Admiral hit by fall in motor insurance cost

WELSH car insurance business Admiral yesterday reported a dip in revenues as UK car insurance premiums declined for the first time in many years.

As a result group revenues fell six per cent to £551m during the first three months of 2013.

“Year-on-year UK car insurance market premiums are down around 10 per cent,” said Admiral chief executive Henry Engelhardt.

“Not surprisingly our turnover has also fallen, but, as we have said before, we continue to be focused on margin not volume and we believe this is not the right time for us to grow our market share in the UK.”

The number of British drivers insured by Admiral remained flat at 3m, although the overseas business grew to 458,000 customers and generated £48m in revenue.

Eamonn Flanagan, an analyst with Shore Capital, said the drop in premiums and the Competition Commission probe into the UK car insurance industry should alarm Admiral investors.

“We view the shares as materially overvalued given the risks to earnings and margins from the plethora of regulatory and other issues currently surrounding the UK personal motor insurance industry,” he explained.

Admiral, which also owns the price comparison website, yesterday saw its shares close down 2.15 per cent at 1,320p.

The company insists its expectations for full-year results remain “positive and unchanged”.