Admiral lifts interim dividend payout after insurer’s profits surpass £300m

  • Admiral Group said investors would receive a 71p per share interim dividend
  • Its pre-tax profits soared by almost a third to £309.8m in the six months to June 

Admiral Group has revealed a bumper dividend hike after first half profits were supercharged by strength in the firm’s motor insurance business. 

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

Its pre-tax earnings soared by almost a third to £309.8million in the six months ending June, with its motor insurance arm’s profits soaring by a fifth to £358.9million thanks to higher earned premiums.

Dividend: Insurance group Admiral said investors would receive a 71 pence per share payout

As Covid-related restrictions loosened and people began travelling more in 2022 and 2023, supply chain issues and increasing secondhand vehicle and repair costs led to Admiral experiencing escalating claims costs.

It responded by hiking premiums, thereby bolstering earnings but causing hundreds of thousands of customers to switch to rival insurers.

However, the company cut premiums at the start of this year even while market rates were still growing, attracting more motorists back onto its books.

Admiral’s total customer base expanded by 12 per cent year-on-year to 10.5 million, supported by UK insurance customer numbers rising by about 1.2 million to 8.2 million.

As a result, its turnover shot up by around £1billion to £3.2billion, while insurance revenue surged by 38 per cent to £2.2billion.

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

‘Given our earlier pricing response to inflation in previous years, we have been able to be more competitive in [the first half].’

Following the result, Admiral shares climbed 7.1 per cent to £30.10 just before midday on Thursday, making them the best-performing FTSE 100 firm.

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

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

Derren Nathan, head of equity research at Hargreaves Lansdown, said Admiral is ‘well placed to jump on similar opportunities if they arise, but for now, it’s doing an excellent job of driving growth organically.

‘Outside of motor, the group’s activities are too small to move the dial. If it can repeat its success in other products, that could accelerate growth, but there is some execution risk in moving away from its bread and butter.’

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