Admiral has revealed that pre-tax profits are up 2% for the first half of the year, despite an “adverse impact” from the rising cost of injury claims as a result of the Ogden rate cut.
The insurance group’s pre-tax profits came in slightly ahead of market expectations at £193 million, with revenues rising 8% to £550 million, according to a Financial Times report. The group’s total interim dividend was cut by 11% to 56p.
While the Ogden rate cut cost the group a total of £150 million, overall results were boosted by a strong performance on price comparison sites and lower losses in the international division.
But despite the slight increase in profits, shares in Admiral fell as much as 7% in early trading today following the announcement, making the stock the worst performer on the FTSE 100, according to a BBC News report.
“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,” Admiral CEO David Stevens, said. “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.”
Turnover and customer numbers in existing businesses have grown by more than 13%, while also delivering a “first half of important ‘firsts’,” Stevens added, pointing to the first loans originated on the company’s new dedicated lending system, the first cars sold on Confused.com, and the first vans directly underwritten in the UK and Spain.
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