However, the group improved its turnover and insurance revenue despite ’a challenging market’, says chief executive
Admiral has revealed that its combined ratio (COR) rose by 2.7 percentage points during the first half of 2023 amid the group seeing “persistent high inflation”.
In a trading update published today (16 August 2023), the insurer said it achieved a COR of 89.8% in the first six months of the year, compared to 87.1% in the same period during 2022.
The firm also revealed that its UK core motor COR also grew year-on-year, from 87.2% in H1 2022 to 89.2% in H1 2023.
In a presentation of its results, Admiral said that “persistent high inflation continued across markets [and] remained higher than the market had anticipated”.
Despite market conditions, however, the group posted a turnover of £2.24bn in H1 2023, some 21% higher than the £1.85bn achieved in the same period in 2022.
In turn, the insurer boosted its insurance revenue by 14% year-on-year, while profit before tax rose from £224.6m to £233.9m in the first half of the year.
“The group has once again delivered a solid performance and strong growth in the context of a challenging market, although we believe that the cycle is turning,” chief executive Milena Mondini de Focatiis said.
“Inflation persists, but we have navigated the cycle well, maintaining pricing discipline and a focus on medium-term profitability.
“We recognise that these are challenging times for many people and we are committed to being there for them when they need us the most, delivering good service and competitively priced products while also actively managing our costs.”
Motor and home
Meanwhile, the insurer revealed its UK motor business achieved a profit before tax of £298.2m in the first half of 2023, up from £290.9m in the same period during 2022.
And it said that while motor claims inflation remains high, there were some early signs of improvement.
“As we increased prices well ahead of the market last year, our active vehicle base reduced over the period, but we are on a strong footing to leverage improving market conditions,” Mondini de Focatiis said.
“We continue to enhance our capabilities, particularly in data and technology, and we are innovating to further develop our core competences and enrich our customer proposition.”
The insurer also revealed that UK household insurance continued to grow despite price increases and continued inflation.
Admiral said this secured a turnover of £157m in H1 2023, up from £121m in H1 2022.
“We are making good progress on our diversification strategy, with our non-UK motor products delivering 19% customer growth and our UK household business and European motor business delivering profits of £8.7m and £4.7m respectively,” Mondini de Focatiis added.
“I am pleased to say that we remain strongly capitalised and, thanks to the hard work of my colleagues across all of our markets, we now serve even more customers and are very well-positioned for a more encouraging outlook.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
Now working within the insurance sector, James has a particular focus on motor, M&A activity and financial reporting.View full Profile