Hastings group has announced that its board intends to pay its final dividend despite warning from the Bank of England to halt payments amid the crisis.
The announcement came as the insurance giant said that its capital position, cash generation and liquidity currently “remains strong” inlight of the pandemic.
This is in part due to the fact it has no business lines with direct claims cost exposure resulting from the pandemic, such as travel or business interruption insurance.
Hastings said it also had the “agility and modern technology” to enable a rapid response to the crisis, and that its underlying business performance remains in line with management’s expectations.
In its latest statement, it said that taking into account these factors, the board still intends to seek shareholder approval of the final dividend of 5.5p at the AGM on 21 May 2020. This does, however, represent a reduction of 39% on the 2018 final dividend.
Nonetheless, it will continue to monitor market developments, financial implications, and related stress scenarios, though it “remains confident”of the group’s “robust capital position, current outlook and ongoing ability to support policyholders”.
In its latest trading update, the group also revealed that net revenue was down slightly at £179.2m in the three months ended 31 March 2020.
Nonetheless, gross written premiums remained stable at £234.3m, while live customer policies were up 4% year on year to 2.87 million as of 31 March.
Hastings said that policy growth had been supported by continued strong retention rates, while pricing discipline has remained a focus during the quarter.
The group said it has also seen a continued progress on its other strategic initiatives. Its digital adoption has increased further with 700,000 mobile app downloads in the period, and online functionality has been “further enhanced”.
Toby van der Meer, CEO of Hastings, said: “The first quarter of 2020 has been unprecedented with the Covid-19 outbreak placing additional operational challenges on top of recent industry headwinds.
“Against this backdrop, Hastings has been agile in responding to customers’ needs and I am immensely proud of how all colleagues have adapted to new ways of working.”
He added: “Our underlying business performance continues to be strong and we continue to make good progress on our strategic initiatives.
“As always, and especially during these difficult times, I would like to thank the entire Hastings team for the hard work and commitment in supporting our customers and the communities in which we work.”