“Profit growth, even if modest, is more exciting considering the £33 million Ogden headwind,” said David Stevens, chief executive.
PLC () shares gained after the insurance firm posted a 4% rise in pre-tax profit for the first half, supported by an increase in customers and a return to profit in the home insurance unit.
Pre-tax profit increased to £220mln from £212mln last year even as it took a £33.3mln charge related to regulatory changes that meant British insurers need to set aside more money to compensate victims of car crashes.
Admiral, which is one of the UK’s largest motor insurers, said the total impact of the change in the so-called Ogden discount rate, which is used to calculate how much accident victims should be given as a lump sum, was expected to be between £50mln and £60mln.
Group turnover grew 6% to £1.76bn in the period as customer numbers rose 8% to 6.74mln.
The UK home insurance business swung to a profit of £4.2mln from a loss of £1.9mln, thanks to better weather and an 18% increase in the number of homes insured as more customers shopped around and switched insurers.
“If it’s a can’t-put-down, read-in-one-go page-turner that you’re after, then I’m afraid our half-year results don’t fit the bill. Frankly, they are a bit dull. Turnover up mid-single digits, profit up low-single digits. Hardly ‘hold the front page’,” said David Stevens, chief executive.
“However, for dedicated aficionados who look behind the headlines, there’s some reward for reading on. Profit growth, even if modest, is more exciting considering the £33 million Ogden headwind.”
The company raised its dividend by 5% to 63p per share.
Shares rose 3.2% to 2,097p in late morning trading.