Motor insurer expects higher profits as lockdown cuts claims

Analysts say the surprise trading update indicates profits will be around double the company’s normal run rate

Admiral says it expects to return £400m  to shareholders in special dividends over the next two years. Photograph: Pacemaker

Admiral says it expects to return £400m to shareholders in special dividends over the next two years. Photograph: Pacemaker

 

Lower accident claims through the pandemic lockdown has delivered higher than expected profits for a top motor insurer.

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.

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

Shares in the British motor insurer Admiral jumped 6 per cent on Monday to a record high after the company’s upbeat trading statement.

Admiral said pre-tax profit for the first half was likely to be between £450 million and £500 million when it reports results for the period next month.

Admiral said it expects to return £400 million to shareholders in special dividends over the next two years. 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. – Reuters