Car insurer drives profit 30% higher

CAR insurer Admiral Group today revealed a 30% leap in profits to £100.6m in its first full-year results since floating on the stock market last summer.

Turnover rose 28% to £548m. 'All in all it was a brilliant year,' said Henry Engelhardt, chief executive. 'From the facts and figures at hand, we still believe we are the most efficient and, pound for pound, the most profitable firmin the UK motor insurance market.'

The amount the company makes on policies remained much better than the industry average, despite a fall on a year earlier. Admiral's loss ratio, the difference between the money it takes in premiums and the amount it pays on claims was 83%, worsening from a 'phenomenal' 67% in 2003.

Admiral said the industry average was around 102% in 2003 and was 'unlikely to be better than 104%' in 2004. 'On average, rates probably fell by 2%-4% across the market, while claims costs continued to rise faster than inflation at 4%-6%,' said Engelhardt.

He said previous cycles of the industry prospering and then lanquishing would be more 'gentle' in future. With more firms selling insurance direct to customers, he believes the industry will be more reactive to changes in pricing.

The group's brands include Admiral, aimed at younger drivers in London, the women-focused Diamond and its online operations Elephant.co.uk and Confused.com. Its customer-base rose from 808,000 to 1.04m over the year.

The company announced a one-off payout to shareholders of 6.2p per share, crediting an 'abnormally low' tax charge for the year.The payment comes on top of a final annual dividend of 3.1p per share, in line with the company's policy of distributing 45% of after-tax profits among shareholders.