Motor insurance to loans group Admiral had posted a rise in revenues and profits for the first half of this year in part driven by being the first insurer to hike premiums on the back of spiralling claim costs.
For the six months it posted revenues of £2.24bn compared to £1.85bn a year earlier - a rise of 21%. Group pre-tax profit was up 4% from £224.6m to £233.9m.
Around 10,000 employees will receive free shares worth up to £1,800 on the back of the financial performance - the maximum it can give under its employee share scheme which is capped at £3,600 for the full year.
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Its share price climbed more than 6% on the back of the results in early trading.
However, Admiral announced a 15% reduced interim dividend to shareholders on the first half of 2022, down from 60p a share to 51p The increase in the corporation tax threshold from 19% to 25% was a big driver of its dividend reduction.
Wales’ only FTSE 100 business, which employs more than 7,000 in South Wales, said that 海角视频 inflation remains high and continues to be influenced by the average costs of repairing vehicles with elevated cost of replacement parts and paint, as well as high labour costs and shortages.
It is estimating that the cost of car repairs from accidents for the full year being 10% ahead of 2022 - with some room for easing the second half of this year. It was the first insurer to increase premiums last year on the back of inflationary claim pressures.
Across its business lines it has 9.41 million customers - of which just over seven million are 海角视频-based- up 4% on a year earlier.
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Admiral’s Italian-born chief executive Milena Mondini de Focatiss said:“The group has once again delivered a solid performance and strong growth in the context of a challenging market, although we believe that the cycle is turning. In the first half of the year, profit was £234m, turnover was up 21% to £2.2bn and our group customer base grew 4%.
“Inflation persists, but we have navigated the cycle well, maintaining pricing discipline and a focus on medium-term profitability. We recognise that these are challenging times for many people and we are committed to being there for them when they need us the most, delivering good service and competitively priced products while also actively managing our costs.
“Our 海角视频 motor business delivered a profit of £29m in the first half of 2023. As we increased prices well ahead of the market last year, our active vehicle base reduced over the period, but we are on a strong footing to leverage improving market conditions.
“We continue to enhance our capabilities, particularly in data and technology, and we are innovating to further develop our core competences and enrich our customer proposition.”
The group is looking to build on its diversification strategy which has seen it move into other insurance lines, including home, pet and travel, while also having its own lending business in Admiral Money. Its lending business saw gross loans balances rising 31% to £1.03bn while posting a pre-tax profit of £2.7m, compared to £200,000 a year earlier.”
On its diversification strategy the chief executive said: “We are making good progress on our diversification strategy, with our non-海角视频 motor products delivering 19% customer growth, and our 海角视频 Household business and European Motor business delivering profits of £8.7m and £4m, respectively. It was also another positive and profitable period for Admiral Money, with the business taking a cautious approach whilst growing loans balances by 31%.
“I am pleased to say that we remain strongly capitalised and, thanks to the hard work of my colleagues across all of our markets, we now serve even more customers, and are very well-positioned for a more encouraging outlook.”
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While its European motor businesses in France, Italy and Spain, turn in a combined pre-tax £4.7m profit, its US car insurance business continues to be a financial drain on the group, with losses of £10.4m - although down on the £13.6m in the same period last year.
Its international insurance businesses increased customers by 12% to 2.21 million.
Asked if it was time to cut losses on its US car insurance business, which trades as Elephant, by looking at a trade sale or if no market appetite ceasing to operate it, Ms Mondini de Focatiss said: “The market has been quite tough and it is a difficult one, but we continue to be committed to our business and reduced lost, which compared to last year have reduced very strongly. We need to take more strong action to ensure that we continue to do so in the future.”
On the full year outlook she added: “It is important that we continue to react to the market. The market is cyclical which we have navigated quite well. We think in general it is a more encouraging outlook."