Admiral, Wales’ only FTSE 100 company, reported a 39% decrease in pre-tax profits in 2022, falling from £769m to £469m, while its turnover rose by 5% to £3.68bn due to an increase in premiums.
Despite the decline, Admiral’s car insurance to loans group performed well in an inflationary-hit insurance market with rising claim costs, as it continued its diversification strategy to rely less on its established UK car insurance business.
The company’s UK loans business, Admiral Money, reported its first profit, and the group’s customer base, both in the UK and internationally, grew by 11% to 9.28 million.
As a result of the financial performance, Admiral will award free shares to its 10,000 staff members, worth up to £3,600, which is the highest level of shares the company can give for its financial performance.
Admiral’s shares decreased by 4.5% in early trading as the market digested the results.
The company will pay a smaller dividend this year compared to last year, with a final payout of 52p to shareholders, down from 72p in 2021.
Admiral’s CEO Milena Mondini de Focatiss said that the company demonstrated agility and adaptability in 2022, increasing its customer base and delivering profits against the backdrop of a challenging market environment.
Admiral reacted quickly to emerging trends by implementing price increases ahead of others in response to higher inflation while maintaining a conservative approach to reserving and capital management.
The company continued to make progress on its diversification strategy, with Admiral Money making its first profit and continued growth across the group, particularly in new products.
Admiral also grew new partnerships and distribution channels in international insurance, which now has over two million customers.
Internationally, Admiral’s US car insurance venture, Elephant, had a challenging year, with disappointing losses of £49m, despite premium increases of over 25% and a drastic reduction in advertising spending.
Admiral is continuing to assess options for Elephant to reach its full potential in such a huge market. The company’s car insurance businesses in Italy and Spain also came under pressure, with very low market average premiums.
Although a strong diversification strategy is emerging, the UK car insurance market remains a key driver of overall profitability, generating £616m in 2022.
Admiral’s CEO emphasized the company’s commitment to people, acknowledging that it has been a challenging year for its customers and people, and continued to invest in its data and technology capabilities to serve its customers better.
»Pre-tax profits of Wales’ only FTSE 100 company, Admiral falls by more than a third«
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