7th Feb 2020 07:55
(Alliance News) - Admiral Group PLC on Friday said it expects to increase its final payout by up to 18% following "better-than-expected" financial performance in 2019.
The FTSE 100-listed insurer said it expects to report a pretax profit in the range of GBP510 million to GBP540 million in 2019, representing 6% to 13% growth on the prior year, thanks to higher-than-expected reserve releases in UK motor insurance.
In addition, the Cardiff, Wales-headquartered company said clarity over the new Personal Injury Discount Rate in July last year helped to an increase the number of large claims settling in 2019 compared to recent years, which contributed to the level of releases.
The company's UK motor insurance business grew marginally in customer numbers during the year.
"The higher than expected profit is due to unusually positive development, during 2019, in the cost of UK motor bodily injury claims from a number of prior underwriting years. This has led to elevated reserve releases and profit commission revenue," Admiral explained in its statement Friday.
As a result, Admiral said it expects to propose a 73 pence to 78p per share final dividend for 2019, having paid a 66.0p a share a year ago. Admiral also said it will award its employees with a special cash bonus of GBP500, which will be paid in the first half of 2020.
Less positively, the company said its profitability continued to be hurt by higher levels of claims inflation during 2019 and as a result, Admiral expects its 2019 loss ratio to be higher than recent years.
The company said it will report its 2019 results on March 5.
By Evelina Grecenko; [email protected]
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