Admiral Loans, the insurer’s one-year-old loan and car finance division, grew its book to £214.2m in the six months to June, up from £11.4m a year ago just after launch.
The business incurred a loss of £6.4m for the half-year, up from £1.6m in H1 2017, which Admiral attributed to business expansion. The company estimated end-year losses to total between £10m and £12.5m.
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Provisions on the loanbook at the end of June totalled £5.3m.
Admiral Loans launched with an unsecured personal loan product last year, and subsequently expanded to direct-to-consumer car finance.
The company said the division had secured a warehouse funding facility of undisclosed size, which would support expansion “well into 2019”.
It said the division was employing “a prudent test and learn approach regarding growth”, adding that “initial results are encouraging … although the group expects the business to make modest losses in its early phase as a result of the upfront accounting for acquisition costs as opposed to interest income earned on loans which is spread over the life of the loans.”
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By GlobalDataScott Cargill, chief executive of Admiral Loans, said during an investors presentation: “We are looking to create something meaningful and sustainable, and certainly over time became a very significant contributor to the group’s profit.”
He added that distribution in the car finance and loans market was moving towards channels that Admiral is already “familiar” with through its insurance business.
Speaking to Motor Finance in January, Cargill said the company would look to metrics such as consumer advocacy and brand awareness to judge products’ success until 2019, rather than the bottom line of statements.
He added that Admiral Loans saw an “opportunity” for its products to appear in price comparison sites such as ClearScore and MoneySupermarket in the future. Admiral already operates an array of insurance comparison platforms in the UK and across western Europe.
