Insurer Admiral cut its full-year dividend on Wednesday as profits fell in a “challenging” market.
Pre-tax profit declined 39% from 2021 to £469m, coming in below consensus expectations of £489.4m. Group net revenue was down 4% to £1.49bn, while group turnover increased 5% to £3.68bn.
The group combined ratio deteriorated to 101.7% from 85.2% the previous year, missing expectations of 92.5%. A level below 100% indicates an underwriting profit.
The board proposed a final dividend of 52p a share, down from 72p a share a year earlier and taking the dividend for the year to 112p, down from 187p.
Admiral said the UK Motor business grew in the first half of the year, driven mainly by growth in renewals customers, but growth reversed in the second half as the company “maintained pricing discipline”, increasing prices ahead of the market.
Admiral said the backdrop had been “challenging” for the sector. It pointed to the impact of the war in Ukraine on energy costs and noted that high inflation had led to higher claims costs. In the UK, meanwhile, the market wad adjusting to the FCA’s pricing reforms, it added.
Chief executive Milena Mondini de Focatiis said: “I am proud of the agility and adaptability that Admiral demonstrated in 2022 as it increased its customer base by 11% and delivered profits of £469 million against the backdrop of a challenging market environment.
“We have yet again shown focus and discipline, reacting quickly to emerging trends – we implemented price increases ahead of others in response to higher inflation whilst maintaining a conservative approach to reserving and capital management.”
