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Admiral expects better profits after fewer car accidents in lockdown

Admiral expects better profits after fewer car accidents in lockdown
Admiral expects better profits after fewer car accidents in lockdown   -   Copyright  Thomson Reuters 2021
By Reuters

LONDON – Shares in British motor insurer Admiral jumped 6% on Monday to a record high after the company said it was on track for a higher than expected first-half profit due to lower motor accident claims through pandemic lockdowns.

Admiral said pre-tax profit for the first half was likely to be between 450 million pounds and 500 million pounds ($625 million-$695 million) when it reports results for the period next month.

The insurer said the boost came from fewer historic injury claims leading to a release of reserves and lower accident claims so far this year through lockdowns.

Shares in the company were last up 2% at 0715 GMT.

Analysts at KBW said the surprise trading update indicated profits would be around double the company’s normal run rate.

Admiral expects to return 400 million pounds to shareholders in special dividends over the next two years, the company said, after it completed the sale of its Penguin Portals unit in April. It said it expects to pay an interim 2021 dividend of between 110 to 125 pence per share.

Admiral said it did not expect the lift in profits to be repeated in the second half of the year.

($1 = 0.7194 pounds)