Insurer Admiral (ADM.L) lead the FTSE100 lower this morning after a disappointing update to investors. H1 revenue at the company declined 9% in the period, even though customer base increased insurance premiums fell overall and the company says it is yet to see signs of any trend of an increase in premiums in the near future.
Comment from Henry Engelhardt, CEO Admiral Group “In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth. Admiral’s rates have been pretty flat over the first half of the year, though as a result of the reductions in 2013, total premiums are down around 9% compared to the first half of last year. Thanks to positive improvements in retention levels, our UK customer numbers have increased by over 4%.
“UK claims development on the back years (2012 and prior) has been positive and we continue to forecast good levels of reserve releases. Our expectations for our UK business in 2014 therefore remain unchanged. However, as we’ve said previously, our margin expectations for business earned this year are lower than in recent years, in the main as a consequence of the decline in premiums. Much of the impact of the reduced margin will be reflected in earnings of subsequent years.
“Outside the UK, our international insurance operations continue to grow and make positive progress. Our European price comparison businesses have had a good, profitable first half of the year and we’re encouraged by the very early indicators from comparenow.com in the US, which would suggest meriting an increase in marketing investment in the second half.
Insurer Admiral (ADM.L) lead the FTSE100 lower this morning after a disappointing update to investors. H1 revenue at the company declined 9% in the period, even though customer base increased insurance premiums fell overall and the company says it is yet to see signs of any trend of an increase in premiums in the near future.
Comment from Henry Engelhardt, CEO Admiral Group
“In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth. Admiral’s rates have been pretty flat over the first half of the year, though as a result of the reductions in 2013, total premiums are down around 9% compared to the first half of last year. Thanks to positive improvements in retention levels, our UK customer numbers have increased by over 4%.
“UK claims development on the back years (2012 and prior) has been positive and we continue to forecast good levels of reserve releases. Our expectations for our UK business in 2014 therefore remain unchanged. However, as we’ve said previously, our margin expectations for business earned this year are lower than in recent years, in the main as a consequence of the decline in premiums. Much of the impact of the reduced margin will be reflected in earnings of subsequent years.
“Outside the UK, our international insurance operations continue to grow and make positive progress. Our European price comparison businesses have had a good, profitable first half of the year and we’re encouraged by the very early indicators from comparenow.com in the US, which would suggest meriting an increase in marketing investment in the second half.
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