Pre-CloseTrading Update

Admiral Group PLC
12 January 2005




12 January 2005



Admiral Meets IPO Expectations and Enters 2005 with Confidence

Before entering its closed period on 21 January 2005, Admiral Group plc
('Admiral', or 'the Company') today provides an update on current trading. The
Company will announce its preliminary results for the year ended 31 December
2004 on 21 March 2005.

Admiral expects to deliver profits in 2004 in line with management expectations
set out at the time of the Company's Initial Public Offering in September 2004.


2004 Highlights


•Total premium written rose 27% to £470 million

The premium written by Admiral for its own account and on behalf of reinsurer
partners grew from £372 million in 2003 to £470 million in 2004. The policy
count at year-end grew from 778,000 to 1,008,000, lifting Admiral's share of the
UK private car insurance market from 3% to over 4%.

•New business policies sold rose 45% to 557,000

The increase in new business policies sold in 2004 from 383,000 in 2003 to
557,000 reflects the success of Admiral's internet offering in general, and
elephant.co.uk in particular. During 2004, Admiral's share of the internet new
business market remained slightly above 20%. For the market as a whole, new
business sourced from the internet continued to increase its share of new
business activity, rising from 30% of new car insurance sales in October 2003 to
38% of new sales in October 2004*.

•Ancillary revenue averaged £51 per policy

Admiral's performance in terms of ancillary revenue per policy in the second
half of 2004 exceeded that of the first half. Revenue per policy of £51 for 2004
as a whole was in line with revenue per policy achieved in 2003. The rapid
growth of policies written combined with a stable level of revenue per policy
led to an increase of around 30% in overall ancillary revenues in 2004.

Market Developments

The market saw a substantial increase in overall marketing spend, with press and
TV spend rising 41% year on year**. These higher levels of marketing expenditure
and the continued growth of the internet business mean 2004 is likely to have
seen a further shift in market share from brokers to direct insurers.

Admiral believes premium rates in the overall market drifted down by around 3%
during 2004, but our conversion data suggests the decreases were more focussed
on the lower premium segments which are not part of Admiral's core market.
Following a small increase in rates in the second half of 2004, Admiral's own
rates finished the year roughly 2% below the level at the start of the year.

These market developments are consistent with the outlook for the UK private car
insurance market described by Admiral at the time of the Initial Public
Offering. Admiral predicts gradual market deterioration from the peak levels of
profitability of 2001/2 due to the failure of premium inflation to keep up with
claims inflation.

Admiral anticipates that, whilst there will be deterioration in market
profitability, the market will not experience the sustained and substantial
rate-cutting activity that led to record high combined ratios in the late 1990s.

Instead, Admiral expects a greatly flattened cycle. This reflects both the rapid
consolidation of the market since the late 1990s (with Royal Bank of Scotland
and Norwich Union now accounting for almost 50% of the private car insurance
market), and higher barriers to entry in a direct-dominated, rather than
broker-dominated, market.

The substantial rise in marketing spend in 2004 is consistent with this analysis
of the market, with the leading players rationally investing in extra marketing
rather than substantial rate-cutting to defend share.


Outlook for 2005

Admiral has already implemented the first of a planned series of rate increases
for 2005. This reflects our plan for 2005 of decelerating policy growth and
widening margins relative to industry averages, as industry profitability
deteriorates. The Company does not, therefore, currently anticipate asking
Munich Re for permission to exceed 11% policy count growth in 2005***.

Admiral implemented the new Insurance Conduct of Business (ICOB) rules on
disclosure at point-of-sale during October 2004 and November 2004 in advance of
the new FSA regime taking effect in January 2005. Experience to date suggests
these rules will not have a material effect on either revenues or costs.

Against the market backdrop of deteriorating profitability, Admiral's plan for
continued, if slower, volume growth in 2005 and its unique business model give
it confidence that it will meet investors' expectations, with continued
out-performance versus the car insurance market as a whole.

Henry Engelhardt, Chief Executive Officer of Admiral, said: 'We are delighted
with our current business performance. We are trading exactly in line with our
expectations at this point in the cycle and as communicated at the time of the
IPO, in September 2004.

'I want to thank everyone who has made Admiral the success that it is for their
hard work during the past historic year. We are in great shape and look forward
to what promises to be an exciting year of sustained and stable growth for the
Company,' he added.

For further information, please contact:
Admiral                                       029 2043 4224
Louisa Scadden

Financial Dynamics                            020 7269 7200
Robert Bailhache
Caroline Ledosquet

www.admiralgroup.co.uk



Notes

* Source: ebenchmarkers. Admiral's market share of internet new business in the
six months to Oct 03 = 21%; 6 months to April 04 = 24%; 6 months to Oct 04 =
23%.

** Source: AC Nielsen, Dec 02-Nov 03 v Dec 03-Nov 04.

*** Under the terms of its reinsurance arrangements with Munich Re, Admiral
requires Munich Re's permission to exceed 11% policy count growth in any
calendar year.



About Admiral

Admiral is a fast growing financial services intermediary with a track record of
profitability. Admiral principally sells private motor insurance and ancillary
products, such as cover for breakdown, roadside assistance and legal expenses.
Admiral markets directly to the public in the UK through its four core brands:
Admiral, elephant.co.uk, Diamond, and Bell Direct.

The Group also offers customers online quotes through its brand Confused.com,
the UK's first insurance aggregator. Unlike other brands, Confused.com does not
sell insurance. Visitors to Confused.com's website fill out their details once
online and Confused.com finds the cheapest quotes available on the internet from
its large panel of insurers.

Admiral's motor insurance is underwritten primarily by third party insurance
providers, with Admiral controlling all pricing and underwriting decisions and
administration. Admiral also retains a proportion (presently 25%, net of quota
share reinsurance) of the private motor underwriting for its own account.

Admiral was admitted to the Official List of the London Stock Exchange on 28
September 2004 following a Global Offer of Ordinary Shares to institutional
investors that was more than seven times subscribed. On 20 December 2004 the
Company became a constituent of the FTSE 250 index. The Ordinary Shares trade
under the ticker symbol ADM.L.




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            The company news service from the London Stock Exchange