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Admiral Not Comparing Prices for Key Website ; INSURANCE

Sep 4, 2007

Admiral Group is not actively pursuing selling a stake in price comparison website,, the UK motor insurer's chairman, Henry Engelhardt, said.

"If someone walked in and said 'Here's a chequebook' then we'd obviously look at selling the stake, but we're not actively pursuing anything," he insisted.

Admiral wholly owns, which made profits of pounds 19.7 million, up from pounds 8.7 million at the same time last year, was the star performer in Admiral's strong first-half results - pretax profit rose 26 per cent to pounds 86.3 million, from pounds 68.7 million a year earlier.

The group's turnover jumped to pounds 417.8 million, from the pounds 359.2 million reported in the year-ago period, as sales and customer numbers rose 16 per cent respectively.

Admiral recently dropped plans to sell a stake in the online operation.

The group had been in talks with private equity suitors to dispose of a minority holding, which had valued at between pounds 600 million and pounds 650 million.

But Admiral said in July it had decided against the sale as the potential bidders were demanding too much boardroom control. provided 7.1 million quotes in the first half of the year, up from 4.1 million in 2006.

The division also saw a rise in the number of quotes for areas other than car insurance, such as home and travel insurance, up by 700,000 to a million.

Admiral admitted it could face tougher times ahead in the price comparison market, with competition increasing from rivals such as and new players.

Chief executive Henry Engelhardt said: "Previously we have said that there will be more competition in this sector.

"Some of this competition went live during the first part of 2007 and more competitors are on their way. We will work hard to defend our leadership position in this growing market."

Admiral, which also takes in insurance brand, is to hand out a share windfall worth pounds 3 million to the group's 2,300 staff.

The UK motor market, which has suffered from competition and lower premium rates for the last few years, will moderately improve year-on-year, Mr Engelhardt predicted.

"It's going to be a crawl rather than a leap," he said. "There will be 5-6 per cent increases over the next few years inching ahead of claims inflation rather than jumping ahead of it."

In recent times, one of the biggest problems for the UK motor market has been inefficiencies, where companies are writing business below claims inflation, and watching as profits dwindle.

However, Mr Engelhardt said: "If you're inefficient you won't last long. Either you're pricing for profit and won't get the business or you're writing too cheap a business and you're losing on margin," he said. "That can't last."

He noted that Admiral's expense ratio - 16 per cent, against the market average of 29 per cent - was lower than its rivals. But, the combined ratio of the group - costs and claims expenses expressed as a proportion of revenues, a key indicator of underwriting profitability - deteriorated to 89.7 per cent from 87 per cent. A reading below 100 denotes a profit.

(c) 2007 Birmingham Post; Birmingham (UK). Provided by ProQuest Information and Learning. All rights Reserved.

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