance Group plc Annual Report and Accounts 2022

Save As You Earn (“SAYE”) Plan

Director

Holding on 1

January

2022

Granted during

the

year

Option price

(£)

Exercised

during the

year Lapsed

Market

price at

exercise date

(£)

Holding as at

31 December

2022 Date of grant

Share price

on date of

grant (£)

Exercisable

period

Gain on

exercise (£)

Geoff Carter 2019 3,174 0 2.268 0 3,174 n/a 0 30 April 2019 2.660 1 July 2022 to 31 December 2022 0

2020 808 0 2.226 0 808 n/a 0 12 May 2020 2.840 1 July 2023 to 31 December 2023 n/a

2021 4,680 0 1.923 0 4,680 n/a 0 21 April 2021 2.690 1 July 2024 to 31 December 2024 n/a

2022 0 3,970 1.813 0 0 n/a 3,970 26 April 2022 2.11 1 July 2025 to 31 December 2025 n/a

Total 8,662 3,970 n/a 0 8,662 n/a 3,970 – – – n/a

Adam Westwood

2019 0 0 n/a 0 0 n/a 0 – – – n/a

2020 0 0 n/a 0 0 n/a 0 – – – n/a

2021 9,360 0 1.923 0 9,360 n/a 0 21 April 2021 2.690 1 July 2024 to 31 December 2025 n/a

2022 0 0 n/a 0 0 n/a 0 – – – n/a

Total 9,360 0 n/a 0 9,360 n/a 0 – – – n/a

Share Incentive Plan (“SIP”)

Director

Purchased

during

the year

Granted during the year

in the form of matching

and dividend shares

Total gained

during the year

Exercised

during the

year Lapsed

Granted in

prior years

Holding as at

31 December

2022 Vesting date

Gain on

exercise

(£’000)

Geoff Carter 1,236 642 1,878 n/a n/a n/a 4,526 Shares can be exercised with effect from the third anniversary of their grant n/a

Adam Westwood 780 406 1,18 6 n/a n/a n/a 2,16 4 Shares can be exercised with effect from the third anniversary of their grant n/a

During the period between 31 December 2022 and 12 March 2023, being the latest practicable date prior to publication of this Annual Report, the following changes to the above table occurred:

– Geoff Carter purchased an additional 294 shares under the Share Incentive Plan (‘SIP’) and was awarded an additional 98 shares in the form of matching shares, taking the number of unvested shares not subject to

performance as at 12 March 2023 to 4,918.

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Directors’ Report Directors’ and Ofcers’

responsibilities statement

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Directors’ shareholdings and share interests (audited)

To further align Executive Directors with shareholders, Executive Directors are required to build up substantial interests in the Company.

Executive Directors are expected to build and hold a shareholding with a value of at least 200% of their base salary. To support the

implementation of this measure Executive Directors are required to retain 50% of any share awards vesting (after settling any tax liability) until

the 200% requirement is met. The Executive Directors have both met their respective shareholding requirements.

Post-cessation of employment, Executive Directors are expected to maintain a minimum shareholding of 200% of their base salary (or their

actual shareholding, if lower) for a period of two years. To enforce this requirement vested shares are held in a nominee account.

Shareholding requirements and the number of shares held by Directors during the year and as at 31 December 2022 are set out in the table below:

Director

Number of

unvested shares

subject to

performance/

underpins as at

31December 2022

Number of

unvested shares

not subject to

performance as at

31 December 2022

Number of shares

held under the

Deferred Bonus

Plan as at

31 December 2022

Number of shares

held as at

31 December 2022

Number of shares

held as at

31 December 2021

Shareholding

requirement as a %

of salary

Shareholding as a

% of salary

achieved at

31 December 2022

Current Directors

Geoff Carter 466,160 8,496 117,167 1,609,317 1,591,165 200% 373%

Adam Westwood 221,972 2,164 64,955 686,267 658,320 200% 261%

Andy Pomfret n/a n/a n/a 174,278 81,278 n/a n/a

Ian Clark n/a n/a n/a 303,006 303,006 n/a n/a

Karen Geary n/a n/a n/a 0 0 n/a n/a

Alison Morris n/a n/a n/a 9,282 n/a n/a n/a

Michael Koller n/a n/a n/a 0 0 n/a n/a

Rebecca Shelley n/a n/a n/a 17, 271 15,521 n/a n/a

1 These awards relate to share options and share awards under the Company’s SIP and SAYE Plans.

2 Calculated using a share price of £1.06 (as at 31 December 2022).

During the period between 31 December 2022 and 12 March 2023, being the latest practicable date prior to publication of this Annual Report,

the following changes to the above table occurred:

– Geoff Carter purchased an additional 294 shares under the Share Incentive Plan (‘SIP’) and was awarded an additional 98 shares in the form

ofmatching shares, taking the number of unvested shares not subject to performance as at 12 March 2023 to 4,918.

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Policy

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Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Company performance – relative total shareholder return (“TSR”)

The graph below shows Sabre’s relative TSR performance from Admission to 31 December 2022 against the TSR performance of the FTSE 250

Index (excluding investment trusts and companies in the extractive industries). This is a broad equity market index which the Committee

considers to be the most appropriate comparator.

TSR performance vs. FTSE 250 excluding investment trusts since IPO

11 Dec

2017

120

130

150

31 Mar

2018

31 Dec

2018

30 Sep

2018

30 Jun

2018

31 Mar

2019

31 Dec

2019

30 Sep

2019

30 Jun

2019

31 Mar

2020

31 Dec

2020

31 Mar

2021

31 Dec

2021

30 Sep

2021

30 Jun

2021

31 Mar

2022

31 Dec

2022

30 Sep

2022

30 Jun

2022

30 Sep

2020

30 Jun

2020

Sabre Insurance FTSE 250 (Excluding investment trusts)

Percentage change in remuneration of Directors and employees

The table below shows the percentage change in salary, taxable benefits and annual bonus for the Directors who served on the Board compared

to an average employee of the Company against the prior year for the financial years 2022 and 2021.

2021 to 2022 2020 to 2021 2019 to 2020

Salary/fees

Taxable

benets

Annual

bonus Salary/fees

Taxable

benets

Annual

bonus Salary/fees

Taxable

benets

Annual

bonus

Geoff Carter 3.3% 11.8% -100.0% 1.6% 34.2% -63.2% 3.2% 0% 0%

Adam Westwood 6.4% 25.1% -100.0% 1.6% 59.9% -71.0% 4.2% 0% 10 3 .1%

Andy Pomfret

3.3% n/a n/a 55.2% n/a n/a 38.1% n/a n/a

Ian Clark

11.0% n/a n/a 3.2% n/a n/a -11.6% n/a n/a

Karen Geary

6.7% n/a n/a 1371.7% n/a n/a n/a n/a n/a

Alison Morris

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Michael Koller

3.3% n/a n/a 200% n/a n/a n/a n/a n/a

Rebecca Shelley

2.5% n/a n/a 9.1% n/a n/a 4.8% n/a n/a

Average of all employees 0.3% 102.4% 0.3% 2.1% 8.1% -27.6% 2.2% -1.4% 15.4%

1 The increase in Andy Pomfret’s salary from 2020 to 2021 is due to him completing a whole financial year in this position as Company Chair.

2 Changes in Ian Clark’s salary reﬂect him being appointed as Audit Committee Chair in January 2022 for an interim period, and stepping down with effect from April

2022 as the Non-executive Director responsible for employee engagement

3 Change in Karen Geary’s salary reﬂect her being appointed as the Non-executive Director responsible for employee engagement in April 2022. Karen Geary was

appointed to the Board during the year which ended on 31 December 2020, and the annualised basis of her salary change from 2020 to 2021, was 0%.

4 Alison Morris was appointed during the 2022 financial year, and therefore no figures for 2020 to 2021 are included. On an annualised basis, Alison Morris’ salary

changed by 0% between 2021 and 2022.

5 Michael Koller was appointed to the Board during the year which ended on 31 December 2020, and the annualised basis of his salary change from 2020 to 2021, was 0%.

6 The change in salary for Rebecca Shelley from 2020 to 2021 is due to her completing a whole financial year in the position as Senior Independent Director, which she

was appointed to in 2020.

Arrangements for the wider workforce

The Committee seeks to align the remuneration of the Executive

Directors and Senior Management with consistency in reward

practices throughout the Group.

During 2022, all employees received a salary at or above the National

Living Wage and were eligible to receive a performance-related bonus.

In addition to this, the Company paid a Christmas bonus to all

employees (apart from the Executive Directors), of net value of £1,000.

Further, to support employees in the current difficult external

environment, all employees, apart from the Executive Team, received

a cost of living payment of £800, which was paid over a period of five

months from October 2022. The Company maintained payment of the

Company’s dividend in line with the Company’s Dividend Policy.

Chief Executive Officer’s single figure

ofremuneration

The following table shows the Chief Executive Officer’s remuneration

for current and prior years:

2022 (£) 2021 (£) 2020 (£) 2019 (£)

2018

(£)

2017

(£)

Single figure of

remuneration

496k 733k 1,110 k 821k 760k 251k

Annual bonus pay out (as

a % of maximum

opportunity)

0% 33.9% 62.2% 63.1% 73.0% n/a

LTIP vesting (as a % of

maximum opportunity)

0% 0% 50% n/a n/a n/a

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Sabre Insurance Group plc Annual Report and Accounts 2022

Chief Executive Officer’s ratio

The ratio compares the total remuneration of Geoff Carter, the Chief

Executive Officer, as set out in the Directors’ Remuneration Report,

against the remuneration of the median Full Time Equivalent (‘FTE’)

employee, as well as FTE employees in the lower and upper quartiles.

We will build up our reporting of these figures over time to cover a

ten-year rolling basis. The ratios were calculated using the Option A

methodology, which uses the pay and benefits of all UK FTE employees.

The Company has chosen Option A as it uses the full-time equivalent pay

and benefits for all UK employees during the year and is therefore a more

accurate representation of employee pay. The employee pay data used

was based on the total remuneration of all of Sabre’s full-time employees

as at 31 December 2022. The Chief Executive Officer’s pay is as per the

single total figure of remuneration for 2022, as disclosed earlier in this

report. Employee full-time equivalent salaries have been calculating by

grossing-up the salary and bonus payments received by employees by

the number of hours worked with reference to a 35-hour week.

Total Pay

Chief Executive

Ofcer’s total

pay

(£’000)

25th

percentile

50th

percentile

75th

percentile

2019

Pay ratio

821

33.3:1 19.2:1 12.3:1

Remuneration values 24,643 42,651 66,846

2020

Pay ratio

1,10 9

42.3:1 25.6:1 16.2:1

Remuneration values 26,19 6 43,273 68,283

2021

Pay ratio

733

23.9:1 16:1 10.6:1

Remuneration values 30,635 45,927 68,868

2022

Pay ratio

496

16.3:1 11.3:1 7.9:1

Remuneration values

27,9 05 40,306 57,552

Salary

Chief Executive

Ofcer’s salary

(£’000)

25th

percentile

50th

percentile

75th

percentile

2022

Pay ratio

454

18.4:1 12.6:1 8.9:1

Remuneration values 24,653 3 6 ,188 50,846

The Committee has considered the pay data and believes that the

median pay ratio is consistent with the pay, reward and progression

policies for the Company’s UK employees.

Relative importance of spend on pay

The following table illustrates total remuneration for all employees

compared to distributions to shareholders in respect of the last two

financial years.

Measure 2022 2021 Change

Total employee remuneration

£12.5m £12.3m £0.2m

Shareholder distributions £30.1m £38.3m

(£8.2m)

1 Total employee cost.

2 Includes dividends paid during the financial year which ended on 31 December

2021.

Implementation of the Policy in 2023

The below sets out how the Committee intends to operate the

Remuneration Policy for the year ending 31 December 2023.

Salaries

The Executive Directors’ salaries were reviewed during the year. The

Committee decided to increase Geoff Carter and Adam Westwood’s

salaries by 5.5%, which was less than the average employee increase.

The average salary increase for employees was 6.04%, with a range

between 5.2% and 8.2%, ensuring the lowest paid employees

received the greatest increase.

The revised salaries, with effect from 1 April 2023, are £483,713.28 for

Geoff Carter, and £295,400 for Adam Westwood. The Committee was

comfortable setting base salaries at these levels given the size of the

roles and the experience and calibre of the individuals, took into account

the experience of employees across the Group, and were conscious of

the cost of living crisis and increase in inﬂation. As per the Policy, the

Committee will continue to review salaries on an annual basis and may

make further increases in future years, in line with the Policy.

Salary as at

1 April 2023

Salary as at

31 December 2022 Increase

Geoff Carter £483,713 £458,496 5.5%

Adam Westwood £295,400 £280,000 5.5%

Benets

The Executive Directors will continue to receive life insurance and

private medical care.

Pension

Pension contributions made to the Executive Directors are aligned with

the average employee rate of 7.5% of salary as at effect from 1 January

2022, and this rate will be used for pension contributions to the

Executive Directors in 2023.

Short Term Incentive Plan (“STIP”)

In line with the Directors’ Remuneration Policy, the Committee will use

a bonus pool funding and allocation approach for awards in 2023 for

the STIP. The Committee reviewed the bonus pool structure for 2023

and felt that, in recognition of the structural industry changes as a

result of COVID-19 and subsequent high inﬂation period, some

amendments were required to the way the bonus pool is structured

toensure the STIP remained a core tool to support the motivation and

retention of our Executive Directors going forward.

In line with the Policy, the pool will continue to be calculated as a

percentage of PBT, subject to a minimum level of PBT being achieved.

For 2023, if 10% Return On Tangible Equity (‘ROTE’) is achieved, a

pool of 1.5% of PBT will be available for the Executive Directors. The

maximum bonus opportunity for Executive Directors will remain 150%

of salary. There will be a second pool for Senior Managers separate to

the pool available to Executive Directors.

The Executive Directors will be eligible to receive STIP awards of up

to150% of salary in 2023. Awards will be subject to the following

performance measures:

Performance measure Weighting

Profit Before Tax 70%

Non-financial Company-wide objectives, including strategy,

customer and partners, ESG, People, development of business,

risk and compliance

15%

Non-financial objectives relating specifically to the individual 15%

Specific performance targets will not be disclosed at this time due to

the commercially sensitive nature of the objectives. Full retrospective

disclosure of the targets and performance against them, will be

included in next year’s Annual Report on Directors’ Remuneration.

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Annual Report on

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responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Long Term Incentive Plan (”LTIP”)

LTIP awards in 2023 will be made under the Company’s LTIP in the

form of restricted shares. When considering grant levels each year the

Committee will take into account share price performance over the

preceding year. The Committee currently intends to award the Chief

Executive Officer an award equivalent to 75% of salary and the Chief

Financial Officer will receive an award equivalent to 60% of salary. In

line with the Policy awards these will vest after three years, with an

additional holding period of two years.

Awards granted in 2023 will be subject to the following underpins:

– maintaining a solvency ratio in excess of 140%

– achieving a return on tangible equity in excess of 10%

– no material regulatory censure – relating to the Executive Director’s

time in office

– overall Committee discretion

If the Company does not meet one or more of the underpins at the

date of vesting the Committee will review whether or not it was

appropriate to reduce the number of shares, including to zero, that vest

under the award. Vesting of awards will also be subject to the

Committee’s overarching discretion in order to ensure that outcomes

reﬂect the underlying performance of the Company and the broader

stakeholder experience.

Chair and Non-executive Director Fees

The range of salary increases for employees was between 5.2% and

8.2%, and the average salary increase was 6.04%. The Committee

reviewed the Chair’s fee in light of the time commitment required of

the role and agreed to increase the fees by 5.5%, which was less than

the average employee increase, with effect 1 April 2023. The Chair,

Chief Executive Officer and Chief Financial Officer reviewed the

Non-executive Directors’, Committee Chair and Senior Independent

Director’s fees in light of the time commitment required of the role and

agreed to increase the Non-executive Directors’ fees by 5.5%, which

was less than the average employee increase, with effect 1 April 2023.

The fees which will apply in 2023 are as follows:

Role

Fee (£)

2023

Fee (£)

2022

Chair fee (all-inclusive fee) 164,580 156,000

Non-executive Director base fee 65,832 62,400

Senior Independent Director fee 10,972 10,400

Committee Chair fee 10,972 10,400

Designated Employee

Representative Non-executive

Director

3,291 3,120

Committee member fee n/a n/a

The Chair and Non-executive Directors’ fees for the financial year

ended 31 December 2023 are therefore:

Director Reason for fee

Total annual

fee (£)

Andy Pomfret Company Chair 164,580

Ian Clark Non-executive Director

Risk Committee Chair

76,804

Karen Geary Non-executive Director

Designated Non-executive Director for

Employee Engagement

69,123

Alison Morris Non-executive Director

Audit Committee Chair

76,804

Michael Koller Non-executive Director 65,832

Rebecca Shelley Non-executive Director

Senior Independent Director

Remuneration Committee Chair

87,7 76

REBECCA SHELLEY

Chair of the Remuneration Committee on behalf of the Board

13 March 2023

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responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Company Financial Statements contained in this Annual Report.

Directors

The Directors who served throughout the year are as follows:

Executive Directors

Geoff Carter – Chief Executive Officer

Adam Westwood – Chief Financial Officer

Non-executive Directors

Andy Pomfret – Chair

Ian Clark

Karen Geary

Michael Koller

Alison Morris

Rebecca Shelley

The members of the Board of Directors, their biographical details

andthe dates of their appointment are set out on pages 53 to 55 of

this AnnualReport.

Appointment and replacement of Directors

The appointment and replacement of Directors is governed by the

Group’s Articles, the Companies Act 2006 (the “Companies Act”) and

related legislation. The Articles provide that Directors may be appointed

by ordinary resolution of the shareholders or by the Board. The Board

has decided to comply with best corporate governance practice, and all

Directors will seek re-election at each Annual General Meeting. In

addition to any powers of removal conferred by the Companies Act,

theGroup may by special resolution remove any Director before the

expiration of their period of office.

The Nomination and Governance Committee is responsible for

overseeing the recruitment of Directors and recommending

appointments for approval by the Board of Directors. Further details

regarding the appointment and replacement of Directors are set out

inthe Governance Report on pages 56 to 61 and the Nomination and

Governance Committee Report on pages 67 to 68.

Executive Directors’ service contracts

Executive Directors are employed under the terms of their service

contracts. Details of the effective dates of the service contracts for the

current Executive Directors as well as their compensation are set out

in the Annual Report on Directors’ Remuneration on pages 78 to 87

and the contracts are available for inspection by shareholders at the

The Directors’ Report for the period ended 31 December 2022 (the

“2022 financial year”) comprises the report set out on pages 88 to 90

and the Directors’ andOfficers’ Responsibility Statement on page 91

together with thefollowing sections of this Annual Report:

The Strategic Report

Pages 2 to 50 which comprise:

– the Chair’s Letter on page 6

– the Chief Executive Officer’s Review on pages 10 to 12

– the Principal Risks and Uncertainties on pages 19 to 28

– the Viability Statement on pages 29 to 30

– the Chief Financial Officer’s Review on pages 35 to 37

– the Responsibility and Sustainability Report on pages 38 to 49

The Governance Report

Pages 51 to 91 which comprise:

– the Chair’s Governance Letter on page 52

– the Biographies pages 53 to 55

– the Governance Report on pages 56 to 61

– the Committee Report on pages 62 to 87

– the Directors’ Report on pages 88 to 90

– the Statement of directors’ responsibilities on page 91

Corporate structure and principal activity

The Group’s principal and only trading subsidiary is a motor insurance

underwriter. Sabre Insurance Group plc is a public company limited by

shares and was incorporated in England and Wales on 21September

2017 with registered number 10974661. Its registered office and

principal place of business is at Sabre House, 150 South Street,

Dorking, Surrey RH4 2YY. The Group has no branches.

The Group is the holding company of the Sabre group of companies.

Details of the Group’s subsidiaries are set out in Note 2 of the Parent

Directors’ Report

Group’s registered office and at the Group’s Annual General Meeting.

Non-executive Director appointments

Non-executive Directors are appointed pursuant to a letter of

appointment. Such appointments are for an initial period of three

years,which is renewable. A Non-executive Director’s appointment is

terminable by the Non-executive Director or the Group by giving written

notice. Details of the effective dates of the letters of appointment for

the current Non-executive Directors as well as their fees are set out in

the Annual Report on Directors’ Remuneration on pages 78 to 87 of the

Annual Report and the terms of appointment are available for inspection

by shareholders at the Group’s registered office and at the Group’s

Annual General Meeting.

Powers

Subject to the provisions of the Articles, the Companies Act and

related legislation, and any directions given by special resolution of

theshareholders, the business of the Group shall be managed by

theBoard, which may exercise all the powers of the Group including

the Group’s powers to borrow money and to issue new shares.

Directors’ indemnities

Each of the Group’s Directors has been granted a qualifying third-party

indemnity pursuant to which the Group agrees to indemnify the

Directors against any liabilities that they may incur as a result of their

office as Director, to the extent permitted by the Companies Act.

Directors’ and Ofcers’ liability insurance

Directors’ and Officers’ liability insurance is provided for all Directors

ofthe Group.

Compensation for loss of ofce

The Group does not have arrangements with any Director that would

provide compensation for loss of office or employment resulting from

atakeover, except that provisions of the Group’s share plans may cause

options and awards granted under such plans to vest on a takeover.

Further information is provided in the Annual Report on Directors’

Remuneration on pages 78 to 87 of this Annual Report.

No such payments were made during the financial year ended

31December 2022.

Articles of Association

The Group may alter its Articles by special resolution of the

shareholders at a general meeting of the Group. The Articles are

available on the Group’s website at www.sabreplc.co.uk

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

As at the date of this report, no shares have been issued under these

authorities. These authorities will expire at the conclusion of the 2023

Annual General Meeting and, accordingly, the Board is proposing to

renew these authorities at thatAnnual General Meeting.

The Group was granted authority by its shareholders at the Meeting to

purchase up to the lower of (i) 25,000,000 Ordinary Shares and (ii) 10%

of the Company’s maximum Ordinary Share capital immediately

following the listing. This authority will expire at the conclusion of the

2023 Annual General Meeting. During 2022, no shares were bought

under this authority. The Board is proposing to renew this authority at

the 2023 Annual General Meeting, however the Company does not

have any current intention to purchase any of its own Ordinary Shares.

Directors’ interests in shares

The Directors who held office during the 2022 financial year had the

following interests (including family interests) in the Ordinary Shares

ofthe Company:

Name of Director

31 December

2022

31 December

2021

Geoff Carter 1,609,317 1,591,165

Ian Clark 303,006 303,006

Karen Geary 0 0

Michael Koller 0 0

Alison Morris 9,282 n/a

Andy Pomfret 174,278 81,278

Rebecca Shelley 17,271 15,521

Adam Westwood 686,267 658,320

The Directors, as employees and potential beneficiaries, have an

interest in 880,914 shares held by the Sabre Insurance Group

Employee Benefit Trust (offshore) and the Group’s SIP Trust (onshore)

as at 31December 2022. As at 31 December 2022, the Sabre

Insurance Group Employee Benefit Trust held 1,431,576 Ordinary

Shares and the Group’s SIP Trust held 301,608 Ordinary Shares. It is

anticipated that these shares, which have not already been allocated,

will be used to satisfy awards made under the Group’s employee

incentive plans. Further details regarding the Group’s employee

incentive plans can be found in the Annual Report on Directors’

Remuneration on pages 78 to 87.

There were no changes in the interests of Directors between

31December 2022 and 13 March 2023 (the latest practical date,

priorto the release of this Annual Report).

Share capital

The Group has one class of ordinary voting shares in issue.

As at 31 December 2022, the issued share capital of the Group

comprised 250,000,000 Ordinary Shares of £0.001 each, all of which

are fully paid (“Ordinary Shares”).

Rights and obligations attaching to shares

The rights and obligations attached to the Group’s shares are

governedby the Articles and prevailing legislation. Each Ordinary Share

ranks equally and carries the same rights to receive all shareholder

documentation (including notices of general meetings), attend, speak

and vote at general meetings, and participate in any distribution of

income or capital. All shareholders entitled to attend and vote at a

general meeting may appoint a proxy or proxies to attend, speak and

vote in their place. None of the Ordinary Shares carry any special rights

with regard to control of the Group and there are no specific restrictions

on voting rights, save where the Group is legally entitled to impose

such restrictions (for example, where the shareholder is in default of

anobligation to the Group). Major shareholders have the same voting

rights per share as all other shareholders.

Restrictions on transfer

There are no restrictions on the transfer or holding of shares in the

Company other than (i) as set out in the Articles and (ii) certain

restrictions which may from time to time be imposed by laws and

regulations and pursuant to the Listing Rules of the Financial Conduct

Authority (the “Listing Rules”) whereby Directors and certain officers

and employees of the Group require approval to deal in the Ordinary

Shares in accordance with the Group’s share dealing policies and the

Market Abuse Regulation.

Power to allot and purchase shares

By a resolution passed at the Annual General Meeting (the “Meeting”)

of the Group on 25 May 2022, the Group was granted a general

authority to allot Ordinary Shares up to the lower of (i) an aggregate

nominal amount of £83,333 and (ii) 33.33% of the Group’s Ordinary

Share capital. At the Meeting, the Group was also granted authority to

allot shares up to the lower of (i) an aggregate nominal amount of

£166,666 and (ii) 66.67% of the Group’s Ordinary Share capital by way

of a rights issue to ordinary shareholders in proportion to their existing

shareholdings (with such amount to be reduced to the extent that the

general authority is utilised (if any)).

The Company also received authority to allot shares for cash on a

non-pre-emptive basis up to the lower of (i) an aggregate nominal

amount of £12,500 and (ii) 5% of the Group’s Ordinary Share capital.

Major interests in shares

Information on major interests in shares notified to the Company under

the Disclosure Guidance and Transparency Rules (“DTRs”) of the UK

Listing Authority is published via a Regulatory Information Service and

on the Group’s website www.sabreplc.co.uk/investors/regulatory-news.

At 31 December 2022, the Company had been notified, in accordance

with Chapter 5 of the DTRs, of the following voting rights in respect of

3% or more of the issued share capital of the Company.

Company name

Current

shareholdings %

Aberforth Partners LLP 12,915,737 5.17

Aviva plc and its subsidiaries 24,947,347 9.98

Axa Investment Managers 12,291,762 4.92

Companies owned by Old Mutual plc 12,870,464 5.14

FMR LLC 12,546,431 5.01

Mawer Investment Management Limited 12,793,280 5.11

M&G plc 11,867,810 4.74

Ninety One UK Limited 12,493,014 5.00

Wellington Management Group LLP 11,9 83,3 5 0 4.79

Unicorn Asset Management Limited 12,050,000 4.82

During the period between 31 December 2022 and 13 March 2023,

being the latest practicable date prior to publication of this Annual

Report, the following changes to the above table occurred:

Date of

transaction Shareholder

Number of

Ordinary

% of voting

rights Change

11/01/2023 Gresham House Asset

Management Ltd

12,704,600 5.08% Increase

Results and dividends

The audited accounts for the year ended 31 December 2022 are set

out on pages 92 to 172. The Group profit after tax for the year was

£10.1m (2021: £30.1m).

The Directors recommend a final dividend of 0p (2021: 4.7p) and a

special dividend of 1.7p (2021: 4.6p).

The total dividend for the 2022 financial year, including the proposed

special dividend and interim dividend paid in 2022 is 4.5p (2021: 13.0p).

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Annual General Meeting

The Annual General Meeting is the Group’s principal forum for

communication with shareholders and the Directors will be available

toanswer shareholders’ questions at the meeting.

The 2023 Annual General Meeting will be held at 9:30am on Thursday

25 May 2023. Full details about the 2023 Annual General Meeting,

including the venue and explanatory notes, will be contained in the

Notice of Annual General Meeting which will be sent to shareholders in

a separate document. The Notice of Annual General Meeting will set

out the resolutions to be proposed at the Annual General Meeting and

an explanation of each resolution. All documents relating to the Annual

General Meeting will be available on the Group’s website at

www.sabreplc.co.uk/investors/annual-general-meeting

Independent auditor

The auditor of the Group, PwC, has indicated their willingness to

continue in office, and resolutions to re-appoint PwC and to fix their

remuneration will be proposed at the 2023 Annual General Meeting.

Statement of disclosure of information to the auditor

Each of the Directors who held office at the date of the approval of

thisAnnual Report confirms that, so far as they are each aware, there

is no relevant audit information of which the Company’s auditors are

unaware, and each Director has taken all the steps that he or she

ought to have taken as a Director in order to make himself or herself

aware of any relevant audit information and to establish that the

Company’s auditors are aware of that information. This confirmation

isgiven and should be interpreted in accordance with the provisions

ofsection 418 of the Companies Act.

Requirements of Listing Rule 9.8.4R

Information to be included in the Annual Report and Accounts under

Listing Rule 9.8.4R can be found as follows:

Listing Rule Description Page

9.8.4 (4) R Details of long term incentive schemes required by Listing

Rule 9.4.3

9.8.4 (12) R

9.8.4 (13) R

Details of dividends waived 151

Significant agreements and change of control

The Group is not a party to any material agreements that would take

effect, alter or terminate upon a change of control of the Group.

Employees and communities

Fewer than 250 individuals were employed by the Group in each week

during the financial year to which this Annual Report relates (further

details regarding the Group’s employees are set out in the Responsibility

and Sustainability section of this report on pages 38 to 49 of this

AnnualReport).

Environment and emissions

Information on the Group’s greenhouse gas emissions is set out in

theResponsibility and Sustainability section on pages 38 to 49 of this

Annual Report. Adam Westwood is the Executive Director responsible

for Environmental, Social and Governance issues.

Research and development

The Group does not undertake any material activities in the field of

research and development.

Financial instruments and risk management

The Group’s financial risk management objective and policies,

including information about its use of financial instruments, are

contained in Notes 2 – 4 of the Consolidated Financial Statements

onpages 109 to 137 of this Annual Report.

Events after the balance sheet date

Refer to Note 22 of the Consolidated Financial Statements on page

162 for information on events after the balance sheet date.

Charitable and political donations

The donations made by the Group to the charities referred to on page

43 of this Annual Report amounted, in aggregate, to £23,713 (2021:

£22,180). The Group made no political donations during the year

(2021:£0).

Supplier payment policy

The Group’s policy is to agree payment terms with suppliers when

entering into each transaction to ensure that suppliers are made aware

of the terms of payment and abide by the terms of payment. Trade

creditors of the Group (consolidated) at 31 December 2022 were

6days (2021: 7 days) based on the average daily amount invoiced

bysuppliers during the year.

Going concern

The Board has considered the business activities of the Group and the

factors likely to affect its future performance as well as the Group’s

principal risks and uncertainties, including the Directors’ statement on

the viability of the Group over a three-year period which is set out in

the Strategic Report on page 29 of this Annual Report. On the basis

ofthese considerations, the Directors have a reasonable expectation

that the Group has adequate resources to continue in operation for

atleast the next 12 months to 31 March 2024 and that therefore it

isappropriate to adopt a going concern basis for the preparation of

thefinancial statements.

By order of the Board

ANNEKA KINGAN

Company Secretary

13 March 2023

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

Directors’ confirmations

Each of the directors, whose names and functions are listed on

pages53 and 55 of this Annual Report confirm that, to the best

oftheirknowledge:

– the Group and Company financial statements, which have been

prepared in accordance with UK-adopted international accounting

standards, give a true and fair view of the assets, liabilities and

financial position of the Group and Company, and of the profit of

theGroup; and

– the Strategic Report includes a fair review of the development and

performance of the business and the position of the Group and

Company, together with a description of the principal risks and

uncertainties that it faces.

This Responsibility Statement was approved by the Board of Directors

on 13 March 2023 and is signed on its behalf by:

GEOFF CARTER

Chief Executive Officer

13 March 2023

ADAM WESTWOOD

Chief Financial Officer

13 March 2023

The directors are responsible for preparing the Annual Report and

Accounts 2022 and the financial statements in accordance with

applicable law and regulation.

Company law requires the directors to prepare financial statements for

each financial year. Under that law the directors have prepared the

Group and the Company financial statements in accordance with

UK-adopted international accounting standards.

Under company law, directors must not approve the financial

statements unless they are satisfied that they give a true and fair view

of the state of affairs of the Group and Company and of the profit or

loss of the Group for that period. In preparing the financial statements,

the directors are required to:

– select suitable accounting policies and then apply them consistently;

– state whether applicable UK-adopted international accounting

standards have been followed, subject to any material departures

disclosed and explained in the financial statements;

– make judgements and accounting estimates that are reasonable and

prudent; and

– prepare the financial statements on the going concern basis unless it

is inappropriate to presume that the group and company will

continue in business.

The directors are responsible for safeguarding the assets of the Group

and Company and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

The directors are also responsible for keeping adequate accounting

records that are sufficient to show and explain the Group’s and

Company’s transactions and disclose with reasonable accuracy at any

time the financial position of the Group and Company and enable them

to ensure that the financial statements and the Directors’

Remuneration Report comply with the Companies Act 2006.

The directors are responsible for the maintenance and integrity of the

Group’s website. Legislation in the United Kingdom governing the

preparation and dissemination of financial statements may differ from

legislation in other jurisdictions.

Statement of directors’ responsibilities

in respect of the financial statements

Strategic Report Governance Financials

Chair’s Governance

Letter

Board of Directors Governance Report Committee Reports Directors’ Remuneration

Policy

Annual Report on

Directors’ Remuneration

Directors’ Report Directors’ and Ofcers’

responsibilities statement

Sabre Insurance Group plc Annual Report and Accounts 2022

93 Independent Auditor’s Report

100 Consolidated Profit or Loss Account

101 Consolidated Statement of Comprehensive Income

102 Consolidated Statement of Financial Position

103 Consolidated Statement of Changes in Equity

104 Consolidated Statement of Cash Flows

105 Notes to the Consolidated Financial Statements

163 Parent Company Statement of Financial Position

164 Parent Company Statement of Changes in Equity

165 Parent Company Statement of Cash Flows

166 Notes to the Parent Company Financial Statements

170 Financial Reconciliations

173 Shareholder Information

Financial

Statements

Primary statements

The primary statements are included at the

beginning of the annual financial statements

and include note references to underlying

detailed notes.

Notes to the financial statements

The notes to the financial statements

consist of insurance-specific, financial

instrument-specific and risk management

notes first, followed by less significant

notes thereafter.

How to navigate the annual

financial statements

ACCOUNTING POLICIES

The principal accounting policies applied

in the preparation of the consolidated and

Company financial statements are

included in the specific notes to which

they relate and are indicated by a blue

border and headings on a shaded blue

background.

CRITICAL ACCOUNTING ESTIMATES

AND JUDGEMENTS

The areas involving a higher degree of

judgement or complexity, or areas where

assumptions and estimates are significant

to the consolidated and Company financial

statements, are included in the specific

notes to which they relate and are indicated

by a red border and headings on a shaded

red background.

RISK MANAGEMENT

Risk management disclosures are

indicated by a purple border and headings,

with a shaded purple background.

Sabre Insurance Group plc Annual Report and Accounts 2022

Strategic Report Governance Financials

Independent auditors’ report to the

members of Sabre Insurance Group plc

Report on the audit of the financial statements

Opinion

In our opinion, Sabre Insurance Group plc’s group financial statements and company financial statements (the “financial statements”):

– give a true and fair view of the state of the group’s and of the company’s affairs as at 31December2022 and of the group’s profit and the group’s and company’s

cash ﬂows for the year then ended;

– have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the Companies

Act 2006; and

– have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise: the Consolidated and Parent

Company Statements of Financial Position as at 31December2022; the Consolidated Profit or Loss Account and Consolidated Statement of Comprehensive

Income, the Consolidated and Parent Company Statements of Changes in Equity, and the Consolidated and Parent Company Statements of Cash Flows for the year

then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are

further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes

the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in Note 8.4, we have provided no non-audit services to the company or its controlled undertakings in the period under audit.

Our audit approach

Context

In addition to forming this opinion, in this report we have also provided information on how we approached our first year of audit, and details of the significant

discussions that we had with the Audit Committee.

Overview

Audit scope

– Our audit scope has been determined to provide coverage of all material financial statement line items; and

– In designing our audit, we have considered the impacts that climate change could have on the Group, including the physical and transitional risks which could

arise. In particular, we have assessed the impacts on reporting of the commitments related to climate change which the Group has made.

Key audit matters

– Valuation of the provision for gross claims incurred but not reported (‘IBNR’) and gross claims incurred but not enough reported (‘IBNER’) (together ‘IBNR’) reserves (group)

– Valuation of Investment in Subsidiaries (parent)

Sabre Insurance Group plc Annual Report and Accounts 2022

Strategic Report Governance Financial s

Independent

Auditor's report

Group statements Notes to the Consolidated

Financial Statements

Parent Company

statements

Notes to the Parent Company

Financial Statements

Financial reconciliations Shareholder information Directors, Advisers and

other information

Materiality

– Overall group materiality: £1.65m based on 5% of the three year average group profit before tax.

– Overall company materiality: £5.8m based on 1% of net assets.

– Performance materiality: £1.24m (group) and £4.4m (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current

period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had

the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any

comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Key audit matter How our audit addressed the key audit matter

Valuation of the provision for gross claims incurred but not reported (‘IBNR’) and gross

claims incurred but not enough reported (‘IBNER) (together ‘IBNR’) reserves (group)

Refer to Note 3 Insurance Liabilities and Reinsurance Assets, specifically the accounting policy

and Note 3.1, of the Consolidated financial statements.

The valuation of IBNR reserves involves a significant degree of judgement. The liabilities are

based on the estimated ultimate cost of all claims incurred but not settled at 31 December 2022,

whether reported or not, together with the related claims handling costs. If the case estimates

are initially held in excess of a best estimate, this will result in a negative IBNER.

A range of methods may be used to determine these provisions. Underlying these methods are

a number of explicit or implicit assumptions relating to the expected settlement amount and

settlement patterns of claims. This includes assumptions relating to the settlement of personal

injury lump sum compensation amounts.

Additionally, IBNR reserves will be affected by the level of inﬂation, both future and current, as

claims are settled. General inﬂation is currently higher than it has been for several years and has

impacted claims settlements through higher costs of vehicle parts and replacement vehicles.

Claims settlements are also likely to be impacted by future inﬂation particularly through higher

costs of care for injury associated claims.

In performing our audit work over the valuation of claims IBNR reserves we have

used actuarial specialists as part of our team to conduct elements of the testing.

Our procedures included:

– Understanding management's process and controls related to claims IBNR

reserves;

– Testing the underlying data to source documentation on a sample basis;

– Developing independent point estimates for certain larger or higher risk classes

as at 30 September 2022 and performing roll-forward testing to 31 December

2022;

– Performing a methodology and assumptions review of the Periodic Payment

Order ('PPO') reserves;

– For inﬂation, testing management's assessment of future inﬂation within the

claims IBNR reserves by comparing to our own independent estimate; and

– Assessing the disclosures in the financial statements.

Based on the work performed and evidence obtained, we consider the

methodology and assumptions used to calculate the claims IBNR reserves to be

appropriate.

Valuation of Investment in Subsidiary undertakings (parent)

Refer to Note 2.1 Investment in subsidiary undertakings of the Parent Company financial

statements.

In the Company's statement of financial position, investment in subsidiary undertakings are

reported at cost less any impairment. The investment in subsidiary undertakings is the largest

asset on the parent company's statement of financial position. The impairment analysis involves

a significant degree of judgement.

In respect to the carrying value of investment in subsidiary undertakings our

procedures included:

– Assessing investment in subsidiary undertakings for indication of impairment

considering our understanding of the business;

– Challenging and testing management's valuation of the subsidiary undertakings

including reviewing the appropriateness of the assumptions, sensitivity analysis,

and testing the underlying source data used in management's valuation; and

– Assessing the disclosures in the financial statements.

Based on the work performed and the evidence obtained, we consider the

carrying value of investment in subsidiary undertakings to be appropriate.

Independent Auditor’s Report tothe members of Sabre Insurance Group plc continued

Sabre Insurance Group plc Annual Report and Accounts 2022

Strategic Report Governance Financial s

Independent

Auditor's report

Group statements Notes to the Consolidated

Financial Statements

Parent Company

statements

Notes to the Parent Company

Financial Statements

Financial reconciliations Shareholder information Directors, Advisers and

other information

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole. Based on the

output of our risk assessment, along with our understanding of the Sabre Insurance Group structure, we performed a full scope audit over Sabre Insurance

Company Limited.

The impact of climate risk on our audit

We have made enquiries of management in order to understand the extent of the impact of climate change risks and the commitments made by the Group in the

Group’s financial statements. As part of this, we have reviewed management's assessment of climate risk. We have also made enquiries to understand, and

performed a risk assessment in respect of, the commitments made by the Group and how these may affect the financial statements and the audit procedures that

we perform. We have assessed the risks of material misstatement to the financial statements as a result of climate change and concluded that for the year ended

31 December 2022, the main audit risks are related to consistency of disclosures included within the Annual Report and ‘other information’ including the Task Force

on Climate-related Financial Disclosure ('TCFD') disclosures. As a result of this assessment, we concluded that there was no impact on our key audit matters.

Materiality

The scope of our audit was inﬂuenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative

considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line

items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

 Financial statements - group Financial statements - company

Overall

materiality

£1.65m. £5.8m.

How we

determined it

5% of the three year average group profit before tax 1% of net assets

Rationale for

benchmark

applied

In determining our materiality, we considered financial metrics which we believed to be relevant, and

concluded, consistent with prior year, that Group profit before tax was the most relevant benchmark.

For the year ended 31 December 2022, we have determined that a 3-year average of this metric is

most appropriate as it normalises the impact of one off events such as the current year inﬂation shock

and provides more consistency.

In determining our materiality, we considered financial

metrics which we believed to be relevant and

concluded that net assets was the most appropriate

benchmark.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The group consists primarily of one

component, Sabre Insurance Company Limited to which we allocated materiality of £1,649,549.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds

overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances,

classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to £1.24m

for the group financial statements and £4.4m for the company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the

effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £82,560 (group audit) and £291,000 (company

audit) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

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Notes to the Parent Company

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Financial reconciliations Shareholder information Directors, Advisers and

other information

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern basis of accounting included:

– Obtaining the Directors’ Going Concern assessment and challenged the rationale for the downside scenarios adopted and material assumptions made using our

knowledge of Sabre’s business performance, review of regulatory correspondence and obtaining further corroborating evidence;

– Considered management's assessment of the regulatory Solvency coverage and liquidity position; and

– Considered information obtained during the course of the audit and publicly available market information to identify any evidence that would contradict

management’s assessment of going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast

significant doubt on the group's and the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements

are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial

statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the company's ability to continue as

a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation

to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are

responsible for the other information, which includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Our

opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise

explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is

materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an

apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the

financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic report and Directors' Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended

31December2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material

misstatements in the Strategic report and Directors' Report.

Directors' Remuneration

In our opinion, the part of the Annual Report on Directors' Remuneration to be audited has been properly prepared in accordance with the Companies Act 2006.

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Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate governance

statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities

with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is materially

consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:

– The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

– The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these

are being managed or mitigated;

– The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing

them, and their identification of any material uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve months from

the date of approval of the financial statements;

– The directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment covers and why the period is appropriate;

and

– The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they

fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope than an audit and only consisted

of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions of the

UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the

group and company and their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is

materially consistent with the financial statements and our knowledge obtained during the audit:

– The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for

the members to assess the group’s and company's position, performance, business model and strategy;

– The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

– The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the Code does not

properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.

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Responsibilities for the financial statements and the audit

Responsibilities of the directors for the nancial statements

As explained more fully in the Statement of directors' responsibilities in respect of the financial statements, the directors are responsible for the preparation of the

financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for

such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to

fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern, disclosing, as

applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the

company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the nancial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or

error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to

detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud,

is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory

principles, such as those governed by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), and we considered the extent to which

non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial

statements such as the Companys Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements

(including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgemental areas

of the financial statements as shown in the 'Key Audit Matters'. Audit procedures performed by the engagement team included:

– Discussions with the Board, management, and Internal Audit function including consideration of known or suspected instances of non-compliance with laws and

regulation and fraud;

– Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities;

– Reviewing relevant meeting minutes including those of the Board of Directors, Audit, Risk, Nomination and Remuneration Committees;

– Identifying and testing journal entries based on risk criteria;

– Challenging assumptions and judgements made by management in their significant accounting estimates, for example, in relation to the valuation of the provision

for gross claims incurred but not reported and gross claims incurred but not enough reported (‘IBNR’) reserves, and the investment in subsidiary;

– Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and

– Attendance at Audit Committee meetings.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and

regulations that are not closely related to events and transactions reﬂected in the financial statements. Also, the risk of not detecting a material misstatement due to

fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional

misrepresentations, or through collusion.

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Financial reconciliations Shareholder information Directors, Advisers and

other information

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically

involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on

their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is

selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This

description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies

Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this

report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

– we have not obtained all the information and explanations we require for our audit; or

– adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

– certain disclosures of directors’ remuneration specified by law are not made; or

– the company financial statements and the part of the Annual Report on Directors' Remuneration to be audited are not in agreement with the accounting records

and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on 25May2022 to audit the financial statements for the year ended

31December2022 and subsequent financial periods. This is therefore our first year of uninterrupted engagement.

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements will form part of the

ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory

Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report will be prepared using the single electronic

format specified in the ESEF RTS.

PHILIP WATSON SENIOR STATUTORY AUDITOR

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

13March2023

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other information

2022 2021

Notes £’k £’k

Gross written premium 19 171,257 169,322

Less: Reinsurance premium ceded (26,456) (21,233)

Net written premium 144,801 148,089

Less: Change in unearned premium reserve

Gross amount 3.1.1 6,918 (3,426)

Reinsurers’ share 3.1.1 1,499 779

Net earned premium 153,218 145,442

Interest income on financial assets using effective interest rate method 4.8 1,374 1,210

Net fair value gains/(losses) on derecognition of financial assets measured at fair value through OCI 22 (16)

Instalment income 3,300 3,924

Other operating income 7 1,784 2,098

Total income 159,698 152,658

Insurance claims 3.4 (125,893) (104,984)

Insurance claims recoverable from reinsurers 3.4 13,094 23,969

Net insurance claims (112,799) (81,015)

Finance costs 5.2 (5) (16)

Commission expenses (12,942) (12,942)

Operating expenses 8 (21,202) (21,486)

Total expenses (34,149) (34,444)

Profit before tax 12,750 37,199

Tax charge 10 (2,643) (7,059)

Profit for the year attributable to ordinary shareholders 10,107 30,140

Basic earnings per share (pence per share) 20 4.06 12.09

Diluted earnings per share (pence per share) 20 4.03 11.98

The attached notes on pages 105 to 162 form an integral part of these financial statements.

Consolidated Profit or Loss Account

for the year ended 31 December 2022

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  2022 2021

Notes £’k £’k

Profit for the year attributable to ordinary shareholders 10,107 30,140

Items that are or may be reclassified subsequently to profit or loss

Fair value losses on debt securities 4.9 (14,207) (5,658)

Realised (gains)/losses transferred to profit or loss account (22) 16

Tax credit 3,563 1,069

Total other comprehensive loss for the year (10,666) (4,573)

Total comprehensive (loss)/income for the year attributable to ordinary shareholders (559) 25,567

The attached notes on pages 105 to 162 form an integral part of these financial statements.

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2022

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  2022 2021

 Notes £’k £’k

Assets   

Goodwill 14 156,279 156,279

Property, plant and equipment 9.1 3,996 4,066

Right-of-use asset 9.2 – 187

Reinsurance assets 3.1 116,526 112,312

Deferred tax assets 11 4,384 820

Deferred acquisition costs 3.1.2 13,354 13,791

Insurance receivables 3.2 31,427 38,003

Loans and other receivables 4.4 7 74

Current tax assets 1,255 –

Prepayments, accrued income and other assets 13 1,278 821

Financial investments 4.1 229,158 234,667

Cash and cash equivalents 4.5 18,502 30,611

Total assets 576,166 591,631



Equity

Issued share capital 15 250 250

Own shares (2,810) (2,257)

Merger reserve 48,525 48,525

FVOCI reserve (13,029) (2,363)

Revaluation reserve 831 831

Share-based payments reserve 2,407 1,841

Retained earnings 186,322 205,900

Total equity 222,496 252,727



Liabilities

Outstanding claims 3.1 257,443 232,516

Unearned premium reserve 3.1 83,858 90,776

Lease liability 5.1 – 193

Insurance payables 3.3 5,981 7,115

Trade and other payables 5.3 5,005 5,831

Current tax liabilities – 580

Accruals 1,383 1,893

Total liabilities  353,670 338,904

Total equity and liabilities  576,166 591,631

The attached notes on pages 105 to 162 form an integral part of these financial statements.

Consolidated Statement of Financial Position

as at 31 December 2022

The financial statements were approved by the

Board of Directors and authorised for issue on

13March 2023.

Signed on behalf of the Board of Directors by:

ADAM WESTWOOD

Chief Financial Officer

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  2022 2021

Notes £’k £’k

ORDINARY SHAREHOLDERS’ EQUITY – at 1 January 15 250 250

At 31 December 250 250

OWN SHARES – at 1 January 16 (2,257) (1,494)

Net movement in own shares (553) (763)

At 31 December (2,810) (2,257)

MERGER RESERVE – at 1 January 17 48,525 48,525

At 31 December 48,525 48,525

FVOCI RESERVE – at 1 January 17 (2,363) 2,210

Fair value losses on debt securities (14,207) (5,658)

Realised (gains)/losses transferred to profit or loss account (22) 16

Tax credit 3,563 1,069

At 31 December (13,029) (2,363)

REVALUATION RESERVE – at 1 January 17 831 831

At 31 December 831 831

SHARE-BASED PAYMENT RESERVE – at 1 January 17 1,841 1,817

Settlement of share-based payments (1,037) (1,051)

Charge in respect of share-based payments 1,603 1,075

At 31 December 2,407 1,841

RETAINED EARNINGS – at 1 January 205,900 214,261

Share-based payments 447 (115 )

Profit for the year attributable to ordinary shareholders 10,107 30,140

Ordinary dividends paid (30,132) (38,386)

At 31 December 186,322 205,900

Total equity at 31 December 222,496 252,727

The attached notes on pages 105 to 162 form an integral part of these financial statements.

Consolidated Statement of Changes in Equity

for the year ended 31 December 2022

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 2022 2021

 Notes £’k £’k

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax for the year 12,750 37,199

Adjustments for:

Depreciation of property, plant and equipment 9.1 108 136

Depreciation of right-of-use assets 9.2 187 249

Share-based payment – equity-settled schemes 16 1,603 1,075

Investment return, including realised net fair value gains and losses on financial assets (1,590) (1,507)

Interest on lease liability 9.2 5 16

Expected credit loss 4.6 (34) 16

Operating cash ﬂows before movements in working capital 13,029 37,184

Movements in working capital:

Change in reinsurance assets (4,214) (12,391)

Change in deferred acquisition costs 437 1,000

Change in insurance receivables 6,576 (4,027)

Change in loans and other receivables 67 10

Change in prepayments, accrued income and other assets (457) 47

Change in insurance liabilities 24,927 5,970

Change in unearned premium reserve (6,918) 3,426

Change in insurance creditors (1,134) 869

Change in trade and other payables (826) 301

Change in accruals (510) (552)

Cash generated from operating activities before investment of insurance assets 30,977 31,837

Taxes paid (4,479) (5,988)

Net cash generated from operating activities before investment of insurance assets 26,498 25,849

Interest and investment income received 3,383 4,273

Proceeds from the sale and maturity of invested assets 37,734 68,178

Purchases of invested assets (48,214) (64,987)

Net cash generated from operating activities 19,401 33,313

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment 9.1 (38) (28)

Net cash used by investing activities (38) (28)

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of principal portion of lease liabilities 9.2 (198) (264)

Net cash used in acquiring and disposing of own shares (1,142) (1,928)

Dividends paid 12 (30,132) (38,386)

Net cash used by financing activities (31,472) (40,578)

Net decrease in cash and cash equivalents (12,109) (7,293)

Cash and cash equivalents at the beginning of the year 30,611 37,904

Cash and cash equivalents at the end of the year 4.5 18,502 30,611

Consolidated Statement of Cash Flows

for the year ended 31 December 2022

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Corporate information

Sabre Insurance Group plc is a company incorporated in the United Kingdom and registered in England and Wales. The address of the registered office is Sabre

House, 150 South Street, Dorking, Surrey, RH4 2YY, England. The nature of the Group’s operations is the writing of general insurance for motor vehicles and

motorcycles. The Company’s principal activity is that of a holding company.

1. ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated and company financial statements are included in the specific notes to which they

relate. These policies have been consistently applied to all the years presented, unless otherwise indicated.

1.1. Basis of preparation

The financial statements of the Group have been prepared in accordance with UK-adopted international accounting standards, comprising International Accounting

Standards (“IAS”) and International Financial Reporting Standards (“IFRS”), and the requirements of the Companies Act 2006. Endorsement of accounting

standards is granted by the UK Endorsement Board (“UKEB”).

The financial statements are prepared in accordance with the going concern principle using the historical cost basis, except for those financial assets that have been

measured at fair value. The preparation of the financial statements necessitates the use of estimates, assumptions and judgements that affect the reported

amounts in the statement of financial position and the statement of profit or loss and other comprehensive income. Where appropriate, details of estimates are

presented in the accompanying notes to the consolidated financial statements.

As the full impact of climate change is currently unknown, it is not possible to consider all possible future outcomes when determining the value of assets, liabilities

and the timing of future cash ﬂows. The Group’s view is that any reasonable impact of climate change would not have a material impact on the valuation of assets

and liabilities at the year-end date.

The financial statements values are presented in pounds sterling (£) rounded to the nearest thousand (£’k), unless otherwise indicated.

The Group presents its statement of financial position broadly in order of liquidity. An analysis regarding recovery or settlement within 12 months after the reporting

date (current) and more than 12 months after the reporting date (non-current) is presented in the respective notes.

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to

offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liability simultaneously.

As permitted by IFRS 4 “Insurance Contracts”, the Group continues to apply the existing accounting policies that were applied prior to the adoption of IFRS, with

certain modifications allowed by the standard effective subsequent to adoption for its insurance contracts.

1.2. Going concern

The consolidated annual financial statements have been prepared on a going concern basis. The Directors have a reasonable expectation that the Group has

adequate resources to continue in operation for at least the next 12 months to 31 March 2024 and that therefore it is appropriate to adopt a going concern basis for

the preparation of the financial statements.

In making their assessment, the Directors took into account the potential impact of the principal risks that could prevent the Group from achieving its strategic

objectives. The assessment was based on the Group’s ORSA, which brings together management’s view of current and emerging risks, with scenario-based

analysis and reverse stress testing to form a conclusion as to the financial stability of the Group. Consideration was also given to what the Group considers its

principal risks which are set out in the Principal Risks and Uncertainties section on pages 19 to 28 of the Strategic Report. The assessment also included

consideration of any scenarios which might cause the Group to breach its solvency requirements which are not otherwise covered in the risk-based scenario testing.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2022

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We have assessed the short, medium and long-term risks associated with climate change. Given the geographical diversity of the Group’s policyholders within the

UK and the Group’s reinsurance programme, it is highly unlikely that a climate event will materially impact Sabre’s ability to continue trading. More likely is that the

costs associated with the transition to a low-carbon economy will impact the Group’s indemnity spend, as electronic vehicles are currently relatively expensive to

fix. We expect that this is somewhat, or perhaps completely, offset by advances in technology reducing the frequency of claims, in particular bodily injury claims

which are generally far more expensive than damage to vehicles. These changes in the costs of claims are gradual and as such reﬂected in our claims experience

and fed into the pricing of our policies. However, if the propensity to travel by car decreases overall this could impact the Group’s income in the long term, but this is

not expected to be material within the viability period of three years. We do not consider it plausible that such a decrease would be as severe as the scenarios that

we have modelled as part of our viability testing exercise.

1.3. New and amended standards and interpretations adopted by the Group

Amendments to IFRS

The following amended IFRS standards became effective for the year ended 31 December 2022:

– Annual Improvements to IFRS 2018–2020

– Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a First-time Adopter

– Amendment to IFRS 9 Financial Instruments - Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities

– Amendment to IFRS 16 Leases – Lease Incentives

– Amendment to IAS 41 Agriculture - Taxation in Fair Value Measurements

– Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

– Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

– Reference to the Conceptual Framework (Amendments to IFRS 3)

None of the amendments have had a material impact to the Group.

1.4. New and amended standards and interpretations not yet effective in 2022

A number of new standards and interpretations adopted by the UK which are not mandatorily effective, as well as standards interpretations issued by the IASB but

not yet adopted by the UK, have not been applied in preparing these financial statements. The Group does not plan to adopt these standards early; instead it

expects to apply them from their effective dates as determined by their dates of UK endorsement. The Group is still reviewing the upcoming standards to

determine their impact:

– IFRS 17: “Insurance Contracts” (IASB effective date: 1 January 2023)

– IFRS 10 and IAS 28: Amendment: “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” (IASB effective date: optional)

IFRS 17 – “Insurance Contracts”

The effective date for IFRS 17 is 1 January 2023. IFRS 17 will change the way insurance contracts are accounted for and reported. Revenue will no longer be equal

to premiums written but instead reﬂect a change in the contract liability on which consideration is expected. On initial assessment the major change will be on the

presentation of the statement of profit or loss, with premium and claims figures being replaced with insurance contract revenue, insurance service expense and

insurance finance income and expense. IFRS 17 also has additional disclosure requirements.

IFRS 17 prescribes a comprehensive model, the general model, which requires entities to measure an insurance contract at initial recognition as the total of the

fulfilment cash ﬂows (comprising the estimated future cash ﬂows, an adjustment to reﬂect the time value of money and an explicit risk adjustment for non-financial

risk) and the contractual service margin. The fulfilment cash ﬂows are remeasured on a current basis each reporting period. The unearned profit (contractual service

margin) is recognised over the coverage period.

Notes to the Consolidated Financial Statements continued

1. ACCOUNTING POLICIES continued

1.2. Going concern continued

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IFRS 17 also provides a simplification to the general model, the premium allocation approach (“PAA”). This simplified approach is applicable for certain types of

contracts, including those with a coverage period of one year or less. The liability for remaining coverage is similar to the current premium reserve profile recognised

over time. The principles of the general model remain applicable to the liability for incurred claims.

All contracts issued by the Group are for one year or less and the Group expects to apply the PAA model to all insurance contracts written.

The Group is continuously assessing the impact of the design decision and relevant accounting policy choices. The Group’s assessment of the requirements of the

standard against current data, processes and valuation models does not indicate a material impact on the Group’s financial results.

The next steps for the Group are to incorporate changes required in the internal management and financial statement reporting process to report its results under

IFRS 17 and finalise the accounting policies and methodologies for the transitional approach that will be applied. Management does not expect the transition to

have a significant impact on the Group’s future profit or the net asset value.

Transitional Accounting

We intend to apply IFRS 17 fully retrospectively. As we intend to operate all contracts under the premium allocation approach, we expect the impact at transition to be limited.

DAC

Under IFRS 4, the Company deferred some of the cash ﬂows from operational expenses which were identified as acquisition costs. Under IFRS 17 the Company

will assess those cash ﬂows arising from the cost of selling, underwriting and starting a group of insurance contacts (issued or expected to be issued) that are

directly attributable to the portfolio of insurance contacts to which the group belongs. We expect the total annual expenditure deferred under IFRS 17 to be lower

than that under IFRS 4. As a result, we expect the deferred acquisition cost asset to be lower under IFRS 17, which will reduce net assets on transition date. We

expect this to be partially off-set by discounting of insurance liabilities. We do not expect a significant impact on the earnings profile of the Company, given the

decrease in total deferred costs will be offset by a decrease in the run-off of opening deferrals.

Reserving for outstanding claims liabilities

While there are some technical differences in the approach to reserving between IFRS 4 and IFRS 17, we do not expect that there will be a material difference in

practice between the reserves held under the two bases, with the exception of discounting and the application of a risk adjustment, which are discussed below.

Discounting

Under IFRS 4 the measurement of the liability for outstanding claims for non-life business is not discounted. Under IFRS 17, the Company will recognise income

and expenses at recognition and as a result of changes in the carrying amount of the liability for incurred claims due to:

– Insurance service expenses – for the increase in the liability because of claims and expenses incurred in the period, excluding any investment components

– Insurance service expenses – for any subsequent changes in fulfilment cash ﬂows relating to incurred claims and incurred expenses

– Insurance finance income or expenses – for the effect of the time value of money and the effect of financial risk

Fulfilment cash ﬂows are adjusted to reﬂect the time value of money and financial risks related to those cash ﬂows. The adjustment is made by discounting

estimated future cash ﬂows. The discount rate applied to fulfilment cash ﬂows will be calculated at the reporting date. The Company will use the IFRS 17 ‘top-

down’ approach to determine the appropriate discount rates for insurance contracts based on a yield curve that reﬂects the current market rates of return implicit in

a fair value measurement of a reference portfolio of assets.

Risk adjustment

Under IFRS 4 the Company applied a risk margin to its liabilities for outstanding claims. Under IFRS 17 the Company will replace the risk margin with a risk

adjustment for non-financial risk. This risk adjustment represents the compensation that the Company requires for bearing the uncertainty about the amount and

timing of cash ﬂows that arise from non-financial risk. Non-financial risk is risk arising from insurance contracts other than financial risk, which is included in the

estimates of future cash ﬂows or the discount rate used to adjust the cash ﬂows. The risks covered by the risk adjustment for non-financial risk are insurance risk

and other non-financial risks such as lapse risk and expense risk.

Notes to the Consolidated Financial Statements continued

1. ACCOUNTING POLICIES continued

1.4. New and amended standards and interpretations not yet effective in 2022 continued

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The risk adjustment for non-financial risk for insurance contracts measures the compensation that the Company would require to make it indifferent between:

– Fulfilling a liability that has a range of possible outcomes arising from non-financial risk; and

– Fulfilling a liability that will generate fixed cash ﬂows with the same expected present value as the insurance contracts

The impact of replacing the IFRS 4 risk margin with the IFRS 17 risk adjustment is expected to have an insignificant impact on the net assets of the Company.

Reinsurance

The Company does not run a complex reinsurance programme and one holds a single group of ‘loss occurring’ reinsurance contracts, having a coverage period of

less than one year. Under IFRS 17 the company will use the premium allocation approach, adapted to reﬂect the features of reinsurance contracts held that differ

from insurance contracts issued.

Under IFRS 17 a group of reinsurance contracts held is recognised from the earliest of the following:

– The beginning of the coverage period of the group of reinsurance contracts held; and

– The date on which the Company recognises an onerous group of underlying insurance contracts if the Company entered into the related reinsurance contract held

in the group of reinsurance contracts held at or before that date.

The Company does not expect any of the underlying contracts to be onerous and will recognise the group of excess-of-loss reinsurance contracts at the beginning

of the coverage period, in-line with current treatment under IFRS 4 and no impact on the net asset value of the Company on transition to IFRS 17.

Defined IFRS 17 terms:

Contractual service margin – A component of the carrying amount of the asset or liability for a group of insurance contracts representing the unearned profit the

entity will recognise as it provides insurance contract service under the insurance contracts in the group.

Coverage period – The period during which the entity provides insurance contract services. The period includes the insurance contract services that relate to all

premiums within the boundary of the insurance contract.

Fulfilment cash ﬂows – An explicit, unbiased and probability-weighted estimate (ie expected value) of the present value of the future cash outﬂows minus the

present value of the future cash inﬂows that will arise as the entity fulfils insurance contacts, including a risk adjustment for non-financial risk.

Liability for incurred claims (“LIC”) – An entity’s obligation to:

a) Investigate and pay valid claims for insured events that have already occurred, including events that have occurred but for which claims have not been reported,

and other incurred insurance expenses; and

b) Pay amounts that are not included in (a) and that relate to:

i. insurance contract services that have already been provided; or

ii. any investment components or other amounts that are not related to the provision of insurance contract services and that are not in the liability for remaining

coverage

Liability for remaining coverage (“LRC”) – An entity’s obligation to:

a) investigate and pay valid claims under existing insurance contracts for insured events that have not yet occurred (ie the obligation that relates to the unexpired

portion of the insurance coverage); and

b) pay amounts under existing insurance contracts that are not included in (a) and that relate to:

i. insurance contract services not yet provided (ie the obligations that relate to future provision of insurance contract services); or

ii. any investment components or other amounts that are not related to the provision of insurance contract services and that have not been transferred to the

liability for incurred claims

Notes to the Consolidated Financial Statements continued

1. ACCOUNTING POLICIES continued

1.4. New and amended standards and interpretations not yet effective in 2022 continued

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2. RISK AND CAPITAL MANAGEMENT

2.1. Risk management framework

The Sabre Insurance Group plc Board is responsible for prudent oversight of the Group’s business and financial operations, ensuring that they are conducted in

accordance with sound business principles and with applicable laws and regulations, and ensure fair customer outcomes. This includes responsibility to articulate

and monitor adherence to the Board’s appetite for exposure to all risk types. The Board also ensures that measures are in place to provide independent and

objective assurance on the effective identification and management of risk and on the effectiveness of the internal controls in place to mitigate those risks.

The Board has set a robust risk management strategy and framework as an integral element in its pursuit of business objectives and in the fulfilment of its

obligations to shareholders, regulators, customers and employees.

The Group’s risk management framework is proportionate to the risks that we face. Our assessment of risk is not static; we continually reassess the risk

environment in which the Group operates and ensure that we maintain appropriate mitigation in order to remain within our risk appetite. The Group’s Management

Risk and Compliance Forum gives Management the regular opportunity to review and discuss the risks which the Group faces, including but not limited to any

breaches, issues or emerging risks. The Forum also works to ensure that adequate mitigation for the risks the Group is exposed to are in place.

2.2. Underwriting risk

The principal risk the Group faces under insurance contracts is that the actual claims and benefit payments, or the timing thereof, differ from expectations. This is

inﬂuenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long-term claims. Therefore, the objective of the

Group is to ensure that sufficient reserves are available to cover these liabilities.

The Group issues only motor insurance contracts, which usually cover a 12-month duration. For these contracts, the most significant risks arise from under-

estimation of the expected costs attached to a policy or a claim, for example through unexpected inﬂation of costs or single catastrophic events..

Refer to Note 3.5 for detail on these risks and the way the Group manages them. Note 3.5 also includes the considerations of climate change. Further discussion on

climate change can be found in the Principal Risks and Uncertainties section on pages 19 to 28 of the Strategic Report and the Responsibility and Sustainability

section on pages 38 to 49.

2.3. Credit risk

Credit risk reﬂects the financial impact of the default of one or more of the Group’s counterparties. The Group is exposed to financial risks caused by a loss in the

value of financial assets due to counterparties failing to meet all or part of their obligations. Key areas where the Group is exposed to credit default risk are:

– Failure of an asset counterparty to meet their financial obligations (Note 4.6)

– Reinsurer default on presentation of a large claim or dispute of cover (Note 3.6)

– Reinsurers default on their share of the Group’s insurance liabilities (Note 3.6)

– Default on amounts due from insurance contract intermediaries or policyholders (Note 3.6)

Notes to the Consolidated Financial Statements continued

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The following policies and procedures are in place to mitigate the Group’s exposure to credit risk:

– A Group credit risk policy which sets out the assessment and determination of what constitutes credit risk for the Group. Compliance with the policy is monitored

and exposures and breaches are reported to the Group’s Risk Committee

– Reinsurance is placed with counterparties that have a good credit rating and concentration of risk is avoided by following policy guidelines in respect of

counterparties’ limits that are set each year by the Board of Directors and are subject to regular reviews. At each reporting date, management performs an

assessment of creditworthiness of reinsurers and updates the reinsurance purchase strategy, ascertaining suitable allowance for impairment

– The Group sets the maximum amounts and limits that may be advanced to corporate counterparties by reference to their long-term credit ratings

– The credit risk in respect of customer balances incurred on non-payment of premiums or contributions will only persist during the grace period specified in the

policy document or trust deed until expiry, when the policy is either paid up or terminated. Commission paid to intermediaries is netted off against amounts

receivable from them to reduce the risk of doubtful debts

Refer to Notes 3.6 and 4.6 as indicated above for further information on credit risk.

2.4. Liquidity risk

Liquidity risk is the potential that obligations cannot be met as they fall due as a consequence of having a timing mismatch or inability to raise sufficient liquid assets

without suffering a substantial loss on realisation. The Group manages its liquidity risk through both ensuring that it holds sufficient cash and cash equivalent assets

to meet all short-term liabilities, and matching the maturity profile of its financial investments to the expected cash outﬂows.

Refer to Note 6 for further information on liquidity risk.

2.5. Investment concentration risk

Excessive exposure to particular industry sectors or groups can give rise to concentration risk. The Group has no significant investment in any particular industrial sector

and therefore is unlikely to suffer significant losses through its investment portfolio as a result of over-exposure to sectors engaged in similar activities or which have

similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions.

A significant part of the Group’s investment portfolio consists primarily of UK government bonds and government-backed bonds, therefore the risk of government

default does exist, however the likelihood is extremely remote. The remainder of the portfolio consists of investment grade corporate bonds. The Group continues

to monitor the strength and security of all bonds.

The Group’s portfolio has a significant concentration of UK debt securities and therefore is exposed to movements in UK interest rates.

Refer to Note 4.2 for further information on investment concentration risk.

2.6. Operational risk

Operational risk is the risk of loss arising from system failure, human error, fraud or external events. When controls fail to perform, operational risks can cause

damage to reputation, have legal or regulatory implications or can lead to financial loss. The Group cannot expect to eliminate all operational risks, but by operating a

rigorous control framework and by monitoring and responding to potential risks, the Group is able to manage the risks. Controls include effective segregation of

duties, access controls, authorisation and reconciliation procedures, staff education and assessment processes, including the use of internal audit. Business risks

such as changes in environment, technology and the industry are monitored through the Group’s strategic planning and budgeting process.

2.7. Capital management

The Board of Directors has ultimate responsibility for ensuring that the Group has sufficient funds to meet its liabilities as they fall due. The Group carries out

detailed modelling of its assets and liabilities and the key risks to which these are exposed. This modelling includes the Group’s own assessment of its capital

requirements for solvency purposes.

Notes to the Consolidated Financial Statements continued

2. RISK AND CAPITAL MANAGEMENT continued

2.3. Credit risk continued

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The Group has continued to manage its solvency with reference to the Solvency Capital Requirement (“SCR”) calculated using the Standard Formula. The Group

has developed sufficient processes to ensure that the capital requirements under Solvency II are not breached, including the maintenance of capital at a level higher

than that required through the Standard Formula. The Group considers its capital position to be its net assets on a Solvency II basis and monitors this in the context

of the Solvency II SCR.

The Group aims to retain sufficient capital such that in all reasonably foreseeable scenarios it will hold regulatory capital in excess of its SCR. The Directors currently

consider that this is achieved through maintaining a regulatory capital surplus of 140% to 160%. As at 31 December 2022, the Group holds significant excess

Solvency II capital.

The Group’s IFRS capital comprised:

As at 31 December

2022 2021

£’k £’k

Equity

Issued share capital 250 250

Own shares (2,810) (2,257)

Merger reserve 48,525 48,525

FVOCI reserve (13,029) (2,363)

Revaluation reserve 831 831

Share-based payments 2,407 1,841

Retained earnings 186,322 205,900

Total 222,496 252,727

The Solvency II position of the Group both before and after final dividend is given below:

As at 31 December

2022 2021

Pre-dividend £’k £’k

Total tier 1 capital 91,191 110,114

SCR 56,516 52,955

Excess capital 34,675 57,159

Solvency coverage ratio (%) 161% 208%

As at 31 December

2022 2021

Post-dividend £’k £’k

Total tier 1 capital 86,941 86,864

SCR 56,516 52,955

Excess capital 30,425 33,909

Solvency coverage ratio (%) 154% 164%

Notes to the Consolidated Financial Statements continued

2. RISK AND CAPITAL MANAGEMENT continued

2.7. Capital management continued

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The following table sets out a reconciliation between IFRS net assets and Solvency II net assets before final dividend:

As at 31 December

2022 2021

£’k £’k

IFRS net assets 222,496 252,727

Less: Goodwill (156,279) (156,279)

Adjusted IFRS net assets 66,217 96,448

Unearned premium reserve 83,858 90,776

Deferred acquisition costs (13,354) (13,791)

Solvency II premium provision (53,581) (6 4 ,011)

IFRS risk margin

(1)

10,764 11, 229

Discount claims provision 11,663 2,209

Change in life reserves 1,047 (1,903)

Solvency II risk margin (7,752) (7,6 3 8)

Change in deferred tax (7,671) (3,205)

Solvency II net assets 91,191 110,114

(1) In line with industry practice, the IFRS risk margin is an explicit additional reserve in excess of the actuarial best estimate which is designed to create a margin held in reserves to allow for

adverse development in open claims.

The adjustments set out in the above table have been made for the following reasons:

– Adjusted IFRS net assets: Equals Group net assets on an IFRS basis, less Goodwill.

– Removal of unearned premium reserve and deferred acquisition costs: The unearned premium reserve and deferred acquisition costs must be removed as

they are not deferred under Solvency II.

– Solvency II premium provision: A premium reserve reﬂecting the future cash ﬂows in respect of insurance contracts is calculated and this must be discounted

under Solvency II.

– IFRS risk margin: Solvency II reserves must reﬂect a true “best estimate” basis. Therefore, the IFRS risk margin is removed from the claims reserve.

– Discount claims provision: The provision held against future claims expenditure for claims incurred is discounted in the same way as the Solvency II premium

provision.

– Solvency II risk margin: The Solvency II risk margin represents the premium that would be required were the Group to transfer its technical provisions to a third

party, and essentially reﬂects the SCR required to cover run-off of claims on existing business. This amount is calculated by the Group through modelling the

discounted SCR on a projected future balance sheet for each year of claims run-off.

– Change in deferred tax: As the move to a Solvency II basis balance sheet increases the net asset position of the Group, a deferred tax liability is generated to

offset the increase.

Notes to the Consolidated Financial Statements continued

2. RISK AND CAPITAL MANAGEMENT continued

2.7. Capital management continued

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Sabre Insurance Group plc’s SCR, expressed on a risk module basis, is set out in the following table:

as at 31 December 2022 as at 31 December 2021

£’k £’k £’k £’k £’k £’k

Interest rate risk 5,548 3,359

Equity risk – –

Property risk 956 956

Spread risk 3,264 4,965

Currency risk 1,112 1,082

Concentration risk – –

Correlation impact (3,660) (3,449)

Market risk 7,220 6,913

Counterparty risk 2,333 3,403

Underwriting risk 52,421 51,985

Correlation impact (6,129) (6,422)

Basic SCR 55,845 55,879

Operating risk 6,372 6,515

Loss absorbing effect of deferred taxes (5,701) (9,439)

Total SCR 56,516 52,955

The total SCR is primarily driven by the underwriting risk element, which is a function of the Group’s net earned premium (or projected net earned premium) and the

level of reserves held. Therefore, the SCR is broadly driven by the size of the business.

The Group’s capital management objectives are:

– to ensure that the Group will be able to continue as going a concern

– to maximise the income and capital return to its equity

The Board monitors and review the broad structure of the Group’s capital on an ongoing basis. This review includes consideration of the extent to which revenue in

excess of that which is required to be distributed should be retained.

The Group’s objectives, policies and processes for managing capital have not changed during the year.

Notes to the Consolidated Financial Statements continued

2. RISK AND CAPITAL MANAGEMENT continued

2.7. Capital management continued

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3. INSURANCE LIABILITIES AND REINSURANCE ASSETS

ACCOUNTING POLICY

Claims incurred include all losses occurring through the year, whether reported or not, related handling costs and any adjustments to claims outstanding from

previous years. Significant delays are experienced in the notification and settlement of certain claims, particularly in respect of liability claims, the ultimate cost

of which cannot be known with certainty at the balance sheet date. Reinsurance recoveries (or amounts due from reinsurers) are accounted for in the same

period as the related claim.

A. Provision for claims outstanding

The provision for claims outstanding is based on information available at the balance sheet date. Significant delays are experienced in the notification and

settlement of certain claims and accordingly the ultimate cost of such claims cannot be known with certainty at the balance sheet date. Subsequent information

and events may result in the ultimate liability being less than, or greater than, the amount provided. Any differences between provisions and subsequent

settlements are dealt with in the profit or loss account. Claims provisions are not discounted, with the exception of Periodic Payment Orders (“PPOs”), which

are discussed more fully in the Critical accounting estimates and judgements section in Note 3.

The provision for claims outstanding includes the following:

– Claims Incurred and Reported (individual case estimates)

– Claims Incurred but Not Reported (“IBNR”)/Claims Incurred But Not Enough Reported (“IBNER”)

– Claims Handling Provision

(i) Claims Incurred and Reported (individual case estimates)

When claims are initially reported, case estimates are set at fixed levels based on previous average claims settlements. As soon as sufficient information

becomes available, the case estimate is amended by a claim handler within the Claims Department to reﬂect the expected ultimate settlement cost of the claim,

including external claims handling costs. The case estimate will be amended throughout the life of a claim as further information emerges. Case estimates

generally do not allow for possible reductions in our liability due to contributory negligence, favourable court judgments or settlements until these are known to a

high probability. Because of this, the outstanding case reserve recorded is generally greater than the probability-weighted likely settlement amount of the claim.

(ii) Claims Incurred But Not Reported (“IBNR”)/Claims Incurred But Not Enough Reported (“IBNER”)

The Claims IBNR provision consists of two elements:

– IBNR – An amount in respect of claims incurred but not yet recorded on the policy administration system (‘pure’ IBNR), which is typically a ‘positive’

– IBNER – An adjustment to open case reserves, booked at a portfolio level, which converts the open reserve recorded on our underwriting system to a true

‘best estimate’ basis. If the case reserves held are in excess of a ‘best estimate’ basis, this will result in a ‘negative’ IBNER. If the case reserves are below a

‘best estimate’ basis, this will result in a ‘positive’ IBNER

The Group refers to these collectively as ‘IBNR’ and unless stated otherwise, when referring to IBNR this always include both elements.

These reserves are calculated using standard actuarial modelling techniques such as chain ladder and Bornhuetter-Ferguson methods. The IBNR adjustment is

set after considering the results of these statistical methods based on, inter alia, historical claims development trends, average claims costs and expected

inﬂation rates.

(iii) Claims Handling Provision

A provision for claims handling costs is estimated based on the number of outstanding claims at the balance sheet date and the estimated average internal cost

of settling claims.

Notes to the Consolidated Financial Statements continued

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B. Provision for unexpired risks

Provision is made for unexpired risks when, after taking account of an element of attributable investment income, it is anticipated that the unearned premiums

will be insufficient to cover future claims and expenses on existing contracts. The expected claims are calculated having regard to events which have occurred

prior to the balance sheet date. Unexpired risk surpluses and deficits are offset when business classes are managed together and a provision is made if an

aggregate deficit arises.

At each reporting date, a liability assessment is performed to ensure the adequacy of the claims liabilities net of deferred acquisition costs and unearned

premium reserves. In performing this assessment, current best estimates of future contractual cash ﬂows and claims handling expenses are used. Any

deficiency is immediately charged to the statement of profit or loss, initially by writing off deferred acquisition costs and subsequently by establishing a provision

for losses arising from the liability assessment (“unexpired risk provision”). There is currently no unexpired risk provision.

C. Deferred acquisition costs

Deferred acquisition costs represent a proportion of commission and other acquisition costs that relate to policies that are in force at the year end. Deferred

acquisition costs are amortised over the period in which the related premiums are earned. Such costs are identified as being directly attributable to the

acquisition of business, or are indirectly attributed to acquisition activity through an allocation exercise.

D. Gross written premiums

Gross written premiums comprise all amounts during the financial year in respect of contracts entered into regardless of the fact that such amounts may relate

in whole or in part to a later financial year. All premiums are shown gross of commission payable to intermediaries (where applicable) and are exclusive of taxes,

duties and levies thereon. Insurance premiums are adjusted by an unearned premium reserve which represents the proportion of premiums written that relate

to periods of risk subsequent to the balance sheet date.

E. Unearned premium reserve (“UPR”)

Unearned premiums are those proportions of the premiums written in a year that relate to the periods of risk subsequent to the balance sheet date. They are

computed principally on a daily pro-rata basis.

RISK MANAGEMENT

Refer to Notes 3.5 and 3.6 for detail on risks relating to insurance liabilities and reinsurance assets, and the management thereof.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

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CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Valuation of insurance contracts

The three key elements impacting the valuation of insurance contracts are:

i. Claims reserve

For the valuation of insurance contracts, estimates are made both for the expected ultimate cost of claims reported at the reporting date, consisting of a reserve

for claims incurred and reported, and an estimate of the sufficiency of these reserves (through the calculation of an Incurred But Not Enough Reported (“IBNER”)

estimate, and for the expected ultimate cost of claims incurred, but not yet reported (“IBNR”), at the reporting date). It can take a significant period of time before

the ultimate claims cost can be established with certainty. The claims reserve consists of an actuarial best estimate and an appropriate, explicit risk margin. The

Board has set the explicit risk margin at 8% of the net best estimate claims reserve (2021: 10%). The risk margin has been set having considered short-term

volatility in claims experience and having assessed estimation uncertainty within the reserving process. Since the last reporting period, the Group has carried out

additional mathematical modelling on effective confidence intervals within the reserving process, which, along with our assessment of the impact of inﬂation, has

contributed to the selection of risk margin.

ii. Outstanding claims

The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques, such as Chain Ladder and Bornhuetter-

Ferguson methods. The main assumption underlying these techniques is that the Group’s past claims development experience can be used to project future

claims development and hence ultimate claims costs. As such, these methods extrapolate the development of paid and incurred losses, average costs per claim

and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is analysed by accident years

and types of claim. In most cases, no explicit assumptions are made regarding future rates of claims inﬂation or loss ratios. Instead, the assumptions used are

those implicit in the historical claims development data on which the projections are based. Additional qualitative judgement is used to assess the extent to

which past trends may not apply in the future, (e.g., to reﬂect one-off occurrences, changes in external or market factors such as public attitudes to claiming,

economic conditions, levels of claims inﬂation, climate change, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features

and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes,

taking account of all the uncertainties involved.

iii. Periodic Payment Orders (“PPO”)

Liability claims may be settled through a PPO, established under the Courts Act 2003, which allows a UK court to award damages for future loss or any other

damages in respect of personal injury. The court may order that the damages either partly or fully take the form of a PPO. To date, the Group has four PPOs

within its reserve for claims incurred and reported. Reinsurance is applied at the claim level, and therefore as PPOs generally result in a liability in excess of the

Group’s reinsurance retention, the net liability on acquisition of a PPO is not significantly different to that arising in a non-PPO situation. Management will

continue to monitor the level of PPO activity. Where Management expect the total probability-weighted cash ﬂows for actual and potential PPOs to generate a

net outﬂow following settlement of reinsurance recoveries, this is reﬂected within gross outstanding claims liabilities and the related reinsurance recoverable.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

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other information

Governance Financials

The Group’s insurance liabilities and reinsurance assets are sumarised below:

  2022 2021

Notes £’k £’k

Outstanding claims 3.1 257,4 4 3 232,516

Unearned premium reserve 3.1.1 83,858 90,776

Deferred acquisition costs 3.1.2 (13,354) (13,791)

Reinsurance assets 3.1 (116,526) (112,312)

Receivables arising from insurance and reinsurance contracts 3.2 (31,427) (38,003)

Payables arising from insurance and reinsurance contracts 3.3 5,981 7,115

Total 3.7 185,975 166,301

A reconciliation between the opening and closing balances is provided in Note 3.7.

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

Notes to the Consolidated Financial Statements continued

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other information

Governance Financials

3.1 Insurance liabilities and reinsurance assets

 2022 2021

Notes £’k £’k

GROSS

Claims incurred and reported 327,334 309,892

Claims incurred but not reported (74,115) (81,272)

Claims handling provision 4,224 3,896

Outstanding claims liabilities 3.1.1 257,4 4 3 232,516

Unearned premium reserve 3.1.1 83,858 90,776

Total insurance liabilities – Gross 341,301 323,292

Expected to be settled within 12 months (excluding UPR) 106,486 112,975

Expected to be settled after 12 months (excluding UPR) 150,957 119, 5 41

RECOVERABLE FROM REINSURERS

Claims incurred and reported (124,477) (127,812)

Claims incurred but not reported 18,134 24,18 4

Outstanding claims liabilities 3.1.1 (106,343) (103,628)

Unearned premium reserve 3.1.1 (10,183) (8,684)

Total reinsurers’ share of insurance liabilities (116,526) (112,312)

Expected to be settled within 12 months (excluding UPR) (31,936) (43,546)

Expected to be settled after 12 months (excluding UPR) (74,407) (60,082)

NET

Claims incurred and reported 202,857 182,080

Claims incurred but not reported (55,981) (57,0 88)

Claims handling provision 4,224 3,896

Outstanding claims liabilities 3.1.1 151,100 128,888

Unearned premium reserve 3.1.1 73,675 82,092

Total insurance liabilities – Net 224,775 210,980

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

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other information

Governance Financials

3.1.1 Movement in insurance liabilities and reinsurance assets

2022 2021

Gross RI share Net Gross RI share Net

£’k £’k £’k £’k £’k £’k

CLAIMS AND CLAIMS HANDLING EXPENSES

Claims incurred and reported 309,892 (127,812) 182,080 313,164 (123,440) 189,724

Claims incurred but not reported (81,272) 24,184 (57,088) (90,267) 31,424 (58,843)

Claims handling provision 3,896 – 3,896 3,649 – 3,649

Total at the beginning of the year 232,516 (103,628) 128,888 226,546 (92,016) 134,530

Cash paid for claims settled in the year (93,353) 10,379 (82,974) (92,247) 12,357 (79,890)

Increase in liabilities

– arising from current year claims 124,604 (20,640) 103,964 89,480 (8,072) 81,408

– arising from prior year claims (6,324) 7,5 4 6 1,222 8,737 (15,897) (7,16 0 )

Total at the end of the year 257,4 4 3 (106,343) 151,100 232,516 (103,628) 128,888

Claims incurred and reported 327, 334 (124,477) 202,857 309,892 (127,812) 182,080

Claims incurred but not reported (74,115) 18,134 (55,981) (81,272) 24 ,18 4 ( 57,08 8 )

Claims handling provision 4,224 – 4,224 3,896 – 3,896

Total at the end of the year 257,4 4 3 (106,343) 151,100 232,516 (103,628) 128,888

Amounts due from reinsurers in respect of claims already paid by the Group on the contracts that are reinsured are included in Note 3.2.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.1 Insurance liabilities and reinsurance assets continued

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Governance Financials

1 January

2021

Cash paid 2021 claims Claims prior

to 2021

31 December

2021

Cash paid 2022 claims Claims prior

to 2022

31 December

2022

Net movement in insurance liabilities (£’k)

160,000

120,000

140,000

80,000

100,000

40,000

20,000

60,000

134,530

(79,890)

81,408

(7,160)

128,888

(82,974)

103,964

1,222

151,100

Increase

Decrease

Total

2022 2021

Gross RI share Net Gross RI share Net

£’k £’k £’k £’k £’k £’k

UNEARNED PREMIUM RESERVE

At the beginning of the year 90,776 (8,684) 82,092 87, 3 5 0 ( 7, 9 05) 79,445

Written in the year 171,257 26,456 197,713 169,322 21,233 190,555

Earned in the year (178,175) (27,955) (206,130) (165,896) (22,012) (187,9 0 8)

Total at the end of the year 83,858 (10,183) 73,675 90,776 (8,684) 82,092

3.1.2 Movement in deferred acquisition costs

2022 2021

£’k £’k

DEFERRED ACQUISITION COSTS

At the beginning of the year 13,791 14,791

Additions 27,699 28,643

Recognised in the profit or loss account (28,136) (29,642)

Total at the end of the year 13,354 13,791

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.1 Insurance liabilities and reinsurance assets continued

3.1.1 Movement in insurance liabilities and reinsurance assets continued

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3.2 Receivables arising from insurance and reinsurance contracts

ACCOUNTING POLICY

Insurance receivables are recognised when due and measured on initial recognition at the fair value of the consideration received or receivable. Subsequent to

initial recognition, insurance receivables are measured at amortised cost, using the effective interest rate method. The carrying value of insurance receivables is

reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable, with the impairment loss recorded in the

profit or loss account.

2022 2021

£’k £’k

Due from brokers and intermediaries 14,334 17,95 4

Due from policyholders 17,093 20,139

Less: provision for impairment of broker and intermediary receivables – (90)

Total at the end of the year 31,427 38,003

The carrying value of insurance and other receivables approximates to fair value. There are no amounts expected to be recovered more than 12 months after the

reporting date.

3.3 Payables arising from insurance and reinsurance contracts

ACCOUNTING POLICY

Payables are recognised when due. Reinsurance payables represent premiums payable to reinsurers in respect of contracts which have been entered into at the

date of the financial position.

2022 2021

£’k £’k

Insurance creditors 1,471 1,244

Amounts due to reinsurers 4,510 5,871

Total at the end of the year 5,981 7,115

Payables arising from insurance and reinsurance contracts are expected to be settled within 12 months. The carrying value of payables approximates fair value.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

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3.4 Insurance claims

2022 2021

Gross RI share Net Gross RI share Net

£’k £’k £’k £’k £’k £’k

Movement in claims provision 117,953 (13,094) 104,859 97,970 (23,969) 74,001

Movement in claims handling provision 327 – 327 247 – 247

Claims handling expenses allocated 7,613 – 7,613 6,767 – 6,767

Net insurance claims 125,893 (13,094) 112,799 104,984 (23,969) 81,015

3.4.1 Claims development tables

The presentation of the claims development tables for the Group is based on the actual date of the event that caused the claim (accident year basis).

Gross outstanding claims liabilities

Accident year

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total

£’k £’k £’k £’k £’k £’k £’k £’k £’k £’k £’k

Estimate of ultimate claims costs

At the end of the accident year 84,939 75,649 103,599 111,518 165,707 120,077 126,981 101,965 89,233 124,277

– One year later 70,567 65,639 90,133 100,935 131,803 108,089 122,663 97, 9 53

87,555

– Two years later 63,197 62,039 82,537 94,294 123,651 107,98 8 127,2 25 88,755

– Three years later 65,313 60,301 79,845 91,336 122,674 113,257 125,608

– Four years later 68,763 59,149 77,0 9 5 90,789 124,128 115,403

– Five years later 64,290 58,367 7 7,03 8 92,629 124,26 4

– Six years later 63,15 3 58,718 77, 4 69 96,596

– Seven years later 63,088 58,438 7 7, 4 80

– Eight years later 63,213 58,361

– Nine years later 63,271

Current estimate of cumulative claims 63,271 58,361 77,4 80 96,596 124,264 115,403 125,608 88,755 87,555 124,277

Cumulative payments to date (59,880) (58,203) (75,753) (89,434) (87,759) (94,578) (101,313) (61,066) (53,419) (42,496)

Liability recognised in balance sheet 3,391 158 1,727 7,16 2 36,505 20,825 24,295 27,68 9

34,136

81,781 237,6 6 9

2012 and prior 15,550

Claims handling provision 4,224

Total 257,4 4 3

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

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Net outstanding claims liabilities

Accident year

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total

£’k £’k £’k £’k £’k £’k £’k £’k £’k £’k £’k

Estimate of ultimate claims costs

At the end of the accident year 7 7, 316 74,609 97, 2 8 8 104,808 106,478 111,4 33 115,011 85,723 81,161 103,637

– One year later 64,071 65,639 85,814 93,664 96,446 99,649 111,5 5 0 81,882

81,826

– Two years later 59,301 60,953 81,16 4 87,824 91,806 98,641 111,3 47 80,602

– Three years later 57,739 59,741 77,86 9 85,243 91,179 99,071 111,121

– Four years later 56,947 59,008 76,409 84,995 88,545 100,853

– Five years later 56,892 58,259 76,254 84,891 88,690

– Six years later 56,593 58,481 76,011 84,987

– Seven years later 56,572 5 8 ,198 76,578

– Eight years later 56,685 58 ,146

– Nine years later 56,813

Current estimate of cumulative claims 56,813 58 ,146 76,578 84,987 88,690 100,853 111,121 80,602

81,826

103,637

Cumulative payments to date (54,565) (57,9 8 6 ) (75,567) (83,091) (83,597) (91,210) (96,127) (60,751) (53,419) (42,496)

Liability recognised in balance sheet 2,248 160 1,011 1,896 5,093 9,643 14,994 19,851

28,407

61,141 144,444

2012 and prior 2,432

Claims handling provision 4,224

Total 151,100

3.5 Underwriting risk

The principal risk the Group faces under insurance contracts is that the actual claims and benefit payments, or the timing thereof, differ from expectations. This is

inﬂuenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long-term claims. Therefore, the objective of the

Group is to ensure that sufficient reserves are available to cover these liabilities.

The Group only issues motor insurance contracts, which usually cover a 12-month duration. For these contracts, the most significant risk which arises is under-

estimation of the expected costs attached to a policy or a claim, for example through unexpected inﬂation of costs or single catastrophic events.

The above risk exposure is mitigated by diversification across a large portfolio of policyholders and geographical areas within the UK. The variability of risks is

improved by careful selection and implementation of underwriting strategies, which are designed to ensure that risks are diversified in terms of type of risk and

level of insured benefits. This is largely achieved through diversification across policyholders. Furthermore, strict claim review policies to assess all new and

ongoing claims, regular detailed review of claims handling procedures and frequent investigation of possible fraudulent claims are all policies and procedures put in

place to reduce the risk exposure of the Group. The Group further enforces a policy of actively managing and promptly pursuing claims, in order to reduce its

exposure to unpredictable future developments that can negatively impact the business. Inﬂation risk is mitigated by taking expected inﬂation into account when

estimating insurance contract liabilities.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.4 Insurance claims continued

3.4.1 Claims development tables continued

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The Group purchases reinsurance as part of its risk mitigation programme. Reinsurance ceded is placed on a non-proportional basis. This non-proportional

reinsurance is excess-of-loss, designed to mitigate the Group’s net exposure to single large claims or catastrophe losses. The current reinsurance programme in

place has a retention limit of £1m, with no upper limit. Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims

provision and are in accordance with the reinsurance contracts. Although the Group has reinsurance arrangements, it is not relieved of its direct obligations to its

policyholders and thus a credit exposure exists with respect to ceded reinsurance, to the extent that any reinsurer is unable to meet its obligations assumed under

such reinsurance agreements. Refer to Note 3.6 for insurance-related credit risk.

Key assumptions

The principal assumption underlying the liability estimates is that the Group’s future claims development will follow a similar pattern to past claims development

experience. This includes assumptions in respect of average claim costs, claim handling costs, claim inﬂation factors and claim numbers for each accident year.

Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future, for example: one-off occurrence; changes in

market factors such as public attitude to claiming; economic conditions; and internal factors such as portfolio mix, policy conditions and claims handling procedures.

Judgement is further used to assess the extent to which external factors such as judicial decisions and government legislation affect the estimates.

Other key circumstances affecting the reliability of assumptions include variation in interest rates and delays in settlement.

Sensitivities

The motor claim liabilities are primarily sensitive to the reserving assumptions noted above. It is not possible to quantify the sensitivity of certain assumptions such

as legislative changes or uncertainty in the estimation process.

The following analysis is performed for reasonably possible movements in key assumptions, including inﬂation, with all other assumptions held constant, showing

the impact on profit before tax and equity. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to

demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual basis. It should be noted that movements in these

assumptions are non-linear.

The table shows the impact of a 10% increase in the gross loss ratio applied to all underwriting years which have a material outstanding claims reserve, and a 10%

increase in gross outstanding claims across all underwriting years, taking into account the impact of an increase in the operational costs associated with handling

those claims. We have considered the impact of excess inﬂation in setting the threshold for this sensitivity analysis.

Decrease

in profit aer tax

Decrease

in total equity

2022 2021 2022 2021

At 31 December £’k £’k £’k £’k

Insurance risk

Impact of a 10% increase in gross loss ratio (9,315) (7, 9 21) (9,315) (7,9 21)

Impact of a 10% increase in gross outstanding claims and claims provision (10,078) (8,710) (10,078) (8,710)

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.5 Underwriting risk continued

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Governance Financials

A substantial increase in individually large claims which are over our reinsurance retention limit, generally will have no impact on profit before tax. The table shows

the impact of a 10% increase on a net basis.

Decrease

in profit aer tax

Decrease

In total equity

2022 2021 2022 2021

At 31 December £’k £’k £’k £’k

Insurance risk

Impact of a 10% increase in net loss ratio (11,597) (9,739) (11,597) (9,739)

Impact of a 10% increase in net outstanding claims and claims provision (12,239) (10,440) (12,239) (10,440)

Climate change

Management has assessed the short, medium and long-term risks which result from climate change. The short-term risk is low. Given the geographical diversity of

the Group’s policyholders within the UK and the Group’s reinsurance programme, it is highly unlikely that a climate event will materially impact the Group’s ability to

continue trading. More likely is that the costs associated with the transition to a low-carbon economy will impact the Group’s indemnity spend in the medium term,

as electronic vehicles are currently relatively expensive to fix. This is somewhat, or perhaps completely, offset by advances in technology reducing the frequency of

claims, in particular bodily injury claims which are generally far more expensive than damage to vehicles. These changes in the costs of claims are gradual and as

such reﬂected in the Group’s claims experience and fed into the pricing of policies. However, if the propensity to travel by car decreases overall this could impact

the Group’s income in the long term.

Further discussion on climate change can be found in the Principal Risks and Uncertainties section on pages 19 to 28 and the Responsibility and Sustainability

section on pages 38 to 49.

3.6 Insurance-related credit risk

Key insurance-related areas where the Group is exposed to credit default risk are:

– Reinsurers default on presentation of a large claim or dispute of cover

– Reinsurers default on their share of the Group’s insurance liabilities

– Default on amounts due from insurance contract intermediaries or policyholders

Sabre uses a large panel of secure reinsurance companies. The credit risk of reinsurers included in the reinsurance programme is considered annually by reviewing

their credit worthiness. The Group’s placement of reinsurance is diversified such that it is not dependent on a single reinsurer. There is no single counterparty

exposure that exceeds 25% of total reinsurance assets at the reporting date. Sabre’s largest reinsurance counterparty is Munich Re. The credit risk exposure is

further monitored throughout the year to ensure that changes in credit risk positions are adequately addressed.

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.5 Underwriting risk continued

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Governance Financials

The following tables demonstrate the Group’s exposure to credit risk in respect of overdue insurance debt and counterparty creditworthiness. Unearned premium

reserve (“UPR”) is excluded as there are no credit risks inherent in them.

Overdue insurance-related debt

Neither past due

nor impaired

Past due 1-90

days

Past due more

than 90 days

Assets that have

been impaired

Carrying value

in the balance

sheet

At 31 December 2022 £’k £’k £’k £’k £’k

Reinsurance assets (excluding UPR) 106,343 – – – 106,343

Insurance receivables 31,364 63 – – 31,427

Total 137,707 63 – – 137,770

Neither past due

nor impaired

Past due1-90

days

Past due more

than 90 days

Assets that have

been impaired

Carrying value in

the balance

sheet

At 31 December 2021 £’k £’k £’k £’k £’k

Reinsurance assets (excluding UPR) 103,628 – – – 103,628

Insurance receivables 37,8 40 163 – – 38,003

Total 141,468 163 – – 141,631

Exposure by credit rating

AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total

At 31 December 2022 £’k £’k £’k £’k £’k £’k £’k

Reinsurance assets (excluding UPR) – 71,318 35,025 – – – 106,343

Insurance receivables – – – – – 31,427 31,427

Total – 71,318 35,025 – – 31,427 137,770

AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total

At 31 December 2021 £’k £’k £’k £’k £’k £’k £’k

Reinsurance assets (excluding UPR) – 72,498 31,13 0 – – – 103,628

Insurance receivables – – – – – 38,003 38,003

Total – 72,498 31,13 0 – – 38,003 141,631

Notes to the Consolidated Financial Statements continued

3. INSURANCE LIABILITIES AND REINSURANCE ASSETS continued

3.6 Insurance related credit risk continued

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Governance Financials

3.7 Reconciliation of opening to closing balances

The below table reconciles the opening and closing balances of insurance liabilities and reinsurance assets.

2022 2021

£’k £’k

Insurance liabilities and reinsurance assets – at the start of the year

Outstanding claims 232,516 226,546

Unearned premium reserve 90,776 87,350

Deferred acquisition costs (13,791) (14,791)

Reinsurance assets (112,312) (99,921)

Receivables arising from insurance and reinsurance contracts (38,003) (33,976)

Payables arising from insurance and reinsurance contracts 7,115 6,246

166,301 171,45 4

Profit or loss account movements

Net earned premium (153,218) (145,442)

Current year net incurred claims 103,964 81,408

Movement in prior year net incurred claims 1,222 ( 7,16 0 )

Claims handling expenses 7,613 6,767

Change in deferred acquisition costs 437 1,000

(39,982) (63,427)

Cash ﬂow movements

Premiums received 178,060 165,505

Reinsurance premiums paid (27, 817) (20,574)

Claims and other claims expenses paid (90,587) (86,657)

59,656 58,274

Insurance liabilities and reinsurance assets – at the end of the year

Outstanding claims 257,44 3 232,516

Unearned premium reserve 83,858 90,776

Deferred acquisition costs (13,354) (13,791)

Reinsurance assets (116,526) (112,312)

Receivables arising from insurance and reinsurance contracts (31,427) (38,003)

Payables arising from insurance and reinsurance contracts 5,981 7,115

185,975 166,301

Notes to the Consolidated Financial Statements continued

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4. FINANCIAL ASSETS

RISK MANAGEMENT

Refer to the following notes for detail on risks relating to financial assets:

Investment concentration risk – Note 4.2

Credit risk – Note 4.6

Liquidity risk – Note 6

The Group’s financial assets are summarised below:

2022 2021

Notes £’k £’k

Debt securities held at fair value through other comprehensive income 4.1.1 229,158 234,667

Loans and receivables 4.4 7 74

Cash and cash equivalents 4.5 18,502 30,611

Total 247,667 265,352

4.1 Debt securities at fair value

4.1.1 Debt securities held at fair value through other comprehensive income

ACCOUNTING POLICY – FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE

Classication

The Group classifies the following financial assets at fair value through other comprehensive income (“FVOCI”):

– Debt securities

A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated at fair value through the profit or loss account

(“FVTPL”):

– The asset is held within a business model whose objective is achieved by both collecting contractual cash ﬂows and selling financial assets

– The contractual terms of the financial asset give rise to cash ﬂows that are solely payments of principal and interest (“SPPI”) on the principal amount

outstanding on specified dates

Recognition and measurement

At initial recognition, the Group measures debt securities through other comprehensive income at fair value, plus the transaction costs that are directly

attributable to the acquisition of the financial asset. Debt securities at FVOCI are subsequently measured at fair value.

Impairment

At each reporting date, the Group assesses debt securities at FVOCI for impairment. Under IFRS 9 a “three-stage” model for calculated Expected Credit Losses

(“ECL”) is used, and is based on changes in credit quality since initial recognition. Refer to Note 4.6.

Notes to the Consolidated Financial Statements continued

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The Group’s debt securities held at fair value through other comprehensive income are summarised below:

2022 2021

£’k % holdings £’k % holdings

Government bonds 87,151 38 .1% 8 6 ,192 36.8%

Government-backed securities 80,753 35.2% 83,878 35.7%

Corporate bonds 61,254 26.7% 64,597 27. 5%

Total 229,158 100.0% 234,667 100.0%

4.2. Investment concentration risk

Excessive exposure to particular industry sectors or groups can give rise to concentration risk. The Group has no significant investment concentration in any

particular industrial sector and therefore is unlikely to suffer significant losses through its investment portfolio as a result of over-exposure to sectors engaged in

similar activities or which have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in

economic, political or other conditions.

A significant part of the Group’s investment portfolio consists primarily of UK government bonds and government-backed bonds, therefore the risk of government

default does exist, however the likelihood is extremely remote. The remainder of the portfolio consists of investment grade corporate bonds. The Group continues

to monitor the strength and security of all bonds. The Group does not have direct exposure to Ukrainian and Russian assets.

The Group’s exposure by geographical area is outlined below:

Government

bonds

Government-

backed

securities Corporate bonds Total

At 31 December 2022 £’k £’k £’k £’k % holdings

United Kingdom 87,151 101 25,942 113,194 49.4%

Europe (excluding UK) – 48,295 25,972 74,267 32.4%

North America – 32,357 9,340 41,697 18.2%

Total 87,151 80,753 61,254 229,158 100.0%

Government

bonds

Government-

backed securities Corporate bonds Total

At 31 December 2021 £’k £’k £’k £’k % holdings

United Kingdom 86,192 105 28,460 114,75 7 48.9%

Europe (excluding UK) – 55,786 26,446 82,232 35.0%

North America – 27,987 9,691 37,678 16.1%

Total 86,192 83,878 64,597 234,667 100.0%

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

4.1 Debt securities at fair value continued

4.1.1 Debt securities held at fair value through other comprehensive income continued

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The Group’s exposure by investment type for government-backed securities and corporate bonds is outlined below:

Agency Supranational Total

At 31 December 2022 £’k £’k £’k

Government-backed securities 37, 9 8 9 42,764 80,753

% of holdings 47.0% 53.0% 100.0%

Financial Industrial Utilities Total

At 31 December 2022 £’k £’k £’k £’k

Corporate bonds 31,229 28,121 1,904 61,254

% of holdings 51.0% 45.9% 3.1% 100.0%

Agency Supranational Total

At 31 December 2021 £’k £’k £’k

Government-backed securities 48,987 34,891 83,878

% of holdings 58.4% 41.6% 100.0%

Financial Industrial Utilities Total

At 31 December 2021 £’k £’k £’k £’k

Corporate bonds 30,642 31,863 2,092 64,597

% of holdings 47.5% 49.3% 3.2% 100.0%

4.3. Fair value

ACCOUNTING POLICY

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the

measurement date, or in its absence, the most advantageous market to which the Group has access at that date.

The Group measures the fair value of an instrument using the quoted bid price in an active market for that instrument. A market is regarded as active if

transactions for the asset take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. A market is regarded

as active if quoted prices are readily and regularly available from the stock exchange or pricing service, and those prices represent actual and regularly occurring

market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing bid price.

Fair value measurements are based on observable and unobservable inputs. Observable inputs reﬂect market data obtained from independent sources, while

unobservable inputs reﬂect the Group’s view of market assumptions in the absence of observable market information.

IFRS 13 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value using a fair value hierarchy that

reﬂects the significance of the inputs used in making the fair value measurement.

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

4.2. Investment concentration risk continued

Investment concentration – by area

United Kingdom 49.4%

Europe (excluding UK)

32.4%

North America

18.2%

Investment concentration – by type

Government bonds 38.1%

Government-backed securities

35.2%

Corporate bonds

26.7%

Corporate bonds – by industry

Financial 51.0%

Industrial

45.9%

Utilities

3.1%

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Disclosure of fair value measurements by level is according to the following fair value measurement hierarchy:

– Level 1: fair value is based on quoted market prices (unadjusted) in active markets for identical instruments as measured on reporting date

– Level 2: fair value is determined through inputs, other than quoted prices included in Level 1 that are observable for the assets and liabilities, either directly

(prices) or indirectly (derived from prices)

– Level 3: fair value is determined through valuation techniques which use significant unobservable inputs

Level 1

The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. A market is regarded as

active if quoted prices are readily and regularly available from the stock exchange or pricing service, and those prices represent actual and regularly occurring market

transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing bid price. These instruments are included in

Level 1 and comprise only debt securities classified as fair value through other comprehensive income.

Level 2

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the

use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant input required to fair value an instrument

is observable, the instrument is included in Level 2. The Group has no Level 2 financial instruments.

Level 3

If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3. The Group has no Level 3 financial

instruments.

The following table summarises the classification of financial instruments:

Level 1 Level 2 Level 3 Total

As at 31 December 2022 £’k £’k £’k £’k

Assets held at fair value

Financial investments 229,158 – – 229,158

Total 229,158 – – 229,158

Level 1 Level 2 Level 3 Total

As at 31 December 2021 £’k £’k £’k £’k

Assets held at fair value

Financial investments 234,667 – – 234,667

Total 234,667 – – 234,667

Transfers between levels

There have been no transfers between levels during the year (2021: no transfers).

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

4.3. Fair value continued

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4.4. Loans and receivables

ACCOUNTING POLICY

Classication

The Group classifies its loans and receivables as at amortised cost only if both of the following criteria are met:

– The asset is held within a business model whose objective is to collect the contractual cash ﬂows

– The contractual terms give rise to cash ﬂows that are solely payments of principle and interest

Recognition and measurement

Loans and receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for

expected credit losses.

Impairment

The Group measures loss allowances at an amount equal to lifetime ECL. To measure the expected credit losses, loans and receivables have been grouped

based on shared credit risk characteristics and the days past due to create the categories namely performing, underperforming and not performing. The

expected loss rates are based on the payment profiles of receivables over a period of 36 months before year end. The loss rates are adjusted to reﬂect current

and forward-looking information on macro-economic factors, such as the socio-economic environment affecting the ability of the debtors to settle the

receivables. Receivables that are 30 days or more past due are considered to be ‘not performing’ and the default rebuttable presumption of 90 days prescribed

by IFRS 9 is not applied.

Performing

Customers have a low risk of default and a strong capacity to meet contractual cash ﬂows.

Underperforming

Loans for which there is a significant increase in credit risk. A significant increase in credit risk is presumed if interest and/or principal repayments are past due.

Not performing

Interest and/or principal repayments are 30 days past due.

The Group’s loans and receivables comprises of:

2022 2021

£’k £’k

Other debtors 7 76

Provision for expected credit losses – (2)

Total 7 74

The estimated fair values of loans and receivables are the discounted amounts of the estimated future cash ﬂows expected to be received.

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

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The carrying value of loans and receivables approximates fair value. Provision for expected credit losses are based on the recoverability of the individual loans and

receivables.

ECL

rate ECL method Gross

Provision

opening

balance

(Released)/

raised in the

period

Provision closing

balance Net

At 31 December 2022 % £’k £’k £’k £’k £’k £’k

Performing 2.5% Lifetime 7 (2) 2 – 7

Underperforming 25.0% Lifetime – – – – –

Not performing 50.0% Lifetime – – – – –

Total 7 (2) 2 – 7

ECL

rate ECL method Gross

Provision opening

balance

(Released)/

raised in the

period

Provision closing

balance Net

At 31 December 2021 % £’k £’k £’k £’k £’k £’k

Performing 2.5% Lifetime 76 (2) – (2) 74

Underperforming 25.0% Lifetime – – – – –

Not performing 50.0% Lifetime – – – – –

Total 76 (2) – (2) 74

The forward-looking information considered was deemed to have an immaterial impact on expected credit losses.

4.5. Cash and cash equivalents

ACCOUNTING POLICY – CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits held on call with banks and money market funds. Cash and cash equivalents are carried at amortised cost.

2022 2021

£’k £’k

Cash and cash equivalents 18,502 3 0,611

Total 18,502 3 0,611

Cash and cash equivalents include money market funds with no notice period for withdrawal.

The carrying value of cash and cash equivalents approximates fair value. The full value is expected to be realised within 12 months.

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

4.4. Loans and receivables continued

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4.6. Credit risk

ACCOUNTING POLICY

Impairment of nancial assets

At each reporting date, the Group assesses financial assets measured at amortised cost and debt securities at FVOCI for impairment. Under IFRS 9 a ‘three-

stage’ model for calculated Expected Credit Losses (“ECL”) is used, and is based on changes in credit quality since initial recognition as summarised below:

Performing nancial assets

– Stage 1: From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial

recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the earlier of the next 12

months or its maturity date (“12-month ECL”).

– Stage 2: Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the

credit losses expected from all possible default events over the remaining lifetime of the asset (“Lifetime ECL”). The assessment of whether there has been a

significant increase in credit risk, such as an actual or significant change in instruments external credit rating; significant widening of credit spread; changes in

rates or terms of instrument; existing or forecast adverse change in business, financial or economic conditions that are expected to cause a significant change

in the counterparty’s ability to meet its debt obligations; requires considerable judgement, based on the lifetime probability of default (“PD”). Stage 1 and 2

allowances are held against performing loans; the main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are

estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset.

Impaired nancial assets

– Stage 3: When a financial asset is considered to be credit-impaired, the allowance for credit losses (“ACL”) continues to represent lifetime expected credit

losses, however, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount.

Application of the impairment model

The Group applies IFRS 9’s ECL model to two main types of financial assets that are measured at amortised cost or FVOCI:

Other receivables, to which the simplified approach prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one.

Debt securities, to which the general three-stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is

monitored for significant increases in credit risk which triggers the recognition of a Lifetime ECL allowance.

ECLs are a probability-weighted estimate of credit losses. The probability is determined by the estimated risk of default which is applied to the cash ﬂow

estimates. On a significant increase in credit risk, from investment grade to non-investment grade, allowances are recognised without a change in the expected

cash ﬂows (although typically expected cash ﬂows do also change) and expected credit losses are rebased from 12-month to lifetime expectations.

The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and

economic conditions.

Presentation of impairment

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the

loss allowance is recognised in the profit or loss account and accounted for as a transfer from OCI to profit or loss, instead of reducing the carrying amount of

the asset.

Write-offs

Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of the amount being recovered. This is generally the case

when the Group concludes that the borrower does not have assets or sources of income that could generate sufficient cash ﬂows to repay the amounts subject

to the write-off.

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

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Exposure by credit rating

AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total

At 31 December 2022 £’k £’k £’k £’k £’k £’k £’k

UK Government bonds – 8 7,151 – – – – 87,151

Government-backed securities 80,031 722 – – – – 80,753

Corporate bonds – 2,839 41,235 17,180 – – 61,254

Loans and other receivables – – – – – 7 7

Cash and cash equivalents 5,340 52 13,110 – – – 18,502

Total 85,371 90,764 54,345 17,180 – 7 247,667

AAA AA+ to AA- A+ to A- BBB+ to BBB- BB+ and below Not rated Total

At 31 December 2021 £’k £’k £’k £’k £’k £’k £’k

UK Government bonds – 86,192 – – – – 86,192

Government-backed securities 75,294 8,584 – – – – 83,878

Corporate bonds – 3,128 39,417 22,052 – – 64,597

Loans and other receivables – – – – – 74 74

Cash and cash equivalents 368 51 30,192 – – – 3 0,611

Total 75,662 97,9 5 5 69,609 22,052 – 74 265,352

With exception of loans and other receivables, all the Company’s financial assets are investment grade (AAA to BBB).

Analysis of credit risk and allowance for expected credit loss

The following table provides an overview of the allowance for ECL provided for on the types of financial assets held by the Group where credit risk is prevalent.

Gross carrying amount Allowance for ECL Net amount

At 31 December 2022 £’k £’k £’k

Government bonds 87,151 (3) 87,148

Government-backed securities 80,753 (2) 80,751

Corporate bonds 61,254 (27) 61,227

Loans and other receivables 7 – 7

Cash and cash equivalents 18,502 – 18,502

Total 247,667 (32) 247,6 3 5

Gross carrying amount Allowance for ECL Net amount

At 31 December 2021 £’k £’k £’k

Government bonds 86,192 (8) 86,184

Government-backed securities 83,878 (4) 83,874

Corporate bonds 64,597 (52) 64,545

Loans and other receivables 74 (2) 72

Cash and cash equivalents 30 ,611 – 3 0,611

Total 265,352 (66) 265,286

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

4.6. Credit risk continued

UK government bonds

AAA 0.0%

AA+ to AA-

100.0%

A+ to A-

0.0%

BBB+ to BBB- 0.0%

BB+ and below

0.0%

Not rated

0.0%

Government-backed securities

AAA 99.1%

AA+ to AA-

0.9%

A+ to A-

0.0%

BBB+ to BBB- 0.0%

BB+ and below

0.0%

Not rated

0.0%

Corporate bonds

AAA 0.0%

AA+ to AA-

4.6%

A+ to A-

67.3%

BBB+ to BBB- 28.1%

BB+ and below

0.0%

Not rated

0.0%

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4.7. Interest rate risk – financial assets

Interest rate risk is the risk that the value or future cash ﬂows of a financial instrument will ﬂuctuate because of changes in market interest rates. Floating rate

instruments expose the Group to cash ﬂow interest risk, whereas fixed interest rate instruments expose the Group to fair value interest risk. Currently the Group

holds only fixed rate securities.

The Group’s interest risk policy requires it to manage the maturities of interest-bearing financial assets and interest-bearing financial liabilities. Interest on fixed

interest rate instruments is priced at inception of the financial instrument and is fixed until maturity.

The Group has a concentration of interest rate risk in UK government bonds and other fixed-income securities.

The analysis that follows is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on profit

before tax and equity. The correlation of variables will have a significant effect in determining the ultimate impact on interest rate risk, but to demonstrate the impact

due to changes in variables, variables had to be changed on an individual basis. It should be noted that movements in these variables are non-linear.

Note that the Group’s investment portfolio has been designed such that the cash ﬂows yielded from investments match, as far as possible, the projected outﬂows

inherent primarily within the claims reserve.

The impact of any movement in market values, such as those caused by changes in interest rates, is taken through other comprehensive income and has no impact

on profit after tax.

Decrease Decrease

in profit aer tax in total equity

2022 2021 2022 2021

At 31 December £’k £’k £’k £’k

Interest rate

Impact of a 100-basis point increase in interest rates on financial investments – – (1,940) (3,861)

Impact of a 200-basis point increase in interest rates on financial investments – – (3,881) (5,781)

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

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4.8. Investment income

ACCOUNTING POLICY

Investment income from debt instruments classified as FVOCI are measured using the effective interest rate which allocates the interest income or interest

expense over the expected life of the asset or liability at the rate that exactly discounts all estimated future cash ﬂows to equal the instrument's initial carrying

amount. Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's yield, premiums or

discounts on acquisition or issue, early redemption fees and transaction costs. All contractual terms of a financial instrument are considered when estimating

future cash ﬂows.

2022 2021

£’k £’k

Interest income on financial assets using effective interest rate method

Interest income from debt securities 1,567 1,507

Investment fees (293) (308)

Interest income from cash and cash equivalents 100 11

Total 1,374 1,210

4.9. Net gains/(losses) from fair value adjustments on financial assets

ACCOUNTING POLICY

Movements in the fair value of debt instruments classified as FVOCI are taken through OCI. When the instruments are derecognised, the cumulative gain or

losses previously recognised in OCI is reclassified to profit or loss.

2022 2021

£’k £’k

Profit or loss

Realised fair value gains/(losses) on debt securities 22 (16)

Realised fair value gains/(losses) on debt securities reclassified to profit or loss 22 (16)

Other comprehensive income

Unrealised fair value losses on debt securities (14,175) (5,674)

Movement in expected credit loss (32) 16

Unrealised fair value losses on debt securities through other comprehensive income (14,207) (5,658)

Net losses from fair value adjustments on financial assets (14,185) (5,674)

Notes to the Consolidated Financial Statements continued

4. FINANCIAL ASSETS continued

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5. OTHER LIABILITIES

The Group’s other liabilities are summarised below:

2022 2021

Notes £’k £’k

Other liabilities at amortised cost

Lease liabilities 5.1 – 193

Trade and other payables, excluding insurance payables 5.3 5,005 5,831

Total 5,005 6,024

5.1. Lease liability

2022 2021

£’k £’k

As at the beginning of the year 193 194

Cash movements

Lease payments (198) (264)

Non-cash movements

Lease extension during the year – 247

Interest 5 16

As at 31 December – 193

Current – 193

Non-current – –

5.2. Finance costs

ACCOUNTING POLICY

Finance costs are recognised using the effective interest method.

2022 2021

£’k £’k

Interest on lease liabilities 5 16

Total 5 16

Notes to the Consolidated Financial Statements continued

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5.3. Trade and other payables, excluding insurance payables

ACCOUNTING POLICY

Trade and other payables are recognised when the Group has a contractual obligation to deliver cash or another financial asset to another entity, or a contractual

obligation to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity. Trade and other

payables are carried at amortised cost.

2022 2021

£’k £’k

Trade and other creditors 657 321

Other taxes 4,348 5,510

Total 5,005 5,831

6. LIQUIDITY RISK

Liquidity risk is the potential that obligations cannot be met as they fall due as a consequence of having a timing mismatch or inability to raise sufficient liquid assets

without suffering a substantial loss on realisation. The Group manages its liquidity risk through both ensuring that it holds sufficient cash and cash equivalent assets

to meet all short-term liabilities and matching, as far as possible, the maturity profile of its financial investments to the expected cash outﬂows.

The liquidity of the Group’s insurance and financial liabilities and supporting assets is given in the tables below:

Total Within 1 year 1–2 years 3–4 years 5–10 years Over 10 years

At 31 December 2022 £’k £’k £’k £’k £’k £’k

Reinsurance assets, excluding UPR

(1)

106,343 31,936 26,290 25,330 22,787 –

Government bonds 87,151 14,463 26,470 38,992 7,226 –

Government-backed securities 80,753 5,119 69,693 5,941 – –

Corporate bonds 61,254 4,426 44,514 12,314 – –

Insurance receivables 31,427 31,427 – – – –

Loans and other receivables 7 7 – – – –

Cash and cash equivalents

(2)

18,502 18,502 – – – –

Total 385,437 105,880 166,967 82,577 30,013 –

Total Within 1 year 1–2 years 3–4 years 5–10 years Over 10 years

At 31 December 2022 £’k £’k £’k £’k £’k £’k

Insurance liabilities, excluding UPR

(1)

257,4 4 3 106,486 77,890 44,025 29,042 –

Insurance payable 5,981 5,981 – – – –

Trade and other payables 5,005 5,005 – – – –

Total 268,429 117,472 77,890 44,025 29,042 –

Management have considered the liquidity and cash generation of the Group and are satisfied that the Group will be able to meet all liabilities as they fall due.

(1) Unearned premiums are excluded as there are no liquidity risks inherent in them.

(2) Includes money market funds with no notice period for withdrawal.

Notes to the Consolidated Financial Statements continued

5. FINANCIAL LIABILITIES continued

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Total Within 1 year 1–2 years 3–4 years 5 –10 years Over 10 years

At 31 December 2021 £’k £’k £’k £’k £’k £’k

Reinsurance assets, excluding UPR

(1)

103,628 43,546 34,496 18,393 7,19 3 –

UK Government bonds 86,192 27,313 22,845 35,001 1,033 –

Government-backed securities 83,878 8,479 64,752 10,647 – –

Corporate bonds 64,597 2,203 14,034 48,360 – –

Insurance receivables 38,003 38,003 – – – –

Loans and other receivables 74 74 – – – –

Cash and cash equivalents

(2)

30,611 30,611 – – – –

Total 406,983 150,229 136,127 112,4 01 8,226 –

Total Within 1 year 1–2 years 3–4 years 5 –10 years Over 10 years

At 31 December 2021 £’k £’k £’k £’k £’k £’k

Insurance liabilities, excluding UPR

(1)

232,516 112,975 75,661 32,848 11,0 32 –

Insurance payables 7,115 7,115 – – – –

Lease liabilities 193 193 – – – –

Trade and other payables 5,831 5,831 – – – –

Total 245,655 126,114 75,661 32,848 11,0 3 2 –

(1) Unearned premiums are excluded as there are no liquidity risks inherent in them.

(2) Includes money market funds with no notice period for withdrawal.

7. OTHER OPERATING INCOME

ACCOUNTING POLICY

Other operating income consists of marketing fees, commissions resulting from the sale of ancillary products connected to the Group’s direct business, and

other non-insurance income such as administrative fees charged on direct business. Such income is recognised once the related service has been performed.

Typically, this will be at the point of sale of the product.

2022 2021

£’k £’k

Marketing fees 384 463

Fee income from the sale of auxiliary products and services 261 196

Administration fees 1,139 1,439

Total 1,784 2,098

Notes to the Consolidated Financial Statements continued

6. LIQUIDITY RISK continued

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8. OPERATING EXPENSES

2022 2021

Notes £’k £’k

Employee expenses 8.1 12,536 12,338

Property expenses 428 331

IT expense including IT depreciation 5,043 5,125

Other depreciation 17 33

Industry levies 5,913 5,000

Policy servicing costs 2,164 2,282

Other operating expenses 2,665 2,189

Expected credit loss on financial assets (34) 16

Before adjustments for deferred acquisition costs and claims handling expenses 28,732 27, 314

Adjusted for:

Claims handling expense reclassification (7,613) (6,767)

Movement in deferred acquisition costs 83 939

Total operating expenses 21,202 21,486

8.1. Employee expenses

ACCOUNTING POLICY

A. Pensions

For staff who were employees on 8 February 2002, the Group operates a non-contributory defined contribution Group personal pension scheme. The

contribution by the Group depends on the age of the employee.

For employees joining since 8 February 2002, the Group operates a matched contribution Group personal pension scheme where the Group contributes an

amount matching the contribution made by the staff member.

Contributions to defined contribution schemes are recognised in the profit or loss account in the period in which they become payable.

B. Share-based payments

The fair value of equity instruments granted under share-based payment plans are recognised as an expense and spread over the vesting period of the

instrument. The total amount to be expensed is determined by reference to the fair value of the awards made at the grant date, excluding the impact of any

non-market vesting conditions. Depending on the plan, the fair value of equity instruments granted is measured on grant date using an appropriate valuation

model or the market price on grant date. At the date of each statement of financial position, the Group revises its estimate of the number of equity instruments

that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the profit or loss account, and a corresponding

adjustment is made to equity over the remaining vesting period. The fair value of the awards and ultimate expense are not adjusted on a change in market

vesting conditions during the vesting period.

C. Leave pay

Employee entitlement to annual leave is recognised when it accrues to employees. An accrual is made for the estimated liability for annual leave as a result of

services rendered by employees up to the statement of financial position date.

Notes to the Consolidated Financial Statements continued

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Governance Financials

The aggregate remuneration of those employed by the Group’s operations comprised:

2022 2021

£’k £’k

Wages and salaries 8,988 9,417

Issue of share-based payments 1,603 1,075

Social security expenses 1,213 1,19 3

Pension expenses 508 475

Other staff expenses 224 178

Before adjustments for deferred acquisition costs and claims handling expenses 12,536 12,338

Adjusted for:

Claims handling expense reclassification (5,860) (5,239)

Movement in deferred acquisition costs 92 535

Employee expenses 6,768 7,63 4

8.2. Number of employees

The table below analyses the average monthly number of persons employed by the Group’s operations.

2022 2021

Operations 123 124

Support 28 30

Total 151 154

8.3. Directors’ remuneration

Amounts paid to Directors are disclosed within the “Annual Report on Director’s Remuneration” on pages 78 to 87.

8.4. Auditors’ remuneration

The table below analyses the Auditor’s remuneration in respect of the Group’s operations.

2022 2021

£’k £’k

Audit of these financial statements 180 124

Audit of financial statements of subsidiaries of the Group 175 255

Audit fees in relation to IFRS 17 transition 85 –

Total audit fees 440 379

Fees for non-audit services – Audit-related assurance services 79 80

Fees for non-audit services – Other non-audit services – –

Total non-audit fees 79 80

Total auditor remuneration 519 459

The above fees exclude irrecoverable VAT of 20%.

Notes to the Consolidated Financial Statements continued

8. OPERATING EXPENSES continued

8.1. Employee expenses continued

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9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of owned and leased assets that do not meet the definition of investment property.

2022 2021

£’k £’k

Property, plant and equipment – owned 3,996 4,066

Property, plant and equipment – leased (Right-of-use assets) – 187

Total 3,996 4,253

9.1. Owned assets

ACCOUNTING POLICY

A. Owner-occupied property

Owner-occupied properties are held by the Group for use in the supply of services or, for its own administration purposes.

Owner-occupied property is held at fair value. Increases in the carrying amount of owner-occupied properties as a result of revaluations are credited to other

comprehensive income and accumulated in a revaluation reserve in equity. To the extent that a revaluation increase reverses a revaluation decrease that was

previously recognised as an expense in profit or loss, such increase is credited to income in profit or loss. Decreases in valuation are charged to profit or loss, except

to the extent that a decrease reverses the existing accumulated revaluation reserve and therefore such a decrease is recognised in other comprehensive income.

A fair value assessment of the owner-occupied property is undertaken at each reporting date with any material changes in fair value recognised. Valuation is at

highest and best use. Owner-occupied property is also revalued by an external qualified surveyor, at least every three years. UK properties do not have frequent

and volatile fair value changes and as such, more frequent revaluations are considered unnecessary, as only insignificant changes in fair value is expected.

Owner-occupied land is not depreciated. As the depreciation of owner-occupied buildings is immaterial and properties are revalued every three years by an

external qualified surveyor, no depreciation is charged on owner-occupied buildings

B. Fixtures, ttings and computer equipment

Fixtures, fittings and computer equipment are stated at historical cost less accumulated depreciation and impairment charges. Historical cost includes

expenditure that is directly attributable to the acquisition of property and equipment.

Depreciation is calculated on the difference between the cost and residual value of the asset and is charged to the profit or loss account over the estimated

useful life of each significant part of an item of fixtures, fittings and computer equipment, using the straight-line basis.

Estimate useful lives are as follows:

Fixtures and fittings 5 years

Computer equipment 5 years

The assets’ residual values and useful lives are reviewed at each statement of financial position date and adjusted if appropriate. An asset’s carrying amount is

written down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are

determined by comparing the proceeds with the carrying amount of the assets and are included in profit or loss before tax.

Repairs and maintenance costs are charged to the profit or loss account during the financial period in which they are incurred. The cost of major renovations is

included in the carrying amount of the asset when it is probable that future economic benefits from the renovations will ﬂow to the Group.

Notes to the Consolidated Financial Statements continued

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Owner-

occupied

Fixtures and

fittings

Computer

equipment Total

£’k £’k £’k £’k

Cost/Valuation

At 1 January 2022 4,250 240 848 5,338

Additions – 27 11 38

Disposals – (226) (450) (676)

Revaluation – – – –

At 31 December 2022 4,250 41 409 4,700

Accumulated depreciation and impairment

At 1 January 2022 425 218 629 1,272

Depreciation charge for the year – 17 91 108

Disposals – (226) (450) (676)

Impairment losses on revaluation – – – –

At 31 December 2022 425 9 270 704

Carrying amount

As at 31 December 2022 3,825 32 139 3,996

All items disposed where either donated to charity or recycled at £NIL.

Owner-occupied

Fixtures and

fittings

Computer

equipment Total

£’k £’k £’k £’k

Cost/Valuation

At 1 January 2021 4,250 235 825 5,310

Additions – 5 23 28

Disposals – – – –

Revaluation – – – –

At 31 December 2021 4,250 240 848 5,338

Accumulated depreciation and impairment

At 1 January 2021 425 185 526 1,136

Depreciation charge for the year – 33 103 136

Disposals – – – –

Impairment losses on revaluation – – – –

At 31 December 2021 425 218 629 1,272

Carrying amount

As at 31 December 2021 3,825 22 219 4,066

Notes to the Consolidated Financial Statements continued

9. PROPERTY, PLANT AND EQUIPMENT continued

9.1. Owned assets continued

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Governance Financials

The Group holds two owner-occupied properties, Sabre House and The Old House, which are both managed by the Group. In accordance with the Group’s

accounting policies, owner-occupied buildings are not depreciated. The properties are measured at fair value which is arrived at on the basis of a valuation carried

out on 1 December 2020 by Hurst Warne and Partners LLP. The valuation was carried out on an open-market basis in accordance with the Royal Institution of

Chartered Surveyors’ requirements, which is deemed to equate to fair value. While transaction evidence underpins the valuation process, the definition of market

value, including the commentary, in practice requires the valuer to reﬂect the realities of the current market. In this context valuers must use their market

knowledge and professional judgement and not rely only upon historical market sentiment based on historical transactional comparables.

The fair value of the owner-occupied properties was derived using the investment method supported by comparable evidence. The significant non-observable

inputs used in the valuations are the expected rental values per square foot and the capitalisation rates. The fair value of the owner-occupied properties valuation

would increase (decrease) if the expected rental values per square foot were to be higher (lower) and the capitalisation rates were to be lower (higher).

Management has performed a fair value assessment of the owner-occupied property which includes a review of current market rental costs. Expected rental costs

per square foot are above the rates as at the date of the last external valuation and do not indicate a decrease in the fair value of the owner-occupied property.

The fair value measurement of owner-occupied properties of £3,825k (2021: £3,825k) has been categorised as a Level 3 fair value based on the non-observable

inputs to the valuation technique used.

The following table shows reconciliation to the closing fair value for the Level 3 owner-occupied property at valuation:

2022 2021

Owner-occupied £’k £’k

At 1 January 3,825 3,825

Revaluation losses – –

Impairment losses – –

At 31 December 3,825 3,825

The fair value of owner-occupied includes a revaluation reserve of £800k (2021: £800k) (excluding tax impact) and is not distributable.

Revaluation losses are charged against the related revaluation reserve to the extent that the decrease does not exceed the amount held in the revaluation surplus in

respect of the same asset. Any additional losses are charged as an impairment loss in the profit or loss account. Reversal of such impairment losses in future

periods will be credited to the profit or loss account to the extent losses were previously charged to the profit or loss account.

The table below shows the impact a 15% decrease in property markets will have on the Company’s profit after tax and equity:

At 31 December

Decrease

in profit aer tax

Decrease

in total equity

2022

£'k

2021

£'k

2022

£'k

2021

£'k

Owner-occupied property

Impact of a 15% decrease in property markets (131) (131) (465) (465)

Historical cost model values

If owner-occupied properties were carried under the cost model (historical costs, less accumulated depreciation and impairment losses), the value of owner-

occupied properties in the balance sheet would have been £2,816k (2021: £2,845k).

Notes to the Consolidated Financial Statements continued

9. PROPERTY, PLANT AND EQUIPMENT continued

9.1. Owned assets continued

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9.2. Leased assets

ACCOUNTING POLICY

Right-of-use assets

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which

comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs

incurred and an estimate of costs to dismantle and remove the underlying assets or to restore the underlying asset or the site on which it is located, less any

lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the

right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as property and equipment.

In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate

implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise the following:

– Fixed payments, including in-substance fixed payments

– Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date

– Amounts expected to be payable under a residual value guarantee

– The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is

reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising

from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the

Group changes its assessment of whether it will exercise a purchase, extension or termination option.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less

and leases of low-value assets, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line

basis over the lease term.

Notes to the Consolidated Financial Statements continued

9. PROPERTY, PLANT AND EQUIPMENT continued

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Right-of-use assets

Additional information on the right-of-use assets by class of assets is as follows:

Computer

equipment Total

£’k £’k

As at 1 January 2022 187 187

Additions – –

Depreciation (187) (187)

As at 31 December 2022 – –

The Group’s right-of-use asset has expired during 2022 and no new lease for IT equipment has been entered into. The right-of-use asset has therefore been

derecognised.

Computer

equipment Total

£’k £’k

As at 1 January 2021 189 189

Additions 247 247

Depreciation (249) (249)

As at 31 December 2021 187 187

Lease liabilities

Lease liabilities are presented in the statement of financial position as follows:

2022 2021

£’k £’k

As at 1 January 193 194

Additions – 247

Accretion of interest 5 16

Payments (198) (264)

As at 31 December – 193

Current – 193

Non-current – –

Notes to the Consolidated Financial Statements continued

9. PROPERTY, PLANT AND EQUIPMENT continued

9.2. Leased assets continued

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Governance Financials

The following are the amounts recognised in the profit or loss account:

2022 2021

£’k £’k

Depreciation expense of right-of-use assets 187 249

Interest expense on lease liabilities 5 16

Expenses relating to short-term leases (included in IT expenses) – –

Expenses relating to low-value assets (included in other operating expenses) 14 14

Variable lease payments – –

Total 206 279

The Group had total cash outﬂows for leases of £212k in 2022 (2021: £278k). The Group had no non-cash additions to right-of-use assets or lease liabilities. The

lease contract expired during 2022.

10. TAX CHARGE

ACCOUNTING POLICY

The taxation charge in the profit or loss account is based on the taxable profits for the year. It is Group policy to relieve profits where possible by the surrender of

losses from Group companies with payment for value.

2022 2021

£’k £’k

Current taxation

Charge for the year 2,644 6,935

2,644 6,935

Deferred taxation (Note 11)

Origination and reversal of temporary differences (1) 124

(1) 124

Current taxation 2,644 6,935

Deferred taxation (Note 11) (1) 124

Tax charge for the year 2,643 7,059

Notes to the Consolidated Financial Statements continued

9. PROPERTY, PLANT AND EQUIPMENT continued

9.2. Leased assets continued

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Governance Financials

Tax recorded in other comprehensive income is as follows:

 2022 2021

£’k £’k

Current taxation – –

Deferred taxation (3,563) (1,069)

(3,563) (1,069)

The actual income tax charge differs from the expected income tax charge computed by applying the standard rate of UK corporation tax of 19.00% (2021: 19.00%)

as follows:

2022 2021

£’k £’k

Profit before tax 12,750 37,199

Expected tax charge 2,423 7,0 6 8

Effect of:

Expenses not deductible for tax purposes 9 6

Adjustment of deferred tax to average rate of 23.5% (2) –

Other permanent difference – –

Adjustment in respect of prior periods 9 (99)

Income/loss not subject to UK taxation 6 8

Other Income Tax Adjustments 198 76

Tax charge for the year 2,643 7,059

Effective income tax rate 20.73% 18.98%

Notes to the Consolidated Financial Statements continued

10. TAX CHARGE continued

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11. DEFERRED TAX CHARGE

ACCOUNTING POLICY

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date where transactions or events

have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more, tax, with the following exception.

Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from

which the future reversal of the underlying timing differences can be deducted.

Provisions and

other temporary

dierences

Depreciation in

excess of capital

allowances

Share-based

Payments

Fair value

movements in

debt securities at

FVOCI Total

£’k £’k £’k £’k £’k

At 1 January 2021 21 (24) 347 (469) (125)

(Debit)/Credit to the profit or loss (2) (2) (114) (6) (124)

(Debit)/Credit to other comprehensive income – – – 1,069 1,069

At 31 December 2021 19 (26) 233 594 820

(Debit)/Credit to the profit or loss (19) 6 20 (6) 1

(Debit)/Credit to other comprehensive income – – – 3,563 3,563

At 31 December 2022 – (20) 253 4,151 4,384

2022 2021

£’k £’k

Per statement of financial position:

Deferred tax assets 4,404 846

Deferred tax liabilities (20) (26)

4,384 820

From 1 April 2023, The Finance Act 2021 increases the UK corporation tax from 19% to 25%. This means that for any temporary differences expected to reverse

on or after 1 April 2023, the new tax rate of 25% will be relevant. The Group has adjusted deferred tax balances accordingly. The impact of this adjustment on the

deferred tax balances is not material.

Notes to the Consolidated Financial Statements continued

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12. DIVIDENDS

ACCOUNTING POLICY

Dividend distribution to the Group’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividend is approved.

2022 2021

pence per share £’k pence per share £’k

Amounts recognised as distributions to equity holders in the period

Interim dividend for the current year 2.8 6,960 3.7 9,218

Final dividend for the prior year 9.3 23,172 11.7 29,168

12.1 30,132 15.4 38,386

Proposed dividends

Final dividend

(1)

1.7 4,250 9.3 23,250

(1) Subsequent to 31 December 2022, the Directors declared a final dividend for 2022 of 1.7p per ordinary share. This dividend will be accounted for as an appropriation of retained earnings in

the year ended 31 December 2022 and is not included as a liability in the Statement of Financial Position as at 31 December 2022.

The trustees of the employee share trusts waived their entitlement to dividends on shares held in the trusts to meet obligations arising on share incentive schemes,

which reduced the dividends paid for the year ended 31 December 2022 by £118k (2021: £114k).

13. PREPAYMENTS, ACCRUED INCOME AND OTHER ASSETS

2022 2021

£’k £’k

Prepayments and accrued income 1,278 821

Total 1,278 821

The carrying value of prepayments, accrued income and other assets approximates to fair value. There are no amounts expected to be recovered more than 12

months after the reporting date.

14. GOODWILL

ACCOUNTING POLICY

Goodwill has been recognised in acquisitions of subsidiaries and represents the difference between the cost of the acquisition and the fair value of the net

identifiable assets acquired. Goodwill is stated at cost less any accumulated impairment losses.

Impairment of goodwill

The Group perform an annual impairment review which involves comparing the carrying amount to the estimated recoverable amount and recognising an

impairment loss if the recoverable amount is lower than the carrying amount. Impairment losses are recognised through the profit or loss account and are not

subsequently reversed.

The recoverable amount is the greater of the fair value of the asset less costs to sell and the value in use.

The value in use calculations use cash ﬂow projections based on financial budgets approved by management.

Notes to the Consolidated Financial Statements continued

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Governance Financials

On 3 January 2014 the Group acquired Binomial Group Limited, the parent of Sabre Insurance Company Limited, for a consideration of £245,485k satisfied by cash.

As from 1 January 2014, the date of transition to IFRS, goodwill was no longer amortised but is subject to annual impairment testing. Impairment testing involves

comparing the carrying value of the net assets and goodwill against the recoverable amount.

The goodwill recorded in respect of this transaction at the date of acquisition was £156,279k. There has been no impairment to goodwill since this date, and no

additional goodwill has been recognised by the Group.

The Group performed its annual impairment test as at 31 December 2022 and 31 December 2021. The Company considers the relationship between the Group’s

market capitalisation and the book value of its subsidiary undertakings, among other factors, when reviewing for indicators of impairment.

Key assumptions

The market capitalisation of the Company as at 31 December 2022 had reduced to £266,000k from £459,500k at 31 December 2021. This provided an indication

that the underlying value had been impaired, and therefore the Directors carried out an impairment assessment based on the Cash Generating Units (“CGUs”)

within the Group.

The group has identified one CGU, for which goodwill has been fully allocated. The Group has assessed the recoverable amount of the CGU as its “value-in-use”.

Value-in-use is defined as the present value of the future cash ﬂows expected to derive from the CGU and represents the recoverable amount for the CGU.

We have used a dividend discount model to estimate the value-in-use, wherein dividend payments are discounted to the present value. Dividends have been

estimated, based on forecasted financial information, over a four-year forecast period with and terminal growth rate applied. The key assumptions used in the

preparation of future cash ﬂows are: plan-period financial performance, dividend payout ratio, long-term growth rates and discount rate.

The key assumptions used in the calculation for the value in use is set out below

– Plan period financial performance set in-line with the Group’s expectations

– Dividend payout ratio in line with the Group’s strategy

– Long-term growth rate beyond the plan period of 2%

– Discount rate of 9.5%, being a calculated cost of capital using market rate returns of Sabre and comparable insurers

These calculations use post-tax cash ﬂow projections based on the Group’s capital models. As the value-in-use exceeds the carrying amount, the recoverable

amount remains supportable.

The Group has conducted sensitivity testing to the recoverable amount, in order to understand the relevance of these various factors in arriving at the value in use.

– Dividend within the plan period – To assess the impact of reasonable changes in performance on our base case impairment analysis and headroom, we ﬂexed the

dividend within the plan period by +10% and -10%. In doing so, the value in use varied by approximately 10.0% around the central scenario.

– Long term growth rate – To assess the impact of reasonable changes in the long-term growth rate on our base case impairment analysis and headroom, we

ﬂexed the long-term growth rate by +1% and -1%. In doing so, the value in use varied by approximately 7.1% around the central scenario.

– Discount rate – To assess the impact of reasonable changes in the dividend payout ratio on our base case impairment analysis and headroom, we ﬂexed the

average discount rate by +2% and -2%. In doing so, the value in use varied by approximately 13.0% around the central scenario.

– When applying these stressed factors, no scenario suggested an impairment of goodwill would be required.

Notes to the Consolidated Financial Statements continued

14. GOODWILL continued

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15. SHARE CAPITAL

2022 2021

£’k £’k

Authorised share capital

250,000,000 ordinary shares of £0.001 each 250 250

Issued ordinary share capital (fully paid up):

250,000,000 ordinary shares of £0.001 each 250 250

All shares are unrestricted and carry equal voting rights.

As at 31 December 2022, The Sabre Insurance Group Employee Benefit Trust held 1,431,576 (2021: 866,855) of the 250,000,000 issued ordinary shares with a

nominal value of £1,431.58 (2021: £866.86) in connection with the operation of the Group’s share plans. Refer to Notes 16 and 17 for additional information on own

shares held.

16. SHARE-BASED PAYMENTS

The Group operates equity-settled share-based schemes for all employees in the form of a Long-Term Incentive Plan (“LTIP”), Deferred Bonus Plan (“DBP”) and

Share Incentive Plans (“SIP”), including Free Shares and Save As You Earn (“SAYE”). The shares are in the ultimate parent company, Sabre Insurance Group plc.

Free shares donated at listing Shares bought/(sold) on open market Total

Number of shares

Average

price

(pence) £ Number of shares

Average

price

(pence) £ £

As at 31 December 2020 63,031 0.001 63 541,208 275.975 1,493,601 1,493,664

Shares purchased – – – 928,186 256.295 2,378,897 2,378,897

Shares disposed – – – (176,672) 255.443 (451,296) (451,296)

Shares vested (39,901) 0.001 (40) (448,997) 259.367 (1,164,550) (1,164,590)

As at 31 December 2021 2 3,130 0.001 23 843,725 267.46 3 2,256,652 2,256,675

Shares purchased – – – 807,981 141.293 1,141,621 1,141,621

Shares disposed – – – – – – –

Shares vested (23,130) – (23) (220,130) 267.4 6 3 (588,766) (588,789)

As at 31 December 2022 – – – 1,431,576 196.253 2,809,507 2,809,507

In thousands £’k £’k £’k

As at 31 December 2021 – 2,257 2,257

As at 31 December 2022 – 2,810 2,810

As at 31 December 2022 there were NIL (2021: NIL) exercisable shares outstanding.

The Group recognised a total expense in the profit or loss for the year ended 31 December 2022 of £1,603k (2021: £1,075k), relating to equity-settled share-based

plans.

Notes to the Consolidated Financial Statements continued

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Long-Term Incentive Plan (“LTIP”)

The LTIP is a discretionary share plan, under which the Board may grant share-based awards (“LTIP Awards”) to incentivise and retain eligible employees.

LTIP Awards – Awards with performance conditions

The LTIP with performance conditions is a discretionary share plan, under which the Board may grant share-based awards (“LTIP Awards”) to incentivise and retain

eligible employees. The vesting of LTIP Awards may (and, in the case of an LTIP Award to an Executive Director other than a Recruitment Award, will) be subject to

the satisfaction of performance conditions. Any performance condition may be amended or substituted if one or more events occur which cause the Board to

consider that an amended or substituted performance condition would be more appropriate and would not be materially less difficult to satisfy.

LTIP Awards which are subject to performance conditions will normally have those conditions assessed as soon as reasonably practicable after the end of the

relevant performance period and, to the extent that the performance conditions have been met, the LTIP Awards will vest either on that date or such later date as

the Board determines. LTIP Awards (other than Recruitment Awards) granted to the Executive Directors will normally be subject to a performance period of at least

three years. LTIP Awards (other than Recruitment Awards) which are not subject to performance conditions will normally vest on the third anniversary of the date of

grant or such other date as the Board determines.

The LTIP Awards issued by the Group for 2020 has two performance metrics with a 50%/50% weighting, being Total Shareholder Return (“TSR”) and Earnings Per

Share (“EPS”).

The Group’s TSR is compared to the TSR of the constituents of the FTSE 250 Index (excluding investment trusts and extractive industries). The TSR tranche will

vest in accordance with the following schedule:

2020LTIP grantTSR performance

Below median 0%

Median (Threshold) 25%

Between median and upper quartile Straight-line

Upper quartile (Stretch) 100%

The Group’s EPS performance is the Groups cumulative EPS over the performance period.

2020LTIP grantEPS performance

Below 48.6p 0%

48.6p (Threshold) 25%

Between threshold and target Straight-line

54.0 (Target) 60%

Between target and stretch Straight-line

66.7p or higher (Stretch) 100%

Notes to the Consolidated Financial Statements continued

16. SHARE-BASED PAYMENTS continued

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Shares granted under the 2019 LTIP did not meet the required performance measures and shares granted under the plan were forfeited in 2022.

The following table lists the inputs to the model used to value the remaining LTIP plan for the year ended 31 December 2022. The TSR fair value of the award

granted is measured using the Monte Carlo method and the Black-Scholes model is used for the EPS fair value. The amount recognised as an expense under

IFRS2 is adjusted to reﬂect the actual number of share awards that vest.

2020 LTIP grant

Weighted average fair value per award at grant date 226 pence

Share price at grant date 282 pence

Expected term 4.43 years

Expected volatility

(1)

30.09%

Expected exercise price on outstanding awards NIL

Grant-date TSR performance of the Group (2.73%)

Average risk – free interest rate 0.10%

(1) Volatility has been estimated using the historical daily average volatility of the share price of similar companies to Sabre over a period of time. This assumption has no impact on the fair value

of the EPS tranche, as the Awards were granted with a nil-cost exercise price.

Shares granted under the LTIP with performance conditions have a three-year vesting period. The Leadership Team Awards are subject to a two-year post-vesting

holding period. To reﬂect the lack of liquidity of the two-year holding period, a discount rate of 15.40% for the 2020 LTIP grant has been applied in determining the

fair value of the grant to the Leadership Team.

Notes to the Consolidated Financial Statements continued

16. SHARE-BASED PAYMENTS continued

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The tables below detail the movement in the LTIP:

LTIP with performance conditions

Number and WAEP

Number £

Outstanding at 1 January 2022 1,149, 3 5 9 NIL

Granted – NIL

Forfeited (541,079) NIL

Vested – NIL

Outstanding at 31 December 2022 608,280 NIL

(1) Weighted average exercise price – as a proxy for fair value.

LTIP with performance conditions

Number and WAEP

Number £

Outstanding at 1 January 2021 1, 9 3 5,124 NIL

Granted – NIL

Forfeited (499,442) NIL

Vested (286,323) NIL

Outstanding at 31 December 2021 1,149,359 NIL

LTIP Awards – Restricted Share Awards (“RSA”)

From 2021 the Group no longer issues awards under the LTIP Awards with performance conditions, but instead issues RSAs.

The RSAs are structured as nil-cost rewards, to receive free shares on vesting. Shares will normally vest three years after grant date, subject to continued

employment and the satisfaction of pre-determined underpins. Awards are also subject to an additional two-year holding period, so that the total time prior to any

potential share sale (except to meet any tax liabilities arising from the award) will generally be five years.

The total number of shares awarded under the scheme was 540,574 (2021: 441,684) with an estimated fair value at grant date of £1,238k (2021: £1,170k). The fair

value is based on the average closing share price of the five trading days before the grant date.

The awards granted during the year ended 31 December 2022 are subject to the following underpins:

– Maintaining a solvency ratio in excess of 140%

– Achieving a Return of Tangible Equity in excess of 10%

– No material regulatory censure

– Overall Committee discretion

Future dividends are accrued separately and are not reﬂected in the fair value of the grant.

Notes to the Consolidated Financial Statements continued

16. SHARE-BASED PAYMENTS continued

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Notes to the Consolidated Financial Statements continued

16. SHARE-BASED PAYMENTS continued

Deferred Bonus Plan (“DBP”)

To encourage behaviour which does not benefit short-term profitability over longer-term value. Directors and some key staff were awarded shares in lieu of a bonus, to be

deferred for two years, using the market value at the grant date. The total numbers of shares awarded under the scheme was 171,234 (2021: 278,084) with an estimate fair

value of £404k (2021: £672k). Of this award, the number of shares awarded to Directors and Persons Discharging Managerial Responsibilities (“PDMRs”) was 144,659

(2021: 247,007) with an estimated fair value of £341k (2021: £597k). Fair values are based on the share price at grant date. All shares are subject to a two-year service

period and are not subject to performance conditions.

Future dividends are accrued separately and are not reﬂected in the fair value of the grant.

The DBP is recognised in the profit or loss account on a straight-line basis over a period of two years from grant date.

Share Incentive Plans (“SIPs”)

The Sabre Share Incentive Plans provide for the award of free Sabre Insurance Group plc shares, Partnership Shares (shares bought by employees under the

matching scheme), Matching Shares (free shares given by the employer to match partnership shares) and Dividend Shares (shares bought for employees with

proceeds of dividends from partnership shares). The shares are owned by the Employee Benefit Trust to satisfy awards under the plans. These shares are either

purchased on the market and carried at fair value or issued by the parent company to the trust.

Matching Shares

The Group has a Matching Shares scheme under which employees are entitled to invest between £10 and £150 each month through the share trust from their

pre-tax pay. The Group supplements the number of shares purchased by giving employees 1 free matching share for every 3 shares purchased up to £1,800.

Matching shares are subject to a three-year service period before the matching shares are awarded. Dividends are paid on shares, including matching shares, held

in the trust by means of dividends shares. The fair value of such awards is estimated to be the market value of the awards on grant date.

In the year ended 31 December 2022, 12,317 (2021: 6,987) matching shares were granted to employees with an estimated fair value of £13k (2021: £13k).

As at 31 December 2022, 28,826 (2021: 16,838) matching shares were held on behalf of employees with an estimated fair value of £31k (2021: £31k). The average

unexpired life of Matching Share awards is 1.5 years (2021: 1.1 years).

Save as You Earn (“SAYE”)

The SAYE scheme allows employees to enter into a regular savings contract of between £5 and £500 per month over a three-year period, coupled with a

corresponding option over shares. The grant price is equal to 80% of the quoted market price of the shares on the invitation date. The participants of the SAYE

scheme are not entitled to dividends and therefore dividends are excluded from the valuation of the SAYE scheme.

Estimated fair value of options at grant date:

SAYE 2020: 71p

SAYE 2021: 55p

SAYE 2022: 40p

The following table lists the inputs to the Black-Scholes model used to value the awards granted in respect of the 2022 SAYE scheme.

2022 SAYE

Share price at grant date 216 pence

Expected term 3 years

Expected volatility

(1)

31.0%

Continuously compounded risk-free rate 1.5%

Continuously compounded dividend yield 6%

Strike price at grant date 181.3 pence

(1) Volatility has been estimated using the historical daily average volatility of the share price of the Group for the year immediately preceding the grant date.

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17. RESERVES

Own shares

Sabre Insurance Group plc established an Employee Benefit Trust (“EBT”) in 2017 in connection with the operation of its share plans. The investment in own shares

as at 31 December 2022 was £2,810k (2021: £2,257k). The market value of the shares in the EBT as at 31 December 2022 was £1,523k (2021: £1,593k).

Merger reserve

Sabre Insurance Group plc was incorporated as a limited company on 21 September 2017. On 11 December 2017, immediately prior to the Company’s listing on the

London Stock Exchange, Sabre Insurance Group plc acquired the entire share capital of the former ultimate parent company of the Group, Barbados TopCo Limited

(“TopCo”). As a result, Sabre Insurance Group plc became the ultimate parent of the Sabre Insurance Group. The merger reserve resulted from this corporate

reorganisation.

FVOCI reserve

The FVOCI reserve records the unrealised gains and losses arising from changes in the fair value of debt securities at FVOCI. The movements in this reserve are

detailed in the consolidated Statement of Comprehensive Income.

Revaluation reserve

The revaluation reserve records the fair value movements of the Group’s owner-occupied properties. Refer to Note 9 for more information on the revaluation of

owner-occupied properties.

Share-based payments reserve

The Group’s share-based payments reserve records the value of equity settled share-based payment benefits provided to the Group’s employees as part of their

remuneration that has been charged through the income statement. Refer to Note 16 for more information on share-based payments.

Notes to the Consolidated Financial Statements continued

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18. RELATED PARTY TRANSACTIONS

Sabre Insurance Group plc is the ultimate parent and ultimate controlling party of the Group. The following entities included below form the Group.

Name Principle Business Registered Address

Binomial Group Limited Intermediate holding company Sabre House, 150 South Street, Dorking, Surrey, United Kingdom, RH4 2YY

Sabre Insurance Company Limited Motor insurance underwriter Sabre House, 150 South Street, Dorking, Surrey, United Kingdom, RH4 2YY

Barbados TopCo Limited

(1)

Non-Trading Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY

Barb IntermediateCo Limited

(2)

Non-Trading 26 New Street, St Helier, Jersey, JE2 3RA

Barb MidCo Limited

(2)

Non-Trading 26 New Street, St Helier, Jersey, JE2 3RA

Barb BidCo Limited

(2)

Non-Trading 26 New Street, St Helier, Jersey, JE2 3RA

Barb HoldCo Limited

(2)

Non-Trading 26 New Street, St Helier, Jersey, JE2 3RA

Other controlled entities

EBT – UK SIP Trust Ocorian, 26 New Street, St Helier, Jersey, JE2 3RA

The Sabre Insurance Group EBT Trust Ocorian, 26 New Street, St Helier, Jersey, JE2 3RA

(1) In process of liquidation

(2) Dissolved in February 2023

No single party holds a significant inﬂuence (>20%) over Sabre Insurance Group plc.

Both Employee Benefit Trusts (“EBTs”) were established to assist in the administration of the Group’s employee equity-based compensation schemes. UK registered

EBT holds the all-employee SIP. The Jersey-registered EBT holds the Long-Term incentive Plan (“LTIP”) and Deferred Bonus Plan (“DBP”).

While the Group does not have legal ownership of the EBTs and the ability of the Group to inﬂuence the actions of the EBTs is limited to a trust deed, the EBT was

set up by the Group with the sole purpose of assisting in the administration of these schemes, and is in essence controlled by the Group and therefore consolidated.

During the period ended 31 December 2022, the Group donated no shares to the EBTs (2021: NIL).

Key Management compensation

Key Management includes Executive Directors, Non-executive Directors and Directors of subsidiaries which the Group considers to be senior management

personnel. Further details of Directors’ shareholdings and remuneration can be found in the “Annual Report on Director’s Remuneration” on pages 78 to 87.

The aggregate amount paid to Directors during the year was as follows:

2022 2021

Remuneration

1,894 2,317

Contributions to defined contribution pension scheme

7 3

Shares granted under LTIP 864 692

Total 2,765 3,012

Notes to the Consolidated Financial Statements continued

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19. SEGMENT INFORMATION

The Group provides short-term motor insurance to clients, which comprises three lines of business, motor vehicle insurance, motorcycle insurance and taxi

insurance, which are written solely in the UK. The Group has no other lines of business, nor does it operate outside of the UK. Other income relates to auxiliary

products and services, including marketing and administration fees, all relating to the motor insurance business. The Group does not have a single client which

accounts for more than 10% of revenue.

2022

Motor vehicle Motorcycle Taxi Total

Note £’k £’k £’k £’k

Profit or Loss Account information

Gross written premium 134,903

23,062

13,292 171,257

Less: Reinsurance premium ceded (21,440)

(3,694)

(1,322) (26,456)

Net written premium 113,463

19,368

11, 970 144,801

Gross written premium 134,903

23,062

13,292 171,257

Less: Change in unearned premium reserve 19,260

(5,236)

(7,10 6) 6,918

Gross earned premium 154,163

17,826

6,186 178,175

Reinsurance premium ceded (21,440)

(3,694)

(1,322) (26,456)

Less: Change in unearned premium reserve 184

960

355 1,499

Reinsurance premium payable (21,256)

(2,734)

(967) (24,957)

Net earned premium 132,907

15,092

5,219 153,218

Insurance claims, excluding claims handling expenses (88,266)

(24,253)

(5,761) (118,280)

Insurance claims recoverable from reinsurers 6,522

6,385

187 13,094

Net insurance claims (81,744)

(17,868)

(5,574) (105,186)

Net loss ratio 61.5%

118.4%

106.8% 68.7%

Segment reinsurance assets 106,519

6,385

3,622 116,526

Segment insurance liabilities (297, 873)

(26,299)

(17,129) (341,301)

Segment net insurance liabilities (191,354) (19,914) (13,507) (224,775)

Other than reinsurance assets and insurance liabilities, the Group does not allocate, monitor or report assets and liabilities per business line and does not consider

the information useful in the day-to-day running of the Group’s operations. The Group also does not allocate, monitor, or report other income and expenses per

business line.

Notes to the Consolidated Financial Statements continued

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Restated 2021

Motor vehicle Motorcycle Taxi Total

Note £’k £’k £’k £’k

Profit or Loss Account information

Gross written premium 164,582 3,231 1,509 169,322

Less: Reinsurance premium ceded (21,019) (30) (184) (21,233)

Net written premium 143,563 3,201 1,325 148,089

Gross written premium 164,582 3,231 1,509 169,322

Less: Change in unearned premium reserve (622) (2,941) 137 (3,426)

Gross earned premium 163,960 290 1,646 165,896

Reinsurance premium ceded (20,814) (238) (181) (21,233)

Less: Change in unearned premium reserve 574 208 (3) 779

Reinsurance premium payable (20,240) (30) (184) (20,454)

Net earned premium 143,720 260 1,462 145,442

‘Taxi’ was not shown as a separate line of business in the 2021 Annual Report and Accounts, as it was not considered to be a separate, material element of

premium income. Following the partnership with Freeway, premium from the provision of taxi insurance has increased significantly and as such it is now considered

both useful and relevant to disclose this separately. The 31 December 2021 business lines have been restated to split Taxi from Motor vehicle.

The Group did not report claims information per business line in prior years as the contribution of motorcycle and taxi business lines were considered immaterial

and a breakdown of claims numbers was not considered meaningful.

Notes to the Consolidated Financial Statements continued

19. SEGMENT INFORMATION continued

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2022 2021

Aer tax

£’k

Per share

pence

Aer tax

£’k

Per share

pence

Profit for the year attributable to equity holders 10,107 4.06 3 0,140 12.09

Diluted earnings per share

2022

Aer tax

£’k

Weighted

average number

of shares

£’k

Per share

pence

Profit for the year attributable to equity holders 10,107 248,865 4.06

Net share awards allocable for no further consideration 1,880 (0.03)

Total diluted earnings 250,745 4.03

2021

Aer tax

£’k

Weighted

average number

of shares

£’k

Per share

pence

Profit for the year attributable to equity holders 30,140 249,221 12.09

Net share awards allocable for no further consideration 2,320 (0.11)

Total diluted earnings 251,541 11.9 8

21. CONTINGENT LIABILITY

In the 2021 Annual Report and Accounts, the Group disclosed a contingent liability regarding a contested determination in relation to the 2015, 2016 and 2017

corporation tax filings of a subsidiary of the Group, which is currently dormant. During 2022 HMRC accepted the Group's appeal against their determination and as

such, the matter is now fully closed with no change in the tax position of the Group.

22. EVENTS AFTER THE BALANCE SHEET DATE

Other than the declaration of a final dividend as disclosed in Note 12, there have been no material changes in the affairs or financial position of the Company and its

subsidiaries since the Statement of Financial Position date.

20. EARNINGS PER SHARE

Basic earnings per share

Notes to the Consolidated Financial Statements continued

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 2022 2021

Notes £’k £’k

Assets

Investments 2 450,000 580,963

Debtors 4 3 128

Prepayments 211 204

Cash and cash equivalents 861 915

Total assets 451,075 582,210

Equity

Issued share capital 5 250 250

Own shares (2,810) (2,257)

Merger reserve 236,949 369,515

Share-based payments reserve 2,407 1,841

Retained earnings 212,581 212,794

Total equity 449,377 582,143

Liabilities

Creditors: Amounts falling due within one year 3 1,607 –

Accruals 91 67

Total liabilities 1,698 67

Total equity and liabilities 451,075 582,210

No income statement is presented for Sabre Insurance Group plc as permitted by section 408 of the Companies Act 2006. The loss after tax of the parent company

for the period was £103,094k (2021: £40,846k profit after tax).

The attached notes on pages 166 to 169 form an integral part of these financial statements.

Parent Company Statement of Financial Position

as at 31 December 2022

The financial statements were approved by the

Board of Directors and authorised for issue on

13March 2023.

Signed on behalf of the Board of Directors by:

ADAM WESTWOOD

Chief Financial Officer

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 2022 2021

Notes £’k £’k

ORDINARY SHAREHOLDERS’ EQUITY – at 1 January 250 250

At 31 December 250 250

OWN SHARES – at 1 January (2,257) (1,494)

Net movement in own shares (553) (763)

At 31 December (2,810) (2,257)

MERGER RESERVE – at 1 January 369,515 369,515

Transfer from retained earnings (132,566) –

At 31 December 236,949 369,515

SHARE-BASED PAYMENT RESERVE – at 1 January 1,841 1,817

Settlement of share-based payments (1,037) (1,051)

Charge in respect of share-based payments 1,603 1,075

At 31 December 2,407 1,841

RETAINED EARNINGS – at 1 January 212,794 210,449

Share-based payments 447 (115 )

Profit for the year (103,094) 40,846

Transfer to merger reserve 132,566 –

Ordinary dividends paid (30,132) (38,386)

At 31 December 212,581 212,794

Total equity at 31 December 449,377 582,143

Parent Company Statement of Changes In Equity

for the year ended 31 December 2022

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2022 2021

£’k £’k

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit after tax for the year (103,094) 40,846

Adjustment for:

Impairment of subsidiary 2.1 132,566 –

Operating cash ﬂows before movements in working capital 29,472 40,846

Movements in working capital:

Change in debtors 124 (47)

Change in prepayments (7) (36)

Change in trade and other payables 1,607 (183)

Change in accruals 24 (96)

Net cash generated from operating activities 31,220 40,484

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in acquiring and disposing of own shares (1,142) (1,928)

Dividends paid (30,132) (38,386)

Net cash used by financing activities (31,274) (40,314)

Net (decrease)/ increase in cash and cash equivalents (54) 170

Cash and cash equivalents at the beginning of the year 915 745

Cash and cash equivalents at the end of the year 861 915

Parent Company Statement of Cash Flows

for the year ended 31 December 2022

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for the year ended 31 December 2022

1. ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated and company financial statements are included in the specific notes to which they

relate. These policies have been consistently applied to all the years presented, unless otherwise indicated.

1.1 Basis of preparation

These financial statements present the Sabre Insurance Group plc company financial statements for the period ended 31 December 2022, comprising the parent

company statement of financial position, parent company statement of changes in equity, parent company statement of cash ﬂows, and related notes.

The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards, comprising International

Accounting Standards (“IAS”) and International Financial Reporting Standards (“IFRS”), and the requirements of the Companies Act 2006. Endorsement of

accounting standards is granted by the UK Endorsement Board (“UKEB”).

In accordance with the exemption permitted under section 408 of the Companies Act 2006, the Company’s income statement and related notes have not been

presented in these separate financial statements.

The financial statements are prepared in accordance with the going concern principle using the historical cost basis, except for those financial assets that have been

measured at fair value.

The financial statements values are presented in pounds sterling (£) rounded to the nearest thousand (£’k), unless otherwise indicated.

The accounting policies that are used in the preparation of these separate financial statements are consistent with the accounting policies used in the preparation of

the consolidated financial statements of Sabre Insurance Group plc as set out in those financial statements.

As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented. The additional

accounting policies that are specific to the separate financial statements of the Company are set out below.

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other information

2. INVESTMENTS

The Company’s financial assets are summarised below:

2022 2021

£’k £’k

Investment in subsidiary undertakings 450,000 580,963

Total 450,000 580,963

2.1 Investment in subsidiary undertakings

ACCOUNTING POLICY – INVESTMENT IN SUBSIDIARY UNDERTAKINGS

Investment in subsidiaries is stated at cost less any impairment.

2022 2021

£’k £’k

As at 1 January 580,963 579,889

Additions 1,603 1,074

Impairment (132,566) –

As at 31 December 450,000 580,963

The only operating insurance subsidiary of the Company is Sabre Insurance Company Limited, from which the value of the Group is wholly derived, as there are no

other trading entities within the Group. The Company performed its annual impairment test as at 31 December 2022 and 31 December 2021. The Company

considers the relationship between the Group’s market capitalisation and the book value of its subsidiary undertakings, among other factors, when reviewing for

indicators of impairment. As at 31 December 2022 and 31 December 2021, the Company’s securities were traded on a liquid market, therefore market capitalisation

could be used as an indicator of value.

The Group performed its annual impairment test as at 31 December 2022 and 31 December 2021. The Company considers the relationship between the Group’s

market capitalisation and the book value of its subsidiary undertakings, among other factors, when reviewing for indicators of impairment.

Having carried out this assessment the Board concluded, on the basis of the cautious assumptions outlined below, that the value of the investment in subsidiary

should be set at £450,000k (2021: £580,963k). This impairment has been taken to the parent company profit or loss account, and transferred to the merger reserve.

There is no impact on the distributable capital available to the Group or Sabre Insurance Group plc as a result of this adjustment.

Key assumptions

The market capitalisation of the Company as at 31 December 2022 had reduced to £266,000k from £459,500k at 31 December 2021. This provided an indication that

the underlying value had been impaired, and therefore the Directors carried out an impairment assessment.

We have used a dividend discount model to estimate the value-in-use, wherein dividend payments are discounted to the present value. Dividends have been estimated,

based on forecasted financial information, over a four-year forecast period, with a terminal growth rate applied. The key assumptions used in the preparation of future

cash ﬂows are: plan-period financial performance, dividend payout ratio, long-term growth rates and discount rate.

Notes to the Parent Company Financial Statements continued

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The key assumptions used in the calculation for the value in use is set out below:

– Plan period financial performance set in-line with the Group’s expectations

– Dividend payout ratio in line with the Group’s strategy

– Long-term growth rate beyond the plan period of 2%

– Discount rate of 9.5%, being a calculated cost of capital using market rate returns of Sabre and comparable insurers

These calculations use post-tax cash ﬂow projections based on the Group’s capital models. As the value-in-use exceeds the carrying amount, the recoverable

amount remains supportable.

The Group has conducted sensitivity testing to the recoverable amount, in order to understand the relevance of these various factors in arriving at the value in use.

– Dividend within the plan period – To assess the impact of reasonable changes in performance on our base case impairment analysis and headroom, we ﬂexed the

dividend within the plan period by +10% and -10%. In doing so, the value in use varied by approximately 10.0% around the central scenario.

– Long term growth rate – To assess the impact of reasonable changes in the long-term growth rate on our base case impairment analysis and headroom, we

ﬂexed the long-term growth rate by +1% and -1%. In doing so, the value in use varied by approximately 7.1% around the central scenario.

– Discount rate – To assess the impact of reasonable changes in the dividend payout ratio on our base case impairment analysis and headroom, we ﬂexed the

average discount rate by +2% and -2%. In doing so, the value in use varied by approximately 13.0% around the central scenario.

Name of subsidiary Place of incorporation Principal activity

Directly held by the Company

Binomial Group Limited United Kingdom Intermediate holding company

Barbados TopCo Limited

(1)

Guernsey Non-trading company

Barb IntermediateCo Limited

(2)

Jersey Non-trading company

Barb MidCo Limited

(2)

Jersey Non-trading company

Barb BidCo Limited

(2)

Jersey Non-trading company

Barb HoldCo Limited

(2)

Jersey Non-trading company

Indirectly held by the Company

Sabre Insurance Company Limited United Kingdom Motor insurance underwriter

(1) In process of liquidation

(2) Dissolved in February 2023

The registered office of each subsidiary is disclosed within Note 18 of the consolidated Group accounts.

3. CREDITORS

2022 2021

£’k £’k

Due within one year

Creditors – –

Amounts due to Group undertakings 1,607 –

As at 31 December 1,607 –

Notes to the Parent Company Financial Statements continued

2. INVESTMENTS continued

2.1 Investment in subsidiary undertakings continued

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other information

4. DEBTORS

2022 2021

£’k £’k

Due within one year

Amounts due from Group undertakings – 126

Other debtors 3 2

As at 31 December 3 128

5. SHARE CAPITAL AND RESERVES

Full details of the share capital and the reserves of the Company are set out in Note 15 and Note 17 to the consolidated financial statements.

6. DIVIDEND INCOME

ACCOUNTING POLICY – DIVIDEND INCOME

Dividend income from investment in subsidiaries is recognised when the right to receive payment is established.

7. RELATED PARTY TRANSACTIONS

Sabre Insurance Group plc, which is incorporated in the United Kingdom and registered in England and Wales, is the ultimate parent undertaking of the Sabre

Insurance Group of companies.

The following balances were outstanding with related parties at year end:

2022 2021

£’k £’k

Due (to)/from

Sabre Insurance Company Limited (1,607) 126

Total (1,607) 126

The outstanding balance represents cash transactions effected by Sabre Insurance Company Limited on behalf of its parent company, and will be settled within one year.

8. SHARE-BASED PAYMENTS

Full details of share-based compensation plans are provided in Note 16 to the consolidated financial statements.

9. RISK MANAGEMENT

The risks faced by the Company, arising from its investment in subsidiaries, are considered to be the same as those presented by the operations of the Group.

Details of the key risks and the steps taken to manage them are disclosed in Note 3 to the consolidated financial statements.

10. DIRECTORS AND KEY MANAGEMENT REMUNERATION

The Directors and key management of the Group and the Company are the same. The aggregate emoluments of the Directors and the remuneration and pension

benefits payable in respect of the highest paid Director are included in the Directors’ Remuneration Report in the Governance section of the Annual Report and Accounts.

Notes to the Parent Company Financial Statements continued

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other information

Financial Reconciliations

as at 31 December 2022

Adjusted Prot Before Tax

2022

£’k

2021

£’k

2020

£’k

Profit before tax 12,750 37,19 9 49,122

Add:

Amortisation of intangible assets – – –

Exceptional items – – –

Adjusted profit before tax 12,750 37,19 9 49,122

Adjusted Prot After Tax

2022

£’k

2021

£’k

2020

£’k

Profit after tax 10,107 30,140 39,798

Add:

Amortisation of intangible assets – – –

Exceptional items – – –

Tax on exceptional items – – –

Adjusted profit after tax 10,107 30,140 39,798

Net Loss Ratio

2022

£’k

2021

£’k

2020

£’k

Net insurance claims 112,799 81,015 8 8,110

Less: Claims handling expenses (7,613) (6,767) (7,637)

Net claims incurred 105,186 74,248 80,473

Net earned premium 153,218 145,442 165,707

Net loss ratio 68.7% 51.1% 48.6%

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other information

Expense Ratio

2022

£’k

2021

£’k

2020

£’k

Total expenses 34,149 34,444 36,670

Plus: Claims handling expenses 7,613 6,767 7,637

Net operating expenses 41,762 41,211 44,307

Net earned premium 153,218 145,442 165,707

Expense ratio 27.3% 28.3% 26.7%

Combined Operating Ratio

2022

£’k

2021

£’k

2020

£’k

Total expenses 34,149 34,444 36,670

Net insurance claims 112,799 81,015 8 8,110

146,948 115,459 124,780

Net earned premium 153,218 145,442 165,707

Combined operating ratio 96.0% 79.4% 75.3%

Solvency Coverage Ratio – Pre-Dividend

2022

£’k

2021

£’k

2020

£’k

Solvency II net assets 91,191 110,114 122,500

Solvency capital requirement 56,516 52,955 60,327

Solvency coverage ratio – pre-dividend 161.4% 207. 9% 20 3.1%

Solvency Coverage Ratio – Post-Dividend

2022

£’k

2021

£’k

2020

£’k

Solvency II net assets 91,191 110,114 122,500

Less: Final dividend (4,250) (23,250) (29,250)

Solvency II net assets (post-dividend) 86,941 86,864 93,250

Solvency capital requirement 56,516 52,955 60,327

Solvency coverage ratio – post-dividend 153.8% 164.0% 154.6%

Financial Reconciliations continued

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other information

Return on Tangible Equity

2022

£’k

2021

£’k

2020

£’k

IFRS net assets at year end 222,496 252,727 266,400

Less:

Goodwill at year end (156,279) (156,279) (156,279)

Closing tangible equity 66,217 96,448 110,121

Opening tangible equity 96,448 110,121 111,138

Average tangible equity 81,333 103,285 110,6 30

Adjusted profit after tax 10,107 30,140 39,798

Return on tangible equity 12.4% 29.2% 36.0%

Dividend Payout Ratio

2022

£’k

2021

£’k

2020

£’k

Adjusted profit after tax 10,107 30,140 39,798

Dividend declared in respect of the financial year 11, 250 32,500 53,000

2019 deferred special dividend – – (13,000)

Effective dividend declared in respect of the financial year 11, 250 32,500 40,000

Dividend payout ratio 111.3% 107.8% 100.5%

Financial Reconciliations continued

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Shareholders

Shareholder Profile as at 31 December 2022

Balance Ranges

Total

Number of

Holdings

Percentage

of Holders

Total

Number of

% Issued

Capital

1-100 10 3.37% 469 0.00%

101-1,000 32 10.77% 16,096 0.01%

1,001-10,000 58 19.53% 255,024 0.10%

10,001-100,000 69 23.23% 2,640,319 1.06%

100,001-1,000,000 76 25.59% 24,897,78 5 9.96%

1,000,001-999,999,999 52 17.51% 222,190,307 88.88%

Totals 297 100.00% 250,000,000 100.00%

Party Type

No Of

Holders

% of Holders

within Type Balance

% Issued

Capital

Male 35 11.78% 341,004 0.14%

Female 12 4.04% 15,803 0.01%

Nominee 194 65.32% 212,812,437 85.12%

Bank 1 0.34% 72 0.00%

Limited Company 26 8.75% 27,018,973 10. 81%

Other Organisation 29 9.76% 9, 811,711 3.92%

Total 297 100.00% 250,000,000 100.00%

Party Type

No Of

Holders

% of Holders

within Type Balance

% Issued

Capital

Private Individuals 47 15.82% 356,807 0.14%

Nominee Companies 194 65.32% 212,812,4 37 85.12%

Limited & Public Limited

Companies

26 8.75% 27,018,973 10.81%

Other Organisations & Banks 30 10.10% 9,811,78 3 3.92%

Total 297 100.00% 250,000,000 100.00%

Share Price during the financial year ending

31December 2022

London Stock Exchange, pence per 0.01 pence share

Highest 238.5p

Lowest 82.8p

Shareholder Information

2023 Financial Calendar

Full Year Results 14 March 2023

Trading Update 25 May 2023

Annual General Meeting 25 May 2023

Half Year Results 27 July 2023

Trading Update 12 October 2023

2023 Dividend Calendar

2022 Final Dividend Payment Dates

Ex-dividend date 20 April 2023

Record date 21 April 2023

Payment date 1 June 2023

2023 Interim Dividend Payment Dates

Ex-dividend date 17 August 2023

Record date 18 August 2023

Payment date 20 September 2023

* subject to shareholder approval

** dates and dividend not yet finalised

Shareholder Queries

General Shareholder Queries

Enquiries relating to shareholdings, such as the transfer of shares,

change of name or address, lost share certificates or dividend

cheques, should be referred to the Company’s Registrar at: Equiniti,

Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA.

Shareholder helpline is 0371 384 2030 (UK), +44 121 415 7047

(International) and 0371 384 2255 (MiniCom).

Lines are open 8.30am to 5.30pm, Monday to Friday, excluding Bank

Holidays in England and Wales.

Registrar Share Dealing Service

For telephone share dealing call 0345 603 7037 between 8.00am and

4.30pm, Monday to Friday.

For internet dealings log onto www.shareview.co.uk/dealing

Dividend mandates

Shareholders who wish dividends to be paid directly into a bank or

building society should contact the Company’s Registrar, Equiniti

Limited, foradividend mandate form. This method of payment

removes the risk of delay or loss of dividend cheques in the post and

ensures that your account is credited on the due date.

Electronic communications

Shareholders can elect to receive shareholder documents electronically

by registering with Shareview at www.shareview.co.uk. This will save

on printing and distribution costs, creating environmental benefits.

When you register, you will be sent an email notification to say when

shareholder documents are available on our website and you will be

provided with a link to that information. When registering you will need

your shareholder reference number which can be found on your share

certificate or proxy form. Please contact Equiniti Limited if you require

any assistance or further information. Equiniti Limited’s shareholder

helpline is 0371 384 2030 (UK), +44 121 415 7047 (International) and

0371 384 2255 (MiniCom). Lines are open 8.30am to 5.30pm,

Monday to Friday, excluding Bank Holidays in England and Wales.

Cautionary note regarding forward-looking statements

This Annual Report includes statements that are forward-looking in

nature. Forward-looking statements involve known and unknown risks,

assumptions, uncertainties and other factors which may cause the actual

results, performance or achievements of the Group to be materially

different from any future results, performance or achievements

expressed or implied by such forward-looking statements. Except as

required by the Listing Rules, Disclosure and Transparency Rules and

applicable law, the Company undertakes no obligation to update, revise

or change any forward-looking statements to reﬂect events or

developments occurring on or after the date of this Annual Report.

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other information

Website

The corporate website address is

www.sabreplc.co.uk

The investor section of the website includes:

– Regulatory news

– Share price information

– Financial results announcements

Registered office

Sabre House

150 South Street

Dorking

Surrey

RH4 2YY

Registered in England and Wales. Registered number 10974661

Shareholder Information continued

Directors, advisers and other information

Directors

Andy Pomfret – Chair

Geoff Carter

Ian Clark

Karen Geary

Michael Koller

Alison Morris

Rebecca Shelley

Adam Westwood

Company Secretary

Anneka Kingan

Auditor

PricewaterhouseCoopers LLP

7 More London Riverside, London, SE1 2RT

Company Brokers

Barclays Bank plc

1 Churchill Place, London, E14 5LB

Numis Securities Limited

45 Gresham St, London, EC2V 7BF

Peel Hunt LLP

100 Liverpool Street, London, EC2M 2AT

Principal Bankers

National Westminster Bank plc

250 Bishopgate, London, EC2M 4AA

Lloyds Bank plc

25 Gresham Street, London EC2V 7HN

Public Relations

Teneo Strategy Limited

Floor, 6 More London Place, London, SE1 2DA

Solicitors

Dickson Minto W.S.

16 Charlotte Square, Edinburgh,EH2 4DF

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other information