Admiral's chief executive steps down

13th May 2015 07:05

Admiral Group's chief executive Henry Engelhardt is stepping down in a year's time, the motor insurance company announced on Wednesday.Engelhardt, who has been in the role since the group's creation in June 1991, will be replaced by well-regarded co-founder and chief operating officer David Stevens.Engelhardt said: "Don't bury me yet, guys! I still have 12 months on the job and lots to accomplish in that time. But I see the wealth of management talent we have rising up in the organisation and I think that in a year it will be the right moment to start the transition towards that younger, very talented team."While Engelhardt is not as active in the business as he used to be, Berenberg noted that his retirement "still seems somewhat premature" given recent bullish commentary on the US business in particular and that he is only his 56 years old."While the operational impact of the departure is limited, the fact that Engelhardt prefers retirement to the growth/earnings prospects of the group should be taken negatively. We expect the shares to be weak today."Shore Capital said: "We expect the market to react negatively to this news despite the high regard in which we hold Stevens."It will also be interesting to note whether this announcement will bring forward any change to group strategy, for example with regard to the international expansion which has been a key feature of Engelhardt's attention these past few years. We wish Henry a prosperous and healthy retirement." The broker reiterate its 'sell' recommendation on Admiral, highlighting the lack of real improvement in the rating environment, the deteriorating claims experience across the industry together with the ongoing regulatory pressure on both ancillary income and instalment income.