Profits fail to dent insurance cost
Rates at motor insurance group Admiral have risen by an average of 12% in the last year - the largest increase for nearly a decade - despite the company recording profits of more than £200 million.
The firm said the hike was necessary to "compensate for claims inflation in recent years", adding that its prior rises had been minimal.
Admiral, which owns Diamond, elephant.co.uk and price comparison site Confused.com, said the cost of car insurance would probably rise again in 2010 because of the explosion of personal injury claims and the rise of "no win, no fee" solicitors.
It added that while its business remained profitable, the company had been forced into the move by poor returns on investments.
There was better news for the group's staff, all 3,500 of whom will share a £9 million bonus pot after the firm recorded a 7% rise in annual profits to £215.8 million. The windfall will be distributed among workers, with each receiving more than £2,500. Investors will also get a 10% increase in the annual dividend payout after the record result.