New deals see Admiral continue to hold 25% of liabilities

Henry Engelhardt, Admiral

Specialist motor insurer Admiral has extended its reinsurance deals to at least 2015.

The deals will see reinsurance cover provided by Munich Re, New Re, Hannover Re, Swiss Re, Mapfre Re and XL Re. Analysts had been worried that the new deals would be on worse terms than the previous arrangements, but Admiral confirmed the arrangements had seen “no material change”.

Admiral will continue to hold 25% of the liabilities with the remainder being spread around the six reinsurers. The arrangements are in addition to an existing co-insurance agreement which sees Munich Re cover 40% of UK business and runs until 2016.

Admiral chief executive Henry Engelhardt (pictured) said: “We are pleased to announce extensions of these key UK reinsurance contracts to at least the end of 2015. Reinsurance has been at the core of Admiral’s successful business model since 2000, allowing us to manage our downside exposure while still participating in upside through profit commission arrangements.

“It significantly reduces the amount of capital the group is required to hold and frees up resources for distribution to shareholders and growing the business. We look forward to continuing our mutually beneficial relationships with our partners for many years to come.”

Admiral reinsurance arrangements

Munich Re40.00%40.00%40.00%
New Re13.25%13.25%12.25%
Hannover Re8.75%8.75%8.75%
Swiss Re7.50%9.00%9.00%
Mapfre Re3.00%4.00%5.00%
XL Re2.50%0.00%0.00%