Hastings insurance boss Gary Hoffman criticised Chancellor George Osborne for plans to introduce a “stealth tax” on customers with a mooted insurance sales tax hike in tomorrow’s budget.
Osborne is set to increase the so-called Insurance Premium Tax, which is levied on every car and home insurance policy sold to punters, from 9.5% to as high as 14%.
“We hope he will not increase the tax,” Hoffman said: “It’s a bit of a stealth tax. It’s a tax on consumers, insurance is a compulsory purchase — customers have no choice about it. We would rather he deal with bonus whiplash claims and reduce premiums.”
The Chancellor raised the tax from 6% to 9.5% in November, triggering protests from the Association of British Insurers.
Hastings is one of the biggest car insurers in the Uk and has about 6% of the overall market.
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The company floated on the London Stock Exchange last year, netting a windfall for its founder Neil Utley, who stood to trouser another £1 million today after the group announced a 2.2p maiden dividend. It also counts Goldman Sachs as a top shareholder.
Hoffman said the next growth plans did not involve M&A, despite a rise in takeovers in the insurance sector. “There’s no reason for M&A. We’ve got plenty of road ahead of us. I think most M&A is value destroying, so we don’t focus on it at all at this stage.”
Overall gross written premiums rose 27% to £614.9 million for the year ending December, driving net revenue a fifth higher to £481 million. Group operating profit was up 19% to £126.1 million.