14th Aug 2019 08:17
(Alliance News) - Admiral Group PLC on Wednesday reported "modest" profit growth in the first half as the insurer's main Motor business saw a slight rise in premiums and customers.
Shares in Admiral were up 4.7% in London in early trade at 2,128.00 pence, rising to the top of the blue chip index.
In the six months to June 30, the insurer's pretax profit increased 3.6% to GBP218.2 million from GBP210.7 million the year before.
Admiral's turnover grew 6.0% to GBP1.77 billion from GBP1.66 billion the year before. Admiral describes its turnover as total written premiums and other revenue & income from Admiral Loans.
The insurer's combined ratio worsened in the first half to 92.3% from 87.4% the year before. A ratio below 100% indicates that the company is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.
Admiral's underwriting profit, however, increased 2.8% to GBP96.0 million from GBP93.4 million the year before.
Admiral upped its payout by 5.0% to 63.0 pence - comprising an interim dividend of 41.8p and a special dividend of 21.2p. The insurer distributed 60.0p in the first half last year.
"If it's a can't-put-down, read-in-one-go page-turner that you're after, then I'm afraid our half-year results don't fit the bill. Frankly, they are a bit dull. Turnover up mid-single digits, profit up low-single digits. Hardly 'hold the front page'," said Chief Executive David Stevens.
The company's number of customers grew 8.1% to 6.7 million. UK Insurance customers increased 4.9% to 5.3 million while the company's International Car Insurance customers jumped 21% to 1.4 million.
Stevens continued: "However, for dedicated aficionados who look behind the headlines, there's some reward for reading on. Profit growth, even if modest, is more exciting considering the GBP33 million Ogden headwind. Low growth in UK Motor policy count reflects a consciously reduced competitiveness, as we price rationally in the face of any rising claims costs across the market as a whole. "
Admiral's UK Insurance unit saw profit growth of 3.1% to GBP254.7 million. The UK Insurance Motor business reported a slight increase in profit to GBP251.7 million.
UK Insurance's total written premiums edged 1.7% higher to GBP1.19 billion with UK Motor total written premiums increasing slightly to GBP1.11 billion.
The unit's number of vehicles insured at the end of the half was also marginally higher year-on-year at 4.3 million.
Admiral International Insurance business's loss widened to GBP2.7 million from a GBP600,000 loss the year before.
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