Admiral profits surge despite failing ad campaign and rising premiums

CAR insurer Admiral yesterday unveiled a surge in profits amid a hike in premiums charged to customers, but said its price comparison website Confused.com had lost out to rivals after its television advertising campaign proved a flop.

The Cardiff-based group, which also owns the Diamond and elephant.co.uk brands, increased premiums by 22 per cent during the first six months of the year. That, together with a 23 per cent rise in customer numbers, helped drive interim pre-tax profits up 21 per cent to 126.9 million in the six months to 30 June.

Admiral said the cost of car insurance soared year-on-year in line with the wider market as the industry battles against a rising trend for injury claims.

It blamed unsuccessful TV ads for a 35 per cent plunge in earnings at Confused.com during the period, admitting that it was no longer market leader, slipping to second place in the market for car insurance comparison.

Competitors have fared better with their campaigns, with moneysupermarket.com recently thanking its "haggle hero" series featuring comedian Omid Djalili for a 5 per cent lift in half-year revenues. Gocompare's opera singer and Comparethemarket's meerkat ads have also been seen as successes in a market that depends heavily on marketing.

However, Admiral said it had responded quickly, pulling back on current ads, which show customers revealing what they bought with the money they saved by using the site, ahead of a new campaign that will roll out in the next six months, as well as cutting costs at Confused.com.

Admiral announced a record interim dividend of 32.6p, up 18 per cent, and said each member of staff would get 1,500-worth of free Admiral shares. They closed the day up 2.7 per cent at 1,512p.