Thompsons Solicitors is calling on car insurers to apologise for misleading the public about personal injury costs after Admiral Insurance announced this morning yet another rise in profits and admitted it had over-provided for claims in the three years from 2010 and 2012.
The UK’s second largest car insurer revealed in a stock market statement that it has seen profits in the first half of the year rise 6% to Â£181.4m (compared to Â£171.8m in the same period last year) and said it would be rewarding shareholders with an 8% hike in its dividend.
The 48.9 pence per share payment means Admiral will distribute Â£134m to shareholders in October – equivalent to Â£44 per policy holder. This follows a Â£245m pay out to shareholders in June from profits made in 2012, which were 19% higher than in the previous year.
Admiral said its profits growth was primarily due to ‘positive claims experience in the group’s core UK car insurance business’. It admitted there had been ‘improvements in the projected ultimate loss ratios especially for the 2010 to 2012 underwriting years’ but said its claims reserves will ‘continue to include a significant margin above projected best estimates of ultimate claims costs’.
“De-coded, Admiral is admitting it got its sums massively wrong on personal injury claims,” said Tom Jones, head of policy and public affairs at Thompsons.
“Over the last few years, the insurers have been saying they couldn’t make profits from car insurance because of fraudulent claims and a supposed compensation culture in the UK. But now their profits reveal they have grossly exaggerated and are able to dish out huge pay outs to their shareholders from the hundreds of millions unnecessarily collected from motorists.
“This is bad enough in itself, but what’s worse is that they’ve exploited the fear they have created to allow the government to introduce restrictions on access to justice for accident victims.”
“We call on Admiral to apologise and, instead of enriching their shareholders, to reimburse their customers for over-charging.”