Admiral ups first half guidance after motor claims windfall
Insurer Admiral this morning said that it was on track to make a higher than expected profit in the first half of 2021 after a boost in profit from its motor injury claims division.
As a result, the firm said that it would pay out an interim dividend of between 110p and 125p per share.
It added that profit from its operations would come in between £450m and £500m.
“The stronger result is due to unusually positive development in the cost of UK motor bodily injury claims from a number of prior underwriting years which has led to higher reserve releases and profit commission revenue”, Admiral said in a trading update.
“Further, motor claims frequency in 2021 to date has been lower than expected due to extended lockdown restrictions resulting in a favourable current period loss ratio, despite the significant reductions in Admiral’s premium rates over the past twelve months.”
However, the windfall looks like it will be a one-time event, with the insurer clear that it would not be repeated in the second half.
During the first half, Admiral also completed the sale of its Penguin Portals comparison businesses, netting the firm £460m.
It said that of this around £400m would be returned to its shareholders in the form of special dividends phased over 2021 and 2022.