• Text size      
  • Send this article to a friend
  • Print this article

Insurer Admiral sees profits rise 2%

Admiral said there were signs that premium rates were no longer falling as it reported an 8% rise in half-year profits just from insuring UK motorists.

Admiral said there were signs that premium rates were no longer falling as it reported an 8% rise in half-year profits from insuring UK motorists.

The group, which trades as Elephant, Bell and Diamond, said its UK premium income fell by 9% to £776 million in a competitive market but that this was offset by a 4% rise in customer numbers to 3.15 million as well as lower costs.

Chief executive Henry Engelhardt said the company's rates had been "pretty flat" but added that it was too early to call a turning point in the market.

He said: "It's very competitive. We have about 40 insurers in this market. There aren't many industries where you have 40 dedicated competitors."

The company also owns comparison site Confused.com, which saw profits fall 11% to £9.1 million after revenues remained flat at £44.4 million.

In a fiercely competitive market dominated by four players, Confused's advertising in the period focused on a campaign involving Brian the Robot.

Across the group, which also offers car insurance and price comparison services in several countries, profits were 2% higher at £184.9 million. UK car insurance profits were £207.7 million, an increase of 8%.

Whilst Admiral's premium rates have been flat in 2014, cuts in previous years led to an average premium in the period of £495, against £555 a year earlier.

Across its operations, Admiral's customer base grew to 3.94 million from 3.70 million at the end of December, while the year-on-year growth was 9%.

Today's performance means 7,000 staff at the Cardiff-based group will divide up £1.5 million of shares through an employee share scheme.

However, the stock was 3% lower today in the wake of the results. Eamonn Flanagan, an insurance analyst at Shore Capital, kept his sell rating on the company due to regulatory uncertainty and household budget constraints.

Over the last two years the car insurance industry has seen rates plunge as regulators have clamped down on fake whiplash claims as well as inflated hire car and garage repair bills that have padded out premiums.

According to data by breakdown group the AA released, average car premiums fell 19.3% in the year ending June 30 - the largest 12-month decrease since the group started compiling these figures 20 years ago.

Contextual targeting label: 
Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

254421