Last checked at 
* Admiral 2020 profit jumps
* Co sees higher loss ratio in 2021
* Shares down 2.3% on the FTSE 100 index
(Adds CEO comments from call, share move)
By Chris Thomas and Muvija M
March 4 (Reuters) - British motor insurer Admiral
said on Thursday an expected rise in claims when lockdowns ease
and people start driving more would increase its loss ratio this
year, with the warning eclipsing a 20% jump in 2020 earnings.
Motor insurers have been a bright spot for the insurance
sector, which is facing billions of dollars in pandemic-linked
claims, including for business interruptions and event
cancellations.
Admiral's pre-tax profit surged to 608.2 million pounds
($848.86 million) for the year ended Dec. 31 as it settled fewer
claims for accidents and car repairs, with coronavirus
restrictions keeping people at home and off the roads.
But a global vaccination drive means that economies will
begin to open up, with a increase in essential journeys and
leisure trips.
Admiral Chief Executive Milena Mondini de Focatiis told
Reuters the insurer expected to return to a normal level of
claims frequency in the next few months, with the company saying
its 2021 loss ratio - the amount it spends on claims compared to
how much it earns on premiums - will be higher than last year's.
Shares fell 2.3% to 30.75 pounds on the UK blue-chip index
by 1138 GMT.
The company added that the impact of discounted policies
written in 2020 will eat into the premiums it earns this year.
Before the health crisis, the industry was struggling with
stiff competition and high costs associated with car repairs,
while a 2019 regulatory change in a rate used to calculate
compensation for personal injuries forced companies to make
larger lump sum payments for such claims.
Admiral, which had reported strong interim results in August
when it also paid a special dividend, proposed a final dividend
of 86 pence per share, a 12% increase from a year earlier.
Rival Direct Line, Britain's largest motor insurer,
is due to report 2020 results next week.
($1 = 0.7165 pounds)
(Reporting by Muvija M and Chris Thomas in Bengaluru; Editing
by Rashmi Aich, Kirsten Donovan)
