Free shares for Admiral staff after insurer drives to record profit

More than 8,000 staff at Elephant and Diamond insurer Admiral have been handed a bumper payout after it secured record full-year profits.

The Cardiff-based insurer said it will give staff free shares worth a total of £3,600 each under an employee share scheme based on the results.

The pay boost comes after rising car insurance premiums helped group pre-tax profits rise 6% to £377 million in 2015.

FTSE 100-listed Admiral grew UK car insurance customers by 5% to 3.3 million, with the average written premium for 2015 rising 4% to £470, up from £453 in 2014.

Shares lifted 3.5% as the full-year results came in better than expected and after the group hiked its total dividend to 114.4p from 98.4p and announced a special dividend of 29.8p per share.

But it was a downbeat year for its price comparison website Confused.com, which saw annual profits drop to £12.5 million in 2015 from £15.8 million in 2014, as it ploughed investment into advertising and saw the market grow at a slower pace.

Group chief executive Henry Engelhardt said 2015 was "the year of the uncut diamond", as he reported his last full-year results before stepping down.

He added: "When the year started many people thought it would turn out to be a lump of coal. But no, 2015 was no lumpy coal year.

"The work we did on the UK business in terms of rate increases ahead of the market and the continued attention to operational detail, amongst other things, all led to an excellent economic outcome."

The insurer also boosted UK turnover 7% to £1.7 billion, fuelled by increases in the average premium and a 6% jump in total premiums written for the full year to £1.54 billion.

UK car insurance profits climbed 11% to £443 million for 2015.

Mr Engelhardt is stepping down after clocking up nearly 25 years at the group he co-founded in 1991.

He will be replaced by co-founder and current Admiral chief operating officer David Stevens in May.

Shore Capital analyst Eamonn Flanagan said the payment of the special dividend would cheer investors, but warned the "UK motor market remains perilous" with claims deteriorating across the market.