Insurer Admiral handed a share windfall to its staff after it saw profits jump by 45 per cent last year, as it attracted more customers and sold more policies.
The group, which also owns comparison website Confused.com and car insurer Elephant, saw profits rise to £403.5million last year compared to 2016, when it had suffered a slump following new Government rules regarding the payment of personal injury claims.
As a result, Admiral handed cash back to investors by raising its final dividend by 12.6 per cent – and said some 9,600 employees would receive free shares worth £3,600.
Confused.com saw losses shrink this year, but competition in the market remains high
The Cardiff-based group saw the number of its UK insurance customers rise by 12 per cent to 4.62million.
It also charged more for car policies, with UK motor premiums up 12 per cent to £2billion, following Government changes to the Ogden discount rate, which regulates the way victims of an accident are compensated in case of injury.
The Government lowered the Ogden rate to minus 0.75 per cent from 2 per cent two years ago. The changes resulted in insurers having to pay more for personal injury claims.
Admiral took a £150million hit in 2016 as the insurance industry struggled off the back of it, but insurers then responded by hiking premiums.
The Ogden rate is now under consultation, but Admiral said it was taking a ‘prudent approach’ and is assuming the minus 0.75 per cent rate will remain until it hears otherwise.
Admiral’s UK insurance division saw underlying profit rise to £465.5million from £337.8 million in 2016, offsetting losses at its international business.
Confused.com saw losses shrink this year – to £7.1million compared to £16.4million in 2016 – but said competition from other comparison website remains high.
‘In the UK, the high level of competition in the price comparison market and investment in the new marketing campaign and product development by Confused.com resulted in reduced profits of £10.1million in 2017 (2016: £16.1million),’ the group said.
Group net revenues were 11 per cent higher than 2016 at £1.1billion.
Admiral shares were down 1.4 per cent, or 27p, at 1,904p.
David Stevens, group chief executive of Admiral, said: ‘2016 was only the second year we’d ever reported a year-on-year fall in profits.
‘So it’s great to be back in the groove, with a 23rd year of ‘record profits’.’