The UK motor COR improved by two percentage points – largely driven by strong releases from prior year claims reserves

Rate increases drove Admiral’s UK motor business to make a profit of £443m in 2015, up 11% on the £398m it made in 2014.

Admiral’s UK motor combined operating ratio (COR) was 81% in 2015, compared with 83% in 2014, largely driven by strong releases from prior year claims reserves – £84.6m versus £66.8m.

If the add-ons Admiral underwrites are included, the COR is 78.2% (2014: 79.5%).

The UK car business accounts for 81% of group turnover (2014: 81%) and 75% of customers (2014: 78%).

Admiral said that after an unprecedented period of premium deflation over 2011‐2013, 2015 saw prices continue to rise following an early indication of increasing prices in late 2014.

As a result of Admiral increasing its rates in early 2014, UK motor turnover increased by 7% to £1.71bn (2014: £1.6bn), while the number of vehicles insured also increased to 3.3m (3.15m).

Admiral chief executive Henry Engelhardt described 2015 as the year of the uncut diamond because when the year started many people thought it would turn out to be a “lump of coal”.

In his final chief executive statement, Engelhardt said: “The work we did on the UK business in terms of rate increases ahead of the market and the continued attention to operational detail amongst other things, led to an excellent economic outcome.”

Operating officer David Stevens will take over as chief executive. Engelhardt will stay on with Admiral on a part‐time basis to help Stevens by managing the price comparison business.

UK household insurance

Admiral’s other UK businesses experienced mixed results. 

The UK household business saw policy numbers grow more than 90% to over 310,000 (2014: 162,600).

Despite the relatively small size of the household book that was launched in December 2014, Admiral said it had generated a small profit and its expense ratio was lower than the UK market ratio.

Admiral’s commercial vehicle insurance broker Gladiator was hit by operational changes.

Together with a competitive environment, this resulted in a reduced operating profit of £1.5m (2014: £2.2m), although customer numbers increased  to 146,600 from 143,900.

Group-wide, Admiral pre-tax profit grew by 6% to £377m, while turnover was up 8% to £2.12bn – helped by the UK and Italian businesses.

However, overall performance was offset by reduced profits for Admiral’s UK price comparison business