Admiral announced it has suspended the recommendation to pay a special dividend following the ongoing pandemic.
The group said the amendment was made in light of regulatory guidance to insurers urging restraint on the payments of dividends due to the “uncertainty of the current economic environment.
After “careful consideration”, the board is recommending an unchanged normal dividend of 56.3p per ordinary share payable on 1 June 2020 to all ordinary shareholders, but is suspending the special dividend of 20.7p per ordinary share.
The board will review the position in relation to the special dividend alongside the company’s half year results.
It currently intends to pay this part of the final dividend later in the year unless there is a significant deterioration in the company’s financial position, trading or outlook.
In its latest update, the insurance group said it had “significant liquidity and a strong solvency position” despite the pandemic.
“Robust” stress tests against its financial position allegedly support the payment of the previously announced final dividend in full under normal circumstances.
However, the board said it is “mindful of the call for heightened prudence from its regulators and has concluded that suspending the payment of the special dividend is appropriate at this time”.
An update will be provided when the company reports its interim results in August 2020.
David Stevens, group CEO, said: “We find ourselves in extraordinary circumstances, and it has been a very difficult decision to suspend the special dividend as we are aware of the importance and impact to our shareholders and staff.
“However, the board and I believe that this is the prudent and right thing to do at this time. We thank our customers, staff and shareholders for their continued support, and we remain committed to making decisions that are in their best interests in the long term.”
Stevens confirmed that the normal dividend payable to him and his wife will be donated in full to their charitable foundation to fund support for charities affected by the Covid-19 crisis.