Motor insurer reports ‘disturbing’ drop in other revenue per vehicle
Admiral reported UK car turnover of £440m in the third quarter of 2013, down 12% on the £502m it reported in the same quarter of 2012.
The company also reported an 11% drop in other revenue per vehicle to £70 in the third quarter from £79 at the full-year 2012 stage.
Shore Capital analyst Eamonn Flanagan described the fall in other revenue per vehicle as “somewhat disturbing”.
UK vehicle count remained flat at 3.03 million, the motor insurer revealed in its interim management statement this morning.
Chief executive Henry Engelhardt said the UK turnover reduction was caused by heavy competition in the UK motor market, where rates are falling.
Engelhardt said: “In the competitive UK car insurance market our strategy is to focus on profitability.
“Year-on-year market premiums are down, a situation which we believe will ultimately cause the cycle to turn.
“The current environment has led us to reduce UK turnover, but encouraging trends in our claims experience and our industry-leading combined ratio means that we continue to deliver strong returns for our shareholders.”
Despite the slump in the UK, Engelhardt said Admiral remains on track to meet its expectations for the full year.
The Admiral group as a whole reported third-quarter 2013 turnover of £528m, down 7% on the £570m it reported in the same quarter last year.
Group vehicle count increased 3% to 3.64 million (Q3 2012: 3.55 million).
International car turnover increased 26% to £49m (Q3 2012: £39m), and vehicle count was up 19% to 500,000 (Q3 2012: 420,600).
Admiral did not provide figures for its fledgling UK home insurance business, but Engelhardt said: “We are making good progress with our new home insurance product.”