AMIGY - Admiral Group PLC

[theasiareport]

I recently attended the London Value Investor Conference and I heard a most intriguing pitch by Jonathan Mills of Metropolis Capital for Admiral Group listed in the London Stock Exchange which he pitched as the GEICO of the UK.

 

Some key takeaways (I will post more tomorrow):

 

Admiral Group is a UK Motor Insurer founded in 1992 with only 20m of equity invested, IPOed in 2004 with a market cap of 711m and has a current market cap of 3.9bn. It has a capital light model and can't be valued on book. The Founders (who are not CEOs and COOs) own slightly under 16% of the company.

 

Admiral actually has a bigger percentage share of the market than GEICO in the UK. Since their IPO, they have also solidly trounced the FTSE Index with close to a 9x return since their IPO in 2009 with dividends re-invested.

 

Love to get everyone's opinion on it. Insurance companies tend to lie outside my circle of competence but this looks like a really compelling idea. I have the printed version of the slides which I will try to summarize and get up tomorrow.

 

Cheers!

 

[petec]

I'm currently working on this following a recommendation from a friend.  I think it is a superb company at first glance, with a very strong culture based around looking after employees as a first step.  They reinsure a lot, hence the capital-light nature, which makes them partly an underwriting fee stream.  They have an excellent combined ratio history and >50% RoE.  Profits very largely derive from UK motor insurance but they are building businesses in Spain, Italy, and the US.  They also have smaller businesses in price comparison.  Read the annual report - very informative and ticks a lot of boxes.  Will post more when I have done more.

[peter1234]

Looks like very solid performance since 2004 IPO.

 

From Q1-14 results:

Admiral's insurance premiums were down 11 percent year-on-year, though the number of vehicles it insured in the UK was up 2 percent to 3.08 million.

 

Premiums in the highly competitive UK car insurance market fell by 19 percent in the first three months of 2014 compared with the same period last year, the lowest since 2009, according to a recent survey by consultant Towers Watson and Admiral's own price-comparison website Confused.com.

 

Admiral was buoyed by overseas growth in the first quarter, with the number of vehicles it insured abroad up 17 percent at 535,000 and international car insurance turnover up 13 percent at 54 million pounds.

 

"Growth outside the UK remains strong and we are happy with the progress we are making in all our international markets," added Engelhardt.

 

Looking forward to your insights.

:)

[thefatbaboon]

What happened in 2011 to cause the stock to drop 50%?

[theasiareport]

Hi Sanjeev,

 

I've realised that Admiral Group is alread an investment idea under its original ticker - ADM.L - Admiral Group Plc. Could you merge both threads?

 

Thanks!