Insurance firm Admiral announces seven% rise in annual profits

Pre-tax revenue at Cardiff-based Admiral  rise to £370m, but turnover falls by 8% from £2.22bn to £2.03bn

Henry Engelhardt

Cost comparison to car insurance group Admiral has this morning announced pre-tax earnings of £370m for the yr ending December 2013 – a rise of 7% above the previous yr.

The Cardiff-headquartered business, which also has offices in Newport and Swansea, revealed that even though profit had elevated from £345m, group turnover had fallen 8% from £2.22bn to £2.03bn.

The fall in revenue was due to the recent downward cycle impacting on vehicle nsurance premiums in the United kingdom market  Although Admiral has expanding price tag comparison and car insurance companies in Spain, Italy France and the USA, the place last 12 months it invested £3.7m in a new price tag comparison enterprise, its Uk insurance organization accounts for 84% of total group turnover.

Its United kingdom value comparison business, Cardiff-primarily based, reported a rise in pre-tax profits of far more than £3m to £21.7m. Its international car insurance businesses accomplished a combined revenue lift of 15% to £187.8m. Its price comparison delivers in Spain and France on a combined measure, moved into the black with a revenue of £2.4m.

Admiral, which employs 6,000  of which 5,300 are in South Wales,  now insures a complete of 3.7m autos, up 4% from 3.55m final yr.

Group chief executive officer Henry Engelhardt mentioned the performance was “reliable, but not flashy”.

“2013 was the yr of the baked potato,” he said.

“It was a very good, strong yr, one thing on the plate that is appreciated but doesn’t really grab the spotlight. This is a comfort food set of final results.

“Why the baked potato? Because the year was sound, but not flashy. We manufactured more income than ever just before, we grew customer numbers a tiny bit, we launched a single new overseas organization (, but there was no development surge, there had been no claims shocks we just went about our organization.

“I was thrilled that our Uk employees voted us the 2nd ideal place to work in the Uk. Pleased employees indicates satisfied consumers and I thank all our staff for their challenging work.”

Chicago-born Mr Engelhardt stated that extended-phrase Admiral’;s worldwide dimension meant it was effectively placed to exploit what had the potential to be incredibly lucrative value comparison and car insurance operations. He is also upbeat on its household insurance coverage supply following the launch in the United kingdom last 12 months of Admiral Home Insurance.

Elaborating on his ‘baked potato theme he extra: “What truly gets me fired up about this enterprise is its lengthy-term long term.

“Behind that statement is the secret of the baked potato. Did you know that potatoes have more potassium than bananas? They are extremely minimal in saturated fats and they are a good source of vitamin C, vitamin B6 and magnesium.

“The stage is, you will not search at a baked potato and feel nutrients. Just as you may well not appear at Admiral’;s 2013 outcomes and see the progress manufactured by our non-Uk operations and United kingdom household. But for the 2 Admiral and the potato, they are there.” 

On the present downward cycle for  Uk car insurance premiums Chicago-born Mr Engeldhardt said: “Currently our bottom line is dominated by the final results in Uk car insurance.

“As has been effectively publicised, rates have fallen some 25% in the United kingdom market in the last 2 years or so. This  drop in prices has been in parallel with a drop in claims fees, but couple of authorities think that they are in best sync.

“Medium-term profitability will be greatly influenced by the eventual turn in the United kingdom cycle and what we can do with it. We’ve created it clear that we really don’;t think the present declining price atmosphere is  the optimum time to grow the company.

“It gets to be an optimum time when rivals start putting  their prices up. We too will place our charges up, just as we’ve taken our rates down in the existing, declining value, part of the cycle. But in the 2 situations, our move is/will be far more gradual than the  competitors. Quite simply, this implies that we really don’;t expand when prices are falling but we ought to grow when prices are increasing.”

Admiral’;s share price was up practically 5% following the outcomes and the higher than marketplace anticipated rise in pre-tax profits.

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