Source: Sharecast
The company said “unusually positive” development meant pre-tax profits would probably total £450m-500m for the first six months of the financial year - almost double the £286m it reported last year and well above analysts forecasts of about £230m - £270m.
It also guided for a dividend of 110 – 125p a share.
“The stronger result is due to unusually positive development in the cost of UK motor bodily injury claims from a number of prior underwriting years which has led to higher reserve releases and profit commission revenue,” Admiral said in a statement.
Lower-than-expected motor claims frequency in 2021 to date due to extended lockdown restrictions also resulted in a favourable current period loss ratio, despite significant reductions in premium rates over the past year after £110m in premiums refunded to customers in May 2020.
“It is not currently expected that the level of reserve releases and profit commission for the first half of 2021 will be repeated in the second half,” Admiral added.
Admiral also completed the sale of its Penguin Portals comparison business during the first half of the year, netting the company around £460m with shareholders to receive around £400m of the proceeds in the form of special dividends phased over 2021 and 2022.
