Insurance firm Admiral ended the day as the second biggest riser in the FTSE 100 yesterday after reporting an increase in turnover of more than 50% for the third quarter.
Group turnover at the Cardiff-based business, which employs 1,600 staff, reached £446m for the three-month period in a set of strong figures released to the London Stock Exchange.
The markets reacted strongly, with Admiral’s shares climbing by 5% and ending the day up 2.64% at 1670p.
An Interim Management Statement released by the insurer showed that at the end of September Admiral provided insurance for 2.6m vehicles, up 28% on the previous year.
But Admiral failed to see a pick up in its price comparison website Confused.com, despite the launch of a new advertising campaign in September.
It said the site’s turnover had been stable since the half-year, although profit margins remain under pressure.
The group admitted at the half-year stage that Confused.com had lost out to rivals who have had more success with TV ads, such as moneysupermarket’s “haggle hero” series featuring comedian Omid Djalili and Gocompare’s opera singer.
Henry Engelhardt, Admiral’s chief executive, said: “Not much has changed since our 2010 interim results. The UK business remains the driving force of the group’s success and we continue to develop our international businesses.
“Our UK car insurance operation continues to benefit from positive market conditions. We grew vehicle count by 28% year-on-year to over 2.3 million whilst also increasing premium rates.”
Admiral also announced it was extending its deals with reinsurers Swiss Re, New Re and Hannover Re. It has also entered new deals with Mapfre Re and XL Re.
The company said that the deals were on similar terms to its existing agreements with New Re and Hannover Re.
“We have signed new quota share reinsurance deals for the UK for 2011 through to 2013. These arrangements maintain Admiral’s use of both short and long-term reinsurance as part of its low risk, low capital approach to car insurance underwriting,” said Mr Engelhardt.
Given yesterday’s turnover figures Admiral has already broken through the £1bn mark for turnover this year. The £446m achieved in the third quarter followed turnover of £720.5m for the first half of the year.
The company is also expanding across Europe and yesterday revealed that turnover for its non-UK car insurance businesses had risen by 87% in the third quarter when compared to the same period in 2009.
Admiral operates under a number of brand names, including Bell, Elephant.co.uk, Diamond and price comparison site Confused.com.
Price comparison sites have become an increasingly important part of the car insurance market. In 2001 price comparison provided 10% of UK new insurance business. In the first half of this year it provided 51% of new business for the group.
But price comparison provides an even bigger share of Admiral’s business – it accounted for 84% of the firm’s new business in the first half of 2010. Analysts praised Admiral’s car insurance performance.
Analysts at Numis Securities said the group had been able to gain market share as loss-making rivals have had to increase rates at a steeper pace in recent months.
“Admiral continued to use its UK cost advantage to maximum advantage,” they said.
Source : Wales Online
