Admiral profits held back by rising personal injury costs

Cornelia Mascio
Agosto 16, 2017

The insurance group's pre-tax profits came in slightly ahead of market expectations at £193 million, with revenues rising 8% to £550 million, according to a Financial Times report.

The changing rate weighed on profits past year, and Admiral said the impact had continued into 2017.

The group's profit before tax rose 2% to £195m while group turnover climbed 15% to £1.45bn.

Admiral said the estimated total cost of the change to the Ogden rate change is unchanged at GBP150.0 million, of which it has taken GBP105.0 million in its 2016 account.

Insurer Admiral fell to the bottom of the FTSE 100 in early trade after disappointing analysts with its results for the first half of the year.

"We've grown turnover and customer numbers in our existing businesses by over 13% while also delivering a first half of important "firsts" - the first loans originated on our new dedicated lending system, the first cars sold on Confused.com, the first vans directly underwritten in the United Kingdom and Spain", said Stevens. In the UK, Confused.com's profit dropped to GBP4.5 million from GBP8.3 million, due to increased investment and marketing costs. However, that included a 11.9p per share return of surplus capital.

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

Admiral Group published interim figures for the six months ended 30 June 2017, in which it was confirmed the dividend is likely to be 56p per share, compared to 51p in the same period in 2016. It is used to calculate compensation awards for serious personal injuries.

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

"However, some extra costs carry into 2017".

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