UK insurer lifts dividend as earnings jump on falling claims in pandemic
Customers in Admiral's core UK motor insurance division rose 12 per cent to 4.9m in the first half, out of a total 8m. By comparison, rival Direct Line's motor policy numbers fell year on year as it chose to protect profits rather than grow volume.
"Making hay whilst the sun shines" Admiral's combined ration improves from an impressive 70.7 per cent in the first half of last year, to 58.4 per cent.
"Mondini de Focatiis, who joined Admiral in 2007, took over the top job earlier this year after the departure of David Stevens, one of the company’s co-founders. She told the FT her focus would be on accelerating investments in data and analysis, and making the group more diversified, by lifting revenues from home insurance and loans."
FT 11th August 2021
Investing in data and analysis is a significant part of the article "Data sharing models, data scientists and the insurance industry". Data always has been, always will be the basis of competitive advantage and you can see why Admiral will focus on this.
In the article I discussed data sharing and flows across the insurance value chain illustrated below.
Diagram from Data Sharing Models in the insurance industry: Willis Towers Watson
Patrick Kelahan added practical insights to temper expectations.
"Anytime an infographic has verticals, horizontals, and diagonals (as does the WTW graphic) it can be considered fraught in describing a pathway that includes customers' needs,.
Consider existing data sharing within insurance, say four users/sharers. If the probability of effective handoff of data is 90% (a robust expectation), then over four handoffs the aggregated probability of effectiveness is...66%. Is that 66% of data are just right, or 66% of data are more pure than the residual 34%?
The concern also is that each player places a priority on data that are really important to the respective player, even though data beyond the key stuff is also shared. And consider timeliness, volume, composition, tests for bias (Y or N), any characteristic you want. In Animal Farm all animals were considered equal, just some animals were noted as more equal than others. It can be said similarly for data sharing."
Just shows how the challenges of sharing data blunts the effectiveness of digital transformation without constant priority being given to finding the gaps and omissions and constantly improving to avoid the issues I described in 'Data sharing models, data scientists and the insurance industry'.
As Martin Ellingsworth at Celent replied "the moat around a walled garden always leaks, but can have defense in depth".
And why Admiral CEO Mondini de Focatiis's focus will be on accelerating investments in data and analysis.
Further Reading
Data sharing models in the insurance industry Willis Towers Watson
Auto insurance, digital maturity and how to transform it Insurtech World
Home Claims Digital Maturity, three Digital Transformation use cases and choosing the right technology partners Insurtech World
UK insurer Direct Line a winner as pandemic cuts commuting Insurtech World
Admiral’s chief executive has said the FTSE 100 insurer’s move to return money to locked-down customers last year, and to cut prices more aggressively than peers, was behind the double-digit growth in its customer numbers during the first half of the year. Like all car insurers, Admiral has benefited from a slump in claims during the pandemic as drivers worked from home and movement was restricted by lockdown measures. But unlike its UK rivals, Admiral responded to these unprecedented conditions by refunding £110m worth of premiums to its customers. US providers also returned money to policyholders
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