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Admiral profit to beat expectations
7th Feb 2020 07:23
(Sharecast News) - Admiral's annual profit will be higher than expected after the insurer benefited from lower costs for UK motor injury claims.
The FTSE 100 company said it expected pretax profit for the year to the end of December to be between ?510m and ?540m - an increase of between 6% and 13% from the year before.
In a trading update, Admiral said its final dividend would be in the range of 73p to 78p a share. It will pay out about ?6m to employees to cover a cash bonus of ?500 per worker based on the strong results.
Admiral said clarity over the new personal injury discount rate in 2019 caused an increase in large claims settling, allowing a higher level of reserve releases.
The company said: "The higher than expected profit is due to an unusually positive development during 2019 in the cost of UK motor bodily injury claims from a number of prior underwriting years. This has led to elevated reserve releases and profit commission revenue."
Profitability in the current year continues to be affected by higher claims inflation during 2019, leading to a higher loss ratio for 2019 than in recent years. Its UK motor insurance business grew customer numbers marginally during 2019.
The FTSE 100 company said it expected pretax profit for the year to the end of December to be between ?510m and ?540m - an increase of between 6% and 13% from the year before.
In a trading update, Admiral said its final dividend would be in the range of 73p to 78p a share. It will pay out about ?6m to employees to cover a cash bonus of ?500 per worker based on the strong results.
Admiral said clarity over the new personal injury discount rate in 2019 caused an increase in large claims settling, allowing a higher level of reserve releases.
The company said: "The higher than expected profit is due to an unusually positive development during 2019 in the cost of UK motor bodily injury claims from a number of prior underwriting years. This has led to elevated reserve releases and profit commission revenue."
Profitability in the current year continues to be affected by higher claims inflation during 2019, leading to a higher loss ratio for 2019 than in recent years. Its UK motor insurance business grew customer numbers marginally during 2019.