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Insurance group Admiral has announced record annual pre-tax profits of nearly £300m, an increase of 13%, for 2011.

The Cardiff-based company said its turnover rose by 38% to £2.19bn, while the number of customers was also up by 22% to 3.36m.

It is the eighth consecutive year that Admiral has reported record profits and turnover.

Markets reacted positively to the news, with Admiral's share price increasing by 10% on Wednesday.

The company said it was pleased, but the annual results were less than expected.

Analysts had pencilled in a 22% profit rise, but reduced their forecasts in November when Admiral warned it had been hit by a jump in personal injury claims, an industry-wide trend it had previously avoided.

Admiral, which also has offices in Swansea and Newport, owns brands such as Confused.com, Elephant.co.uk and Diamond.

The firm insures one in 10 cars on the UK's roads.

Henry Engelhardt, the group's chief executive, said: "Profits are up 13%, and in most situations you'd call this a giant winner.

"But this is less than most people thought they would be. Far less than I thought they would be, that's for sure.

"It has been a disappointing year. Not because it was a bad year, but because so much more was expected."

He added that it was the eighth consecutive year that Admiral Group had reported record profits and record turnover.

"We have now exceeded £2.1bn turnover, within 19 years of a standing start, which is a fantastic achievement," Mr Engelhardt said.

"We enter 2012 with confidence. We can continue to grow profitably and have a business full of committed and motivated people who work hard every day to ensure Admiral's continued success well into the future."

Group chairman Alastair Lyons said the the firm was pleased to report a profit before tax of £299m, and to propose an increase in total dividends for the year of 11% to 75.6p per ordinary share.

Admiral shares closed at 1,040p on Tuesday, valuing the company at about £2.8bn.

Its staff, which number nearly 5,500, will receive free shares worth £3,000 as part of a company scheme.