Admiral lifts payout as injury claims costs put brake on profits

Alexander Bueso WebFG News | 16 Aug, 2017 08:07 - Updated: 15:55 | | |

admiral, insurance
  • 1,879.00
  • 0.21%4.00
  • Max: 1,883.00
  • Min: 1,873.00
  • Volume: 314,687
  • MM 200 : n/a
17:17 17/11/17
  • 7,380.68
  • -0.08%-6.26
  • Max: 7,406.53
  • Min: 7,356.16
  • Volume: 0
  • MM 200 : n/a
17:30 17/11/17
  • 3,077.40
  • -0.16%-4.89
  • Max: 3,092.30
  • Min: 3,074.44
  • Volume: 0
  • MM 200 : n/a
17:18 17/11/17
  • 4,102.67
  • -0.12%-4.73
  • Max: 4,116.61
  • Min: 4,089.64
  • Volume: 0
  • MM 200 : n/a
17:18 17/11/17
  • 4,051.78
  • -0.11%-4.62
  • Max: 4,065.06
  • Min: 4,039.36
  • Volume: 0
  • MM 200 : n/a
17:25 17/11/17

Admiral's profits for the first six months of the year were hit by the rising cost of personal injury claims after the government changed the payment calculation, though the insurer surprised some analysts by hiking its half-year pay-dividend.

However, in its UK car arm the insurer's combined ratio worsened significantly, rising from 75.0% in the comparable year ago period to 82.9%, although it was down from 90.8% at year-end 2016.

Furthermore, interim profits were hit by the rising cost of personal injury claims after the government changed the payment calculation, the so-called Ogden rate, which weighed on 2016 profits and continued into 2017.

"Most of the adverse impact from the increase in the costs of large injury claims was in our 2016 second half result," said chief executive David Stevens in a statement.

"However, some extra costs carry into 2017. In these circumstances, we are happy to report a marginal increase in profitability and to deliver a more material increase in the underlying dividend," he said.

For the six months to 30 June, the motor insurer posted an 8% jump in net revenues to £550m and 15% in group turnover to £1.45bn, which drove a 2% rise in statutory profits before tax to £193m (Numis: £189m).

In turn, the group's earnings per share were up 3% to 57.3p.

Turnover was lifted as the number of UK insurance customers increased 11% to 4.34m, alongside a 27% jump in international car insurance clients to 961,200.

Stevens also highlighted the multiple operational milestones achieved by the group over the period, which included the launch of its new dedicated lending system, the sale of the first cars on Confused.com and the first direct underwriting of vans in the UK and Spain.

Post dividend, the motor insurer's solvency ratio stood at 214%, up from 180% for the comparable year-ago period.

Meanwhile, the interim dividend, which included a special payout component of 18.1p, was raised by 10% to 56.0p.

As of 1120 BST the company's stock was 5.28% lower to 2,063p, having bounced off technical support towards 2,000p. On 16 August 2016 the shares hit their highest level on record at 2,254p.

More news

17 Nov Europe close: Stocks slip going into the weekend

Stocks reversed early gains as investors opted to play it safe going into the weekend and the euro edged a tad higher on the back of the political gyrations on Capitol Hill.

17 Nov Europe open: Stocks start slightly higher, analysts wary

Stocks have started the morning trading slightly higher, tracking overnight gains on Wall Street but analysts are worried about buying into Thursday's bounce.

17 Nov London close: Stocks finish week on down note

London's top flight index slipped on Friday, but managed to finish well-off its lows of the session despite renewed Brexit angst as the pound gave back early gains.

17 Nov Kingfisher gets RBC upgrade as 'reasons to be cheerful' in France

DIY retailer Kingfisher has more "reasons to be cheerful" thanks to an improving French outlook, analysts at RBC Capital Markets said on Friday, while clothes seller Supergroup remains "compelling" but its shares have gained a lot in recent weeks.

17 Nov NAV on the rise as Alpha Real Estate Trust turns focus to build-to-rent market

Real estate investment group Alpha Real Trust saw its net asset value (NAV) rise in its first half of trading as it moved to make further investments in build-to-rent projects.

17 Nov Pacific Industrial & Logistics completes sale of Bedford asset

Industrial and logistics-focussed real estate investment trust Pacific Industrial & Logistics has completed the sale of an asset located at Hammond Road, Bedford, for a total consideration of £5.8m, it announced on Friday.

17 Nov DP Poland cuts ribbon on 50th Polish Domino's store

DP Poland, which holds the exclusive master franchise for the Domino’s Pizza brand in Poland, celebrated the opening of its 50th location in the country on Friday.

17 Nov Mercia Technologies makes new investment into Aston EyeTech

National investment group Mercia Technologies has made a new direct investment into Aston EyeTech - a spinout from Aston University, Birmingham - which has developed a range of proprietary hardware and software products in ocular care, it announced on Friday.

17 Nov SimiGon receives final approval for $2m Israeli Air Force order

Modelling, simulation and training solutions provider SimiGon has now received final regulatory approval for a $2m purchase order received from the Israeli Air Force, initially announced on 20 June 2016, it confirmed on Friday.

17 Nov Agriterra losses grow after 'subdued' interest in corn products

Agricultural investment group Agriterra saw losses widen in the first half of its trading year as subdued demand for its maize flour products slashed revenues by more than a third.