The Admiral Group plc (LON: ADM) share price rallied 7.83% after releasing its half-year earnings report for the six months ended 30 June 2023. The company noted that it had to hike the prices of its motor insurance products by about 20% to stay ahead of inflation.
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The insurance company also revealed that it generated group profits before tax of £233.9 million compared to £224.6 million in H1 2022, marking a 4% improvement. However, the company’s earnings per share fell 5% to 57.6p, from 60.8p in 2022. The firm slashed its interim dividend by 15% to 51.0p per share from 60.0p in H1 2022.
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Admiral’s UK Motor business delivered a profit of £298 million in the first half of 2023, driven by the 20% increase in the price of new and existing premiums. Luckily for the company, it had increased prices last year, way ahead of the market, which paid off significantly.
However, despite growing the total number of customers served by the insurance group, the company recorded a 7% decline in its UK Motor clients due to the price increases. The company confirmed its focus was on quality over quantity regarding its clients.
Admiral had 9.4 million customers at the group level as of 30 June 2023, marking a 4% improvement from H1 2022. The group’s turnover was over 20% higher as rate increases across the Group to address claims inflation led to significant increases in average premiums.
Milena Mondini de Focatiis, Group CEO, commented: “The Group has once again delivered a solid performance and strong growth in the context of a challenging market, although we believe that the cycle is turning. In the first half of the year, profit was £234 million, turnover was up 21 per cent to £2.2 billion, and our Group customer base grew 4 per cent. Inflation persists, but we have navigated the cycle well, maintaining pricing discipline and a focus on medium-term profitability. We recognise that these are challenging times for many people and we are committed to being there for them when they need us the most, delivering good service and competitively priced products while also actively managing our costs.”
Admiral share price.
The Admiral share price rallied 7.83% to trade at 2375.5p, from Tuesday’s closing price of 2203.0p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.