Admiral reinstates dividend after profits buoyed by lower motor claims

Insurance firm Admiral has brought back its special dividend after it was boosted by a slump in motor claims as Britons stayed off the roads.

Shares in the company rose in early trading after it reinstated a dividend of 91.2p per share, having suspended an interim pay-out in April due to the coronavirus pandemic.

Admiral said its pre-tax profits for the six months to June increased by 30% to £286.7 million.

It said this was particularly driven by lockdown restrictions in core markets, which resulted in “significantly lower motor insurance claims frequency as customers stayed at home and fewer miles were driven”.

However, total revenues slipped by 4% to £1.69 billion for the period despite increasing customer numbers.

It said revenues fell after it was impacted by its decision to give customers a £25-per-vehicle “stay at home” rebate to reflect the fall in vehicle usage.

David Stevens, chief executive officer of the group, said: “Our response to the pandemic highlighted two of Admiral’s key strengths – competent execution in the short term and sustainable values for the long term.

“We adapted quickly to the new circumstances, pirouetting from one working model to another and compressing years of learning and development into a matter of weeks through a phenomenal collective effort across the company at all levels.

“This year’s interims benefit again from our consistently competent underwriting and conservative reserving on past years, feeding into another strong set of results in the core business and beyond.”

Shares in Admiral increased by 4.8% to 2,646p on Wednesday morning.