PRICE COMPARISON SITE SINGLED OUT FOR SPECIAL PRAISE
THE Admiral Groups price comparison website, Confused. com was singled out for praise.
Geraint Jones, chief financial officer for the Admiral Group, said that picking a highlight was “reassuringly tough”.
He said options included a good turnaround in UK household profit, strong growth and an improved result at L’olivier in France, and progress in Admiral Loans.
“But there’s one standout for me,” he said. “The improvement in performance under Louise [O’Shea, pictured below, CEO of Confused.com] and team’s leadership over the past two years has been stark.”
The operating profit of confused.com has grown by 102% between 2017 and 2019, at £20.4m from £10.1m. The operating profit percentage had grown to 18% from 12%, a 50% rise, and revenue had gone to £112.7m from £87.1m – a rise of 29%.
Mr Jones said there were a number of factors that contributed to the doubling of profit compared with 2017, citing focus on profitability and cost efficiency, and improvements in marketing, customer experience and product.
“From a marketing perspective, brand awareness has significantly improved and, in particular, spontaneous awareness almost doubled in 2019,” Mr Jones said.
“No doubt you’ll have enjoyed Confused.com’s sponsorship of the Rugby World Cup on
TV whilst desperately hoping for a Welsh win. Marketing efficiency was also improved.
“Confused’s product offering is better than it was two years back, as is the customer journey. Results from products beyond car insurance comparison have improved significantly.”
Mr Jones added that the group was disappointed in the reversal in the trend of improving financials for Elephant Auto and associated writedown of the carrying value in the parent company financial statements.
“The last few years have seen some great progress at Elephant,” Mr Jones said.
“Some examples from 2019 include notable improvements in service levels (leading to a big increase in Net Promotor Score) and technology (online self-service as one example), launching a second brand and diversifying distribution channels, amongst others.
“But 2019 will probably be most remembered for a deterioration in loss ratio (2019 underwriting year is projected around 77% v 74% for 2018 at the same point of development) when we were expecting the opposite.
“Much action is being and has been taken (including underwriting rule changes and significant rate increases) and improving the loss ratio will continue to be a (or actually, the) major area of focus in 2020.
“Some additional conservatism has also been built into the booked reserves at the end of 2019.
“Partly because of the result being worse than plan, we changed to using shorter-term projections for the carrying value impairment test.
“Whilst we remain confident that Elephant’s result will improve in the short term, and the business will go on to profitability in the (ideally) not too distant future, this led us to conclude that further impairment to the carrying value was required and a £66m charge was taken in the 2019 parent company
accounts.”