After one Cardiff-based motor car insurance provider announced figures indicating its first quarter was highly profitable, shares in the firm soared by approximately 5 per cent.
Cheap car insurance provider, Admiral, stated that their Q1 turnover had increased by 56 per cent to a total of £539 million. The insurer stated that it increased the number of policies it issued by 33 per cent to a total of 2.9 million and also raised its car insurance rates as well.
The firm stated that it could be on track to exceed its projected growth in 2011 by reaching a pre-tax profits increase of 21 per cent. This could mean as much as £321.8 million in profits for the insurer.
However the company did admit that its car insurance comparison site has been stagnant as of late. Additionally the site’s margins have remained under pressure as well.
Henry Engelhardt, chief executive for Admiral, recently stated that the firm’s UK motor insurance business had benefited from continued positive market conditions which had led to another excellent quarter. Admiral grew its vehicle count by 34 per cent in comparison to last year’s figures, said Mr Engelhardt.
Insurers have been increasing rates lately in order to try to return to profitability. Margins have been slashed for many by both the advent of price comparison sites and rising incidences of fraudulent road traffic accident claims.
Previous to the most recent announcement, Admiral has claimed that its market share growth can be attributed to the rate by which it has increased its premiums. The firm had gone on record previously saying that it strove to increase its prices less than its competitors have, and industry experts agree that such a strategy could easily lead to increased turnover.