Admiral increases interim dividend payout after insurer’s profits top £300m

Admiral Group has revealed a bumper dividend increase after first-half profits were boosted by strength in the company’s motor insurance business.

The insurer said investors would receive a payout of 71 pence per share, made up of a normal dividend of 51.3 pence per share and a special dividend of 19.7 pence per share.

Its pre-tax profits rose by almost a third to £309.8m in the six months to June, and profits at its motor insurance division rose by a fifth to £358.9m thanks to higher premiums earned.

As Covid-related restrictions eased and people began to travel more in 2022 and 2023, supply chain issues and rising repair and used vehicle costs led to Admiral experiencing increasing claims costs.

It responded by raising premiums, which boosted its profits but caused hundreds of thousands of customers to switch to rival insurers.

However, the company lowered premiums earlier this year even as market rates were still growing, attracting more motorists back to its rolls.

Admiral’s total customer base expanded by 12 percent year-on-year to 10.5 million, supported by an increase in the number of UK insurance customers from approximately 1.2 million to 8.2 million.

As a result, its turnover soared by around £1 billion to £3.2 billion, while insurance revenues rose 38 percent to £2.2 billion.

Milena Mondini de Focatiis, Admiral’s CEO, said: ‘We have delivered a strong set of results in the first half, increasing profits, revenues and customer numbers, demonstrating our resilience and agility in the changing market dynamics.

“Thanks to our early response to inflation in previous years, we have been able to be more competitive in (the first half).”

After the result, Admiral’s actions rose 7.1 per cent to £30.10 just before midday on Thursday, making them the best-performing FTSE 100 company.

Founded in 1993, Admiral is known as one of the UK’s largest motor insurers, but has also diversified into home, pet and travel insurance.

In March, the Cardiff-based firm acquired More Than’s home and pet insurance operations from rival RSA in a deal potentially worth £115m.

Derren Nathan, head of equity research at Hargreaves Lansdown, said Admiral “is well positioned to take advantage of similar opportunities if they arise, but for now, it is doing an excellent job of driving growth organically.”

“Outside the automotive sector, the group’s activities are too small to warrant change. If it can replicate its success in other products, it could accelerate growth, but there is some execution risk if it moves away from its core business.”