The Admiral Group has recently announced the sell off of its German motor car insurance group.
The FTSE 100 company, which has its headquarters in Cardiff, recently confirmed the sale of one of its car insurance groups. AdmiralDirekt was sold for an undisclosed sum to Itzehoer Versicherung. The gross assets disposed of in the sale have been valued at approximately £4.4 million.
Itzehoer wil be fully reinsuring any car insurance contracts that AdmiralDirekt generates and the Admiral underwrites in 2011. Further intentions of the Admiral include a transfer of all insurance contracts dated for 2011 and earlier to the German firm. This last step will be done once regulatory and court approval has been given.
In its comments regarding the sale, Admiral stated that its focus will remain on a continuation of its UK operations’ profitable growth. Moreover it will also be focused on building sustainable, growing, and profitable businesses in France, Italy, Spain, and the US.
AdmiralDirekt suffered losses of £1.6 million in the first half of last year. This followed the £2.2 million losses it posted in the second half of the previous year. Admiral stated in its interim results that the strategy they had adopted in Germany to increase car insurance rates led to a drop-off in premiums of approximately 25 per cent. In addition the number of cars the German division of Admiral Group insured fell by 17 per cent to less than 32,000. AdmiralDirekt employs approximately 130 in staff.
Investor response to the sell-off has been lukewarm. After the announcement of the sale, shares of Admiral Group were down only 0.06 per cent, a loss of one pence, leaving the stock trading at 1564 pence.