Admiral Group anticipates that its pre-tax profit for the first half of 2021 will be “higher than expected” and range between £450-£500m.
The stronger result will reportedly be due to the “unusually positive” development in the cost of UK motor bodily injury claims from a number of prior underwriting years, which led to higher reserve releases and profit commission revenue.
Furthermore, motor claims frequency in 2021 to date was lower than expected due to extended lockdown restrictions resulting in a “favourable current period loss ratio”.
This is despite the reductions in the group’s premium rates over the past twelve months, which followed the £110m of premium refunded to customers in May 2020.
In addition, the sale of the Penguin Portals comparison businesses which was completed on 30 April 2021, generated approximately £460m.
The group said off the back of the sale, it expects to return £400m to shareholders in the form of “special dividends” phased over 2021 and 2022.