Cardiff-headquartered insurer Admiral Group Plc is ready to be the bearer of good news when the company publishes its 2021 half year results on August 11.
If preliminary figures are anything to go by, Admiral believes it is poised to see somewhere between £450 million and £500 million in group profit before tax for the period. The earnings from the group’s continuing operations will be a “higher than expected” amount, said the firm.
In a trading update, Admiral stated: “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. There has been no change to Admiral’s prudent approach to claims reserving.
“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 12 months, which followed the £110 million of premium refunded to customers in May 2020.”
Meanwhile the insurer – whose sale of its Penguin Portals comparison businesses crossed the finish line at the end of April – expects to return £400 million (out of the approximately £460 million in net proceeds from the offloading) to shareholders. Special dividends are likely to be phased over this year and 2022.
The above dividend will be in addition to the proposed 2021 interim dividend, which is slated to be as much as 125 pence per share. Admiral attributed the approximation to the company’s preliminary results and “very strong” solvency position.
