Car insurer Admiral has posted record profits after “a high adrenaline combination” of rapid growth in the number of vehicles on its books and “dramatic” price hikes.
The firm behind Diamond and elephant.co.uk said the number of vehicles it insured in the UK increased 32% to 2.5 million as it hiked prices by less than its competitors.
The strong growth of its car insurance business helped push Cardiff-based Admiral’s turnover up 47% to £1.58 billion in 2010 and pre-tax profits rose 23% to £266 million.
But its price comparison website confused.com suffered a “disappointing” year in which its adverts flopped against competition from Go Compare’s opera singer, Compare The Market’s meerkats and Moneysupermarket’s campaign fronted by comedian Omid Djalili.
Confused’s profits fell 34% to £16.9 million in the year although it said a new marketing campaign launched at the end of the year helped the site’s share of the car insurance market to stabilise.
The car insurance industry has seen a large increase in premiums in 2010 after an increase in fraudulent cash-for-crash claims and as insurers move to increase profit margins, which were hammered in recent years after the introduction of price comparison websites.
The record profits will trigger a pay-out of shares worth more than £12 million for 3,500 eligible staff. Employees will receive up to £3,000 each – the maximum available under the scheme.
Admiral, which also has offices in Swansea and Newport and is one of Wales’ biggest private employers, also benefited from the closure of some of its rivals, such as Quinn. It took on an additional 800 staff in the year to help it cope with the influx of new business, bringing its employee numbers up to 4,250.
Chief executive Henry Engelhardt said trading conditions in the UK were more favourable than at any time since 2000.
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