Admiral Group Plc won’t be releasing its final 2019 numbers until March 05 but it has offered a glimpse of the likely picture come financial results time.
In an update this morning, the Cardiff-headquartered enterprise said it expects to post a group profit before tax of between £510 million and £540 million. The profit estimate translates to an increase of approximately 6% to 13% from the company’s pre-tax profit in 2018.
Lifting the lid on its forecast, Admiral explained: “The higher than expected profit is due to unusually positive development, during 2019, in the cost of UK motor bodily injury claims from a number of prior underwriting years. This has led to elevated reserve releases and profit commission revenue.
“Clarity over the new personal injury discount rate (the ‘Ogden’ rate) in July 2019 led to an increase in the number of large claims settling in 2019 compared to recent years which contributed to the level of releases. There has been no change to Admiral’s prudent approach to reserving.”
Meanwhile the insurance group is anticipating its 2019 loss ratio to be higher than in recent years, citing higher levels of claims inflation that continue to impact profitability.
Admiral, however, added: “On the basis of these preliminary results and strong solvency position, the proposed final dividend for 2019 is expected to be in the range of 73 to 78 pence per share.
“To recognise the contribution of Admiral’s employees to the strong results, all group staff (excluding executive directors) will receive a special cash bonus of £500 (approximately £6 million in total) in the first half of 2020.”
