Car-insurance competition sinks Admiral

Admiral was the biggest faller on the FTSE 100 today as competition in the motor-insurance market hit its third-quarter performance.

The company, which sponsors the Welsh rugby team, said that even though its customer numbers rose 10% to 4.03 million, turnover was down 3% to £513 million. Like rivals including Direct Line, it blamed falling prices.

“We anticipate that future earnings will be impacted by the decline in premiums experienced across the market in recent years coupled with a return to higher-claims inflation,” boss Henry Engelhardt said today.

However, he added: “Admiral’s industry-leading combined ratios mean that we are well placed to grow and continue to deliver strong returns for our shareholders.”

Shares in the company were down 36p — or 2.86% — to 1223p.

Eamonn Flanagan, analyst at Shore Capital, reiterated his sell rating on the company, citing a “deteriorating” claims environment across the sector.

Earlier this week, Aviva said “crash-for-cash” incidents — when road-traffic accidents are deliberately caused to claim whiplash compensation — are at an all-time high.