Direct insurer's IPO will seek £600m from institutional investors
Direct motor insurer Admiral's decision to float on the London stock exchange is to recoup the money invested by its capital provider, Barclays Private Equity.
Admiral Group chief executive Henry Engelhardt said: "We have chosen to do an IPO now because this has been a good investment for Barclays Private Equity, which backed our management buy-out over four years ago.
"This represents the best option for all stakeholders," he added. Owen Clarke, managing director for Barclays Private Equity said Barclays would continue to look for other investment opportunities in the insurance sector.
The company hopes the estimated £600m flotation will attract a fair number of institutional investor backing. But some analysts warn that investors could be put off by the current unattractive rates in the motor business.
According to analysts, in terms of results, the company had done extremely well. Its trading profits were up 29% to £71.2m and its turnover rose 13% to £427m.
Its combined ratio dropped from 80% to an impressive 67.7%. Admiral puts its good performance down to its growing internet business.
The possible flotation is good news for 900 of its employees who could each reap around £50,000.
Admiral also sells car insurance through its other brands, Diamond and elephant.co.uk and Bell Direct.
