(qlmbusinessnews.com Wed, 16th Aug, 2023) London, UK —
The UK-based insurer Admiral has revealed intentions to persist in raising prices to counteract the ripple effects of elevated inflation. This announcement came after the company reported a modest increase in profits for the first half of the year.
Shares in the FTSE 100 company rose by 7.2% as of 0800 GMT. Analysts and investors are banking on the implementation of price hikes to counterbalance the ramifications of heightened expenses related to claims servicing.
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Admiral has encountered a challenging period due to factors including the conflict in Ukraine, increased inflation, and disruptions to supply chains stemming from the pandemic. These issues have contributed to escalated costs for automobile repairs.
The insurer has managed to cushion some of the negative impact through raising prices, albeit at the cost of losing customers who face additional living expenses due to pricier insurance.
CEO Milena Mondini de Focatiis shared insights in an interview, stating, “Costs are now beginning to stabilize, and we anticipate a return to growth as the market aligns with the price adjustments. Inflation in the first half of the year has proven more persistent than initially anticipated, making predictions challenging. Nevertheless, we hold a more optimistic view of the future.”
Mondini de Focatiis also indicated that Admiral is envisaging a minor reduction in inflationary pressures in motor insurance, its largest division, during the latter half of the year.
Admiral's pre-tax group profit climbed to £233.9 million ($297.50 million) for the six months ending on June 30, as compared to £224.6 million in the same period the previous year.
The group reported a customer count of 9.41 million in the first half, a rise from 9.28 million at the conclusion of 2022.
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The company declared an interim dividend of 51 pence, slightly lower than the 60 pence from the previous year. This figure exceeded expectations by approximately 2%, according to an analysis by Jefferies.
Matt Britzman, an analyst at Hargreaves Lansdown, commented, “The coming months are likely to present challenging conditions, but Admiral's strategy of selective underwriting and robust pricing power should enable it to maintain its streak of outperforming industry peers.”
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