Admiral profit falls as boss eyes push into EV insurance
Key Takeaways
- •Admiral's pre-tax profit fell 18% to £429.2 million in the first half, weighed down by lower earned premiums in its UK car insurance business.
- •The insurer raised prices at the start of the year to counter claims inflation, with CEO Milena Mondini expecting improvement in the second half.
- •Admiral's European business swung to a £17.2 million profit from a £0.6 million loss a year earlier, led by strong performance in France.
- •The company's electric vehicle insurance book grew by 27%, supported by increasing EV adoption driven by the UK's zero-emission vehicle mandate.
- •Customer numbers exceeded 12 million for the first time, representing 5% growth, while shares gained over 20% since the start of the year.
Admiral suffered a drop in profit as the insurance giant was weighed down by lower earned premiums in its UK car business.
The group's profit before tax fell by 18 per cent to £429.2m in the first half of the year, while turnover remained flat at £3.11bn.
Milena Mondini, group chief executive, told City AM the market had been very soft at the end of 2024 and 2025, so the insurer increased prices at the beginning of the year to match claims inflation, adding that she expects this to pay off in the second half of the year.
UK motor insurers have been navigating a cyclical market in which premium rates adjust in response to claims costs, which have been pushed higher across the industry by rising repair bills and parts inflation.
In its motor division, Admiral reported a 27 per cent rise in its electric vehicle (EV) insurance book, as well as increased demand for its free subscription service designed to help with the costs of EV ownership. The UK's zero-emission vehicle (ZEV) mandate requires 28 per cent of new car sales to be zero-emission in 2025, rising annually toward a full phase-out of new petrol and diesel cars by 2035, underpinning a structural shift in the vehicle fleet that insurers must price for.
Mondini said Admiral has been “very competitive for EVs” from a very early stage, as EVs are “a great feature for the planet”.
Despite headwinds in its UK motor group, the company's European business swung to a profit of £17.2m, up from a £0.6m loss last year. Mondini said she was “particularly proud” of France, which was running at “very strong margin” and double-digit growth.
Customer numbers grew by 5 per cent, surpassing 12 million for the first time.
Admiral shares rose 4.4 per cent in early trade on Thursday. The stock is up by more than a fifth since the start of the year.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The headline profit decline only tells half the story. Yes, Admiral is feeling the impact of last year's softer motor pricing, but under the hood, it's navigating the turn in the cycle well.
“There are also encouraging signs that Admiral is becoming more than a UK Motor story. Household, Europe and Admiral Money are all moving in the right direction. Near-term earnings may remain a little uneven, but the route back to growth is becoming clearer, and the building blocks for a stronger 2027 are falling into place.”
