Admiral Group beats market expectations with 24% leap in profits

Motor insurance group, Admiral, beat market forecasts with a 24% increase in full-year profit. The group said its pre-tax profit for the 12 months to the end of December was £182 million compared with £147 the previous year.

Admiral also announced a strong performance at its Confused.com insurance price comparison website, which generated a profit of £36 million - a rise of 59%.

However, the company said 2008 is likely to be ‘a much tougher year’ for Confused.com, due to increasing competition from a series of newly launched insurance price comparison websites.

Admiral said there were only tentative signs of a cyclical upturn in UK motor insurance prices, with intense competition continuing to deter most companies from raising their rates.

Last year, UK motor rates increased on average by 4%, just keeping pace with the average increase in claims. Chief executive, Henry Engelhardt, said the UK car insurance market cycle is turning with sloth-like speed.

Last July, Admiral ended discussions with an unnamed private equity investor over the sale of a stake in Confused.com. However, it has announced that it intends to keep full control of the business.

Following the deteriorating market conditions Confused.com is now up against, Henry Engelhardt was asked if he regretted his decision to end takeover talks but said I do not regret it one bit, the terms were not acceptable.

Admiral sells car insurance direct to consumers through the Admiral, Bell, Diamond and Elephant.co.uk brands.

Discuss this in the Finance Markets forums

Story link: Admiral Group beats market expectations with 24% leap in profits