Admiral FY profits surge on strong UK motor performance, dividend hiked

(Sharecast News) - Admiral hiked its dividend on Thursday as the insurer posted a surge in full-year profit, attributing much of the strength to its UK motor business. In the year to the end of December, pre-tax profit jumped 90% to £839.2m, with group turnover 28% higher at £6.15bn and insurance revenue up 37% at £4.78bn.

Earnings per share rose to 216.6p from 111.2p and the company declared a dividend of 192p per share, up 86%.

Group customer numbers grew 14% to 11.10 million, while UK insurance customer numbers were up 19% to 8.80m. The number of international insurance customers dipped 3% to 2.10m.

The UK motor division saw a 15% jump in customer numbers, "driven by reducing prices ahead of the market around the start of the year, after a period of prices moving higher to address significant claims cost inflation in the past few years".

Turnover in the UK motor segment was up £1.1bn to £4.5bn and pre-tax profit rose 61% on the previous year to £955m. Admiral said this was thanks to its strong performance as well as a circa £100m reserving benefit from the recent change to the Ogden discount rate, which impacts large personal injury claims.

The insurer said it passed the benefits from the new Ogden rate to its customers by lowering prices accordingly the day after the announcement in December.

Chief executive Milena Mondini de Focatiis said 2024 had been "a remarkable year".

"To remain one of the most competitive insurers for the largest number of people is a priority for us. We have emerged from several rather challenging years so when we saw conditions improve we were quick to respond. We were one of the first to reduce prices in response to easing inflation and cut rates the day after the favourable Ogden rate change announcement," she said.

"The main driver of our exceptional performance was our UK Motor business. However, it is great to see UK Household, Admiral Money, and our French and US Motor businesses all report a double-digit profit.

"As we enter into 2025, the market is softening, and the outlook is uncertain. Our priority is to stay efficient and agile so that we can adapt as needed and deliver long-term growth by building on our strong foundations and talented team."

At 0815 GMT, the shares were up 6.7% at 3,095p.