LONDON (Alliance News) - Admiral Group PLC Wednesday said Chief Financial Officer Kevin Chidwick is handing his duties over to his deputy in order to focus on his role in the US as chief executive of the group's Elephant Auto Insurance business, as the insurer looks to build up its international business.
Chidwick's successor, Geraint Jones, who has been with the group since 2012, has held a number of senior finance positions in his time at Admiral, including head of Finance, before being promoted to deputy chief financial officer in January 2012.
Admiral said that Chidwick will continue to contribute to group board meetings despite stepping down from the board.
News of the change came Wednesday alongside interim results for the six months ended June 30, in which Admiral reported an increase in pretax profit to GBP183.3 million from GBP181.4 million in the corresponding period a year earlier, helped by an 8% increase to GBP207.7 million in UK car insurance pretax profit.
This more than offset a widening in the international insurance pretax loss to GBP15.5 million from GBP10.8 million, which was due to increased marketing investment and claims costs in Spain, the cost of in-sourcing operations in France, along with a greater impact arising from exposure caps on some of the quota-share reinsurance contracts, as well as a GBP5.1 million loss in international price comparison, which was wider than last year's GBP300,000 loss.
Overall, revenue decreased by 5% to GBP1.04 billion, mainly due to reductions in premium rates in the UK car insurance business during 2013. In addition, the group's loss ratio improved to 67.1% from 68.8%, due to a positive UK claims experience allowing higher reserve releases.
During the first half, the group increased its customer base to 3.94 million from 3.70 million.
Chief Executive Henry Engelhardt said there are some signs that premiums are no longer falling in the UK but cautioned that the insurer is yet to see "firm evidence of an inflection point" and a return to premium growth. Signs that UK premiums are no longer falling will be welcome, as the UK's motor insurance market has become notoriously cut-throat, resulting in very low premiums as insurers look to acquire market share.
"Admiral's premium rates [in the UK] have been pretty flat over the first half of the year, though as a result of the reductions in 2013, total premiums are down around 9% compared with the first half of 2013. Thanks to improved retention levels, we now insure over 130,000 more customers in the UK than at this time last year," Engelhardt said in a statement.
"UK claims development on the back years (2012 and prior) has been positive, and we continue to forecast good levels of reserve releases. Our expectations for our UK business in 2014 therefore remain unchanged. However, as we've said previously, our margin expectations for business earned this year are lower than in recent years, which is unsurprising considering the decline in premium levels over the last three years," Engelhardt added.
Outside the UK, Engelhardt said, Admiral's international insurance operations are growing and making progress.
"Our European price comparison businesses had a profitable first half of the year and we're encouraged by the very early indicators from comparenow.com in the US. We therefore plan to increase marketing investment behind comparenow.com during the second half of 2014," the CEO said.
Admiral increased its interim dividend to 49.4 pence per share from 48.9p.