Motor insurer Admiral's combined ratio (of claims to premiums) deteriorated by over six percentage points in 2011, to 95.7 per cent, largely due to the kind of 'whiplash' personal injury claims the government wants to curb. The shares have been losing speed for some time, and there's no obvious catalyst for a re-rating.
UK pre-tax profits slipped 25 per cent in 2011 to £207m and, even though premium rates here rose 15 per cent during 2011 as a whole, that pace seems to be slowing. Last year, for instance, management reported merely 'modest' premium rate increases during the period between 1 July and 9 November. Meanwhile, the international business remains heavily loss-making, with a combined ratio of 164 per cent. It's growing fast, with vehicles insured rising 88 per cent year-on-year to 306,000, but remains small compared to the UK's 2.97m vehicles insured.
Price comparison website confused.com saw profits slip £0.8m to £16.1m amidst tough competition, while the investment book, which is focused on cash and bonds, managed a slender looking 1 per cent return.
Prior to these figures, broker Numis was expecting 2012 pre-tax profit of £316.3m, giving EPS of 87.1p (from 81.9 last year).
ADMIRAL GROUP (ADM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,161p | MARKET VALUE: | £3.14bn | |
| TOUCH: | 1,161-1,163p | 12-MONTH HIGH: | 1,729p | LOW: 786p |
| DIVIDEND YIELD: | 6.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 145p* | COMBINED RATIO: | 95.7% | |
| Year to 31 Dec | Net premiums (£m) | Pre-tax profit (£m) | Investment income (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 142 | 182 | 24.6 | 43.8 |
| 2008 | 170 | 203 | 24.4 | 52.5 |
| 2009 | 212 | 216 | 8.80 | 57.5 |
| 2010 | 288 | 266 | 9.50 | 68.1 |
| 2011 | 446 | 299 | 13.7 | 75.6 |
| % change | +55 | +12 | +44 | +11 |
Ex-div:02 May Payment:01 Jun *Includes intangible assets of £87.5m or 32p a share | ||||
