Insurers: Admiral blows hot and cold but Aviva soars pre-Friends Life mergerComments Off on Insurers: Admiral blows hot and cold but Aviva soars pre-Friends Life merger
The company saw pre-tax profits drop 4% to £357 million after being hit by diving premiums in the UK market, where it insures 3.2 million vehicles.
This accounts for 81% of group turnover and 78% of its customers.
“Admiral’s 2014 was the year of the Baked Alaska — hot and cold in a single bite,” boss Henry Engelhardt said.
“The hot? Profits emerging from our international insurance businesses, in ConTe in Italy, and record profits at Rastreator and LeLynx, our price-comparison businesses in Spain and France.
“The cold? For the first time since we went public, Admiral did not post a record profit, but we still made a lot of money, had an enviable 52% return on equity and distributed 95% of our after-tax profits to our shareholders.”
Shares in the company lost 2% to 1430p.
Engelhardt took a sideswipe at “competitors” who he claimed were chasing volume in the car insurance market and keeping prices down.
However, he said there were signs prices are starting to rise again this year.
Rival FTSE 100 insurer Aviva geared up for its £5.6 billion merger with Friends Life by increasing its pre-tax profits 6% to £2.17 billion and its final dividend 30.3% to 12.25p.
Aviva shareholders are expected to approve the Friends deal at a meeting on March 26 with it likely to be completed by April 13.
Chief executive Mark Wilson said his turnaround of the company still had “further to travel than the distance we have come”.
He cited areas like Aviva Investors as those expected to contribute more to the group’s profits over the next few months.
The £245.9 billion under its control will grow by a further £70 billion once the merger is done.
Friends also published its results, with pre-tax profits up 38% to £556 million. Aviva shares rose almost 5% to 556.55p, while Friends climbed 4.4% to 424.3p.