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Insurer Admiral reinstated its special dividend on Wednesday as it reported a jump in first-half earnings, the latest car insurer to benefit from a slump in claims as coronavirus lockdowns kept Britons off the road in March and April.
The company’s combined ratio, considered the main gauge of an insurer’s profitability, dropped to 83% from 92.3% a year earlier. A level below 100% indicates that premiums earned exceeded claims.
Admiral’s results were similar to those from rival and Britain’s biggest car insurer Direct Line, which last week beat estimates for half-year profits and hiked its interim dividend due to the drastic drop in claims.
“Lockdown restrictions in the Group’s markets resulted in significantly lower motor insurance claims frequency as customers stayed at home and fewer miles were driven,” Admiral said.
The company, which in April suspended its special dividend due to the global health crisis, said an interim dividend of 91.2 pence a share, including the 20.7 pence special dividend deferred in 2019, has been set.
Statutory pretax profit surged 31% to 286.1 million pounds ($373.10 million) for the six months ended June 30, handily beating the 233.2 million pounds estimate as per analyst consensus.
($1 = 0.7668 pounds) (Reporting by Muvija M in Bengaluru; editing by Ramakrishnan M.)