Admiral diversifies into home insurance
BRITISH car insurer Admiral yesterday announced plans to expand into household insurance, making its first foray outside the motor market in pursuit of continued growth.
Admiral, which insures about six per cent of the cars on Britain’s roads and also owns popular price comparison website Confused.com, will start underwriting household insurance next year, a spokesman for the insurer said, confirming an earlier report in insurance industry publication Post Magazine.
Admiral’s well-known brand should enable it to capture a share of the household insurance market simply by offering its policies through price comparison sites, avoiding costly marketing campaigns, analyst James Shuck at stockbroker Jefferies said.
“The next leg up in the Admiral story is diversifying into new product areas,” he said.
“There are pockets of household insurance that are overpriced. If Admiral can identify those, they should do well.”
Household insurance generated premium income of £8.8bn in 2008, making it Britain’s second-biggest retail insurance market after motor with £10bn, according to the Association of British Insurers.
Admiral, which operates from Wales, saw shares rise 1.14 per cent yesterday, closing at 1,423p. The stock, seen as recession-resistant because car insurance is compulsory, has risen 19 per cent since the beginning of the year.
The uptick comes a week after Admiral Group’s shares dropped 45p after an Execution Noble downgrade to “hold”.
Analyst Joy Ferneyhough advised clients to take profits because the stock had outperformed the sector and the FTSE by 30 per cent over the past year.