Admiral ploughs on with year end shareholder dividend

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Admiral confirmed it will recommend a final dividend for the year to shareholders, as it suspended a special dividend.

Admiral joins fellow motor insurers Hastings and Sabre in pushing forwards with year end final dividend plans, despite warnings from the UK and European regulators to hit pause on payouts in the wake of Covid-19.

On 31 March, Bank of England deputy governor and Prudential Regulation Authority CEO, Sam Woods urged insurers “to pay close attention to the need to protect policyholders and maintain safety and soundness, and in so doing to ensure that their firm can play its full part in supporting the real economy throughout the economic disruption arising from Covid-19.”

The European Insurance and Occupational Pensions Authority has echoed the PRA’s message.

In early April the EU insurance regulator advised: “Against this background of uncertainty, Eiopa urges that at the current juncture (re)insurers temporarily suspend all discretionary dividend distributions and share buy backs aimed at remunerating shareholders. This suspension should be reviewed as the financial and economic impact of the Covid-19 starts to become clearer.”

Aviva, Direct Line, Hiscox and RSA all suspended final dividend payouts following the regulators’ warnings.

Like Sabre, which put a special dividend payout on hold, Admiral has pushed back a 20.7p per share special dividend recommendation.  

In a London Stock Exchange update today, Admiral said the decision to pay out the year end dividend of 56.3p per share should be taken in the context of a “broader package of measures” it has implemented, including offering blanket premium rebates worth £110m to motor customers, pledging a further £80m to supporting communities and NHS staff and not furloughing its own employees.

David Stevens, Admiral group CEO said: “We find ourselves in extraordinary circumstances, and it has been a very difficult decision to suspend the special dividend as we are aware of the importance and impact to our shareholders and staff.  

“However, the board and I believe that this is the prudent and right thing to do at this time.  We thank our customers, staff and shareholders for their continued support, and we remain committed to making decisions that are in their best interests in the long term.”

Stevens, who is set to step down from the post next year, confirmed his and his wife’s normal dividend will be donated in full to their charitable foundation.

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