Admiral shares fall as results fail to meet expectations

Admiral shares fell this morning as the market gave its verdict on the company’s 2018 financial performance.

The share price was trending down by over 5% at one point. This came despite the group posting a pre-tax profit of £479.3m. 

But analysis from Shore Capital highlighted that the results were actually 8% below expectations when the one-off Ogden discount is discounted.

In its results, Admiral said that it had had to increase its motor prices in the second half of the year due to higher than expected claims inflation. This in turn affected competitiveness and slowed growth.

”As we have expected, the growth in motor continues to slow and the home and travel businesses have both delivered small losses during the year,” it said. 

“The international and price comparison businesses are slightly better than expected but given the size of the UK motor book in relation to the whole group, this outweighs the positives elsewhere.

“Admiral has long traded on a premium to the rest of the UK non-life insurers, but we believe that this is not reflective of the actual outlook. The business remains fundamentally a UK motor insurer (97% of earnings, FY2019F) where Admiral is now a mature incumbent rather than a fast-growing challenger. The international operations are making headway but will still take several years to become material to earnings, in our view.”