Leading car insurer Admiral has today reported another sharp rise in profits and plans for a big dividend pay out to shareholders – but no cut in premiums for motorists.
In the half year to the end of June, Admiral said its UK car insurance profits rose 8% to £207.7m allowing it to pay another £133m in dividends in October.
Contrary to Government claims of insurers suffering from ‘compensation culture’ and fraud, Admiral’s chief executive Henry Engelhardt admitted Admiral is booming because of much fewer claims than expected.
He said the claims environment dating as far back as 2009 had been positive and that this would allow the company to continue to release cash from reserves.
These results follow half year figures last week from AVIVA showing overall group profits rising by 4% to £1.05 billion, alongside a 4.5% increase in the dividend to shareholders.
The problem for consumers and policy makers trying to make sense of the market is that AVIVA’s figures are for all their products and not just motor insurance.
AVIVA continues to refuse to divulge separate figures for the UK car market, hiding them under ‘general insurance’. However, the £263m profit it made in six months under this heading suggests that MPs were right to ask recently why it is not complying with international reporting requirements to disclose profits accounting for more than 10% of the total.
Amid claims that car insurers face a crisis, centred on what they allege to be widespread fraud and a crippling ‘compensation culture’, here we have car insurance companies turning in huge profits. A contradiction which demands explanation.
Undoubtedly, these half year results will shock motorists as much as they delight shareholders. They further reinforce just how lucrative this captive market really is.
Head of policy at Thompsons Solicitors, Tom Jones, explains more about the hypocrisy of the Government and the car insurers when they complain about Britain’s so called ‘compensation culture’.
Click here view Thompsons’ car insurance video and access materials on the #cutpremiumsnow campaign.