Car insurer Admiral reported a 13% rise in profits today but admitted it had been a ``disappointing year" because of the cost of bodily injury claims.
The group, which is the second largest insurer in the UK with 2.9 million customers, saw shares slump by a quarter in November after it warned the results for 2011 were likely to be at the bottom end of hopes.
The Cardiff-based owner of Elephant and Bell and the comparison website Confused.com revealed a figure of £299m today, which chief executive Henry Engelhardt admitted was far less than he thought it would be.
This was caused by the proportion of 2009 and 2010 claims that emerged as potentially bigger, costlier claims, as well as those last year that were classified as having the potential to result in high costs.
Admiral’s reinsurance contracts mean it only underwrites around one quarter of the risk on its books, but the effect of the higher claims caused a reduction in the level of profit commission, which fell to 15% of premiums from 25%.
Mr Engelhardt said: "It has been a disappointing year. Not because it was a bad year, but because so much more was expected."
He said the Admiral business model remained solid and that there would be growth in 2012.
"If there was any complacency developing in our operation it is certainly gone now. I know we’ve got lots of people who work hard every day to ensure Admiral’s continued success well into the future," he added.
The slump in Admiral’s share price has been felt by staff as they receive free shares under an employee share scheme. Admiral said around 5,500 staff will this year pick up free shares worth £3,000 for 2011.