Insurer Admiral takes a dip after Brexit vote hits capital buffer

Shares in car insurer Admiral dropped 7% earlier after it revealed that the fall in gilt yields after the Brexit vote had knocked its solvency ratio hard.

The day before the Leave vote Admiral’s ratio, which reflects the size of its capital against its potential payout liabilities, stood around its year-end level of 206%. But by the end of June it had dropped to 180%.

Finance director Geraint Jones said this was “still a very healthy ratio” and said Admiral had applied to regulators to use a method of valuing its liabilities which would smooth out such sudden changes.

But some analysts questioned the decision to boost its half-year dividend by 23% to 62.9p, which included 11.9p of “excess capital” when its solvency ratio fell.

The hike means ex-chief executive and founder Henry Engelhardt picks up a cheque for £22.6 million.

Profits rose 4% to £193 million as customer numbers leapt 15% to 4.8 million. premiums went up an average 3%. The shares fell 166p to 2088p.