LONDON (Reuters) - British motor insurer Admiral Group Plc (ADML.L) reported a higher-than-expected 15 percent profit increase, helped by a turnaround at its Confused.com price comparison website.
Admiral, which insures one in 10 cars on Britain’s roads, made a pretax profit of 344.6 million pounds in 2012, it said on Wednesday, ahead of the 331.2 million expected by analysts in a company poll.
The improvement partly reflected a rebound at Confused.com, where profit rose 2 percent to 18 million pounds, the first increase in four years, as the website brokered more sales of financial products other than car insurance.
Admiral also benefited from the release of 17.6 million pounds of cash reserves it set aside in previous years against claims that did not materialise.
Shares in Admiral were up 5.2 percent by 08:50 a.m, making the company the third-biggest riser in the FTSE 100 share index. The stock has risen 10 percent in the past year, lagging a 20 percent rise in the FTSE non-life insurance index .FTASX8530.
Admiral Finance Director Kevin Chidwick said the company did not expect to be seriously affected by forthcoming regulatory changes to the British motor insurance market.
“We’d say Admiral are pretty agnostic about the changes that are going on, because they’re changes that are going to affect the whole industry,” he told reporters on a conference call.
“They’re likely to make a few changes to accounting lines within the numbers and they’re probably going to be generally offsetting each other.”
The British government will from next month ban personal injury lawyers from paying to obtain accident victims’ contact details, a source of revenue for some insurers including Admiral.
Separately, the country’s competition watchdog is investigating how insurers provide customers with replacement vehicles for customers whose cars are damaged, amid worries the current practices lead to inflated costs.
Admiral earned 32.2 million pounds from personal injury and car hire referral fees last year, it said.
Cardiff-based Admiral, which also trades under the Bell, Diamond and Elephant brands, passes on as much as three quarters of the risks it underwrites to Munich Re (MUVGn.DE) and other reinsurers.
The company is paying a total dividend for 2012 of 90.6 pence per share, an increase of 20 percent and ahead of the 86.7p pencilled in by analysts.
Editing by David Holmes