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Good Italian job helps Admiral to boost H1 profits

Published: 09:15 19 Aug 2015 BST

BB2
Admiral's UK car insurance profit rose 6% to £219.2mln

Insurer Admiral (LON:ADM) flagged up a good performance in its Italian business as it boosted half-year profits and dividends.

Admiral said the Italian arm, ConTe, made a maiden half-year profit and lifted customers to more than 300,000.

The positive performance helped to reduce the group's international car insurance losses to £11.2mln from £15.5mln a year ago.

It said its UK business turned in a very solid result helped by positive claims cost development, with modest growth accompanying price increases.

UK car insurance profit rose 6% to £219.2 mln mainly as a result of higher reserve releases.

Group pre-tax profit in the first half increased 1% to £186.1mln while earnings per share gained 4% to 54.8p.

It increased the interim dividend by 3% to 51p per share against the same time a year ago.

The group, which owns price comparison site Confused.com, said price comparison losses of £4mln against a profit of £5.9mln last time resulted from increased investment in compare.com and lower profit from Confused.com.

Chief executive Henry Engelhardt said: "Overall, I'd say it has been a good first half."

Shares rose 69p to 1535p. Shore Capital, which has a 'sell' recommendation on the shares, said the numbers were better than its top-of-the-range forecast.

Shore said: "The loss from International was lower than we had expected but the fall in ancillary profits was greater than we had anticipated.

"Little reference was made to conditions in the UK motor market, where we believe claims frequency and severity are both rising.

"The figure that jumps out at us from the UK is that the 2014 accident year loss ratio has increased sharply to 93% from 79% in 2013, thus putting pressure on further reserve releases."

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