Admiral posts 23 per cent jump in profit on price hikes but lowers dividend
Insurer Admiral has posted a surge in profit as it reaped the benefits of price hikes, offsetting the impact of higher claims inflation.
However, investors were rewarded with a lower total dividend of 103p for 2023, compared with 112p in 2022. Admiral’s shares traded mostly flat on Thursday morning.
Admiral pledged a 90 to 95 per cent payout ratio at the half-year mark but since then has struck a deal to acquire the home and pet insurance operations of RSA, with expected costs of at least £100m.
The group’s pretax profit came in at £442.8m for 2023, up 23 per cent from £361.2m in 2022. Its turnover jumped 31 per cent to £4.81bn.
The UK’s largest private motor insurer has benefitted from a surge in the price of premiums, with car insurance costs at record levels due to inflation. Its premiums written surged to £3.5bn from £2.56bn last year.
Admiral added more than 500,000 customers last year. It saw the number of vehicles it insures stay flat at 4.94m compared with 2022, recovering from a 380,000 loss in the first of 2023.
Households and travel and pet policies insured rose by around 180,000 and 250,000 respectively.
The firm is looking to diversify its balance sheet, having agreed to buy RSA’s More Than insurance business in December and growing its electric vehicle book.
“Admiral achieved another good set of results, within the context of challenging market conditions,” said chief executive Milena Mondini de Focatiis.
“Our 30th anniversary is a good opportunity to remind ourselves of our growth story, from a Welsh startup to a £4.8bn business serving nearly ten million customers in five countries, driven by technical competence and continuous innovation across service, pricing, products, and distribution. Our core values of prioritising customers and people remain unchanged.”
She added: “Despite global uncertainties, our outlook is positive, benefitting from improved market conditions and a strengthened position, thanks to the discipline we maintained in the last year.”