March 6 (Bloomberg) -- Admiral Group Plc, the U.K. motor insurer that owns the confused.com website, said full-year profit rose 15 percent as car net insurance premiums and profit commission rose.
Pretax profit climbed to 345 million pounds ($522 million) in 2012, from 299 million pounds a year earlier, the Cardiff, Wales-based insurer said today in a statement. That beat the 331.7 million-pound average estimate of 18 analysts surveyed by Bloomberg.
“U.K. car insurance business is the main driver of our improved results this year,” Finance Director Kevin Chidwick said on a call with reporters. “We’ve seen claims levels reverting to normalized levels after a bumpy 2011.”
Admiral, which insures 3.6 million vehicles mainly in the U.K., is slowing its growth in its home market as prices fall after reaching an all-time high in 2012. Admiral, which has more than quadrupled in value since its initial public offering in 2004, has grown profitably by undercutting competitors in a period of rising prices.
Admiral rose as much as 6.6 percent to 1,350 pence in London and traded at 1,333 pence at 9:02 a.m. local time, valuing the company at 3.6 billion pounds.
The U.K. car insurance business, which makes up 87 percent of the firm’s sales, reported profit before tax rose 19 percent to 372.8 million pounds. Net insurance premiums, which exclude reinsurance, rose 8.8 percent to 455.6 million pounds.
Admiral’s net income rose 17 percent to 258.4 million pounds in 2012, the firm said in the statement. The insurer increased its dividend to 90.6 pence a share, beating the analysts’ estimate of 85.8 pence.
Joy Ferneyhough, an analyst at Espirito Santo Investment Bank, estimated pretax profit of 315 million pounds before today’s statement.
“Our first look through the full year results suggests that we were wrong in mainly one area: profit commission,” she said in a note to clients today. The firm reported profit commission, which Admiral earns on some reinsurance contracts, rose 75 percent to 108.4 million pounds. That contributed more than 30 percent to pretax profit, Ferneyhough estimated.
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