Admiral still cashing in on PI referral fees
Admiral, one of the UK’s leading car insurers, last year made £6 on every vehicle it insures through personal injury referral fees.
The company revealed in its financial statement for the 2012 calendar year that it earned £18.6m from selling customers’ details to personal injury lawyers.
The Cardiff-based business appears to have reduced its reliance on referral fees ahead of next month’s ban, with receipts down from £24.5m in 2011.
But the importance of referral fees will lead to speculation that the insurer will seek out a law firm or claims management company with which to form an alternative business structure and get round the ban.
There was no mention of a possible acquisition in the financial statement, with chairman Alastair Lyons (pictured) merely stating that the firm will ‘embrace and profit from change, rather than fear it’.
As well as the £18.6m earned from personal injury referral fees, the firm made £13.6m from credit hire referral fees. The financial statement noted that the Competition Commission has recently started a review of the car insurance market which may result in referral fees being banned.
Overall, Admiral Group increased profit before tax from £299.1m in 2011 to £344.6m in 2012. Turnover, which takes into account revenue from referral fees, was £2.2bn last year, up from £2.19bn in 2011.
UK car insurance delivered a profit of £372.8m - up 19% on 2011's result of £313.6m, primarily driven by higher net premiums.