(Reuters) - British insurer Admiral (ADML.L) said on Friday 2019 profit is expected to rise 6% to 13% as it was able to release more money put aside for UK motor bodily injury claims written in previous years as those claims were lower.
“Clarity over the new Personal Injury Discount Rate (the ‘Ogden’ rate) in July 2019 led to an increase in the number of large claims settling in 2019 compared to recent years which contributed to the level of releases,” the company said, adding that there was no change to its “prudent approach to reserving”.
The change in the Ogden rate, or discount rate, has required insurers in Britain to set aside more money than they expected to compensate victims of serious car crashes.
Admiral, one of Britain’s largest motor insurers said profitability in the current year is still affected by higher levels of claims inflation during 2019, which could lead to a higher loss ratio in 2019 than in recent years.
The company expects profit before tax for 2019 to be in the range of 510 million pounds to 540 million pounds.
The proposed final dividend for 2019 is seen in the range of 73 pence to 78 pence.
Reporting by Yadarisa Shabong in Bengaluru and Carolyn Cohn in London; Editing by Subhranshu Sahu, Bernard Orr