Like its peers Hastings and Direct Line, Admiral has benefited from a fall in claims frequency during lockdown
Admiral’s half-year results have followed the trend seen for other motor insurers - a profit boost due to the reduction in car claims during lockdown.
The group’s combined operating ratio (COR) improved to 83% for the first six months of the year compared to 92.3% for the same period of 2019.
”Lockdown restrictions in the Group’s markets resulted in significantly lower motor insurance claims frequency as customers stayed at home and fewer miles were driven”, the company said.
Statutory pre-tax profit rose steadily to £286.1m compared with the £218.2m posted in the same period of 2019, beating analyst forecasts.
Admiral’s performance was in line with that of competitor Direct Line, which saw a similar boost to profit for the first half of the year due to fewer claims, as did Hastings which posted a COR in line with expectations for the half.
Other highlights for the half included a slight profit increase in UK household (£5.5m, up from £4.2m in H1 2019) and improved investment income.
Reserve releases climbed to £64.2m, an increase of 3.7% on the H1 2019 figure, which was due to the fall in premium income, the company said.
The group’s underwriting figures were impacted by its ‘stay at home’ premium refund to customers, which cost £110m overall, and equated to returns of £25 for each car and van policy. This accounted for a 7.5% reduction in premium income for the half.
Commenting on the half-year results, chief executive David Stevens said: ”A year ago I described our results as ‘frankly a bit dull’. With the benefit of hindsight there’s a lot to be said for ‘dull’ if the alternative is a global pandemic.
“Our response to that pandemic highlighted two of Admiral’s key strengths – competent execution in the short term and sustainable values for the long-term.
”We adapted quickly to the new circumstances, pirouetting from one working model to another and compressing years of learning and development into a matter of weeks through a phenomenal collective effort across the company at all levels.
“This year’s interims benefit again from our consistently competent underwriting and conservative reserving on past years, feeding into another strong set of results in the core business and beyond.”
In May, Admiral topped the Insurance Times underwriting league table. Its market best COR of 88.6% helped Admiral to clinch the gold medal for the first time since 2015 when it was displaced by Hastings, since which time Hastings secured a cleansweep with a hat-trick of gold medals between 2016 and 2018.
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