Admiral posted strong first half results and set out the impact of any future Ogden change 

Admiral Group reported strong first half results, boosted by its motor business, with pretax profit rising to £212m from £195m a year earlier.

During the period, the group said it passed the 4 million mark for UK cars on cover, with UK customers reaching 5.07 million by the end of June, up from 4.34 million. International customers also grew to 1.12 million from 0.96 million.

The direct insurer said its share of aggregator’s profit rose to £3.5m from £3.1m.

Group turnover in the period was £1.66bn, up from £1.45bn.

“Zut alors! Nos opérations européennes sont rentables!,” said chief executive David Stevens, hailing the profit and growth posted by the group’s international operations.

“Most importantly,” he added, “the core UK car insurance business continues to grow both in terms of profit and customer numbers.

Net insurance premium revenue was £323.7m in the period, up from £301.3m, while the underwriting profit grew to £93.4m from £88.9m.

UK insurance registered a profit of £247.0m, up from £225.8m, while the group combined ratio improved to 87.4% from 90.0%.

Admiral said that, though a favourable claims environment and positive results in 2017 contributed to declining prices in the motor market in the first half of 2018, it was able to grow its business strongly in the first half of 2018 with no change to base rates.

It said the first half saw a slightly higher overall claims frequency, a slowing of the rate of improvement in injury claims frequency, and continuing inflation in property damage claims costs.

It said large bodily injury claims costs were also less positive in the first half, exacerbated by the cut in the Ogden discount rate.

Reserve releases rose to £56.5m from 344.9m.

Looking ahead to the government’s planned review of the Ogden rate, Admiral set out the likely impact on profit of any change to the rate.

Impact on Admiral Group of Ogden rate change
  on annual pretax profit £m on solvency ratio %
Increase of 75 basis points to 0% 94 7
Increase of 125 basis points to 0.5% 141 9
Increase of 175 basis points to 1.0% 179 13
Decrease of 75 basis points to minus 1.5% -115 -18