The insurer started increasing new and renewal business prices in 2014 and anticipates further hikes in 2015

Henry Engelhardt, Admiral

Admiral’s UK motor business made a profit of £398m in 2014, up 1% on the £393.9m it made in 2013.

The reported motor combined ratio remained stable at 83% (2013: 83%)

The insurer’s combined operating ratio (COR) improved by 1.5 percentage points to 79.5% (2013: 81%).

The improvement was largely due to higher reserve releases of £137.4m, up 45.9% on the £94.2m Admiral made in 2013.

UK turnover has continued to fall, decreasing by 6% to £1.6bn from £1.7bn  in 2013, primarily due to reductions in average premiums which also led to a 6% reduction in total premiums written to £1.5bn (2013: £1.6bn).

Group chief executive Henry Engelhardt said: “The UK motor insurance market was again characterised by falling prices, albeit that the sustained reduction since the market turned in 2010 now appears to be running out of steam.

“Our aim through this period has been to maximise value rather than volume, maintaining our book at around three million customers and focusing on a major systems upgrade that is scheduled to complete in 2015.”

Admiral chief operating officer David Stevens added: “2014 was the third successive year of premium reductions in the UK car insurance market. Admiral’s response has been to prioritise margin protection rather than attempting to grow market share materially.

“As a consequence, although strong renewal retention figures led to a 4% increase in vehicles insured, turnover fell to £1.6 billion from £1.7 billion. In the latter part of 2014, some evidence emerged of prices in the market increasing, though not yet in a material way.”

The insurer started increasing new and renewal business prices in May and June, respectively. By the end of 2014 it had implemented a series of single digit price increases cumulatively.

Admiral also anticipates further price increases during 2015, reversing some of the margin reduction of the last two or three years.

UK household

The UK household insurance, which was launched in December 2012 under the Admiral brand made a second year loss of £100,000.

But Stevens remained optimistic, adding: “Results are encouraging. Our strategic bet is that we can materially under cut the 40% plus expense ratios of many of the established players, while also delivering a decent loss ratio outcome.

“Our expense ratio, on a written basis, is already actually below market average and our loss ratio is also encouraging.

“We have, of course benefited, along with other players, from unusually benign weather, notwithstanding increasing tabloid “weather bomb” hysteria. So, it’s so far, so good, but it is early days.”

Admiral retains 30% of the UK household premium it writes, passing the other 70% to reinsurers Munich Re, which takes 40% and Swiss Re, which has a 30% share.


Admiral Group profit fell by 4% to £357m from £371m in 2013, while group turnover also fell by 3% to £1.97bn (2013: £2.03bn).

The international car insurance business posted losses of £19.9 million (2013: £22.1 million), while the group’s share of price comparison profit totalled £3.6 million (2013: profit £21.1million) reflecting the investment in, the group’s US comparison business.

Engelhardt described the group’s performance in 2014 as the year of the baked Alaska; hot and cold in a single bit, adding that profits had emerged from its international insurance business, in Italy and record profits from its price comparison businesses in Spain and France.

He added: “For the first time since we went public, Admiral Group did not post a record profit; we still made a lot of money, had an enviable return to equity and distributed 95% of our after-tax profits to our shareholders.”

Join the debate in our new LinkedIn specialist discussion forum