ELEPHANT and Diamond insurer Admiral said its profits fell for the first time in a decade as it wrote fewer car policies in a "highly competitive" market.
The group, which has just over four million customers, said its pre-tax profits dipped 4% to £357 million last year after the number of car policies it wrote fell 12.5% to 1.4 million at it chased value over volume sales.
However, the business said that car premiums began to rise in the second half of last year and it expects the trend to continue this year as the industry adjusts to recent rule changes.
Over the last three 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.
The group added that it started increasing new prices across all its units in May and for renewals in July.
It added: "We anticipate further price increases during 2015, reversing some of the margin reduction of the last two to three years."
During the year it also reported that its price comparison website Confused.com saw profits plunge 27% to £15.8 million, reflecting limited growth in the market and the unit's high marketing spend.
The market is dominated by four players, with Confused's advertising in the period focused on a campaign involving Brian the Robot.
The group's fall in profit is the first it has registered since its flotation on the London Stock Exchange in April 2004.
Co-founder and chief executive Henry Engelhardt said: "For the first time since we went public, Admiral Group did not post a record profit, but we still made a lot of money."
Shore Capital analyst Eamonn Flanagan added: "Admiral reported 2014 results which were lower than our forecasts and what the market had expected. This is the first year the group has gone backwards."
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