Analysts warn Admiral is under pressure as it makes 50% of revenue from ancillary income
Admiral was the biggest loser in yesterday’s Office of Fair Trading (OFT) verdict as its shares plummeted 7%.
The stock dropped 80p to £10.39 after the OFT referred the private motor insurance market to the Competition Commission.
Admiral makes around half its profits from ancillary fees, which include hire fees, medical expenses and referral fees.
Despite the concerns over Admiral, its profits continue to climb year on year.
Chief executive Henry Engelhardt criticised the doubters in Admiral’s 2011 annual report. Last year he also bought Admiral stock heavily, indicating his faith in the company’s ability to grow its share price.
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