Admiral, one of the United Kingdom’s largest motor insurers, has allocated £50 million to compensate customers who received unfair settlements for stolen or written-off vehicles. In half-year financial results released on Thursday, the group admitted it had not acted quickly enough to reflect rising used-car prices in its claims assessments.
The discrepancy in payouts affected claims dating from 2019 to 2025, with the issue coming to light following the Financial Conduct Authority’s (FCA) investigation into several key players in the insurance sector. Admiral is the first insurer to publicly quantify its redress exposure, a move likely to prompt similar responses from competitors. The FCA revealed that it is scrutinising a dozen insurers responsible for the majority of the nation’s motor insurance market.
According to Admiral, many settlements failed to match the true replacement cost of vehicles, especially during periods such as the pandemic lockdown when second-hand car prices soared. The FCA’s review noted that some insurers not only offered customers less than their cars were worth but increased offers only when pressed by policyholders. Unfair deductions for wear and tear, along with initial low offers, were also cited as common practices.
Admiral’s chief executive Milena Mondini de Focatiis highlighted that only about three per cent of motor loss claims over the examined years were impacted. She emphasised that fair claims settlement remains paramount for the business. The insurer now expects to reach out to affected customers before year-end, though it has not specified the exact number involved or the process for identification.
The £50 million provision does not include additional interest that must be paid. The FCA stated it welcomes Admiral’s move to address the shortfall and assured that it is working with the company to ensure fair compensation for those affected. Policyholders are advised to wait to be contacted directly by Admiral regarding potential compensation.
Admiral, based in Wales and employing around 13,000 staff, reported a strong performance with pre-tax profits up 67 per cent to £516 million in the first half, benefitting from both higher earnings and a generous interim dividend. Shares in the group closed up 6.7 per cent on the day as investors responded to the robust financial update despite the compensation provision.
