Admiral grows in H1 and offsets Ogden hit
UK-based motor insurer Admiral Group grew its operations in the first half of 2017, offsetting the impact of a lower Ogden personal injury discount rate.
The group grew turnover by 15 percent year on year to £1.45 billion in the first six months of 2017. Customer numbers increased 13 percent to 5.46 million over the period.
The group’s share of pre-tax profit increased slightly to £194.5 million in the first half of 2017 from £193.3 million. Slightly higher UK Insurance profit, a lower loss in the International Insurance segment and an improved Price Comparison result were partially offset by higher other group charges and business development costs.
“The first half of 2017 saw Admiral ambitious in pursuit of both immediate and longer-term growth opportunities,” said David Stevens, group chief executive officer.
“We've grown turnover and customer numbers in our existing businesses by over 13% while also delivering a first half of important "firsts" - the first loans originated on our new dedicated lending system, the first cars sold on Confused.com, the first vans directly underwritten in the UK and Spain.
UK Insurance profit before tax was slightly higher at £226.2 million in the first six months of 2017 compared to £224.0 million in the same period a year ago, reflecting the adverse impact of the lower Ogden discount rate on current period claims costs and profit commission, the company said.
In February, the UK’s Lord Chancellor decided to change the Ogden discount rate to -0.75 percent from 2.5 percent. The so-called Ogden tables detail figures to be used to multiply the annual cost of a damage to be awarded. It is used to calculate compensation awards for serious personal injuries.
“Most of the adverse impact from the increase in the costs of large injury claims, resulting from the change in the Ogden discount rate, was captured in our 2016 second half result,” Stevens explained.
“However, some extra costs carry into 2017. In these circumstances, we are happy to report a marginal increase in profitability and to deliver a more material increase in the underlying dividend.”
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