Motor insurance to loans group Admiral has reported record half year profits and revenues driven by growth in the 海角视频 with customers growing to reach 6.22 million and the impact of Covid reducing claims.
The Cardiff headquartered FTSE 100 business, which employs 7,500 in South Wales with offices also in Newport and Swansea, saw operating profits for the six months to end of June this year, climb 76% from £274.4m a year earlier to £482.2m.
When including the £400m proceeds from the sale of its Penguin Portals business, which included Cardiff-based price comparison firm Confused.Com, pre-tax profits came in at £897.m. Revenues were up 9% from £1.6m to £1.75bn.
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However, collectively its international insurance businesses, which include those in the US, France, Italy and Spain, made pre-tax losses of £900,000. It had slightly lower profits in its European operations with increased losses in the US partly attributable to severe weather in Texas, which combined with the reducing impact in Covid, saw road usage and claims frequency rise.
Overall, the strong financial performance means that 10,000 Admiral staff will each receive the maximum of £1,800 under the employee share scheme, while for shareholders there is a record interim dividend of 115p a share, compared to 70.5p in the first half of 2020.
In the 海角视频 its 6.22 million customers were up 12% on the first half of 2020.
Chief executive Milena Mondini de Focatiis said: “A good strategy is a plus; good execution is a must, especially in times of disruption. It’s been a half year of good execution for Admiral. By and large, we’ve done the right things more often and a bit earlier than most.
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“This included adjusting pricing ahead of the market in the 海角视频 to reflect shifting pandemic-related claims trends and providing more self-service and digital options to our customers. These actions have rewarded us with double digit growth in policy numbers in the 海角视频 and in international insurance, whilst operating in very competitive markets.
“Another highlight of this half year is a notably higher level of profit driven by positive development of prior years in our 海角视频 motor book resulting in increased reserve releases and higher than usual profit commission, as well as lower levels of claims frequency.
"We also made progress against our long-term strategy, increasing adoption of advanced analytics models and planting new seeds for product diversification.
“I am delighted that we can once again pay a record dividend (which includes a part of the proceeds from the sale our comparison businesses) to our shareholders, including our staff who continued to work hard to provide great service to our customers."
On the outlook for increasing claims, as more people return to driving, she said: “What we are seeing after the big reduction during the pandemic, is that it is moving back towards pre-Covid levels although we are not there yet it is increasing. There could also be a short term trend relating to vacations.”
As part of its diversification strategy its 海角视频 loans business is one Admiral has strong growth expectations for.
While still loss-making it is has narrowed with less provisions for default due to the economic bounce back from the pandemic.
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On the outlook for loans Admiral’s chief finance officer, Geraint Jones, said: “If you look at the first half of this year we have actually grown quite nicely and we advanced nearly £200m worth of loans and we are quite encouraged at they way that business is going.
"It is an important part of our longer-term diversification and we are really excited by it and expect to continue to grow and are predicting loan balances to get close to £550m by the end of this year.”
On its overseas car insurance businesses, and in particularly the US where it operates in eight states, the chief executive said: “In general we are happy with our international businesses. The US is extremely interesting in that it is a very large opportunity, but at the same time growing is very expensive and the acquisition costs are particularly high. We are growing modestly, but we are also improving our results. We need more patience and time.”
In Cardiff, Swansea and Newport, up to 15% of Admiral staff are office based. Ms Mondini de Focattis, said its office requirements were still being assessed in consultation with staff, but that a hybrid model was the way forward.
She added: “We are very committed to taking the best of the two worlds so that people can enjoy more flexibility from working from home, but at the same time we are together in the office and when we are together there will be more collaborative space so there will be some changes in the layout.
"It is not only about how many people will be in the office, but also how the space will be used. So, we will probably have larger space for interaction to counter balance less presence in the office.”
She confirmed that a small amount of space in its Welsh offices has been sublet.