Admiral Group has reported an 18 per cent drop in pre-tax profit to £429.2 million for the first half of the year, as its UK motor insurance arm struggled with reduced earned premiums. Turnover remained steady at £3.11 billion, according to the Cardiff-based insurer's interim results released on Thursday.
UK Motor Market Challenges
The company said the UK motor market was particularly subdued in late 2024 and into 2025, prompting Admiral to raise prices at the start of the year to keep pace with claims inflation. Group chief executive Milena Mondini told City AM that she anticipates these pricing actions will bear fruit in the second half of the year.
Despite the overall profit decline, Admiral's electric vehicle (EV) insurance book grew by 27 per cent, driven by strong demand for its complimentary subscription service designed to offset EV ownership costs. Mondini said Admiral has been "very competitive for EVs" from an early stage, describing them as "a great feature for the planet."
European Operations Turn Profitable
Admiral's European operations swung to a profit of £17.2 million, recovering from a £0.6 million loss in the same period last year. Mondini expressed particular pride in France, which is running at "very strong margin" with double-digit growth.
Customer numbers climbed by 5 per cent, surpassing 12 million for the first time in the company's history. The insurer's shares rose 4.4 per cent in early trading on Thursday, and the stock has gained more than a fifth in value since the start of the year.
Analyst View: More Than a UK Motor Story
Matt Britzman, senior equity analyst at Hargreaves Lansdown, commented: "The headline profit decline only tells half the story. Yes, Admiral is feeling the impact of last year's softer motor pricing, but under the hood, it's navigating the turn in the cycle well."
Britzman added: "There are also encouraging signs that Admiral is becoming more than a UK Motor story. Household, Europe and Admiral Money are all moving in the right direction. Near-term earnings may remain a little uneven, but the route back to growth is becoming clearer, and the building blocks for a stronger 2027 are falling into place."
Outlook for the Second Half
Admiral's management remains confident that the pricing increases implemented early in the year will support profitability in the coming months. The company's focus on EV insurance and European expansion are seen as key growth drivers amid a challenging UK motor market.
