Admiral looks at Linea deal as profits rise

ADMIRAL GROUP could bid for Spanish insurer Linea Directa and is eyeing an expansion into the household market after growing its interim profit by more than a fifth to £127m.

Admiral, which specialises in car insurance, said an offer for Linea Directa was a possibility at the right valuation. The Spanish business could be worth around €850m (£700m) based on the price at which its parent, Bankinter, bought out joint venture partner Royal Bank of Scotland’s 50 per cent share last year.

Admiral finance director Kevin Chidwick told City A.M.: “It’s a ‘maybe’ if it was at a very good price, but we’ve got fantastic growth on the organic side too.”

Separately, Chidwick said Admiral would launch a household insurance pilot project toward the second half of next year. The FTSE 100 company has a large database of motoring cover customers and would hope to leverage its brand to enter the home insurance space, Chidwick said.

His comments came as rising sales and prices boosted Admiral’s pre-tax profit 20.5 per cent to £126.9m. The group, run by Henry Engelhardt, increased its half-year dividend 18 per cent to 32.6p and announced plans to hand out 1,500 free shares to each employee worth £6m in total.

One dark spot was Confused.com, Admiral’s comparison website, which saw profits drop 20 per cent as it was outgunned by Comparethemarket.com.