5th Mar 2015 07:57
LONDON (Alliance News) - Admiral Group PLC Thursday reported a lower profit for 2014, hit by investments it made in a US price comparison site and lower average premiums in its UK car insurance business.
The insurer reported a pretax profit excluding minority interests of GBP357 million for 2014, down from GBP371 million in 2013. Pretax profit fell to GBP350.7 million, from GBP370.2 million, as net insurance premium revenue dropped to GBP464.9 million, from GBP483.0 million, partly offset by a fall in net insurance claims to GBP259.1 million from GBP303.0 million.
Admiral Chief Executive Henry Engelhardt likes to compare the company's annual performance to foods, and had described 2013 as like a baked potato because it was "solid but not flashy". Performance in 2014 was like a Baked Alaska, he said Thursday.
"Admiral Group's 2014 was the year of the Baked Alaska - hot and cold in a single bite. The hot? Profits emerging from our international insurance businesses, in ConTe in Italy, and record profits at Rastreator and LeLynx, our price comparison businesses in Spain and France, respectively. The cold? For the first time since we went public, Admiral Group did not post a record profit, but we still made a lot of money, had an enviable 52% return on equity and distributed 95% of our after-tax profits to our shareholders," he said.
Admiral will pay a final dividend for 2014 of 49.0 pence, comprising a 22.5p normal dividend and 26.5p special dividend. That brings its total dividend for the year to 98.4p, down from 99.5p in 2013.
Its UK car insurance business is its largest, and the market has been going through a period of falling rates and extremely tough competition. Admiral said it has been focusing on margin protection rather than volume, and its UK revenue fell 6% to GBP1.60 billion.
Revenue in its growing international car insurance business rose 10% to GBP206.2 million, and the loss from the operations narrowed to GBP19.9 million, from GBP22.1 million in 2013.
By Steve McGrath; [email protected]; @stevemcgrath1
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