Insurance giant Admiral profits surge and a strong growth in turnover have both been reported in its full-year results.
In the year to 31 December 2023, the Cardiff based insurer made a group profit before tax of £442.8m, up 22.6 per cent from £361.2m in the prior period.
Group turnover rose by 31 per cent to £4.81bn and Admiral also saw customer numbers grow. It had 9.73 million customers at the end of 2023 which was a 6 per cent increase from 9.2 million in 2022.
On the back of the news more than 10,000 employees will each receive free share awards worth up to £3,600 under the employee share scheme based on the full year 2023 results.
Milena Mondini de Focatiis, group chief executive, noted Admiral achieved “another good set of results, within the context of challenging market conditions. The addition of over 500,000 customers and improved loss ratios demonstrate our commitment to strengthening and diversifying our business,” she said.
Whiplash Reform and Lower Premiums
We were all promised that the 2021 law reforms to tighten up the legal sector would benefit the car insurance policy holder and would not restrict access to justice. The jury is still out on this and we will need to wait until a 2025 HM Treasury Report to see if the promise was delivered, or not.
The Whiplash Reform and Official Injury Claim Service introduction was touted to the public as being the magic bullet to curb ever rising car insurance premiums.
The Government estimated that the whiplash reform programme would remove more than £1.2 billion from the cost of providing motor insurance, and that these savings would be passed on to policyholders through lower premiums. However, whilst the total number of minor personal injury claims has reduced in the last two years, the cost of motor insurance has continued to rise and so to have premiums.
In 2022, premiums rose by 15%, a further 25% in 2023 and 2024 is expected to see a further 10% rise. Which ever way you look at it, a 50% increase in premiums is excessive and way beyond inflation.
FCA Rules Changed
In January 2022, the FCA introduced new rules for the insurance industry to protect loyal customers from being charged more than new customers who often benefited from a new customer discount. This meant renewal prices for existing customers from 2022 had to be the same or lower than the equivalent price for a new customer.
As many skeptics in the legal sector pointed out at the time, the Whiplash Reform was likely to only benefit the insurers and at the expense of the insurance policy premium paying public who would likely see an important barrier to justice put up and without the reduction in premiums.
The skeptics made the point that the insures had been somewhat deceptive in their renewal pricing and that any savings from the reforms wouldnt be passed on if there was no legal requirement to do so.
Justice Committee Recommendation
Whilst many factors may impact on the cost of motor insurance premiums, it is vital that the direct effect of the whiplash reforms is properly assessed so HM Treasury (HMT) have been instructed to lay a report in Parliament by no later than 1 April 2025 on any savings achieved by the Whiplash Reform and how (and if) these savings have been applied to motor insurance policies.
Given the millions of us affected by high car insurance premiums it would be a dark day indeed to fast forward to April 1st 2025 and learn that although savings had been made by the likes of Admiral, following the Whiplash Reforms, that instead of lowering premiums for consumers, the savings were retained and helped Admiral profits surge, as mentioned here today.
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