CORRECTED-UPDATE 2-Insurer Admiral’s customer gains drive profit, shares rise 5 pct


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(Corrects to UK from London in third bullet)

* Profit helped by demand, customer numbers

* Expects a 10-member team in EU hub in Madrid

* Does not look to move jobs out of UK

* Shares rise more than 5 percent, leading FTSE gainer

By Noor Zainab Hussain

Aug 15 (Reuters) – British insurer Admiral posted better-than-expected pretax profit on Wednesday, as it sold more insurance products and added customers, sending its shares up more than 5 percent.

Admiral’s pre-tax profit rose 9 percent to 211 million pounds ($268.2 million) for the six months ended June, above a company-supplied forecast of 207.8 million pounds.

Customers rose 14 percent to 6.23 million.

The motor and home insurer, which has picked Madrid for its post-Brexit European Union base, flagged potential risks if Britain crashed out of the European Union without a deal but added it did not expect daily operations to be hurt by Brexit.

Other issues may emerge over time, particularly from a “no-deal” exit, it added.

Admiral’s shares, which rose 13 percent in 2017, were up 5.1 percent to 2101 pence at 0848 GMT, the biggest rise on London’s blue-chip index.

While a number of commercial and life insurers have announced plans for an EU unit, most UK motor insurers only have domestic customers and do not need to be regulated in the EU.

Admiral, which had applied for Spanish licences for different parts of its business, said the entities would be operational by the start of 2019 and the cost of the restructuring would not be material.

“We plan for all outcomes and we are very ready to be able to operate in Europe regardless of what happens with the negotiations or an settlement. We think we are good to go,” Chief Financial Officer Geraint Jones told Reuters.

He added that Admiral would have a “reasonably small team” in the order of ten employees in Madrid.

“We don’t really foresee any jobs moving from our UK offices into Madrid. It would be additional jobs.”

Cardiff-based Admiral also operates outside the UK in France, Italy, Spain and the United States.

“Admiral’s 2018 H1 results were ahead of our estimates, with customer numbers, reserve releases and underwriting discipline all better than expected in the UK Motor business. The losses in the International business improved…” Peel Hunt analyst Andreas van Embden, said.

With a market capitalisation of 5.77 billion pounds, Admiral competes with Aviva, RSA, Direct Line, esure and Hastings in a highly competitive car insurance market in Britain where prices have fallen.

($1 = 0.7867 pounds)

Reporting by Noor Zainab Hussain in Bengaluru; Editing by
Bernard Orr, Amrutha Gayathri and Alexandra Hudson


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