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German insurance giant buys into the UK.

German reinsurance giant Munich Re has thrown its weight behind one of the UK's largest direct car insurers.

The Munich-based group has taken an 18.6 per cent shareholding in Admiral Group, which owns Admiral, Bell, Diamond, elephant.co.uk, Gladiator Commercial and Confused.com.

Munich Re has bought shares in the group from Barclays Private Equity and XL Group subsidiary Ridgewood. It also has received newly issued shares to fund Admiral's future growth.

Cardiff and Swansea-based Admiral launched ten years ago as a direct motor insurer for those motorists who usually pay higher-than-average premiums, including drivers under 35, those who live in big cities or drive customised 'hot hatch' cars.

Admiral's management bought out the firm in November 1999, backed by Barclays Private Equity, whose Birmingham office, in Cherry Street, handled the deal. Barclays remains Admiral's largest shareholder with a 42.3 per cent stake.

The group's development of brands such as Diamond for women and elephant.co.uk has fuelled an 80 per cent increase in its premium income, to pounds 335 million during the last three years. Admiral now has more than 700,000 customers.

Dr Thomas Braune of Munich Re said: 'With our minority participation, we have seized the opportunity to participate as financial investor in the bright outlook of Admiral.

'We are convinced that its excellent management and the particular business model of the company will continue to provide attractive returns in the growing insurance market.'

Andy Murtagh, of Barclays Private Equity's Birmingham office, said: 'Barclays Private Equity's expertise in the financial services sector led us to make the initial investment in Admiral at a time when the car insurance market was experiencing difficulties.

'We have since seen a significant return on our investment, with double our initial financing already received.'

Admiral's chief executive, Henry Engelhardt, said: 'The investment of Munich Re is a strong endorsement of Admiral.

'Our company has a history of rapid growth and we predict this will continue. As already one of the most efficient providers of car insurance in the UK, this investment will strengthen Admiral's position in a competitive market.'
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Publication:The Birmingham Post (England)
Date:Jan 24, 2003
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