Motor insurance has been in the news recently after the European court of justice ruled that use of gender in determining rates was unfair. Given the rise in insurance rates this year, long-suffering motorists might be tempted to regard premiums as universally unfair, but insurer Admiral won't be complaining - a 25 per cent increase in premium rates was the main driver of these buoyant results.
Total premiums in the group's core UK car insurance business rose by more than 50 per cent to £1.23bn, while the number of vehicles insured rose by a third to 2.46m. The performance from Admiral's fledgling Italian business Conte was even better, with its customer base more than doubling to 86,500 and premiums up 150 per cent to £30m. Admiral fared less well with it price comparison website Confused.com, which lost market share to rivals with better advertising and caused operating profits to fall by a third to £16.9m.
Chief operating officer David Stevens said the growth seen in premium rates is almost unprecedented and added that he does not expect the growth in rates to be maintained at the same level this year, although rises are still likely to be in double figures.
Numis Securities forecasts 2011 EPS of 82.8p (2010: 72.3p).
ADMIRAL (ADM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,666p | MARKET VALUE: | £ 4.47bn | |
| TOUCH: | 1,665p-1,668p | 12-MONTH HIGH: | 1,770p | LOW: 1,167p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 130p* | COMBINED RATIO: | 89.3% | |
| Year to 31 Dec | Net Premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 145 | 147 | 39.8 | 36.1 |
| 2007 | 142 | 182 | 48.6 | 43.8 |
| 2008 | 170 | 203 | 54.9 | 52.5 |
| 2009 | 212 | 216 | 59.0 | 57.5 |
| 2010 | 288 | 266 | 72.3 | 68.1 |
| % change | +36 | +23 | +23 | +18 |
Ex-div:18 May Payment:10 Jun *Includes intangible assets of £83m, or 31p a share | ||||
