27th Apr 2020 10:20
(Alliance News) - Car insurer Admiral Group PLC on Monday suspended its special dividend payout for 2019 in keeping with UK regulatory guidance to insurers "urging restraint on the payments of dividends" due to the current uncertain economic environment.
The company said it will suspend the previously announced 20.7 pence per share special payout, but will still pay an unchanged normal final dividend of 56.3p.
Shares in Admiral were 0.9% higher at 2,328.00p each in London on Monday morning.
"Robust stress tests against the company's financial position support the payment of the previously announced final dividend in full under normal circumstances. However, the board is mindful of the call for heightened prudence from its regulators and has concluded that suspending the payment of the special dividend is appropriate at this time," the FTSE 100-listed company said.
Admiral said it has significant liquidity and a strong solvency position, and it plans to review the special payout at the time of its half-year results in August
CEO David Stevens said: "We find ourselves in extraordinary circumstances, and it has been a very difficult decision to suspend the special dividend as we are aware of the importance and impact to our shareholders and staff. However, the board and I believe that this is the prudent and right thing to do at this time".
Earlier in April, Admiral pledged to hand back GBP110 million to car and van policyholders due to falling numbers of claims amid the coronavirus lockdown in the UK.
The Cardiff-based company had said it will pay out GBP25 for each of the 4.4 million vehicles covered at April 20, with refunds being made by the end of May.
The company also had pledged another GBP80 million towards lowering prices for cover to reflect the drop in claims, as well as for further initiatives to support NHS staff and local communities.
This includes waiving all motoring claim excess fees for NHS or emergency service workers, and guaranteeing cover for customers using their vehicle to transport people, deliver medical supplies and equipment, or items to people who are self-isolating.
By Tapan Panchal; [email protected]
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