CUSTOMER NUMBERS BOOST HELPS EARN ADMIRAL £193 MILLION PROFIT
Car insurer Admiral notched up record half-year results as it added another 217,000 UK motor customers despite further moves to hike the cost of its cover.
The Cardiff-based group – which also owns the Elephant, Diamond and Bell brands, as well as price comparison website Confused.com – said pre-tax profits rose 4% to £193 million for the six months to June 30 – its highest ever interim earnings haul.
But it said the Brexit vote knocked its balance sheet strength, wiping around 20% off its so-called solvency ratio.
However, the group said its capital buffer remained strong and cheered investors with an extra £33 million in shareholder dividend payments.
Admiral said its UK car insurance profits rose 2% to £222.8 million in the half-year after boosting customer numbers by 11% to 3.52 million.
It revealed further increases in prices, with average written premiums up by around 3% in the first half.
Recently-appointed chief executive David Stevens, who took over from co-founder Henry Engelhardt in May, said: “In the core UK car insurance business, we’ve benefited from an increasingly rational motor market with evidence of a move towards a less violent cycle.
“Prices have been rising, and we’ve used this opportunity to grow our motor book strongly.”
Shares in the group tumbled 7% amid worries over the Brexit hit and as profits came in slightly lower than City forecasts.
Admiral said its solvency ratio remained at a “very strong” 180%, down from 206%, despite the hit from the market volatility following the UK’s decision to quit the EU.
It warned of the risk of potential further market turbulence, economic woes and fears over passporting rules in the EU from the Brexit vote, but added that it does not expect a “material adverse impact on day-to-day operations”.
The firm saw overall group-wide customer numbers grow 15% to 4.82 million.
On a bottom- line basis, statutory pre-tax profits rose 4% to £189.5 million from £181.7 million a year earlier.
Its price comparison business made a loss of £1.1 million, against losses of £4 million a year earlier, as ongoing investment in its fledgling US site compare.com offset a robust performance from Confused.com in the UK.
Confused.com hiked half-year profits to £8.3 million, up from £4.8 million a year ago.
The group’s international car insurance arm also sank deeper into the red, with losses of £12.9 million, up from £11.2 million a year earlier, as it invested further in the US and France. But it said its overseas division insured 20% more motors year on year, at 757,900.