Annual Financial Report
6 March 2025
2024 Results Highlights
Admiral Group reports excellent 2024 performance with
strong growth in customers, turnover and profit and good strategic
progress
| |
31 December 2024 |
31 December 2023 |
% change vs. 2023 |
| Group profit
before tax |
£839.2m |
£442.8m |
+90% |
| Earnings per
share |
216.6p |
111.2p |
+95% |
| |
|
|
|
| Dividend per
share |
192.0p |
103.0p |
+86% |
| Return on
equity1 |
56% |
36% |
+20pts |
| |
|
|
|
| Group
turnover¹ |
£6.15bn |
£4.81bn |
+28% |
| Insurance
revenue |
£4.78bn |
£3.49bn |
+37% |
| |
|
|
|
| Group
customers¹ |
11.10m |
9.73m |
+14% |
| UK insurance
customers¹ |
8.80m |
7.39m |
+19% |
| International
insurance customers1 |
2.10m |
2.17m |
-3% |
| Admiral Money
gross loan balances |
£1.17bn |
£0.96bn |
+23% |
| |
|
|
|
| Solvency ratio
(post-dividend)¹ |
+203% |
+200% |
+3pts |
1 Alternative Performance Measures – refer to the end of the
report for definition and explanation.
Over 13,000 employees will each receive free share awards worth up
to £3,600 under the employee share schemes based on the full year
2024 results.
Comment from Milena Mondini de Focatiis, Group Chief
Executive Officer:
“2024 was a remarkable year. We delivered an excellent result
with a 28 per cent increase in turnover and 90 per cent increase in
profit as we welcomed an additional 1.4 million customers to the
Group.
“To remain one of the most competitive insurers for the largest
number of people is a priority for us. We have emerged from several
rather challenging years so when we saw conditions improve we were
quick to respond. We were one of the first to reduce prices in
response to easing inflation and cut rates the day after the
favourable Ogden rate change announcement.
“The main driver of our exceptional performance was our UK Motor
business. However, it is great to see UK Household, Admiral Money,
and our French and US Motor businesses all report a double-digit
profit.
“We are excited to be building on the synergies within our
businesses and products. We recognise that there is more that we
can do to meet even more of the needs of our growing customer base.
We continue to focus on being a great choice for customers by
leveraging our expertise in pricing, claims management and
underwriting, and making continuous improvements in our
service.
“I was pleased to see our MSCI ESG score upgraded to AAA and to
have our science-based targets officially approved. We have
published our Net Zero Transition Plan and, as one of the leading
insurers of electric vehicles in the UK, we are supporting the
transition to greener vehicles.
“Thanks to our incredible colleagues we have achieved so much
this year and rewarded them with an additional bonus for their
commitment.
“As we enter into 2025, the market is softening, and the outlook
is uncertain. Our priority is to stay efficient and agile so that
we can adapt as needed and deliver long-term growth by building on
our strong foundations and talented team.”
Comment from Mike Rogers, Admiral Group
Chair:
“Admiral has had an excellent year, demonstrating, once again,
how its unwavering focus on doing the right thing for customers can
deliver growth and long-term value to all its stakeholders.
“Admiral is now helping even more people to look after their
future with its wider range of products. The Group’s commitment to
continuous evolution and innovation means that it is using new
technologies to better anticipate and meet customers’ needs and
achieve greater efficiencies in how it operates.
“Although inflation has eased, political, regulatory and
economic uncertainty remains. Admiral’s prudent and disciplined
approach will be key to ensuring that the Group continues to
achieve long-term sustainable growth and can be there for its
customers, colleagues and communities when they need it the
most.”
Final Dividend
The Board has proposed a dividend of 121.0 pence per share
(2023: 52.0 pence per share) representing a normal dividend (65% of
post-tax profits) of 91.4 pence per share and a special dividend of
29.6 pence per share. The final dividend will be paid on
13 June 2025. The ex-dividend date is 15 May 2025, and
the record date is 16 May 2025.
Management presentation
Analysts and investors will be able to access the Admiral Group
management presentation which commences at 10.00 GMT on Thursday
6 March 2025 by registering at the following link to attend
the presentation in person, or access the presentation live via
webcast or conference call:
https://admiralgroup.co.uk/events/event-details/2024-full-year-results.
A copy of the presentation slides will be available at the
following link: Results, reports and presentations | Admiral Group
Plc (www.admiralgroup.co.uk)
Investors and Analysts: Admiral Group plc
Diane
Michelberger Diane.Michelberger@admiralgroup.co.uk
Media: Admiral Group plc
Addy
Frederick Addy.Frederick@admiralgroup.co.uk
+44 (0) 7500 171
810
Media: FTI Consulting
Edward
Berry +44
(0) 7703 330 199
Tom
Blackwell +44
(0) 7747 113 919
Chair Statement
Admiral Group performed very strongly in 2024 despite
an unfavourable macroeconomic backdrop. The Group has achieved
significant customer growth, while increasing customer
satisfaction, and delivered an excellent UK Motor performance,
supported by changes to the Ogden rate, with strong results in many
other business lines. This has translated into profit before tax of
£839.2 million and a proposed final dividend of 121.0 pence per
share, making a total of 192.0 pence per share for the
financial year.
The Group’s impressive customer growth is a testament to
its core value of doing what is right for customers. In the
UK, due to better cycle management and in response to improved
market conditions, Admiral reduced prices earlier than the market
in early 2024.
Delivering growth, digitisation and
sustainability
Defending and extending the competitive advantages of the UK
motor business remains our number one priority, alongside our
strategy of developing other franchises with the potential to drive
future profitable growth. We have seen positive results across
many of our newer franchises, with double-digit profit in the UK’s
Household and Money businesses and our French business.
The Group has made significant strides in enhancing
its digital capabilities and unlocking the potential of
new technologies to achieve a superior customer experience
and greater productivity.
Admiral continues to navigate a challenging regulatory landscape
to ensure its resilience and sustainability in the long term. As
one of the UK’s largest motor insurers, the business has been
engaging with members of the motor insurance taskforce to identify
solutions to tackle the current high costs of insurance.
Admiral continues to support customers to adopt greener
behaviours and is one of the leading UK electric vehicle insurers.
The publication of Admiral’s Net Zero Transition Plan and the
SBTi’s approval of its science-based targets demonstrates our
commitment to responsible and sustainable business practices.
Powered by our people
Admiral colleagues’ expertise and dedication to supporting
customers, colleagues and local communities is remarkable,
so I was pleased that Admiral was, again, named one of the
world’s best workplaces. Similarly, it was an honour to be at
the London Stock Exchange to celebrate 20 years of Admiral
being a listed business and delivering for customers and
shareholders with colleagues who are custodians of the business’
incredible culture.
I was sorry to say goodbye to Cristina Nestares who had
successfully led the UK Insurance business since 2016. We all wish
her the very best for the future. I’m pleased that, in line with
the Group’s strong track record on succession planning, Alistair
Hargreaves has been appointed UK Insurance CEO.
We conducted an evaluation on the performance of the Board and
its Committees. This process confirmed that these were operating
effectively, that the business is managed for the long-term benefit
of all stakeholders and provided a clear focus on areas for
improvement for the forthcoming year.
On behalf of the Board, I would like to thank Admiral colleagues
for their ongoing commitment, and the management team for their
excellent leadership and performance.
While the external landscape remains uncertain, I believe that
the Group’s competitive advantages, disciplined approach,
and customer-first mindset will drive continued growth and
shareholder value.
Mike Rogers
Group Chair
5 March 2025
Group Chief Executive Officer’s Review
Overall, 2024 was a remarkable year for Admiral. It was not
only a year of delivering excellent financial results but also one
of continuous improvements in serving our customers and making
solid progress on our strategy.
Despite persisting economic, political, and regulatory
uncertainty, motor insurance market conditions improved and this –
combined with our historical discipline and agility across the
insurance market cycle allowed us to achieve a great many
successes. We have welcomed 1.4 million new customers, improved
customer satisfaction, added £1.3 billion in turnover, and
increased profits by 90 per cent.
Our core business, UK Insurance, was the main driver of this
success. It delivered just under £1 billion in profit, supported
by the impact of the recent favourable Ogden Rate change, and
strong growth across our other products. Our acquisition
of the renewal rights for More Than completed in the first
half of the year. The integration is progressing well with 7
months of renewals at the end of January and retention is in
line with expectations.
To remain one of the most competitive insurers for the largest
number of people is a priority for us so, when we saw conditions
improve, we were quick to reflect this in our pricing. We led
on reducing rates, doing it earlier than most at the start of
the year, as we saw inflation easing. We also cut rates the day
after the favourable Ogden rate change announcement.
Beyond UK motor, we have delivered double-digit profits
within our UK Household, French and US Motor businesses
and Admiral Money. We now serve over 11 million customers
globally, with almost half of customer growth coming from other
business lines across the Group.
We are proud of the pleasing turnaround that the US team has
achieved. As previously mentioned, we’re assessing the strategic
options for our US business. We have made good progress and are in
exclusive talks with a potential acquirer.
Across our European franchises, we now insure more than
half a million French customers and have seen an improved
performance in our Spanish business. In Italy, the team
is focused on turning the business around following a
disappointing financial performance in a tough market in 2024.
We are conscious that there is more to do to unlock the
potential of these businesses. We have ambitious plans
to build on our UK customer base, to further improve the
customer experience and harness the advantage of automation and AI
to achieve even greater efficiency.
Taking a step back, our story has been one of continuous growth
and, to celebrate 20 years as a listed company, colleagues joined
Mike Rogers and I at the London Stock Exchange to close the market.
This anniversary was a time for reflection on where the
business has come from and, of course, where the business is
going (and to celebrate Geraint who has been Group CFO for ten
years – congratulations Mr Jones!).
Our success has been underpinned by our pricing, underwriting
and claims management expertise, all united by a culture that
is truly unique. We put our customers and people first, and
are data-driven, agile and entrepreneurial.
We want to have a positive impact on society. We are one
of the leading electric vehicle insurers and are proud of our
commitment to improve road safety. In the UK, our Words
to Live By campaign video was shown in cinemas nationwide.
I am proud of how our colleagues have supported customers
impacted by flooding and we are working cross-industry
to ensure that homes are more flood resistant or resilient.
Our colleagues want to play a positive role in the communities
in which we live and work, and the number of volunteering hours
more than doubled in 2024.
We have published our Net Zero Transition Plan and are working
hard to meet our sustainability goals. I was pleased to see
our science-based targets officially approved and our MSCI ESG
score upgraded to AAA.
We know that if our people like what they do, they will
do it better, and it is brilliant to be recognised, once
again, as one of the World’s Best Workplaces. We focus on
being an inclusive employer and maintaining our unique culture
to attract and retain the talent we need to execute our
strategy.
I am so proud of everything that we have been able to achieve
this year thanks to our incredible colleagues. Ever since we
floated, colleagues have been given a stake in the business
so that they can benefit from their hard work and customer
focus. This year, we have given colleagues an additional bonus to
reward their commitment.
In October, we announced that Cristina Nestares was stepping
down as CEO of our UK Insurance business to spend more time in
her native Spain. We will miss Cristina’s passion and customer
focus, which were key to building on the business’ position as a
leading insurer. I was pleased to appoint Alistair Hargreaves
as CEO. Alistair has significant leadership experience and
extensive knowledge of our customers, colleagues, products and
strategy, and I look forward to working even more
closely with him as we continue to deliver for our
growing customer base.
We are emerging from four years of challenge from the pandemic
and cost-of-living crisis to inflation spikes and regulatory
changes. Although, no doubt, further challenges lie ahead,
I am optimistic about the opportunities too. Our priority
will be to stay agile, lean, and efficient so that we can
adapt as needed, leveraging our strong foundations and
talented team to deliver long-term growth.
Milena Mondini de Focatiis
Group Chief Executive Officer
5 March 2025
Group Chief Financial Officer’s Review
I closed my 2023 statement by saying I looked forward to
seeing improved underlying margins feeding into reported results
for 2024. These results have duly delivered.
There are many positives and milestones: customer numbers up by
1.37 million (record number and highest annual gain); turnover up
£1.3 billion to £6.1 billion (same records as customers); highest
ever investment return at £182 million; very strong solvency
position (203%) maintained despite the significant 121.0p
final dividend; some of the best results we have delivered in
UK Motor (including a material boost from the review of the
Personal Injury Discount Rate); and some encouraging results from
businesses beyond UK Motor - over £70 million in aggregate from UK
Household, Admiral Money, L’olivier Motor and Elephant US - each
delivering their own record result.
In UK Motor Insurance, after the very challenging 2021 and 2022
underwriting years (both of which experienced severe claims
inflation), 2023 and 2024 have been more positive – with a notably
larger business (5.7 million risks at year-end 2024 v 4.9 million
at year-end 2023), much higher revenue and more positive
combined ratios for both years (driven by quite large cumulative
price increases since the start of 2023). These factors have
contributed to materially higher reported profit in 2024.
In terms of volumes, after very positive conditions in the
market at the start of the year (very large new business volumes
and very competitive Admiral prices), the environment became
tougher from Q2 onwards, with prices drifting down quite steadily.
Confidence in our loss ratios meant we were able to reduce
prices around the start of 2024 (ahead of the market) and in H2 as
well (partly to pass the benefits of the new discount rates to our
customers), but inevitably our growth in the second half was
lower than in H1.
Personal Injury Discount Rates
As we explain more fully later in the report, the Discount Rate
for all parts of the UK changed during 2024, resulting in
lower projected costs of large open claims. We estimate that in
today’s money, the total (positive) impact on profit is around £150
million (emphasis on estimate) of which £100 million has been
recognised in 2024.
Investments
Much larger balances (£5.2 billion at year-end ’24 v £4.2
billion year-end ’23) due to strong revenue growth combined with
a higher yield (4.0% for 2024 v 3.3% for 2023 as the portfolio
has been reinvested over the past couple of years) led to
investment income for 2024 of £182 million, our highest ever.
More details on the portfolio are set out later in the report,
but there’s been no change in our approach and only small changes
in the asset allocation. Obviously very subject to what happens to
market interest rates and spreads, we’d expect the yield shown in
the income statement to continue to increase but much more
gradually in 2025.
Italy
In a generally very positive year, it’s fair to call out the
ConTe result as a disappointment. ConTe has been steadily
profitable since 2014, and the loss for the year (£23 million
compared to a profit in 2023 of £7 million) was obviously
not in our plan. The disappointing performance came about, partly,
because of an update to the Milan Court tables (used to
determine the cost of many injury claims), but also because of some
adverse experience, notably from some business written in 2023.
Our management team (along with pretty much the whole business)
is very focused on restoring profitability through various actions
as soon as possible, and I’m confident they’ll achieve this.
It might well come at the cost of some volume in the very
short term, though we’re still confident in ConTe’s
prospects.
At the risk of upsetting some of our terrific management teams,
let me also call out a few other high points:
- Partly benefiting from lower than
budgeted weather cost in 2024 (but also see an improving
attritional loss ratio), UK Household Insurance reported its
largest profit of £34 million. The team has also been well focused
on the migration of the acquired More Than renewal rights
portfolio as well as organic growth as we close in fast on two
million policies
- After some quite bruising years in
the US, huge credit goes to our team in Elephant Auto who have very
much met their goal of materially improving the bottom line in
2024. The result swung impressively from a loss of £20 million
to a profit of £14 million due to a much better loss
ratio and a very solid expense outcome. And whilst
acknowledging the portfolio has shrunk as a consequence, this
is a pleasing turnaround and we’re very proud of the team’s
work
- Veygo (mainly offering short-term
car insurance in the UK) is possibly the Group’s fastest
growing business, reporting revenue of £64 million in 2024 (with a
very healthy three-year CAGR of 45%) and also returned its first
(albeit small in the Group context) profit
- Our French motor insurer L’olivier
reported its highest profit of £11 million (2023: £7 million). With
turnover above €260 million and a solid combined ratio, we’re
positive about the future in France
- And finally – partly stretching
timeframe of the report – I’m very happy that Admiral Money
has, in early 2025, signed its first deal to use third-party
capital to grow the personal loan business – we think this is an
important part of the model for the future
Internal capital model
As part of the process to ultimately use our own capital model
to calculate our capital requirement, Admiral entered the
pre-application phase (focused on UK car insurance) with
the two main prudential regulators in mid-2024. We received
feedback late in the year and are working to address that
as well as finalise the other aspects of the model before
submitting our full application. Lots of hard work is
continuing on this important but complex project and we’ll update
on progress in due course.
Looking ahead to 2025
We move into the new year well-placed for continued positive
results. There are one or two challenges for sure (a competitive
market in UK motor and the need to restore profit in Italy to name
two), but particularly noting the prudent claims reserves position
in all lines of business at the end of 2024, we expect strong
releases and profit to flow into 2025 and beyond. Subject to market
conditions, we’re still hoping to grow in pretty much all our
operations too.
Big thanks to all Admiral colleagues for helping to achieve
these great results!
Geraint Jones
Group Chief Financial Officer
5 March 2025
|
£m |
2024 |
2023 |
Change vs 2023 |
|
UK Insurance |
977 |
597 |
+380 |
|
UK Insurance (Ogden -0.25%) |
877 |
597 |
+280 |
|
Europe Insurance |
(20) |
2 |
-22 |
| US Insurance |
14 |
(20) |
+34 |
| Admiral Money |
13 |
10 |
+3 |
| Share scheme
cost |
(62) |
(54) |
-8 |
|
Other costs including Admiral Pioneer |
(83) |
(92) |
+9 |
|
Pre-tax profit |
839 |
443 |
+396 |
|
Pre-tax profit (Ogden -0.25%) |
739 |
443 |
+296 |
2024 Group overview
|
£m |
2024 |
2023 |
% change vs.
20234 |
|
Group turnover (£bn)1 3 |
6.15 |
4.81 |
+28% |
|
Net insurance and investment result |
798.7 |
363.1 |
+120% |
| Net interest
income from financial services |
76.3 |
68.1 |
+12% |
|
Other income and expenses |
(9.3) |
31.7 |
nm |
|
Operating profit |
865.7 |
462.9 |
+87% |
|
Group profit before tax |
839.2 |
442.8 |
+90% |
|
|
|
|
|
| Analysis
of profit |
|
|
|
|
UK Insurance |
976.7 |
596.5 |
+64% |
|
UK Insurance (Ogden -0.25%) |
876.4 |
596.5 |
+47% |
|
International Insurance |
(5.3) |
(18.0) |
+71% |
|
International Insurance – European Motor |
(14.8) |
6.1 |
nm |
|
International Insurance – US Motor |
14.4 |
(19.6) |
nm |
|
International Insurance – Other |
(4.9) |
(4.5) |
-10% |
|
Admiral Money |
13.0 |
10.2 |
+28% |
|
Other |
(145.2) |
(145.9) |
+1% |
|
Group profit before tax |
839.2 |
442.8 |
+90% |
|
Group profit before tax (Ogden
-0.25%) |
738.9 |
442.8 |
+67% |
|
|
|
|
|
| Key
metrics |
|
|
|
| Reported Group
loss ratio1 2 |
+55.4% |
+63.9% |
-9pts |
| Reported Group
expense ratio1 2 |
+22.0% |
+24.8% |
-3pts |
|
Reported Group combined ratio1 2 |
+77.4% |
+88.7% |
-11pts |
|
Reported Group combined ratio (Ogden -0.25%) |
+79.7% |
+88.7% |
-9pts |
|
Insurance service margin1 2 |
+16.2% |
+10.2% |
+6pts |
| Customer numbers
(million)1 |
11.10 |
9.73 |
+14% |
| |
|
|
|
|
Earnings per share |
216.6 |
111.2 |
+95% |
|
Earnings per share (Ogden -0.25%) |
190.2 |
111.2 |
+71% |
|
Dividend per share |
192.0 |
103.0 |
+86% |
| Return on
equity1 |
56% |
36% |
+20pts |
|
Solvency ratio1 |
+203% |
+200% |
+3pts |
1 Alternative Performance Measures – refer to the end of the
report for definition and explanation.
2 Reported Group loss and expense ratios are calculated on a
basis inclusive of all insurance revenue – this includes insurance
premium revenue net of excess of loss reinsurance, plus revenue
from underwritten ancillaries and an allocation of instalment and
administration fees/related commissions. See glossary for an
explanation of the ratios and Appendix 1a for a reconciliation of
reported loss and expense ratios, and insurance service margin, to
the financial statements.
3 Alternative Performance Measures – refer to note 14 for
explanation and reconciliation to statutory income statement
measures.
4 Definition: nm – not meaningful.
Group highlights
Admiral reports strong growth in turnover and customer numbers
and significantly higher profits in 2024.
- Group customer numbers increased by
14% and turnover was 28% higher, driven by UK Motor Insurance
- Group pre-tax profit was £839
million, 90% higher than 2023 as a result of a significantly
improved current year underwriting performance and continued
significant prior period releases, notably in the UK Motor
Insurance business. Excluding the impact of the change in Personal
Injury (‘Ogden’) Discount Rate (see below), pre-tax profit would
have been £739 million, 67% higher than 2023
- Strong growth in UK Household
pre-tax profit to £34 million (2023: £8 million). A relatively
benign year for weather and an improved attritional loss year
resulted in a favourable current year loss ratio
- Completion of the acquisition of the
More Than direct UK Household and Pet Insurance renewal rights;
renewals started to transfer to Admiral in the second half of
2024
- A lower overall loss in
International Insurance (£5 million v £18 million), including a
profit of £14 million in US motor, which was offset by a loss of
£20 million in Europe
- Continued growth in Admiral Money
profit to £13 million (2023: £10 million) and gross loan balances
(+23% year-on-year growth).
Earnings per share
Earnings per share for 2024 were 216.6 pence (2023: 111.2
pence). The increase from 2023 is higher than the increase in
pre-tax profit above due to a slightly lower effective tax
rate.
Return on equity
Return on equity was 56% for 2024, 20 percentage points higher
than the 36% reported for 2023. The increase is the result of the
significantly higher post-tax profits, partially offset by higher
average equity.
Dividends
The Group’s dividend policy is to pay 65% of post-tax profits
as a normal dividend and to pay a further special dividend
comprising earnings not required to be held in the Group for
solvency, buffers or purchasing shares for the Group’s employee
share plans. No shares are expected to be purchased for the share
plans until 2026.
The Board has proposed a final dividend of 121.0 pence per share
(approximately £366.6 million) splits as follows:
- 91.4 pence per share normal
dividend
- A special dividend of 29.6 pence per
share.
The 2024 final dividend reflects a pay-out ratio of 87% of
second half earnings per share. 121.0 pence per share is 133%
higher than the final 2023 dividend (52.0 pence per share), in line
with the growth in earnings per share.
The 2024 final dividend payment date is 13 June 2025,
ex-dividend date 15 May 2025, and record date 16 May
2025.
Economic background
Whilst remaining higher than its long-term average, the elevated
inflation observed over the course of 2022 and 2023 started
to reduce in 2024. Price increases implemented to mitigate the
impact of the higher inflation in the Group’s main UK business
in 2022 and 2023 have resulted in a strong current year
underwriting performance compared to the prior year.
Admiral continues to focus on medium-term profitability and has
maintained a disciplined approach to business volumes. The Group’s
customer base in UK Motor grew significantly at the start of 2024
as a result of price reductions ahead of the market, with market
competition increasing in the second half. The Group continues
to set claims reserves cautiously.
Admiral Money has continued to grow its consumer loans book,
with a cautious approach to growth and evolving underwriting
criteria to reflect the macroeconomic environment and potential
financial impact on consumers. The business continues to hold
appropriately cautious provisions for credit losses.
Change in UK personal injury discount rate
(‘Ogden’)
The discount rate, which is used in setting personal injury
compensation (referred to throughout the report as ‘Ogden’),
changed to +0.5% across the UK in H2 2024.
In Scotland and NI, the discount rate changed from -0.75% to
+0.5%, effective from September 2024. In England and Wales, it was
announced in December 2024 that the discount rate would change to
+0.5% from the existing -0.25% rate, effective from 11 January
2025. The +0.5% rate is expected to remain in place for up to the
next five years.
Given the announcements were made in 2024, the Group has updated
its insurance contract liabilities to reflect the new rate. The
impact of the change in rate is an increase in 2024 pre-tax
profits of £100 million (with the ultimate profit impact estimated
to be around £150 million).
UK Insurance Review – Alistair Hargreaves, CEO UK
Insurance
It is a great privilege and responsibility to be appointed
UK Insurance CEO and I’m fortunate that in writing this statement,
I’m able to reflect on the UK Insurance teams’ many
achievements in 2024, a very positive year. Our disciplined
approach to managing uncertainty and the motor market cycle,
alongside enhancements to propositions, pricing, claims and
customer experience, helped us to welcome 1.4 million new
customers, sustain our market-leading combined ratio and deliver
£977 million profit before tax, while improving our Trustpilot
customer rating to an industry-leading 4.6.
In motor, price is the primary customer consideration. This was
especially true in 2024 after the recent sustained period of
elevated claims inflation drove market premiums up and motor
insurance affordability made the headlines. Our discipline
throughout 2022 and 2023, where we increased prices ahead of
competitors and sacrificed growth, paid off in 2024. We were able
to start reducing rates in early 2024, ahead of the market, and our
competitive prices resulted in a 15% increase in motor
policies to a record 5.7 million. This was achieved whilst
maintaining strong service levels and repair times due to the
strength of our repair network partners. UK Motor turnover grew by
£1.1 billion in 2024 to £4.5 billion and profit before tax
increased to £955 million, driven by our strong performance
as well as a c.£100 million reserving benefit from the recent
change to the Ogden discount rate, which impacts large personal
injury claims. We passed the benefits from the new Ogden rate going
forward to our customers by lowering prices accordingly the day
after the announcement in December.
Beyond Motor, our strong MultiCover proposition supported
further growth in our Household insurance business, despite
continued rate increases offsetting claims inflation. The
integration of the ‘More Than’ Pet and Home renewal rights from
Royal Sun Alliance (RSA) is going well. The customer migration runs
over 12 months and started in the summer of 2024. This has given a
boost to our Household business, which finished the year with just
under two million customers, and led to a significant acceleration
for Pet with more than 200,000 policies. The renewal process will
continue through to the summer of 2025. Our Travel business grew
both new business and renewals with strong underwriting discipline
leading to a small but growing profit.
We continue to invest to further improve customer journeys and
maintain our market-leading insurance expertise. In 2024, we drove
improvements in speed, both in feature development sprints and
deploying machine-learning models across pricing, claims, and
customer experience. This is supported by the fact that over 80% of
our estate is now cloud-based. We are pleased with the continued
growth of our digital experience, which enables customers to engage
with us in the most convenient way for them. We give customers the
choice to self-serve digitally, and half of mid-term changes and a
third of claims notifications are now made this way. In Motor, our
investment in customer proposition and claims is supporting strong
growth in insured electric vehicles where we continue to be one of
the industry leaders with a high teens market share.
The driving force of our business is our culture and people, we
were pleased to, again, have been listed in the Top 10 for both
Great Places to Work and for Great Places to Work for Women. One
element of our culture, which I’m particularly proud of, is our
continued support of our communities. In 2024, our colleagues spent
over 30,000 hours helping over a thousand people to secure work or
to gain new skills with funding and support for our community
partners.
2024 has been a remarkable year for UK Insurance, and by
delivering for our customers we’ve taken the opportunity to grow.
Looking ahead, some uncertainty remains around near-term market
dynamics, but our strong team and fundamentals give us a great
platform to continue to provide value, ease and trust for
customers and in doing so make the most of opportunities for
sustainable profitable growth in 2025 and beyond.
UK Insurance financial performance
|
£m |
2024 |
2023 |
|
Turnover1 2 |
5,108.5 |
3,776.0 |
| Total premiums
written1 |
4,745.2 |
3,502.6 |
|
Insurance revenue |
3,873.4 |
2,596.9 |
|
Underwriting
result1 |
764.4 |
383.4 |
| Net investment
income |
70.5 |
55.2 |
|
Co-insurer profit commission and net other revenue |
141.8 |
157.9 |
|
UK Insurance profit before
tax1 |
976.7 |
596.5 |
Segment result: UK Insurance profit before
tax1
|
£m |
2024 |
2023 |
|
Motor |
955.1 |
593.3 |
|
Motor (Ogden -0.25%) |
854.8 |
593.3 |
|
Household |
34.1 |
7.9 |
|
Travel and Pet |
(12.5) |
(4.7) |
|
UK Insurance profit before tax |
976.7 |
596.5 |
|
UK Insurance profit before tax (Ogden
-0.25%) |
876.4 |
596.5 |
Segment performance
indicators1
|
|
2024 |
2023 |
|
Vehicles insured |
5.69m |
4.94m |
| Households
insured |
1.97m |
1.76m |
|
Travel and Pet policies |
1.14m |
0.69m |
|
Total UK Insurance customers |
8.80m |
7.39m |
1 Alternative Performance Measures – refer to the end of
this report for definition and explanation.
2 Alternative Performance Measures – refer to note 14 for
explanation and reconciliation to statutory income statement
measures.
Highlights for the UK Insurance business
include:
- In UK Motor:
- A 15% increase in customer numbers,
driven by reducing prices ahead of the market around the start of
the year, after a period of prices moving higher to address
significant claims cost inflation in the past few years
- The increase in customers, combined
with higher premiums, resulted in a 33% rise in turnover, and a 50%
rise in insurance revenue
- Profit of £955 million was 61%
higher than 2023, driven by the resulting improved current year
combined ratio and continued positive reserve releases, as well as
the favourable impact of the Ogden Discount Rate change. Excluding
the Ogden change, profit would have been £855 million, 44% higher
than 2023.
- In UK Household:
- An increase in customer numbers of
12% to 1.97 million (31 December 2023: 1.76 million). Growth
continued, particularly in the second half of 2024 when rate
increases in response to inflation eased, resulting in increased
competitiveness
- Profit grew strongly to £34 million
(2023: £8 million) as a result of a positive current period
combined ratio driven by higher earned premiums, a relatively
benign year for severe weather, an improved attritional loss year
plus continued prior period releases.
- In UK Travel and Pet
Insurance:
- Both business lines continued to
grow their customer base and turnover
- Travel delivers second consecutive
annual profit, whilst there was an increased loss in Pet due to
both integration costs (primarily IT) in relation to the More Than
acquisition of £6.3 million, and the premium written as a result of
More Than renewals not yet earning through
- More Than
acquisition:
- In March 2024, the Group
successfully completed its first significant acquisition, of the
direct UK Household and Pet insurance renewal rights of the More
Than brand and the transfer of over 280 colleagues from RSA.
Liabilities relating to existing policies and those up to renewal
remain with RSA
- The integration of the business is
now largely complete, with renewals having commenced in July 2024
for Household and in August 2024 for Pet
- The 2024 UK Insurance results,
therefore, include an impact of £11.9 million of integration costs
in relation to the acquired business. See note 13 to the financial
statements for further details.
UK Motor Insurance financial review
UK Motor profit in 2024 was £955 million, 61% higher than 2023.
Excluding the impact of the change in the Ogden Discount Rate, UK
Motor profit was £855 million, 44% higher than 2023. This increase
is the result of an improved current period combined ratio (driven
by higher average premiums earning through), along with continued
positive development of prior year claims, partly offset by
recognising the reinsurer’s share of releases on underwriting years
2021-2023.
In addition, favourable net investment income is driven by
higher yields and investment balances.
|
£m |
2024 |
2023 |
|
Turnover1 |
4,495.9 |
3,371.8 |
|
Total premiums written1 2 |
4,157.7 |
3,118.2 |
|
Insurance premium revenue1 |
3,160.5 |
2,115.4 |
|
Other insurance revenue |
209.0 |
134.8 |
|
Insurance revenue |
3,369.5 |
2,250.2 |
|
Insurance revenue net of XoL2 4 |
3,271.4 |
2,188.6 |
| Insurance
expenses1 2 3 |
(586.8) |
(451.2) |
| Insurance claims
incurred net of XoL2 4 |
(2,078.1) |
(1,729.0) |
| Insurance claims
releases net of XoL2 4 |
374.6 |
392.8 |
| Quota share
reinsurance result2 3 |
(228.8) |
(16.8) |
|
Movement in onerous loss component net of
reinsurance2 |
1.1 |
4.1 |
|
Underwriting
result2 |
753.4 |
388.5 |
| Investment
income |
150.0 |
111.8 |
|
Net insurance finance expenses |
(83.4) |
(58.2) |
|
Net investment income |
66.6 |
53.6 |
| Co-insurer profit
commission |
53.3 |
76.5 |
|
Other net income |
81.8 |
74.7 |
|
UK Motor Insurance profit before
tax1 |
955.1 |
593.3 |
|
UK Motor Insurance profit before tax (Ogden
-0.25%) |
854.8 |
593.3 |
Segment performance indicators
|
|
2024 |
2023 |
|
Reported Motor loss ratio1 2 5 |
52.1% |
61.1% |
| Reported Motor
expense ratio1 2 5 |
17.9% |
20.6% |
|
Reported Motor combined ratio1 2 5 |
70.0% |
81.7% |
|
Reported Motor combined ratio (Ogden
-0.25%)1 |
73.2% |
81.7% |
|
Reported Motor Insurance service margin1 2 5 |
23.0% |
17.7% |
|
Core motor loss ratio before releases1 2 6 |
69.2% |
87.0% |
|
Core motor claims releases1 2 6 |
(12.7)% |
(20.2)% |
|
Core motor loss ratio1 2 6 |
56.5% |
66.8% |
| Core motor
expense ratio1 2 6 |
18.2% |
21.4% |
|
Core motor combined ratio1 6 |
74.7% |
88.2% |
|
Core motor written expense ratio1 2 7 |
16.8% |
17.8% |
|
Vehicles insured at period end1 2 |
5.69m |
4.94m |
|
Other revenue per vehicle2 8 |
£76 |
£62 |
1 Alternative Performance Measures – refer to the end of
this report for definition and explanation.
2 Alternative Performance Measures – refer to Appendix 1b
for explanation and reconciliation to statutory income statement
measures.
3 Insurance expenses and quota share reinsurance result
excludes gross and reinsurers’ share of share scheme charges
respectively. Share scheme charges reported in Other Group
Items.
4 XoL refers to Excess of Loss (non-proportional)
reinsurance; see glossary at end of report for further
information.
5 Reported Motor loss ratio, expense ratio and insurance
service margin are all net of XoL, as defined in the glossary.
Reconciliation in Appendix 1b.
6 Core Motor loss ratio, expense ratio and combined ratio
are all net of XoL, as defined in the glossary. Reconciliation in
Appendix 1b.
7 Core motor written expense ratio defined as insurance
expenses divided by core product written insurance premium, net of
excess of loss reinsurance.
8 Other revenue per vehicle includes other revenue included
within insurance revenue. See ‘Other Revenue’ section for
explanation.
Claims
Claims inflation continues to show signs of gradually reducing,
with Admiral's current estimate of average claims cost inflation
for full-year 2024 (compared to full-year 2023) being approximately
in mid-to-high single-digits (2023: around 10%). Despite the
significant growth in policy base, a small reduction in claims
frequency has been observed.
As usual, the longer-term impacts of inflation on bodily injury
claims remain uncertain. Admiral did not observe material changes
in inflation for bodily injury claims settled in 2024, when
compared to 2023. We maintain a prudent allowance held in the best
estimate reserve to reflect potential impacts of higher than
historic levels of future wage inflation on certain elements of
large bodily injury claims reserves.
There is still uncertainty within motor claims across the market
arising from inflation, and future developments relating to both
whiplash reforms, and regulatory developments. As noted above, the
new Ogden discount rate of +0.5%, as announced in December
2024, has been used within the best estimate reserves.
In line with the FCA’s multi-firm review into total loss claims
valuations, Admiral is conducting a review of its total loss and
related processes, which considers current practice and customer
outcomes in the recent past. The work is in the process of being
finalised, with the conclusion that some action is required.
Although uncertainty remains over the final position, when fully
concluded, the cost is not expected to have a significant impact on
the financial statements. Taking account of current information,
appropriate amounts are included within insurance contract
liabilities at 31 December.
Admiral continues to hold a significant and prudent risk
adjustment above best estimate reserves, with an increase in the
confidence level to the 95th percentile (93rd percentile at 31
December 2023). When setting the level of risk adjustment due
consideration has been given to the strong releases in the best
estimate, inherent uncertainty in bodily injury claims, growth in
the UK motor book along with an assessment of other external
factors. There has been a slight reduction in the volatility of the
reserve risk distribution from which the percentile is selected as
a result of the strong reserve releases following the change in
Ogden discount rate; otherwise it has not changed significantly
since 2023.
The core motor loss ratio has reduced to 56.5% (2023: 66.8%)
with offsetting movements in the current period loss ratio and
prior year reserve releases, as follows:
|
Core Motor loss ratio1
2 |
Core motor loss ratio before releases |
Impact of claims reserve releases |
Core motor loss ratio |
|
FY 2023 |
87.0% |
(20.2)% |
66.8% |
| Change in current
period loss ratio excluding Ogden |
(16.9)% |
—% |
(16.9)% |
| Change in claims
reserve release excluding Ogden |
—% |
10.2% |
10.2% |
|
Impact of Ogden discount rate change |
(0.9)% |
(2.7)% |
(3.6)% |
|
FY 2024 |
69.2% |
(12.7)% |
56.5% |
1 Reported Motor loss ratio shown on a discounted basis,
excluding unwind of finance expenses
2 Alternative Performance Measures – refer to Appendix 1b
for explanation and reconciliation to statutory income statement
measures.
The rate increases that were implemented over the course of 2022
and 2023, as well as favourable frequency in 2024, have driven a
significant improvement in the current period loss ratio.
The benefit from prior-period releases includes both the
positive development of the best estimate reserve and the unwind of
risk adjustment for prior-period claims. The absolute value of
releases is consistent with 2023, with higher releases on the best
estimate arising from significant favourable development, along
with the benefit from the Ogden rate change, being offset by lower
releases of risk adjustment given the increase in risk
adjustment percentile. The lower release percentage is a result of
significantly increased earned premiums.
Quota share reinsurance
Admiral’s quota share reinsurance result reflects the net
movement on ceded premiums, reinsurer margins and expected
recoveries (claims and expenses, excluding share scheme charges)
for underwriting years on which quota share reinsurance is in place
(2021 underwriting year onwards).
The ‘Group capital structure’ section sets out further details
on Admiral’s UK Motor quota share arrangements.
Quota share reinsurance
result1
|
£m |
2024 |
2023 |
Quota share claims asset
31 December 2024 |
|
2021 and prior |
(27.2) |
(55.3) |
15.0 |
| 2022 |
(84.0) |
8.2 |
62.8 |
| 2023 |
(81.0) |
30.3 |
— |
|
2024 |
(36.6) |
— |
— |
|
Total |
(228.8) |
(16.8) |
77.8 |
1 Quota share result in underwriting year 2024 includes an
£11.1 million re-charge for the reinsurer’s assumed share scheme
recoveries, out of other Group costs in line with prior period
(2023: £11.1 million)
The significantly increased quota share charge in 2024 is the
result of:
- Favourable developments in the
underlying loss ratios on underwriting years 2021-2023 resulting in
the reversal of quota share recoveries previously
recognised
- A charge rather than credit on the
most recent underwriting year (2024), as the booked combined ratio
is below 100%, which means no quota share recoveries are
recognised.
Co-insurer profit commission
Co-insurer profit commission of £53.3 million is lower than in
2023 (£76.5 million).
In 2024, a significant proportion of claims releases are on
underwriting years 2021 and 2022, which reduce the losses
on those years but do not result in profit commission, given
the years are not yet profitable with booked combined ratios of
over 100%.
In addition, the losses on those years are carried forward in
line with contractual clauses, suppressing the recognition of
profit commission on underwriting years 2023 and also, to a large
extent, 2024.
Net investment income
Net investment income increased to £66.6 million from £53.6
million, benefiting from higher investment income, which was
largely offset by increased net insurance finance expenses.
Investment income grew by 34% to £150.0 million (2023: £111.8
million), as a result of increased investment balances (due to
strong growth in premium collected) and higher average return.
Further information on the Group’s investment portfolio and the
income generated in the period is provided later in the report.
Net insurance finance expense reflects the unwind of the
discounting benefit recognised when claims are initially incurred.
The expense has increased notably in 2024 (£83.4 million; 2023
£58.2 million) as a result of the unwind of discounting benefit
recognised from early 2022 onwards, when there was a significant
increase in risk-free interest rates. A significant proportion
of the insurance finance expense in 2024 relates to claims incurred
during 2022 and 2023.
Other revenue
Admiral generates other revenue from a portfolio of insurance
products that complement the core motor insurance product, and also
fees generated over the life of the policy. The most material
contributors to other revenue continue to be:
- Profit earned from Motor policy
upgrade products underwritten by Admiral, including breakdown, car
hire and personal injury covers
- Revenue from other insurance
products, not underwritten by Admiral
- Fees such as administration and
cancellation fees
- Interest charged to customers paying
for cover in instalments.
Under IFRS 17, income from underwritten ancillaries and an
allocation of instalment income and administration fees in line
with Admiral’s gross share of the core motor product premium, are
included within Insurance revenue in the underwriting result. The
remaining income from instalment income and fees, as well as income
from other non-underwritten ancillary products is presented in
other net income.
Overall contribution increased to £321.8 million (2023: £247.3
million), primarily due to the growth in customer numbers in the
past year. In particular, more customers along with the increased
proportion of customers choosing to pay via monthly payments in the
prior period has resulted in higher earned instalment income.
Other revenue was equivalent to £76 per vehicle (gross of
costs), with net other revenue per vehicle at £61 per vehicle, both
up compared to 2023 in line with the increased contribution.
UK Motor Insurance Other revenue
|
£m |
2024 |
|
|
Within underwriting result |
Other net income |
Total |
|
Premium and revenue from additional products and
fees1 |
139.8 |
83.4 |
223.2 |
|
Instalment income and administration fees2 |
209.0 |
45.7 |
254.7 |
|
Other revenue |
348.8 |
129.1 |
477.9 |
|
Claims costs and allocated expenses3 |
(108.8) |
(47.3) |
(156.1) |
|
Net other revenue |
240.0 |
81.8 |
321.8 |
|
Other revenue
per vehicle4 |
|
|
£76 |
|
Other revenue per vehicle net of internal costs |
|
|
£61 |
|
£m |
2023 |
|
|
Within underwriting result |
Other net income |
Total |
|
Premium and revenue from additional products and
fees1 |
107.8 |
89.4 |
197.2 |
|
Instalment income and administration fees2 |
134.8 |
29.3 |
164.1 |
|
Other revenue |
242.6 |
118.7 |
361.3 |
|
Claims costs and allocated expenses3 |
(70.0) |
(44.0) |
(114.0) |
|
Net other revenue |
172.6 |
74.7 |
247.3 |
|
Other revenue
per vehicle4 |
|
|
£62 |
|
Other revenue per vehicle net of internal costs |
|
|
£52 |
1 Premium from underwritten ancillaries is recognised within
the insurance service result (underwriting result). Other income
from non-underwritten products and fees is included within other
net income, below the underwriting result but part of the insurance
segment result.
2 Instalment income and administration fees are recognised
within insurance revenue (% aligned to Admiral’s share of premium,
net of co-insurance) and other revenue (% aligned to co-insurance
share of premium).
3 Claims costs relating to underwritten ancillary products,
along with an allocation of related expenses, are recognised within
the insurance result. Expenses allocated to the generation of
revenue from non-underwritten ancillaries are recognised within
other net income.
4 Other revenue per vehicle (before internal costs) divided
by average active vehicles, rolling 12-month basis. Presented here
based on all ancillary income.
UK Household Insurance financial review
|
£m |
2024 |
2023 |
|
Turnover1 |
475.4 |
338.6 |
|
Total premiums written1 |
450.3 |
318.8 |
|
Insurance revenue |
399.6 |
292.8 |
|
Insurance revenue net of XoL1 |
376.4 |
275.3 |
| Insurance
expenses1 |
(102.9) |
(80.9) |
| Insurance claims
incurred net of XoL1 |
(225.7) |
(199.8) |
|
Insurance claims releases net of XoL1 |
37.0 |
6.4 |
|
Underwriting result, net of XoL
reinsurance1 |
84.8 |
1.0 |
|
Quota share reinsurance result1 3 |
(61.2) |
(1.4) |
|
Underwriting
result1 |
23.6 |
(0.4) |
| Net insurance
investment income |
3.9 |
1.6 |
|
Other income |
6.6 |
6.7 |
|
UK Household Insurance profit before
tax1 |
34.1 |
7.9 |
Segment performance indicators
|
|
2024 |
2023 |
|
Reported Household loss ratio1 2 |
50.1% |
70.2% |
| Reported
Household expense ratio1 2 |
27.3% |
29.4% |
| Reported
Household combined ratio1 2 |
77.4% |
99.6% |
| Household
insurance service margin2 |
6.3% |
(0.1%) |
| Household loss
ratio before releases2 |
60.0% |
72.6% |
| (Favourable)
impact of weather on reported loss ratio vs budget4 |
(7.9%) |
(3.8%) |
|
Households insured at period end |
1.97m |
1.76m |
1 Alternative Performance Measures – refer to the end of
this report for definition and explanation
2 Alternative Performance Measures – refer to Appendix 1c
for explanation and reconciliation to statutory income statement
measures.
3 Quota share reinsurance result within the segment result
excludes reinsurers’ share of share scheme costs.
4 Weather impact, being the combined impact of claims
related to freeze, flood, storm and subsidence, is disclosed
relative to a budget expectation. The 2023 impact has been restated
to align.
The UK Household Insurance business reported strong growth
in turnover of 40% to £475.4 million (2023: £338.6 million).
The number of homes insured increased by 12% to 1.97 million
(31 December 2023: 1.76 million), despite price increases made by
Admiral during 2024, in particular the first half, to reflect
continued higher claims inflation. Competitors also increased
prices, with Admiral’s competitiveness in price comparison (the
main distribution channel for new policies) relatively
unchanged.
Profit before tax for the period was £34.1 million (2023:
£7.9 million), the large increase arising as a result of:
- Strong prior year reserve releases
of £37.0 million (2023: £6.4 million), reducing the loss ratio by
9.9 percentage points (2023: 2.4 percentage points). These releases
primarily reflect the unwind of best estimate reserves in relation
to the freeze events in late 2022, along with some impact from the
unwind of storm events in late 2023
- A lower current period combined
ratio, with both a lower loss ratio and expense ratio driven
in large part by higher earned premiums.
The reported loss ratio excluding releases decreased
significantly to 60.0% (2023: 72.6%) as a result of the higher
earned premiums, along with relatively benign weather and
a reduction in claims frequency.
Weather was relatively benign in both periods. While there
was some impact of freeze, flood and storm events, this was
considered below a budget expectation, creating a net benefit to
the current period loss ratio of just under 8% (2023: 3.8%).
Despite growth in absolute expenses during the year as the
business grew, Admiral’s expense ratio improved to 27.3% (from
29.4%), benefiting from the larger portfolio and the earning
through of higher average premiums. Customer growth leading to
higher acquisition costs and IT integration costs relating to the
More Than acquisition were the primary drivers of the increase in
absolute costs.
The quota share result for the period (a loss of £61.2 million
compared to £1.4 million) arises as a result of the proportional
sharing of the positive underlying underwriting result, with only a
small amount of profit commission recognised to date on
underwriting year 2024, due to a relatively cautious view of the
written combined ratio.
International Insurance
International Insurance – Costantino Moretti – CEO,
International Insurance
In 2024 we continued to prioritise margin over growth,
maintaining our pricing discipline which resulted in an improved
performance in most of our markets.
Market conditions improved in France and Spain, with premiums
finally increasing to reflect continued claims inflation. Having
increased prices ahead of competitors in 2023, the businesses saw
their competitiveness improve resulting in an improved performance
year-on-year.
On 1st July, Julien Bouverot was appointed CEO of L’olivier
which now insures 453,000 motorists and 83,000 homes. In 2024
the business has increased its turnover and delivered
a double-digit profit. The team is also investing in its
technological capabilities to make it easier to provide
multiproduct propositions for its growing customer base.
In Spain, Admiral Seguros is making good progress against its
distribution diversification strategy which aims to make it easier
for customers to access insurance through the channels that best
suit them. This approach is yielding positive results with a lower
expense ratio despite the investment into new channels.
2024 was more challenging for ConTe, partly, driven by the
update to the Milan Court tables which determine the cost of most
bodily injury claims, inflation and because of some adverse
experience, notably from some business written in 2023. The
management team has already taken material pricing and other
remediating actions to restore ConTe to profitability.
Our team in the US has achieved a great turnaround. Elephant
delivered a profit of £14 million due to management's focus on
improving the book mix and cost discipline. The business
experienced a shrinkage of book size which is now stabilising.
We are proud of the team’s hard work. As previously mentioned,
we’ve been assessing the strategic options for Elephant. We have
made good progress and are in exclusive talks with a potential
acquirer.
Our colleagues’ commitment and dedication to our customers and
each other is unmatched, which is why we continue to see positive
customer satisfaction scores across the board and our businesses
are recognised as Great Places to Work. The combination of our
colleagues and management teams’ strategic focus and expertise mean
that we are well-placed for a positive 2025.
International Insurance financial review
|
£m |
2024 |
2023 |
|
Turnover1 |
840.0 |
894.9 |
|
Total premiums written1 |
785.7 |
840.0 |
|
Insurance revenue |
829.5 |
842.6 |
|
Insurance revenue net of XoL1 |
794.2 |
811.8 |
| Insurance
expenses1 |
(236.5) |
(249.4) |
|
Insurance claims net of XoL1 |
(564.5) |
(565.2) |
|
Underwriting result, net of
XoL1 |
(6.8) |
(2.8) |
| Quota share
reinsurance result1 3 |
(4.1) |
(22.1) |
|
Movement in net onerous loss component |
0.4 |
0.6 |
|
Underwriting
result1 |
(10.5) |
(24.3) |
| Net investment
income |
6.1 |
4.3 |
|
Net other revenue |
(0.9) |
2.0 |
|
International Insurance loss before
tax1 4 |
(5.3) |
(18.0) |
Segment performance
indicators
|
£m |
2024 |
2023 |
|
Loss ratio1 2 |
71.1% |
69.6% |
|
Expense ratio1 2 |
29.8% |
30.7% |
|
Combined ratio¹ |
100.9% |
100.3% |
|
Insurance service margin1 2 |
(1.3%) |
(3.0%) |
|
Customers insured at period end1 |
2.10m |
2.17m |
International Motor Insurance – Geographical
analysis1
|
2024 |
Spain |
Italy |
France |
US |
Total |
|
Vehicles insured at period end |
0.45m |
0.96m |
0.45m |
0.14m |
2.00m |
|
Turnover (£m) |
131.8 |
269.1 |
224.0 |
200.1 |
825.0 |
|
|
|
|
|
|
|
|
2023 |
Spain |
Italy |
France |
US |
Total |
|
Vehicles insured at period end |
0.45m |
1.04m |
0.42m |
0.19m |
2.10m |
|
Turnover (£m) |
121.8 |
272.4 |
219.1 |
271.2 |
884.5 |
Segment result: International Insurance
result1
|
£m |
2024 |
2023 |
|
European Motor |
(14.8) |
6.1 |
|
Spain Motor |
(3.1) |
(8.6) |
|
Italy Motor |
(22.8) |
7.3 |
|
France Motor |
11.1 |
7.4 |
|
US Motor |
14.4 |
(19.6) |
|
Other |
(4.9) |
(4.5) |
|
International Insurance loss before tax |
(5.3) |
(18.0) |
1 Alternative Performance Measures – refer to the end of
this report for definition and explanation.
2 Alternative Performance Measures – refer to Appendix 1d
for explanation and reconciliation to statutory income statement
measures.
3 Quota share reinsurance result within the segment result
excludes reinsurers’ share of share scheme costs.
4 Costs related to the settlement of a historic Italian tax
matter during 2023 are excluded from the International Insurance
result and presented within Group other costs, given that these are
not reflective of the underlying trading performance of the
International Insurance business.
Admiral’s International insurance businesses reported a 3%
reduction in customer numbers at 31 December 2024 to 2.10 million
(31 December 2023: 2.17 million), as a result of a continued
reduction in the US, and a reduction in Italy following pricing
action taken to prioritise margin over growth. Turnover fell to
£840.0 million (2023: £894.9 million), driven by a reduction in the
US, partially offset by higher turnover in the European businesses
as a result of higher average premiums.
The combined result for the segment improved by around £13
million to a loss of £5.3 million (2023: loss of £18.0 million),
driven by a significantly improved result in the US, which was
partly offset by the disappointing Italian result.
The combined ratio increased slightly to 100.9% (2023: 100.3%).
An improved expense ratio (30% v 31%) was offset by a higher loss
ratio, which was impacted by higher Italian and lower US and other
European loss ratios.
The European insurance operations in Spain, Italy and France
insured 1.86 million vehicles at 31 December 2024 – 2% lower than a
year earlier (31 December 2023: 1.91 million). Motor turnover was
up 2% to £624.9 million (2023: £613.3 million), driven by continued
price increases following continued focus on improving loss
ratios.
The combined European Motor loss was £14.8 million
(2023: £6.1 million), with the combined ratio increasing to
105.0% (2023: 95.4%) largely a result of the loss of £22.8 million
recognised in ConTe in Italy (2023: profit of £7.3 million).
ConTe’s performance in 2024 was adversely impacted by both the
significant increase to the settlement inflation rate for large
bodily injury claims provided by the court of Milan (known as the
Milan tables) which had an impact of approximately £16 million, and
also the impact of continued inflation on claims settlement costs,
particularly on business written in 2023. Action has been taken
with strong price increases to improve the loss ratio and restore
profitability. Vehicles insured decreased by 7% to 0.96 million
(2023: 1.04 million) as a result of the pricing action,
with turnover decreasing by 1% to £269.1 million (2023:
£272.4 million).
L’olivier assurance (France) continued to grow, with the
customer base increasing by 8% to 0.45 million (31 December 2023:
0.42 million), and turnover increasing by 2% to £224.0 million
(2023: £219.1 million). The business reported increased profits in
2024 (£11.1 million v £7.4 million) as a result of its focus over
the past year on risk selection and loss ratio improvements, as
well as cost reduction.
In Admiral Seguros (Spain) customer numbers were flat at 0.45
million, due to increased prices to target loss and expense ratio
improvements. The loss for the year was notably lower
(£3.1 million v £8.6 million). Admiral Seguros continues to
focus on sustainable growth through distribution
diversification in the broker channel and other partnerships
alongside its direct offering.
In the US, Admiral underwrites motor insurance through its
Elephant Auto business. Elephant delivered a significantly improved
result in 2024 with a profit of £14.4 million (2023: loss of £19.6
million) due to strong management action on pricing, underwriting
and expense control.
In early March 2025, Admiral entered into a memorandum of
understanding with a counterparty with a view to signing a purchase
agreement to sell Elephant. The agreement, if signed, would be
subject to regulatory approval.
Admiral Money
Scott Cargill – CEO, Admiral Money
I’m pleased to be able to say it has been a positive 2024
for Admiral Money. Throughout the year we have retained a firm
focus on prime lending and continued to prioritise a controlled and
conservative approach to growth. Our book at the end of
December stands at £1.17 billion, 23% growth since FY
2023.
Our gross income of £112.5 million has grown 19% since FY 2023,
reflecting the higher average balances through the year. Our book
net interest margin finishes the year at a healthy 650bps and our
credit performance has been more than satisfactory, with a full
year of cost of risk of 2.5%. The outcome of this has been our
third consecutive year of growing profits, achieved whilst
maintaining an appropriately conservative provision to cover
potential credit losses.
Our NPS score of 75 and Trust Pilot score of 4.4 provide
continued evidence that our focus on being an efficient
customer-focussed prime lender, providing certainty and
transparency to UK customers on their lending needs through
offering guaranteed rate solutions, is a successful formula.
In 2024 we have also continued our focus on being the lender of
choice for Admiral Insurance customers. This is a key pillar of our
strategy and where we have the most significant competitive
advantage. Over 68% of our new customer flows in 2024 came from
either current or recent Admiral Insurance customers.
When we set out Admiral Money’s strategy in 2018, we identified
four key ingredients for an ‘Admiral-like’ lender. Over seven
years, we have clearly proven three: pricing excellence, expense
efficiency, and product differentiation. I’m delighted to see us
take our first step towards delivering the fourth, using
third-party capital to enhance shareholder returns and manage risk.
I’m pleased to confirm our first off-balance-sheet deal, a forward
flow agreement consisting of £150 million back book and up to £300
million per annum, transferring loan risk off Admiral’s balance
sheet in exchange for origination and servicing fees. This
milestone enables future growth beyond the Group’s balance sheet
and acts as a model for us to expand participation in consumer
lending beyond the current asset classes.
Looking to 2025, we enter with strong momentum. I expect to see
continued growth towards the £1.3 billion on-balance sheet loans,
with total loans under management towards £1.6 billion. I’d like to
finish by thanking our customers and all of my colleagues and wish
everyone the best for 2025.
Admiral Money financial review
|
£m |
2024 |
2023 |
|
Total interest income |
112.5 |
94.7 |
|
Interest expense¹ |
(43.2) |
(28.3) |
|
Net interest income |
69.3 |
66.4 |
|
Other income |
0.5 |
0.1 |
|
Total income |
69.8 |
66.5 |
|
Credit loss charge |
(26.9) |
(33.4) |
|
Expenses |
(29.9) |
(22.9) |
|
Admiral Money profit before tax² |
13.0 |
10.2 |
1 Includes £6.1 million intra-group interest expense (2023:
£1.5 million).
2 Alternative Performance Measures – refer to the end of
this report for definition and explanation.
Admiral Money distributes and underwrites unsecured personal
loans and car finance products for UK consumers through the
comparison channels, credit scoring applications, through car
dealerships, and direct to consumers via the Admiral website. The
aim of the proposition is to provide customers with affordable
guaranteed rates, ensuring transparency and certainty.
Admiral Money recorded a pre-tax profit of £13.0 million
in 2024, improved from £10.2 million profit in 2023,
continuing the positive trajectory of growth in both the
loan book and profit.
The business has continued to focus on writing high-quality
loans, with the increase in profit largely driven by net interest
income growth of 4% to £69.3 million (2023: £66.4 million), as well
as a reduced provision charge driven by a focus on high-quality
risk selection and positive loss performance. Increased interest
expense is driven by market-linked funding instruments and
continued investment to support the ongoing growth in the business,
partially offset the increased net interest income and lower credit
loss charge.
Gross loans balances totaled £1,174.0 million at the end of the
year (31 December 2023: £956.8 million), with a £84.3 million
(31 December 2023: £81.7 million) expected credit loss provision.
This leads to a net loans balance of £1,089.7 million (31 December
2023: £875.1 million)
Credit loss models reflect the latest economic assumptions
and appropriate post model adjustments remain in place to
maintain an appropriately cautious level of provisioning. The
provision to loans balance coverage ratio is lower at 7.2%
(31 December 2023: 8.5%), with a £2.6 million increase in
absolute provision size in the period to £84.3 million. The
provision includes lower post model adjustments of £4.6
million (31 December 2023: £9.2 million) reflecting the improved UK
economic outlook.
Admiral Money is funded through a combination of internal
and external funding sources. The external funding is secured
against certain loans via a transfer of the rights to the cash
flows to two special purpose entities (‘SPEs'). The securitisation
and subsequent issue of notes via SPEs does not result in a
significant transfer of risk from the Group.
Other Group Items
Other Group items financial review
|
£m |
2024 |
2023 |
|
Share scheme charges |
(62.2) |
(54.4) |
| Other central
costs |
(51.2) |
(41.7) |
| Admiral Pioneer
result |
(11.3) |
(16.2) |
| Business
development costs |
(20.1) |
(15.3) |
| Finance
charges1 |
(26.4) |
(20.3) |
| Compare.com loss
before tax |
— |
(2.6) |
| Sale of shares in
Insurify |
12.5 |
— |
|
Other interest and investment income |
13.5 |
4.6 |
|
Total |
(145.2) |
(145.9) |
1 Finance charges within other Group items include £1.8
million (2023: £1.7 million) that relate to intra-group
arrangements,
with the corresponding income presented within the UK Insurance
result.
Share scheme charges relate to the Group’s two employee share
schemes. The increase in charge in the period is driven primarily
by both higher vesting assumptions and increases in bonuses tied to
dividends paid in the year.
Other central costs consist of Group-related expenses and
include an allocation of Group employee costs as well as the cost
of a number of significant Group projects. In 2024, these include
the cost of a one-off employee bonus of approximately £8 million,
along with higher project costs for the internal capital model
development and the strategic review of the US Insurance business.
In addition, central Group employee expenses increased relative to
2023.
Admiral launched Admiral Pioneer in 2020 to focus on new product
diversification opportunities. Pioneer businesses include Veygo
(short-term and learner driver car insurance in the UK) and Admiral
Business (small business insurance in the UK). Pioneer’s businesses
reported a lower loss of £11.3 million in 2024 (2023: £16.2
million). The 2023 result was impacted by adverse large claims
experienced in Veygo (one large claim in particular); the
improvement in 2024 arises from continued growth and better claims
experience, with Veygo reporting its first profit. The overall loss
in Admiral Pioneer reflects continued investment in the development
of new products, including for example, the partnership with
Insurtech fleet insurer Flock, entered into in 2024.
Business development costs increased to £20.1 million
(2023: £15.3 million), primarily as a result of non-recurring
transaction and other costs of £6.5 million related to the
More Than acquisition.
Finance charges of £26.4 million (2023: £20.3 million) primarily
related to interest on the £250 million subordinated notes issued
in July 2023 at a rate of 8.5%, with the charge in 2023 based on
the original £200 million subordinated loan notes issued in July
2014. The increase in finance charges is largely offset by the
increase in other interest and investment income, which arises
primarily from the higher interest rate environment, with 2023 also
including a loss on disposal of £3.6 million.
A loss of £2.6 million was attributed to compare.com in 2023
following its disposal. As part of the disposal, the Group received
shares as a minority interest shareholder of the acquirer. In 2024,
the Group sold those shares, realising a one-off gain of £12.5
million.
Group capital structure and financial
position
The Group manages its capital to ensure that all entities are
able to continue as going concerns and that regulated entities
comfortably meet regulatory capital requirements. Surplus capital
within subsidiaries is paid up to the Group holding company in the
form of dividends.
The Group’s regulatory capital is based on the Solvency II
Standard Formula, with a capital add-on to reflect recognised
limitations in the Standard Formula with respect to Admiral’s
business, predominantly in respect of profit commission
arrangements in co-insurance and reinsurance agreements.
Admiral continues to develop its partial internal model to form
the basis of calculating capital requirements post-approval. This
programme is ongoing with regular engagement with the regulator on
the application process and timing.
The current approved capital add-on is £24 million.
The estimated and unaudited Solvency ratio for the Group at the
date of this report is as follows:
Group capital position (estimated and
unaudited)
|
£bn |
2024 |
2023 |
|
Eligible Own Funds (post-dividend)1 |
1.74 |
1.42 |
|
Solvency II capital requirement2 |
0.86 |
0.71 |
|
Surplus over capital requirement |
0.88 |
0.71 |
|
Solvency ratio
(post-dividend)3 |
203% |
200% |
1 Own Funds include approximately £250 million of Tier 2
capital following the Group’s issue of ten-year subordinated loan
notes.
2 Solvency capital requirement includes updated, unapproved
capital add-on.
3 Solvency ratio calculated on a volatility adjusted
basis.
The Group’s solvency ratio is slightly improved compared with
the closing position of 2023 at 203% (2023: 200%). Own funds
increased following continued strong generation of economic capital
in the core UK motor business as a result of the positive current
period underwriting performance of UK Motor and prior period
releases, including the impact of the change in Ogden discount
rate, which offset a reduction of around 11 points of solvency
ratio following the de-recognition of intangible assets recognised
in the More Than acquisition due to Solvency II rules, and a higher
foreseeable dividend.
The SCR also increased over the year, though to a lesser extent.
The increase of approximately £150 million was primarily due to the
increase in premiums across all Group businesses and the associated
impact on underwriting and operational risk elements of the capital
requirement. The estimated solvency ratio including the fixed Group
capital add-on of £24 million, that is calculated at the balance
sheet date rather than the date of this report, and is expected to
be reported in the Group’s 2024 Solvency and Financial Condition
Report (SFCR) is as follows:
|
Regulatory solvency ratio (estimated and
unaudited) |
2024 |
2023 |
|
Solvency ratio as reported above |
203% |
200% |
| Change in
valuation date1 |
(9%) |
(11%) |
|
Other (including impact of updated, unapproved capital add-on) |
4% |
(6%) |
|
Solvency ratio to be reported (SFCR) |
198% |
183% |
Solvency ratio sensitivities
|
|
2024 |
2023 |
|
UK Motor – incurred loss ratio +5% |
(26%) |
(11%) |
| UK Motor –
1-in-200 catastrophe event |
(3%) |
(1%) |
| UK Household –
1-in-200 catastrophe event |
(3%) |
(5%) |
| Interest rate –
yield curve up 100 bps |
(1%) |
(1%) |
| Interest rate –
yield curve down 100 bps |
—% |
1% |
| Credit spreads
widen 100 bps |
(2%) |
(5%) |
| Currency – 10%
(2023: 25%) movement in euro and US dollar |
(2%) |
(3%) |
| ASHE – long-term
inflation assumption up 100 bps |
(6%) |
(3%) |
|
Loans – 100% weighting to ‘severe’ scenario2 |
(1%) |
(1%) |
1 The solvency ratio reported above includes additional own
funds generated post-year-end up to the date of this
report.
2 Refer to note 7 to the financial statements for further
information on the ‘severe’ scenario.
The increased sensitivity of the incurred loss ratio stress is
the result of the growth in premium exposure and relatively
profitability of the most recent underwriting year, whilst the
increased sensitivity to ASHE is due to both a slight increase in
settled periodic payment orders (PPOs), and higher PPO propensity
assumptions following the change in Ogden.
Investments and cash
Investment strategy
Admiral Group’s investment strategy focuses on capital
preservation and low volatility of returns relative to liabilities,
and follows an asset liability matching strategy to control
interest rate, inflation and currency risk. A prudent level of
liquidity is held and the investment portfolio has a high-quality
credit profile. In 2024, the focus remained on matching, and
cashflows were invested into high-quality assets to take advantage
of healthy risk-free rates, whilst being appropriately cautious on
the credit outlook. The Group holds a range of government bonds,
corporate bonds, alternative and private credit assets, alongside
liquid holdings in cash and money market funds.
A further aim of the strategy is to reduce the Environmental,
Social, and Governance (ESG) related risks in the portfolio whilst
continuing to achieve sustainable long-term returns. In 2024,
the portfolio weighted average ESG score was upgraded to an MSCI
AAA rating.
Total investment income for 2024 was £175.6 million
(2023: £126.7 million).
The investment return on the Group’s investment portfolio
(excluding unrealised gains and losses and the movement in
provision for expected credit losses) was £182.1 million (2023:
£124.4 million). The annualised rate of return was higher at 4.0%
(2023: 3.3%) mainly as a result of higher investment yields, with
the increased income driven by a combination of the higher yield
and increased asset balances following the growth in the
business.
Investment return
|
£m |
2024 |
2023 |
|
Underlying investment income yield |
4.0% |
3.3% |
|
Investment return |
182.1 |
124.4 |
| Unrealised losses
on derivatives |
(0.2) |
(0.2) |
|
Movement in provision for expected credit losses |
(6.3) |
2.5 |
|
Total investment return |
175.6 |
126.7 |
Cash and investments analysis
|
£m |
2024 |
2023 |
|
Fixed income and debt securities |
3,335.4 |
2,825.9 |
| Money market
funds and other fair value through P&L investments |
1,421.0 |
918.8 |
| Cash
deposits |
91.7 |
116.7 |
|
Cash |
313.6 |
353.1 |
|
Total¹ |
5,161.7 |
4,214.5 |
1 Total Cash and Investments includes £354.5 million (2023:
£278.2 million) of Level 3 investments. Refer to note 6d in the
financial statements for further information.
Cashflow
|
£m |
2024 |
2023 |
|
Operating cashflow, before movements in investments |
1,303.4 |
697.5 |
|
Transfers to financial investments |
(810.3) |
(285.5) |
|
Operating cashflow |
493.1 |
412.0 |
| Tax payments |
(124.1) |
(133.0) |
| Investing cashflows
(capital expenditure) |
(144.2) |
(75.9) |
| Financing
cashflows |
(436.0) |
(216.7) |
| Loans funding
through special purpose entity |
178.1 |
44.9 |
|
Foreign currency translation impact |
(6.4) |
24.8 |
|
Net cash movement |
(39.5) |
56.1 |
|
Unrealised gains on investments |
11.4 |
98.1 |
|
Movement in accrued interest, foreign exchange and unrealised gains
on derivatives |
165.0 |
69.0 |
|
Net increase in cash and financial
investments |
947.2 |
508.7 |
The main items contributing to the operating cash inflow are as
follows:
|
£m |
2024 |
2023 |
|
Profit after tax |
662.9 |
337.2 |
|
Change in net insurance contract liabilities |
606.5 |
309.5 |
| Net change in
trade receivables and liabilities |
46.3 |
(42.3) |
| Change in loans
and advances to customers |
(231.4) |
(73.6) |
| Non-cash Income
Statement items |
42.8 |
61.1 |
|
Taxation expense |
176.3 |
105.6 |
|
Operating cashflow, before movements in
investments |
1,303.4 |
697.5 |
The Group continues to generate significant amounts of cash,
particularly notable during 2024, and its capital-efficient
business model enables the distribution of the majority of post-tax
profits as dividends. Total cash and investments at
31 December 2024 was £5,161.7 million (31 December 2023:
£4,214.5 million), the increase reflecting the collections from
higher written premium in UK Insurance.
The net increase in cash and investments in the period is
£947.2 million (2023: increase of £508.7 million).
Taxation
The tax charge for the period is £176.3 million (2023: £105.6
million), which equates to 21.0% (2023: 23.8%) of profit before
tax. The tax rate in 2023 was impacted by the settlement of
a non-recurring historic Italian tax matter. In addition, in
2024, a greater proportion of profits has arisen in the
Group’s businesses outside the UK, leading to the lower effective
tax rate. See note 10 to the financial statements for further
details.
Co-insurance and reinsurance
Admiral makes significant use of proportional risk sharing
agreements, where insurers outside the Group underwrite a majority
of the risk generated, either through co-insurance or quota share
reinsurance contracts. These arrangements include profit commission
terms which allow Admiral to retain a significant portion of
the profit generated.
Although the primary focus and disclosure is in relation to the
UK Motor Insurance book, similar longer-term arrangements are in
place in the Group’s International Insurance operations and the UK
Household and Van businesses.
UK Motor Insurance
Munich Re and its subsidiary entity, Great Lakes, currently
underwrite 40% of the UK Car business. From 2022, 20% of this total
is on a co-insurance basis (via Great Lakes) and will extend to
2029. The remaining 20% is on a quota share reinsurance basis and
these arrangements now extend to 2026.
The Group also has other quota share reinsurance arrangements
confirmed to at least 2025 covering 38% of the business
written.
The nature of the co-insurance proportion underwritten by Munich
Re (via Great Lakes) in the UK is such that 20% of all Car premium
and claims accrue directly to Great Lakes and are not reflected in
the Group’s financial statements. Similarly, Great Lakes reimburses
the Group for its proportional share of expenses incurred in
acquiring and administering this business.
Admiral’s UK Motor quota share reinsurance arrangements result
in all premiums, claims and expenses that are ceded to reinsurers
being included within the quota share result in the Group’s
financial statements, with a recovery recognised where years are
not yet profitable.
These agreements operate on a funds withheld basis with Admiral
retaining ceded premium (net of the reinsurer margin), which then
covers claims and expenses. If an underwriting year is not
profitable, investment income is allocated to the withheld fund and
used to delay the point at which cash recoveries are collected from
the reinsurer. Other features of the arrangements include expense
ratio caps and commutation options for Admiral that become
available 24-36 months after the start of the underwriting
year.
Admiral tends to commute its UK Car Insurance quota
share reinsurance contracts 24-36 months after inception of
an underwriting year, assuming there is sufficient confidence
in the profitability of the business covered by the
reinsurance contract.
In 2024, there were commutations of a small number of remaining
contracts from underwriting years 2017-2020. All arrangements
covering the 2020 and prior underwriting years have now been
commuted. In addition, a majority of contracts from underwriting
year 2021 have been commuted during 2024. There was no significant
impact on profit before tax as a result of the
commutations.
UK Household Insurance
The Group’s Household business is supported by long-term
proportional reinsurance arrangements covering 70% of the risk,
that runs to at least 2027. In addition, the Group has
non-proportional reinsurance to cover the risk of catastrophes
stemming from weather events.
International Car Insurance
In 2023 and 2024, Admiral retained 35% (Italy), 30% (France),
30% (Spain), and 40% (2023) and 60% (2024) (US) of the underwriting
risk in each country, respectively. In 2025, Admiral will
retain 60% of the underwriting risk in Italy and 100% of the
underwriting risk in the US, with the retained share in France and
Spain unchanged.
Excess of loss reinsurance
The Group also purchases excess of loss reinsurance to provide
protection against large claims and reviews this cover annually.
The UK Motor excess of loss cover in 2024 remained similar to prior
years with cover starting at £10 million.
Principal Risks and Uncertainties
The Group’s 2024 Annual Report will contain an analysis of the
Principal Risks and Uncertainties identified in the Group’s
Enterprise Risk Management Framework, along with the impacts of
those risks and actions taken to mitigate them.
Disclaimer on forward-looking statements
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
assumptions and are subject to a number of known and unknown risks
and uncertainties that may cause actual events or results to differ
materially from any expected future events or results expressed or
implied in these forward-looking statements.
Persons receiving this announcement should not place undue
reliance on forward-looking statements. Unless otherwise required
by applicable law, regulation or accounting standard, the Group
does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future
developments or otherwise.
Consolidated Income Statement
For the year ended 31 December 2024
|
|
|
Year ended |
|
|
Note |
31 December
2024
£m |
31 December
2023
£m 1 |
|
|
|
|
|
| Insurance
revenue |
5 |
4,776.2 |
3,486.1 |
|
Insurance service expenses |
5 |
(3,547.5) |
(3,093.2) |
|
Insurance service result before reinsurance |
|
1,228.7 |
392.9 |
|
Net expense from reinsurance contracts held |
5 |
(518.4) |
(87.1) |
|
Insurance service result |
|
710.3 |
305.8 |
| Investment return
- Effective interest rate |
6 |
106.3 |
81.1 |
|
Investment return - Other |
6 |
74.6 |
41.8 |
|
Investment return |
6 |
180.9 |
122.9 |
| Finance expenses
from insurance contracts issued |
5 |
(128.4) |
(94.5) |
|
Finance income from reinsurance contracts held |
5 |
35.9 |
28.9 |
|
Net insurance finance expenses |
|
(92.5) |
(65.6) |
| |
|
|
|
| Net
insurance and investment result |
|
798.7 |
363.1 |
| |
|
|
|
| Interest income
from financial services |
7 |
113.5 |
94.9 |
|
Interest expense related to financial services |
7 |
(37.2) |
(26.8) |
|
Net interest income from financial services |
|
76.3 |
68.1 |
| |
|
|
|
| Other revenue and
profit commission |
8 |
189.6 |
205.7 |
| Other operating
expenses |
9 |
(293.6) |
(250.8) |
| Other operating
expenses recoverable from co-insurers |
9 |
129.3 |
107.8 |
|
Movement in expected credit loss provision and write-offs |
6 |
(34.6) |
(31.0) |
|
Other income and expenses |
|
(9.3) |
31.7 |
|
|
|
|
|
|
Operating profit |
|
865.7 |
462.9 |
|
Finance costs |
6 |
(27.1) |
(20.5) |
|
Finance costs recoverable from coinsurers |
6 |
0.6 |
0.4 |
|
Net finance costs |
|
(26.5) |
(20.1) |
|
Profit before tax |
|
839.2 |
442.8 |
|
Taxation expense |
10 |
(176.3) |
(105.6) |
|
Profit after tax |
|
662.9 |
337.2 |
|
Profit after tax attributable to: |
|
|
|
| Equity holders of
the parent |
|
663.3 |
338.0 |
|
Non-controlling interests (NCI) |
|
(0.4) |
(0.8) |
|
|
|
662.9 |
337.2 |
|
Earnings per share |
|
|
|
|
Basic |
12 |
216.6p |
111.2p |
|
Diluted |
12 |
216.6p |
110.8p |
|
|
|
|
|
|
Dividends declared and paid (total) |
12 |
369.8 |
307.1 |
|
Dividends declared and paid (per share) |
12 |
123.0p |
103.0p |
1 The Consolidated Income Statement for the year ended
31 December 2023 has been re-presented to show the breakdown
of Investment return between effective interest rate and investment
return relating to other transactions, this having been provided
within note 6a to the 2023 financial statements. For further
detail, see note 6a to the financial statements.
Consolidated Statement of Comprehensive
Income
For the year ended 31 December 2024
|
|
Year ended |
|
|
31 December
2024
£m |
31 December
2023
£m1 |
|
Profit for the period |
662.9 |
337.2 |
| Other
comprehensive income |
|
|
| Items
that are or may be reclassified to profit or loss |
|
|
| Movements in fair
value reserve |
11.3 |
98.1 |
| Deferred tax
charge in relation to movement in fair value reserve |
2.4 |
(5.7) |
| Movements in
insurance finance reserve - insurance contracts |
7.9 |
(128.1) |
| Deferred tax in
relation to movement in insurance finance reserve - insurance
contracts |
(5.1) |
14.5 |
| Movements in
insurance finance reserve - reinsurance contracts |
3.3 |
49.2 |
| Deferred tax in
relation to movement in insurance finance reserve - reinsurance
contracts |
1.3 |
(4.8) |
| Exchange
differences on translation of foreign operations |
(4.2) |
3.7 |
| Movement in
hedging reserve |
(4.1) |
(18.1) |
|
Deferred tax charge in relation to movement in hedging reserve |
1.0 |
4.5 |
|
Other comprehensive income for the period, net of income tax |
13.8 |
13.3 |
|
Total comprehensive income for the period |
676.7 |
350.5 |
|
Total comprehensive income for the period attributable to: |
|
|
| Equity holders of
the parent |
677.1 |
351.3 |
|
Non-controlling interests |
(0.4) |
(0.8) |
|
|
676.7 |
350.5 |
1 Represented: see note 1 to the
financial statements.
Consolidated Statement of Financial
Position
As at 31 December 2024
|
|
|
As at |
|
|
Note |
31 December
2024
£m |
31 December
2023
£m |
|
ASSETS |
|
|
|
| Property and
equipment |
11 |
87.8 |
90.1 |
| Intangible
assets |
11 |
321.0 |
242.9 |
| Deferred tax
asset |
10 |
19.8 |
46.1 |
| Corporation tax
asset |
|
18.1 |
20.4 |
| Reinsurance
contract assets |
5 |
988.6 |
1,191.9 |
| Loans and
advances to customers |
7 |
1,106.9 |
879.4 |
| Other
receivables |
6 |
225.2 |
409.9 |
| Financial
investments |
6 |
4,863.2 |
3,862.4 |
|
Cash and cash equivalents |
6 |
313.6 |
353.1 |
|
Total assets |
|
7,944.2 |
7,096.2 |
|
EQUITY |
|
|
|
| Share
capital |
12 |
0.3 |
0.3 |
| Share premium
account |
|
13.1 |
13.1 |
| Other
reserves |
12 |
(26.7) |
(40.5) |
|
Retained earnings |
|
1,383.4 |
1,018.9 |
|
Total equity attributable to equity holders of the
parent |
|
1,370.1 |
991.8 |
|
Non-controlling interests |
|
0.6 |
1.0 |
|
Total equity |
|
1,370.7 |
992.8 |
|
LIABILITIES |
|
|
|
| Lease
liabilities |
6 |
79.6 |
81.2 |
| Subordinated and
other financial liabilities |
6 |
1,322.2 |
1,129.8 |
| Corporation tax
liabilities |
|
35.0 |
4.9 |
| Insurance
contracts liabilities |
5 |
4,961.4 |
4,581.7 |
|
Trade and other payables |
6, 11 |
175.3 |
305.8 |
|
Total liabilities |
|
6,573.5 |
6,103.4 |
|
Total equity and total liabilities |
|
7,944.2 |
7,096.2 |
The accompanying notes form part of these financial statements.
These financial statements were approved by the Board
of Directors on 5 March 2025 and were signed on its
behalf by:
Geraint Jones
Chief Financial Officer
Admiral Group plc
Company Number: 03849958
Consolidated Cashflow Statement
For the year ended 31 December 2024
|
|
|
Year ended |
|
|
Note |
31 December
2024
£m |
31 December
2023
£m1 |
|
Profit after tax |
|
662.9 |
337.2 |
| Adjustments for
non-cash items: |
|
|
|
|
- Depreciation of property, plant and equipment and right-of-use
assets |
|
18.8 |
18.2 |
|
- Impairment/ disposal of property, plant and equipment and
right-of-use assets |
|
9.1 |
(4.0) |
|
- Amortisation and impairment of intangible assets |
11 |
66.7 |
40.5 |
|
- Movement in expected credit loss provision |
|
10.3 |
15.7 |
|
- Share scheme charges |
|
67.8 |
63.3 |
|
- Interest expense on funding for loans and advances to
customers |
|
32.3 |
26.2 |
|
- Investment return |
6 |
(177.4) |
(119.3) |
|
- Profit on disposal of Insurify share option |
9 |
(12.5) |
– |
|
- Finance costs, including unwinding of discounts on lease
liabilities |
6 |
27.7 |
20.5 |
|
- Taxation expense |
10 |
176.3 |
105.6 |
| Change in gross
insurance contract liabilities |
5 |
421.6 |
451.3 |
| Change in
reinsurance assets |
5 |
184.9 |
(141.8) |
| Change in
insurance and other receivables |
6 |
182.4 |
(94.7) |
| Change in gross
loans and advances to customers |
7 |
(231.4) |
(73.6) |
|
Change in trade and other payables, including tax and social
security |
11 |
(136.1) |
52.4 |
|
Cash flows from operating activities, before movements in
investments |
|
1,303.4 |
697.5 |
|
Purchases of financial instruments |
|
(8,083.3) |
(3,538.4) |
| Proceeds on
disposal/ maturity of financial instruments |
|
7,182.4 |
3,176.1 |
|
Interest and investment income received |
|
90.6 |
76.8 |
|
Cash flows from operating activities, net of movements in
investments |
|
493.1 |
412.0 |
|
Taxation payments |
|
(124.1) |
(133.0) |
|
Net cash flow from operating activities |
|
369.0 |
279.0 |
|
Cash flows from investing activities: |
|
|
|
| Purchases of
property, equipment and software |
|
(61.7) |
(75.9) |
|
Intangible assets acquired through business combinations |
|
(82.5) |
– |
|
Net cash used in investing activities |
|
(144.2) |
(75.9) |
|
Cash flows from financing activities: |
|
|
|
| Proceeds on issue
of loan backed securities |
|
372.2 |
291.7 |
| Repayment of loan
backed securities |
|
(194.1) |
(246.8) |
| Proceeds from
other financial liabilities |
|
177.7 |
428.4 |
| Repayment of
other financial liabilities |
|
(170.1) |
(292.2) |
| Finance costs
paid, including interest expense paid on funding for loans |
|
(76.7) |
(52.8) |
|
Proceeds/(repayments) on hedging derivatives |
|
15.6 |
17.7 |
| Repayment of
lease liabilities |
|
(12.7) |
(10.7) |
|
Equity dividends paid |
12 |
(369.8) |
(307.1) |
|
Net cash used in financing activities |
|
(257.9) |
(171.8) |
|
Net increase in cash and cash equivalents |
|
(33.1) |
31.3 |
|
Cash and cash equivalents at 1 January |
|
353.1 |
297.0 |
|
Effects of changes in foreign exchange rates |
|
(6.4) |
24.8 |
|
Cash and cash equivalents at 31 December |
|
313.6 |
353.1 |
1. Represented: see note 1 to the financial
statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
|
|
Attributable to the owners of the Company |
|
|
Note |
Share
Capital
£m |
Share premium account
£m |
Fair value reserve £m |
Hedging reserve
£m |
Foreign exchange reserve
£m |
Insurance finance reserve
£m |
Retained profit
and loss
£m |
Total
£m |
Non-controlling interests
£m |
Total equity
£m |
|
At 1 January 2023 |
|
0.3 |
13.1 |
(205.9) |
21.1 |
0.1 |
134.5 |
922.6 |
885.8 |
1.2 |
887.0 |
| Profit/(loss) for
the period |
|
— |
— |
— |
— |
— |
— |
338.0 |
338.0 |
(0.8) |
337.2 |
|
Other comprehensive income |
|
— |
— |
92.4 |
(13.6) |
3.7 |
(69.2) |
— |
13.3 |
— |
13.3 |
|
Total comprehensive income for the period |
— |
— |
92.4 |
(13.6) |
3.7 |
(69.2) |
338.0 |
351.3 |
(0.8) |
350.5 |
| Transactions with
equity holders |
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
12 |
— |
— |
— |
— |
— |
— |
(307.1) |
(307.1) |
— |
(307.1) |
| Share scheme
credit |
|
— |
— |
— |
— |
— |
— |
63.3 |
63.3 |
— |
63.3 |
| Deferred tax on
share scheme credit |
|
— |
— |
— |
— |
— |
— |
2.1 |
2.1 |
— |
2.1 |
|
Transfer to loss on disposal of assets held for sale |
|
— |
— |
— |
— |
(3.6) |
— |
— |
(3.6) |
0.6 |
(3.0) |
|
Total transactions with equity holders |
— |
— |
— |
— |
(3.6) |
— |
(241.7) |
(245.3) |
0.6 |
(244.7) |
|
As at 31 December 2023 |
|
0.3 |
13.1 |
(113.5) |
7.5 |
0.2 |
65.3 |
1,018.9 |
991.8 |
1.0 |
992.8 |
Consolidated Statement of Changes in Equity
(continued)
|
|
Attributable to the owners of the Company |
|
|
Note |
Share
Capital
£m |
Share premium account
£m |
Fair value reserve £m |
Hedging reserve
£m |
Foreign exchange reserve
£m |
Insurance finance reserve
£m |
Retained profit
and loss
£m |
Total
£m |
Non-controlling interests
£m |
Total equity
£m |
|
At 1 January 2024 |
|
0.3 |
13.1 |
(113.5) |
7.5 |
0.2 |
65.3 |
1,018.9 |
991.8 |
1.0 |
992.8 |
| Profit/(loss) for
the period |
|
— |
— |
— |
— |
— |
— |
663.3 |
663.3 |
(0.4) |
662.9 |
|
Other comprehensive income |
|
— |
— |
13.7 |
(3.1) |
(4.2) |
7.4 |
— |
13.8 |
— |
13.8 |
|
Total comprehensive income for the period |
— |
— |
13.7 |
(3.1) |
(4.2) |
7.4 |
663.3 |
677.1 |
(0.4) |
676.7 |
| Transactions with
equity holders |
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
12 |
— |
— |
— |
— |
— |
— |
(369.8) |
(369.8) |
— |
(369.8) |
| Share scheme
credit |
|
— |
— |
— |
— |
— |
— |
67.8 |
67.8 |
— |
67.8 |
| Deferred tax on
share scheme credit |
|
— |
— |
— |
— |
— |
— |
3.2 |
3.2 |
— |
3.2 |
|
Transfer to loss on disposal of assets held for sale |
|
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|
Total transactions with equity holders |
— |
— |
— |
— |
— |
— |
(298.8) |
(298.8) |
— |
(298.8) |
|
As at 31 December 2024 |
|
0.3 |
13.1 |
(99.8) |
4.4 |
(4.0) |
72.7 |
1,383.4 |
1,370.1 |
0.6 |
1,370.7 |
Notes to the consolidated financial
statements
General information
Admiral Group plc is a public limited Company incorporated in
England and Wales. Its registered office is at Tŷ Admiral, David
Street, Cardiff, CF10 2EH and its shares are listed on the London
Stock Exchange.
The consolidated financial statements have been prepared and
approved by the Directors in accordance with United Kingdom adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006.
The financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards ('IFRS’) as adopted by the UK. The financial information
set out in this preliminary results announcement does not
constitute the statutory accounts for the year ended
31 December 2024. The financial information is derived from
the statutory accounts, which comply with IFRS, within the Group’s
Annual Report & Accounts 2024. These accounts were signed on 5
March 2025 and are expected to be published in March 2025 and
delivered to the Registrar of Companies following the Annual
General Meeting to be held on 9 May 2025. The independent
Auditor’s report on the Group accounts for the year ended
31 December 2024 was signed on 5 March 2025, is unqualified,
does not draw attention to any matters by way of emphasis and does
not include a statement under S498(2) or (3) of the Companies Act
2006. This audit opinion excludes disclosures surrounding capital
adequacy calculated under the Solvency II regime as these are
outside of the audit scope.
1. Basis of preparation
The consolidated financial statements have been prepared on a
going concern basis. In considering this requirement, the Directors
have taken into account the following:
- The Group’s profit projections,
including:
- Changes in premium rates and
projected policy volumes across the Group’s insurance
businesses
- Projected cost of settling claims
across all of the Group’s insurance businesses, including the
impact of continuing, albeit reducing, high levels of
inflation
- Projected trends in motor claims
frequency
- Projected trends in other revenue
generated by the Group’s insurance business from fees and the sale
of ancillary products
- Projected contributions to profit
from businesses other than the UK Motor insurance business
- Expected trends in unemployment in
the context of credit risks and the growth of the Group’s consumer
lending business
- The impact of the More Than
acquisition, which completed in the first half of 2024, with
renewals starting in the second half of 2024.
- The Group’s solvency position, which
continues to be closely monitored. The Group continues to maintain
a strong solvency position above target levels
- The adequacy of the Group’s
liquidity position after considering all the factors noted
above
- The results of business plan
scenarios and stress tests on the projected profitability, solvency
and liquidity positions including the impact of severe downside
scenarios that assume severe adverse economic, credit and trading
stresses
- The regulatory environment, focusing
on regulatory guidance issued by the FCA and the PRA in the UK and
regular communications between management and regulators
- A review of the Company’s principal
risks and uncertainties and the assessment of emerging risks,
including climate-related risks.
The accounting policies set out in the notes to the financial
statements have, unless otherwise stated, been applied consistently
to all periods presented in these Group financial statements.
The financial statements are prepared on the historical cost basis,
except for the revaluation of financial assets classified as fair
value through profit or loss or as fair value through other
comprehensive income, and insurance and reinsurance contract assets
and liabilities which are measured at their fulfilment value in
accordance with IFRS 17 Insurance Contracts.
The Group and Company financial statements are presented in
pounds sterling, rounded to the nearest £0.1 million.
Adoption of new and revised standards
The Group has adopted the following IFRSs and interpretations
during the year, which have been issued and endorsed:
- Amendments to IAS 7 Statement of
Cashflows and IFRS 7 Financial Instruments: Disclosures: Supplier
Finance Arrangements (effective 1 January 2024)
- Amendments to IAS 1 Presentation of
Financial Statements: Classification of liabilities as Current or
Non-current (effective 1 January 2024)
- Amendments to IFRS 16 Leases: Lease
Liability in a Sale and Leaseback (effective 1 January 2024).
The application of the amendments listed above has not had a
material impact on the Group’s results, financial position and
cashflows.
Representation of Consolidated Cashflow
Statement
The 2023 Consolidated Cashflow Statement has been re-presented
to reflect the gross cashflows relating to the subordinated loan
note, loan backed securities and other borrowings which were
previously all presented on a net basis within the financial
statement line items ‘proceeds from other financial liabilities’
and ‘proceeds on issue of loan backed securities’. This has
resulted in £292.2 million additional cash outflows within
‘repayment of other financial liabilities’ and the same inflow
within ‘proceeds from other financial liabilities’ and £246.8
million additional cash outflows within ‘repayment of loan backed
securities’ and the same inflow within ‘proceeds on issue of loan
backed securities’. There is no overall impact on resulting cash,
or the Consolidated Statement of Financial Position, Consolidated
Income Statement or the Earnings per share calculations within.
Representation of Consolidated Statement of
Comprehensive Income
The 2023 Consolidated Statement of Comprehensive Income has been
re-presented to show the breakdown of the movements in the
insurance finance reserve between that attributed to insurance
contracts and that attributed to reinsurance contracts. The
resulting deferred tax movement has also been re-presented.
The movements in the insurance finance reserve are included
within the Insurance finance reserve within the Statement of
Changes in Equity. For the breakdown of the insurance finance
reserve between insurance contracts and reinsurance contracts, see
note 5e to the financial statements.
2. Critical accounting judgements and
estimates
In applying the Group’s accounting policies as described in the
notes to the financial statements, the Directors are required to
make judgements (other than those involving estimations) that have
a significant impact on the amounts recognised and to make
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the year in which the estimate is reviewed. To the extent that a
change in an accounting estimate gives rise to changes in assets
and liabilities, the movement is recognised by adjusting the
carrying amount of the related asset or liability in the period in
which the change occurs.
3. Financial risk
3a. Insurance risk sensitivity
analysis
The following sensitivity analysis shows the impact on profit
for reasonably possible movements in key assumptions with all other
assumptions held constant. The correlation of assumptions will have
a significant effect in determining the ultimate impacts, but to
demonstrate the impact due to changes in each assumption,
assumptions have been changed on an individual basis. It should be
noted that movements in these assumptions are non-linear.
The sensitivities are shown for UK motor only, being the line of
business where such sensitivities could have a material impact at a
Group level. The sensitivities are shown on a gross and net of
quota share reinsurance basis to illustrate the impacts on
shareholder profit and equity before and after risk mitigation from
quota share reinsurance. The sensitivities (both gross and net)
include the impacts of movements in co-insurance profit commission,
given that underwriting year loss ratios including risk adjustment,
are a direct input to the calculation of profit commission. Refer
to note 8 to these financial statements for the accounting policy
for co-insurance profit commission.
Risk adjustment
The sensitivities reflect the impact on profit before tax in
2024 and equity as at the end of 2024 for changes in the selection
of the UK motor risk adjustment confidence level at
31 December 2024, with all other assumptions remaining
unchanged.
|
|
|
|
|
2024 |
|
£m |
Impact on profit before tax gross of
reinsurance |
Impact on profit before tax net of
reinsurance |
Impact on equity gross of reinsurance |
Impact on equity net
of reinsurance |
| Risk adjustment
decrease to 90th percentile |
123.5 |
112.2 |
100.8 |
91.4 |
|
Risk adjustment decrease to 85th percentile |
199.3 |
180.8 |
162.5 |
147.2 |
Undiscounted loss ratios, including risk
adjustment
The sensitivities reflect the impact on profit before tax in
2024 and equity as at the end of 2024, of a change in in the booked
loss ratios for individual underwriting years (UWY) as at
31 December 2024, with all other assumptions remaining
unchanged.
|
£m |
UWY 2021 impact on: |
UWY 2022 impact on: |
UWY 2023 impact on: |
UWY 2024 impact on: |
|
|
PBT |
Equity |
PBT |
Equity |
PBT |
Equity |
PBT |
Equity |
|
|
|
|
|
|
|
|
|
|
| Increase of 1%:
gross of reinsurance |
(14.8) |
(11.2) |
(15.8) |
(13.1) |
(21.0) |
(17.8) |
(16.4) |
(13.8) |
| Increase of 5%:
gross of reinsurance |
(67.5) |
(51.2) |
(72.4) |
(60.2) |
(98.5) |
(83.8) |
(75.4) |
(63.9) |
| Increase of 10%:
gross of reinsurance |
(133.3) |
(101.1) |
(143.2) |
(119.2) |
(195.3) |
(166.3) |
(149.2) |
(126.6) |
| |
|
|
|
|
|
|
|
|
| Decrease of 1%:
gross of reinsurance |
16.7 |
12.7 |
16.1 |
13.3 |
22.5 |
18.9 |
16.8 |
14.0 |
| Decrease of 5%:
gross of reinsurance |
76.7 |
58.1 |
85.7 |
70.2 |
118.7 |
98.9 |
88.8 |
73.9 |
| Decrease of 10%:
gross of reinsurance |
164.5 |
124.5 |
171.8 |
140.7 |
232.3 |
194.1 |
180.9 |
150.3 |
| |
|
|
|
|
|
|
|
|
| Increase of 1%:
net of reinsurance |
(11.7) |
(8.8) |
(9.0) |
(7.2) |
(21.0) |
(17.8) |
(16.4) |
(13.8) |
| Increase of 5%:
net of reinsurance |
(51.9) |
(38.8) |
(37.6) |
(30.8) |
(79.8) |
(67.7) |
(69.8) |
(59.0) |
| Increase of 10%:
net of reinsurance |
(102.1) |
(76.3) |
(73.5) |
(60.3) |
(124.7) |
(105.4) |
(111.7) |
(94.2) |
| |
|
|
|
|
|
|
|
|
| Decrease of 1%:
net of reinsurance |
13.6 |
10.2 |
9.1 |
7.3 |
22.5 |
18.9 |
16.8 |
14.0 |
| Decrease of 5%:
net of reinsurance |
63.1 |
47.2 |
54.0 |
43.4 |
118.7 |
98.9 |
88.8 |
73.9 |
|
Decrease of 10%: net of reinsurance |
148.3 |
111.6 |
118.0 |
95.2 |
232.3 |
194.1 |
180.9 |
150.3 |
‘Booked’ loss ratios are undiscounted underwriting year loss
ratios, including risk adjustment.
3b. Financial risk: Interest rate sensitivity
analysis
The impact on profit (before tax) and equity arising from the
impact of 100 basis point and 200 basis point increases and
decreases in interest rates on insurance contract liabilities and
reinsurance contract assets as at 31 December 2024, is as
follows:
|
|
31 December 2024 |
|
£m |
Impact on profit before tax gross of
reinsurance |
Impact on profit before tax net of
reinsurance |
Impact on equity gross of reinsurance |
Impact on equity net of reinsurance |
|
Increase of 100 basis points |
— |
— |
60.8 |
58.3 |
| Decrease of 100
basis points |
— |
— |
(69.7) |
(67.1) |
| Increase of 200
basis points |
— |
— |
115.1 |
110.3 |
|
Decrease of 200 basis points |
— |
— |
(152.2) |
(146.9) |
The impact on profit (before tax) and equity arising from the
impact of 100 basis point and 200 basis point increases and
decreases in interest rates on investments and cash as at 31
December 2024, is as follows:
|
|
|
31 December 2024 |
|
£m |
Impact on profit before tax |
Impact on equity |
|
Increase of 100 basis points |
— |
(83.4) |
| Decrease of 100
basis points |
— |
90.4 |
| Increase of 200
basis points |
— |
(161.0) |
|
Decrease of 200 basis points |
— |
189.2 |
Refer to Appendix 2 for the impact on profit before tax arising
from the impact of 100 bps and 200 basis point increases and
decreases in interest rates during 2024.
4. Operating segments
The Group has four reportable segments, as described below.
These segments represent the principal split of business that is
regularly reported to the Group’s Board of Directors, which is
considered to be the Group’s chief operating decision maker in line
with IFRS 8 Operating Segments.
UK Insurance
The segment consists of the underwriting of Motor, Household,
Pet and Travel insurance and other products that supplement these
insurance policies within the UK. It also includes the generation
of revenue from additional products and fees from underwriting
insurance in the UK. The Directors consider the results of these
activities to be reportable as one segment as the activities
carried out in generating the revenue are not independent of each
other and are performed as one business. This mirrors the approach
taken in management reporting.
International Insurance
The segment consists of the underwriting of car and home
insurance and the generation of revenue from additional products
and fees from underwriting car insurance outside of the UK. It
specifically covers the Group operations Admiral Seguros in Spain,
ConTe in Italy, L’olivier Assurance in France and Elephant Auto in
the US. None of these operations are reportable on an individual
basis, based on the threshold requirements in IFRS 8.
Admiral Money
The segment relates to the Admiral Money business launched in
2017, which provides consumer finance and car finance products in
the UK, through the comparison channel, credit scoring applications
and direct channels including car dealers and brokers.
Other
The ‘Other’ segment is designed to be comprised of all other
operating segments that are not separately reported to the Group’s
Board of Directors and do not meet the threshold requirements for
individual reporting. It includes the results of Admiral
Pioneer.
Taxes are not allocated across the segments and, as with the
corporate activities, are included in the reconciliation to the
Consolidated Income Statement and Consolidated Statement of
Financial Position.
An analysis of the Group’s revenue and results for the year
ended 31 December 2024, by reportable segment, is shown below.
The accounting policies of the reportable segments are
materially consistent with those presented in the notes to the
financial statements for the Group.
|
|
|
Year ended 31 December 2024 |
|
|
UK
Insurance
£m |
International
Insurance
£m |
Admiral
Money
£m |
Other
£m |
Eliminations3
£m |
Total
£m |
|
Turnover1 |
5,108.5 |
840.0 |
108.3 |
89.9 |
— |
6,146.7 |
|
Insurance revenue |
3,873.4 |
829.5 |
– |
73.3 |
– |
4,776.2 |
| Insurance revenue
net of XoL |
3,751.1 |
794.2 |
– |
65.8 |
– |
4,611.1 |
| Insurance
services expenses |
(745.7) |
(236.5) |
– |
(33.7) |
– |
(1,015.9) |
| Insurance claims
net of XoL |
(1,952.1) |
(564.5) |
– |
(39.0) |
– |
(2,555.6) |
| Quota share
reinsurance result |
(290.0) |
(4.1) |
– |
– |
– |
(294.1) |
|
Net movement in onerous loss component |
1.1 |
0.4 |
– |
– |
– |
1.5 |
|
Underwriting result |
764.4 |
(10.5) |
– |
(6.9) |
– |
747.0 |
| Net investment
income2 |
70.5 |
6.1 |
0.3 |
0.7 |
(7.9) |
69.7 |
| Net interest
income from financial services |
– |
– |
69.3 |
0.9 |
6.1 |
76.3 |
|
Net other revenue and operating expenses |
141.8 |
(0.9) |
(56.6) |
(12.1) |
– |
72.2 |
|
Segment profit/(loss) before
tax4 |
976.7 |
(5.3) |
13.0 |
(17.4) |
(1.8) |
965.2 |
| Other
central revenue and expenses, including share scheme charges |
|
(115.0) |
|
Investment and interest income |
|
|
|
13.5 |
|
Finance costs |
|
|
|
|
|
(24.5) |
|
Consolidated profit before tax |
|
|
|
|
|
839.2 |
|
Taxation expense |
|
|
|
|
|
(176.3) |
|
Consolidated profit after tax |
|
|
|
|
662.9 |
Revenue and results for the corresponding reportable segments
for the year ended 31 December 2023 are shown below.
|
|
|
Year ended 31 December 2023 |
|
|
UK
Insurance
£m |
International
Insurance
£m |
Admiral
Money
£m |
Other
£m |
Eliminations3
£m |
Total
£m |
|
Turnover1 |
3,776.0 |
894.9 |
92.1 |
48.5 |
– |
4,811.5 |
|
Insurance revenue |
2,596.8 |
842.6 |
– |
46.7 |
– |
3,486.1 |
| Insurance revenue
net of XoL |
2,517.3 |
811.8 |
– |
44.4 |
– |
3,373.5 |
| Insurance
services expenses |
(559.6) |
(249.4) |
– |
(27.9) |
– |
(836.9) |
| Insurance claims
net of XoL |
(1,560.2) |
(565.2) |
– |
(33.1) |
– |
(2,158.5) |
| Quota share
reinsurance result |
(18.4) |
(22.1) |
– |
0.1 |
– |
(40.4) |
|
Net movement in onerous loss component |
4.3 |
0.6 |
– |
– |
– |
4.9 |
|
Underwriting result |
383.4 |
(24.3) |
– |
(16.5) |
– |
342.6 |
| Net investment
income2 |
55.2 |
4.3 |
– |
0.3 |
(3.2) |
56.6 |
| Net interest
income from financial services |
– |
– |
66.4 |
0.2 |
1.5 |
68.1 |
|
Net other revenue and operating expenses |
157.9 |
2.0 |
(56.2) |
(12.4) |
– |
91.3 |
|
Segment profit/(loss) before
tax4 |
596.5 |
(18.0) |
10.2 |
(28.4) |
(1.7) |
558.6 |
| Other
central revenue and expenses, including share scheme charges |
|
|
(101.8) |
|
Investment and interest income |
|
|
|
4.6 |
|
Finance costs |
|
|
|
|
|
(18.6) |
|
Consolidated profit before tax |
|
|
|
|
|
442.8 |
|
Taxation expense |
|
|
|
|
|
(105.6) |
|
Consolidated profit after tax |
|
|
|
|
337.2 |
1 Turnover is an Alternative Performance Measure presented
before intra-group eliminations. Refer to the glossary and note 14
for further information.
2 Net Investment income is reported net of impairment of
financial assets, in line with management reporting.
3 Eliminations are in respect of the intra-group interest
charges related to the UK Insurance and Admiral Money
segment.
4 Segment results exclude gross share scheme charges, and
any quota share reinsurance recoveries; these net share scheme
charges are presented within ‘Other central revenue and expenses,
including share scheme charges’ in line with internal management
reporting.
5. Insurance Service result
5a. Accounting policies
The full accounting policies will be provided in the Group’s
2024 Annual Report.
Discount rates
A bottom-up approach has been applied in the determination of
discount rates. Under this approach, the discount rate is
determined as the risk-free yield adjusted for differences in
liquidity characteristics between the financial assets used to
derive the risk-free yield and the relevant liability cashflows
(known as an illiquidity premium).
The following weighted average rates, based on the yield curves
derived using the above methodology, were used to discount the
liability for incurred claims at the end of the current and prior
periods:
|
|
31 December 2024 |
31 December 2023 |
|
|
1 year |
3 years |
5 years |
10 years |
1 year |
3 years |
5 years |
10 years |
| UK Insurance |
5.0% |
4.7% |
4.5% |
4.6% |
5.4% |
4.3% |
4.0% |
3.9% |
| International
(European motor) |
2.7% |
2.6% |
2.6% |
2.8% |
4.0% |
3.1% |
3.0% |
3.0% |
5b. Insurance revenue
Insurance revenue for the corresponding reportable segments for
the period ended 31 December 2024 are shown below.
|
|
31 December 2024 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
|
Insurance revenue related movement in liability for
remaining coverage |
3,369.5 |
503.9 |
829.5 |
73.3 |
4,776.2 |
Insurance revenue for the corresponding reportable segments for
the period ended 31 December 2023 are shown below.
|
|
31 December 2023 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
|
Insurance revenue related movement in liability for
remaining coverage |
2,250.2 |
346.6 |
842.6 |
46.7 |
3,486.1 |
The Group’s share of its insurance business was underwritten by
Admiral Insurance (Gibraltar) Limited, Admiral Insurance Company
Limited, Admiral Europe Compañia Seguros (‘AECS’) and Elephant
Insurance Company. The majority of contracts are short term in
duration, lasting for between 6 and 12 months.
5c. Insurance service expenses
Insurance service expenses for the corresponding reportable
segments for the period ended 31 December 2024 are shown
below.
|
|
31 December 2024 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
| Incurred
claims |
|
|
|
|
|
| Claims incurred
in the period |
2,107.2 |
298.2 |
583.7 |
48.9 |
3,038.0 |
|
Changes to liabilities for incurred claims |
(496.1) |
(51.4) |
(11.1) |
(1.3) |
(559.9) |
|
Total incurred claims |
1,611.1 |
246.8 |
572.6 |
47.6 |
2,478.1 |
| Movement in
onerous contracts |
(5.1) |
0.1 |
(0.1) |
— |
(5.1) |
| Directly
attributable expenses |
|
|
|
|
|
| Administration
expenses |
461.5 |
113.7 |
175.2 |
18.7 |
769.1 |
|
Acquisition expenses |
125.3 |
45.2 |
61.3 |
15.0 |
246.8 |
|
Insurance expenses |
586.8 |
158.9 |
236.5 |
33.7 |
1,015.9 |
|
Share scheme expenses |
40.7 |
5.4 |
11.1 |
1.4 |
58.6 |
|
Total insurance expenses including share scheme
expenses |
627.5 |
164.3 |
247.6 |
35.1 |
1,074.5 |
|
Total Insurance service expenses |
2,233.5 |
411.2 |
820.1 |
82.7 |
3,547.5 |
Insurance service expenses for the corresponding reportable
segments for the period ended 31 December 2023 are shown
below.
|
|
31 December 2023 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
| Incurred
claims |
|
|
|
|
|
| Claims incurred
in the period |
1,755.5 |
255.0 |
618.2 |
36.4 |
2,665.1 |
|
Changes to liabilities for incurred claims |
(406.9) |
(9.1) |
(21.3) |
(3.3) |
(440.6) |
|
Total incurred claims |
1,348.6 |
245.9 |
596.9 |
33.1 |
2,224.5 |
| Movement in
onerous contracts |
(18.6) |
(2.4) |
(2.4) |
— |
(23.4) |
| Directly
attributable expenses |
|
|
|
|
|
| Administration
expenses |
377.8 |
73.5 |
184.0 |
19.0 |
654.3 |
|
Acquisition expenses |
73.4 |
34.8 |
65.4 |
8.9 |
182.5 |
|
Insurance expenses |
451.2 |
108.3 |
249.4 |
27.9 |
836.8 |
|
Share scheme expenses |
43.2 |
2.4 |
8.9 |
0.8 |
55.3 |
|
Total insurance expenses including share scheme
expenses |
494.4 |
110.7 |
258.3 |
28.7 |
892.1 |
|
Total Insurance service expenses |
1,824.4 |
354.2 |
852.8 |
61.8 |
3,093.2 |
5d. Net expenses from reinsurance contracts
held
Net expenses from reinsurance contracts held for the
corresponding reportable segments for the period ended
31 December 2024 are shown below.
|
|
31 December 2024 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
|
Allocation of reinsurance premiums |
145.8 |
45.8 |
153.9 |
7.6 |
353.1 |
| Amounts
recoverable from reinsurers for incurred insurance service
expenses |
|
|
|
|
|
| Incurred
claims |
(29.2) |
3.1 |
(275.9) |
(8.5) |
(310.5) |
|
Changes to liabilities for incurred claims |
291.6 |
34.3 |
146.3 |
— |
472.2 |
|
Net expense from reinsurance contracts excluding movement
in onerous loss component |
408.2 |
83.2 |
24.3 |
(0.9) |
514.8 |
|
Other reinsurance recoveries including movement in onerous loss
component |
4.0 |
(0.1) |
(0.3) |
— |
3.6 |
|
Net expenses/(income) from reinsurance contracts
held |
412.2 |
83.1 |
24.0 |
(0.9) |
518.4 |
Net expenses from reinsurance contracts held for the
corresponding reportable segments for the period ended
31 December 2023 are shown below.
|
|
31 December 2023 |
|
|
UK Motor
£m |
UK Non-motor
£m |
Int. Insurance
£m |
Other
£m |
Total Group
£m |
|
Allocation of reinsurance premiums |
93.6 |
49.5 |
190.0 |
2.2 |
335.3 |
| Amounts
recoverable from reinsurers for incurred insurance service
expenses |
|
|
|
|
|
| Incurred
claims |
(173.8) |
(52.0) |
(270.3) |
— |
(496.1) |
|
Changes to liabilities for incurred claims |
135.1 |
(1.4) |
95.9 |
(0.1) |
229.5 |
|
Net expense from reinsurance contracts excluding movement
in onerous loss component |
54.9 |
(3.9) |
15.6 |
2.1 |
68.7 |
|
Other reinsurance recoveries including movement in loss recovery
component |
14.5 |
2.2 |
1.7 |
— |
18.4 |
|
Net expenses/(income) from reinsurance contracts
held |
69.4 |
(1.7) |
17.3 |
2.1 |
87.1 |
5e. Finance expenses/(income) from insurance
contracts held and reinsurance contracts issued
|
£m |
2024 |
2023 |
| Amounts
recognised through the income statement |
|
|
| Insurance finance
expenses from insurance contracts issued |
128.4 |
94.5 |
|
Insurance finance income from reinsurance contracts held |
(35.9) |
(28.9) |
|
Net finance expense from insurance / reinsurance contracts
issued |
92.5 |
65.6 |
|
|
|
|
|
£m |
2024 |
2023 |
| Insurance
finance reserve |
|
|
| Insurance finance
reserve – insurance contracts |
119.0 |
111.1 |
| Deferred tax in
relation to insurance finance reserve - insurance contracts |
(18.6) |
(13.5) |
| Insurance finance
reserve – reinsurance contracts |
(32.4) |
(35.7) |
|
Deferred tax in relation to insurance finance reserve - reinsurance
contracts |
4.7 |
3.4 |
|
Total insurance finance reserve |
72.7 |
65.3 |
5f. Insurance Liabilities and Reinsurance
assets
(i). Analysis of recognised amounts
|
|
Year ended 31 December 2024 |
Year ended 31 December 2023 |
|
£m |
Liability for remaining coverage |
Liability for incurred claims |
Total |
Liability for remaining coverage |
Liability for incurred claims |
Total |
|
Insurance contracts issued |
|
|
|
|
|
| UK Motor |
883.3 |
2,691.1 |
3,574.4 |
769.0 |
2,546.7 |
3,315.7 |
| UK Non-motor |
195.3 |
214.7 |
410.0 |
136.2 |
217.5 |
353.7 |
| International
Motor |
201.4 |
690.2 |
891.6 |
221.0 |
641.5 |
862.5 |
|
Other |
8.6 |
76.8 |
85.4 |
3.5 |
46.3 |
49.8 |
|
Total insurance contracts issued |
1,288.6 |
3,672.8 |
4,961.4 |
1,129.7 |
3,452.0 |
4,581.7 |
|
|
|
|
|
|
|
|
| |
Asset/(liability) for remaining coverage |
Asset for incurred claims |
Total |
Asset/(liability) for remaining coverage |
Asset for incurred claims |
Total |
|
Reinsurance contracts held |
|
|
|
|
|
| UK Motor |
34.0 |
236.5 |
270.5 |
23.1 |
496.8 |
519.9 |
| UK Non-Motor |
11.2 |
173.5 |
184.7 |
21.4 |
170.2 |
191.6 |
| International
Motor |
43.1 |
481.5 |
524.6 |
(21.0) |
502.8 |
481.8 |
|
Other |
(0.1) |
8.9 |
8.8 |
(1.4) |
— |
(1.4) |
|
Total reinsurance contracts held |
88.2 |
900.4 |
988.6 |
22.1 |
1,169.8 |
1,191.9 |
|
|
|
|
|
|
|
|
| |
Liability/(asset) for remaining coverage |
Liability/(asset) for incurred claims |
Total |
Liability/(asset) for remaining coverage |
Liability/(asset) for incurred claims |
Total |
|
Net |
|
|
|
|
|
|
| UK Motor |
849.3 |
2,454.6 |
3,303.9 |
745.9 |
2,049.9 |
2,795.8 |
| UK Non-Motor |
184.1 |
41.2 |
225.3 |
114.8 |
47.3 |
162.1 |
| International
Motor |
158.3 |
208.7 |
367.0 |
242.0 |
138.7 |
380.7 |
|
Other |
8.7 |
67.9 |
76.6 |
4.9 |
46.3 |
51.2 |
|
Total insurance contracts issued |
1,200.4 |
2,772.4 |
3,972.8 |
1,107.6 |
2,282.2 |
3,389.8 |
(ii) Roll-forward of net asset or liability for insurance
contracts issued
UK Motor
The following tables reconcile the opening and closing balances
of the LRC and LIC for UK Motor.
|
2024 |
Liability for remaining coverage |
Liability for incurred claims |
Total |
|
£m |
Excluding loss component |
Loss component |
Total |
Present value of future cashflows |
Risk adj. for non-financial risk |
Total |
Total |
|
Opening assets |
— |
— |
— |
— |
— |
— |
— |
|
Opening liabilities |
(766.0) |
(3.0) |
(769.0) |
(2,202.8) |
(343.9) |
(2,546.7) |
(3,315.7) |
|
Net opening balance |
(766.0) |
(3.0) |
(769.0) |
(2,202.8) |
(343.9) |
(2,546.7) |
(3,315.7) |
|
Insurance revenue |
3,369.5 |
— |
3,369.5 |
— |
— |
— |
3,369.5 |
| Insurance service
expenses |
|
|
|
|
|
|
|
| Incurred claims
and insurance service expenses |
— |
— |
— |
(2,548.7) |
(186.0) |
(2,734.7) |
(2,734.7) |
Changes to
liabilities for
incurred claims |
— |
— |
— |
343.4 |
152.7 |
496.1 |
496.1 |
|
Losses and reversals of losses on onerous contracts |
— |
5.1 |
5.1 |
— |
— |
— |
5.1 |
|
Insurance service result |
3,369.5 |
5.1 |
3,374.6 |
(2,205.3) |
(33.3) |
(2,238.6) |
1,136.0 |
Insurance finance income/(expense) recognised in
profit or loss |
— |
(2.4) |
(2.4) |
(86.5) |
(15.3) |
(101.8) |
(104.2) |
|
Insurance finance income/(expense) recognised in OCI |
— |
0.3 |
0.3 |
16.2 |
2.2 |
18.4 |
18.7 |
|
Total changes in comprehensive income |
3,369.5 |
3.0 |
3,372.5 |
(2,275.6) |
(46.4) |
(2,322.0) |
1,050.5 |
|
Other changes |
35.9 |
— |
35.9 |
79.3 |
— |
79.3 |
115.2 |
|
Cashflows |
|
|
|
|
|
|
|
| Premiums
received |
(3,522.7) |
— |
(3,522.7) |
— |
— |
— |
(3,522.7) |
| Claims and other
insurance service expenses paid |
— |
— |
— |
2,098.3 |
— |
2,098.3 |
2,098.3 |
|
Other movements |
— |
— |
— |
— |
— |
— |
— |
|
Total cashflows |
(3,522.7) |
— |
(3,522.7) |
2,098.3 |
— |
2,098.3 |
(1,424.4) |
|
Net closing balance |
(883.3) |
— |
(883.3) |
(2,300.8) |
(390.3) |
(2,691.1) |
(3,574.4) |
|
Closing assets |
— |
— |
— |
— |
— |
— |
— |
|
Closing liabilities |
(883.3) |
— |
(883.3) |
(2,300.8) |
(390.3) |
(2,691.1) |
(3,574.4) |
|
2023 |
Liability for remaining coverage |
Liability for incurred claims |
Total |
|
£m |
Excluding loss component |
Loss component |
Total |
Present value of future cashflows |
Risk adj. for non-financial risk |
Total |
Total |
|
Opening assets |
— |
— |
— |
— |
— |
— |
— |
|
Opening liabilities |
(534.1) |
(8.1) |
(542.2) |
(1,984.5) |
(426.6) |
(2,411.1) |
(2,953.3) |
|
Net opening balance |
(534.1) |
(8.1) |
(542.2) |
(1,984.5) |
(426.6) |
(2,411.1) |
(2,953.3) |
|
Insurance revenue |
2,250.2 |
— |
2,250.2 |
— |
— |
— |
2,250.2 |
| Insurance service
expenses |
|
|
|
|
|
|
|
| Incurred claims
and insurance service expenses |
— |
— |
— |
(2,105.1) |
(144.8) |
(2,249.9) |
(2,249.9) |
Changes to
liabilities for
incurred claims |
— |
— |
— |
140.1 |
266.8 |
406.9 |
406.9 |
|
Losses and reversals of losses on onerous contracts |
— |
18.6 |
18.6 |
— |
— |
— |
18.6 |
|
Insurance service result |
2,250.2 |
18.6 |
2,268.8 |
(1,965.0) |
122.0 |
(1,843.0) |
425.8 |
Insurance finance income/(expense) recognised in
profit or loss |
— |
(4.1) |
(4.1) |
(59.0) |
(12.3) |
(71.3) |
(75.4) |
|
Insurance finance income/(expense) recognised in OCI |
— |
(9.4) |
(9.4) |
(60.5) |
(27.0) |
(87.5) |
(96.9) |
|
Total changes in comprehensive income |
2,250.2 |
5.1 |
2,255.3 |
(2,084.5) |
82.7 |
(2,001.8) |
253.5 |
|
Other changes1 |
|
— |
— |
64.0 |
— |
64.0 |
64.0 |
|
Cashflows |
|
|
|
|
|
|
|
| Premiums
received |
(2,482.1) |
— |
(2,482.1) |
— |
— |
— |
(2,482.1) |
| Claims and other
insurance service expenses paid1 |
— |
— |
— |
1,802.2 |
— |
1,802.2 |
1,802.2 |
|
Other movements |
— |
— |
— |
— |
— |
— |
— |
|
Total cashflows |
(2,482.1) |
— |
(2,482.1) |
1,802.2 |
— |
1,802.2 |
(679.9) |
|
Net closing balance |
(766.0) |
(3.0) |
(769.0) |
(2,202.8) |
(343.9) |
(2,546.7) |
(3,315.7) |
|
Closing assets |
— |
— |
— |
— |
— |
— |
— |
|
Closing liabilities |
(766.0) |
(3.0) |
(769.0) |
(2,202.8) |
(343.9) |
(2,546.7) |
(3,315.7) |
1 Claims paid and other changes have been re-presented to
separately present the transfer of non-cash insurance service
expenses, (primarily depreciation, amortisation and IFRS 2
equity-settled share based payments), out of the LIC. There is no
impact on the closing balance.
(iii) Roll-forward of net asset or liability for reinsurance
contracts issued
UK Motor
The following tables reconcile the opening and closing balances
of the ARC and AIC for UK Motor.
|
2024 |
Asset for remaining coverage |
Asset for incurred claims |
Total |
|
£m |
Excluding loss component |
Loss-recovery component |
Total |
Present value of future cashflows |
Risk adj. for non-financial risk |
Total |
Total |
|
Opening assets |
20.8 |
2.3 |
23.1 |
313.2 |
183.6 |
496.8 |
519.9 |
|
Opening liabilities |
— |
— |
— |
— |
— |
— |
— |
|
Net opening balance |
20.8 |
2.3 |
23.1 |
313.2 |
183.6 |
496.8 |
519.9 |
|
Allocation of reinsurance premiums |
(145.8) |
— |
(145.8) |
— |
— |
— |
(145.8) |
| Amounts
recoverable from reinsurers for incurred claims |
|
|
|
|
|
|
|
| Incurred
claims |
— |
— |
— |
22.2 |
7.0 |
29.2 |
29.2 |
Changes to
liabilities for
incurred claims |
— |
— |
— |
(158.6) |
(133.0) |
(291.6) |
(291.6) |
Changes in the loss
recovery component |
— |
(4.0) |
(4.0) |
— |
— |
— |
(4.0) |
|
Net income/ (expense) from reinsurance contracts
held |
(145.8) |
(4.0) |
(149.8) |
(136.4) |
(126.0) |
(262.4) |
(412.2) |
Reinsurance finance income/(expense) recognised in
profit or loss |
— |
1.8 |
1.8 |
11.1 |
7.9 |
19.0 |
20.8 |
|
Reinsurance finance income/(expense) recognised in OCI |
— |
(0.1) |
(0.1) |
(2.8) |
(1.5) |
(4.3) |
(4.4) |
|
Total changes in comprehensive income |
(145.8) |
(2.3) |
(148.1) |
(128.1) |
(119.6) |
(247.7) |
(395.8) |
|
Cashflows |
|
|
|
|
|
|
|
| Premiums
paid |
159.0 |
— |
159.0 |
— |
— |
— |
159.0 |
| Claims
recoveries |
— |
— |
— |
(0.9) |
— |
(0.9) |
(0.9) |
|
Recoveries as a result of commutations |
— |
— |
— |
(11.7) |
— |
(11.7) |
(11.7) |
|
Total cashflows |
159.0 |
— |
159.0 |
(12.6) |
— |
(12.6) |
146.4 |
|
Net closing balance |
34.0 |
— |
34.0 |
172.5 |
64.0 |
236.5 |
270.5 |
|
Closing assets |
34.0 |
— |
34.0 |
172.5 |
64.0 |
236.5 |
270.5 |
|
Closing liabilities |
— |
— |
— |
— |
— |
— |
— |
|
2023 |
Asset for remaining coverage |
Asset for incurred claims |
Total |
|
£m |
Excluding loss component |
Loss-recovery component |
Total |
Present value of future cashflows |
Risk adj. for non-financial risk |
Total |
Total |
|
Opening assets |
20.2 |
6.3 |
26.5 |
255.4 |
175.6 |
431.0 |
457.5 |
|
Opening liabilities |
— |
— |
— |
— |
— |
— |
— |
|
Net opening balance |
20.2 |
6.3 |
26.5 |
255.4 |
175.6 |
431.0 |
457.5 |
|
Allocation of reinsurance premiums |
(93.6) |
— |
(93.6) |
— |
— |
— |
(93.6) |
| Amounts
recoverable from reinsurers for incurred claims |
— |
— |
— |
— |
— |
— |
— |
| Incurred
claims |
— |
— |
— |
96.7 |
77.1 |
173.8 |
173.8 |
Changes to
liabilities for
incurred claims |
— |
— |
— |
(43.1) |
(92.0) |
(135.1) |
(135.1) |
Changes in the loss
recovery component |
— |
(14.5) |
(14.5) |
— |
— |
— |
(14.5) |
|
Net income/ (expense) from reinsurance contracts
held |
(93.6) |
(14.5) |
(108.1) |
53.6 |
(14.9) |
38.7 |
(69.4) |
Reinsurance finance income/(expense) recognised in
profit or loss |
— |
3.2 |
3.2 |
9.4 |
7.5 |
16.9 |
20.1 |
|
Reinsurance finance income/(expense) recognised in OCI |
— |
7.3 |
7.3 |
12.5 |
15.4 |
27.9 |
35.2 |
|
Total changes in comprehensive income |
(93.6) |
(4.0) |
(97.6) |
75.5 |
8.0 |
83.5 |
(14.1) |
|
Cashflows |
— |
— |
— |
— |
— |
— |
— |
| Premiums
paid |
94.2 |
— |
94.2 |
— |
— |
— |
94.2 |
| Claims
recoveries |
— |
— |
— |
(2.2) |
— |
(2.2) |
(2.2) |
|
Recoveries as a result of commutations |
— |
— |
— |
(15.5) |
— |
(15.5) |
(15.5) |
|
Total cashflows |
94.2 |
— |
94.2 |
(17.7) |
— |
(17.7) |
76.5 |
|
Net closing balance |
20.8 |
2.3 |
23.1 |
313.2 |
183.6 |
496.8 |
519.9 |
|
Closing assets |
20.8 |
2.3 |
23.1 |
313.2 |
183.6 |
496.8 |
519.9 |
|
Closing liabilities |
— |
— |
— |
— |
— |
— |
— |
(iv) Claims development
The tables below illustrate how estimates of cumulative claims
for UK Motor have developed over time on a gross and net of
reinsurance basis, for each underwriting year, and reconciles the
cumulative claims to the amount included in the Statement of
Financial Position.
Gross claims development
|
Financial year ended 31 December 2024 |
|
Underwriting year |
2014 & prior |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Total |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
| UK Motor
(core) |
|
|
|
|
|
|
|
|
|
|
|
|
| At end of year
one |
|
394 |
436 |
552 |
686 |
701 |
552 |
688 |
845 |
973 |
1,241 |
|
| At end of year
two |
|
701 |
829 |
1,144 |
1,175 |
1,067 |
985 |
1,326 |
1,584 |
1,812 |
|
|
| At end of year
three |
|
707 |
788 |
994 |
1,109 |
1,010 |
954 |
1,294 |
1,544 |
|
|
|
| At end of year
four |
|
680 |
727 |
947 |
1,064 |
996 |
921 |
1,270 |
|
|
|
|
| At end of year
five |
|
636 |
713 |
912 |
1,008 |
981 |
910 |
|
|
|
|
|
| At end of year
six |
|
619 |
690 |
890 |
1,000 |
938 |
|
|
|
|
|
|
| At end of year
seven |
|
606 |
656 |
865 |
959 |
|
|
|
|
|
|
|
| At end of year
eight |
|
594 |
652 |
849 |
|
|
|
|
|
|
|
|
| At end of year
nine |
|
585 |
657 |
|
|
|
|
|
|
|
|
|
|
Ten years later |
|
583 |
|
|
|
|
|
|
|
|
|
|
|
Gross best estimates of undiscounted claims |
3,803 |
583 |
657 |
849 |
959 |
938 |
910 |
1,270 |
1,544 |
1,812 |
1,241 |
14,566 |
| Cumulative gross
claims paid |
(3,666) |
(568) |
(618) |
(782) |
(906) |
(822) |
(733) |
(924) |
(1,104) |
(1,105) |
(561) |
(11,789) |
| Gross undiscounted
best estimate liabilities |
137 |
15 |
39 |
67 |
53 |
116 |
177 |
346 |
440 |
707 |
680 |
2,777 |
| Risk adjustment
(undiscounted) |
|
|
|
|
|
|
|
|
|
|
|
480 |
|
Effect of discounting |
|
|
|
|
|
|
|
|
|
|
|
(673) |
|
Gross claims liabilities |
|
|
|
|
|
|
|
|
|
|
|
2,584 |
|
Ancillary claims and expense liabilities |
|
|
|
|
|
|
|
|
|
|
|
107 |
|
UK Motor Gross liabilities for incurred claims |
|
|
|
|
|
|
|
|
|
|
|
2,691 |
Claims development net of XoL reinsurance
|
Financial year ended 31 December 2024 |
|
Underwriting year |
2014 & prior |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Total |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
| UK Motor
(core) |
|
|
|
|
|
|
|
|
|
|
|
|
| At end of year
one |
|
378 |
427 |
510 |
646 |
675 |
520 |
661 |
825 |
951 |
1,220 |
|
| At end of year
two |
|
682 |
783 |
1,053 |
1,123 |
1,033 |
949 |
1,292 |
1,550 |
1,776 |
|
|
| At end of year
three |
|
667 |
743 |
917 |
1,053 |
986 |
927 |
1,257 |
1,517 |
|
|
|
| At end of year
four |
|
637 |
692 |
883 |
1,024 |
969 |
892 |
1,240 |
|
|
|
|
| At end of year
five |
|
607 |
677 |
860 |
974 |
950 |
886 |
|
|
|
|
|
| At end of year
six |
|
599 |
663 |
840 |
978 |
925 |
|
|
|
|
|
|
| At end of year
seven |
|
586 |
640 |
820 |
946 |
|
|
|
|
|
|
|
| At end of year
eight |
|
579 |
635 |
825 |
|
|
|
|
|
|
|
|
| At end of year
nine |
|
577 |
644 |
|
|
|
|
|
|
|
|
|
|
Ten years later |
|
580 |
|
|
|
|
|
|
|
|
|
|
|
Net of XoL best estimates of undiscounted claims |
3,773 |
580 |
644 |
825 |
946 |
925 |
886 |
1,240 |
1,517 |
1,776 |
1,220 |
14,332 |
Cumulative
claims paid |
(3,666) |
(568) |
(618) |
(782) |
(906) |
(822) |
(733) |
(924) |
(1,104) |
(1,105) |
(561) |
(11,789) |
| Net of XoL
undiscounted best estimate liabilities |
107 |
12 |
26 |
43 |
40 |
103 |
153 |
316 |
413 |
671 |
659 |
2,543 |
| Risk adjustment
(undiscounted) |
|
|
|
|
|
|
|
|
|
|
|
428 |
|
Effect of discounting |
|
|
|
|
|
|
|
|
|
|
|
(543) |
Net of XoL
claims liabilities |
|
|
|
|
|
|
|
|
|
|
|
2,428 |
|
Ancillary claims and expense liabilities |
|
|
|
|
|
|
|
|
|
|
|
107 |
|
UK Motor Net of XoL liabilities for incurred claims |
|
|
|
|
|
|
|
|
|
|
|
2,535 |
Claims development net of reinsurance
|
Financial year ended 31 December 2024 |
|
Underwriting year |
2014 & prior |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Total |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
| UK Motor
(core) |
|
|
|
|
|
|
|
|
|
|
|
|
| At end of year
one |
|
378 |
427 |
493 |
625 |
626 |
520 |
657 |
762 |
939 |
1,220 |
|
| At end of year
two |
|
682 |
783 |
1,016 |
1,086 |
1,033 |
949 |
1,259 |
1,442 |
1,776 |
|
|
| At end of year
three |
|
667 |
743 |
886 |
1,018 |
986 |
927 |
1,239 |
1,470 |
|
|
|
| At end of year
four |
|
637 |
692 |
853 |
990 |
969 |
892 |
1,236 |
|
|
|
|
| At end of year
five |
|
607 |
677 |
830 |
957 |
950 |
886 |
|
|
|
|
|
| At end of year
six |
|
599 |
663 |
811 |
944 |
925 |
|
|
|
|
|
|
| At end of year
seven |
|
586 |
640 |
793 |
913 |
|
|
|
|
|
|
|
| At end of year
eight |
|
579 |
635 |
798 |
|
|
|
|
|
|
|
|
| At end of year
nine |
|
577 |
644 |
|
|
|
|
|
|
|
|
|
|
Ten years later |
|
580 |
|
|
|
|
|
|
|
|
|
|
|
Net best estimates of undiscounted claims |
3,773 |
580 |
644 |
798 |
913 |
925 |
886 |
1,236 |
1,470 |
1,776 |
1,220 |
14,221 |
Cumulative net
claims paid |
(3,666) |
(568) |
(618) |
(755) |
(874) |
(822) |
(733) |
(924) |
(1,104) |
(1,105) |
(561) |
(11,730) |
Net undiscounted
best
estimate liabilities |
107 |
12 |
26 |
43 |
39 |
103 |
153 |
312 |
366 |
671 |
659 |
2,491 |
| Risk adjustment
(undiscounted) |
|
|
|
|
|
|
|
|
|
|
|
419 |
|
Effect of discounting |
|
|
|
|
|
|
|
|
|
|
|
(528) |
|
Net claims liabilities |
|
|
|
|
|
|
|
|
|
|
|
2,382 |
Ancillary claims and
expense liabilities |
|
|
|
|
|
|
|
|
|
|
|
72 |
UK Motor Net liabilities for
incurred claims |
|
|
|
|
|
|
|
|
|
|
|
2,454 |
(v) UK Motor Loss ratios and Changes to liabilities
for incurred claims
The table below shows the development of UK Motor Insurance loss
ratios for the past three financial periods, presented on an
underwriting year basis, both using undiscounted amounts (i.e.
cashflows) and discounted amounts.
|
|
31 December |
|
UK Motor Insurance loss ratio development - undiscounted*, net of
excess of loss reinsurance |
2021 |
2022 |
2023 |
2024 |
|
Underwriting year |
|
|
|
|
| 2019 |
73% |
71% |
67% |
64% |
| 2020 |
68% |
65% |
58% |
57% |
| 2021 |
95% |
91% |
86% |
82% |
| 2022 |
—% |
104% |
96% |
91% |
| 2023 |
—% |
—% |
94% |
80% |
|
2024 |
—% |
—% |
—% |
77% |
* Booked undiscounted loss ratios presented from the
transition date of IFRS 17 (1 January 2022) onwards.
|
|
31 December |
|
UK Motor Insurance loss ratio development - discounted*, net of
excess of loss reinsurance |
2021 |
2022 |
2023 |
2024 |
|
Underwriting year |
|
|
|
|
| 2019 |
71% |
69% |
65% |
63% |
| 2020 |
67% |
63% |
57% |
55% |
| 2021 |
92% |
86% |
81% |
77% |
| 2022 |
—% |
97% |
88% |
83% |
| 2023 |
—% |
—% |
86% |
72% |
|
2024 |
—% |
—% |
—% |
71% |
* Loss ratios using discounted locked-in curves,
excluding finance expenses are presented from the transition date
of IFRS 17 (1 January 2022) onwards.
The following table analyses the impact of movements in changes
to liabilities from incurred claims by underwriting year on a gross
and net of excess of loss reinsurance basis for UK Motor.
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Gross |
|
|
|
Underwriting year |
|
|
| 2019 &
prior |
173.7 |
152.9 |
| 2020 |
41.8 |
98.2 |
| 2021 |
87.0 |
76.4 |
| 2022 |
107.1 |
79.4 |
| 2023 |
83.8 |
0.0 |
|
2024 |
0.0 |
0.0 |
|
Total UK Motor gross changes to liabilities for incurred
claims |
493.4 |
406.9 |
|
Net |
|
|
| Underwriting
year |
|
|
| 2019 &
prior |
99.6 |
145.6 |
| 2020 |
30.5 |
97.7 |
| 2021 |
70.6 |
80.1 |
| 2022 |
94.5 |
69.4 |
| 2023 |
76.7 |
0.0 |
|
2024 |
0.0 |
0.0 |
|
Total UK Motor net of excess of loss changes to liabilities
for incurred claims |
371.9 |
392.8 |
6. Investment income and finance costs
6a. Investment return
|
|
31 December 2024
£m |
31 December 2023
£m |
|
|
At EIR |
Other |
Total |
At EIR |
Other |
Total |
|
Investment return |
|
|
|
|
|
|
| On assets
classified as FVTPL |
— |
67.1 |
67.1 |
— |
43.3 |
43.3 |
| On assets
classified as FVOCI1 3 |
100.4 |
5.2 |
105.6 |
77.0 |
(3.6) |
73.4 |
| On assets
classified as amortised cost1 |
5.9 |
— |
5.9 |
4.1 |
— |
4.1 |
| |
|
|
|
|
|
|
| Net
unrealised losses |
|
|
|
|
|
|
| Unrealised (loss)
/ gain on forward contracts |
— |
(0.2) |
(0.2) |
— |
(0.2) |
(0.2) |
| Share of
associate profit/ loss |
— |
(1.0) |
(1.0) |
— |
(1.3) |
(1.3) |
| Interest income
on cash and cash equivalents1 |
— |
5.5 |
5.5 |
— |
5.4 |
5.4 |
|
Investment fees |
— |
(2.0) |
(2.0) |
— |
(1.8) |
(1.8) |
|
Total investment and interest
income2 |
106.3 |
74.6 |
180.9 |
81.1 |
41.8 |
122.9 |
1 Interest received during the year was £90.6 million (2023:
£76.8 million).
2 Total investment return excludes £7.9 million of
intra-group interest (2023: £3.2 million).
3 Realised losses on sales of debt securities classified as
FVOCI are £4.5 million (2023: £0.9 million).
6b. Finance costs
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Interest expense on subordinated loan notes and other credit
facilities1 2 |
24.5 |
18.5 |
| Interest expense
on lease liabilities |
2.6 |
2.0 |
|
Interest recoverable from co-insurers |
(0.6) |
(0.4) |
|
Total finance costs |
26.5 |
20.1 |
1 Interest paid during the year was £27.0 million (2023:
£20.5 million).
2 See note 7 for details of credit facilities.
Finance costs represent interest payable on the £250.0 million
(2023: £305.1 million) subordinated notes and other financial
liabilities.
Interest expense on lease liabilities represents the unwinding
of the discount on lease liabilities under IFRS 16.
6c. Expected credit losses
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Expected credit (gains)/losses on financial investments |
6.3 |
(2.5) |
|
Expected credit losses on loans and advances to
customers1 |
28.3 |
33.5 |
|
Total expense for expected credit losses |
34.6 |
31.0 |
1 Includes £26.1 million (2023: £15.0 million) of
write-offs, with total movement in the expected credit loss
provision being £28.3 million (2023: £33.5 million).
6d. Financial assets and
liabilities
The Group’s financial assets and liabilities can be analysed as
follows:
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Financial investments measured at FVTPL |
|
|
| Money market
funds |
902.6 |
587.5 |
| Other
funds1 |
473.9 |
301.3 |
| Derivative
financial instruments |
5.8 |
17.6 |
|
Equity investments (designated FVTPL) |
46.9 |
12.4 |
|
|
1,429.2 |
918.8 |
| Financial
investments classified as FVOCI |
|
|
| Corporate debt
securities |
2,410.9 |
2,040.6 |
| Government debt
securities2 |
772.2 |
519.6 |
|
Private debt securities |
152.3 |
242.7 |
|
|
3,335.4 |
2,802.9 |
|
Equity investments (designated FVOCI) |
— |
23.0 |
|
|
3,335.4 |
2,825.9 |
| Financial
assets measured at amortised cost |
|
|
| Deposits with
credit institutions |
91.7 |
116.7 |
|
Other |
|
|
| Investment in
Associate |
— |
1.0 |
|
Investment Property |
6.9 |
— |
|
Total financial investments |
4,863.2 |
3,862.4 |
|
|
|
|
| Other
financial assets (measured at amortised cost) |
|
|
| Insurance related
receivables |
51.1 |
272.7 |
|
Trade and other receivables |
110.4 |
75.0 |
|
Insurance related and other receivables |
161.5 |
347.7 |
| Loans and
advances to customers (note 7) |
1,106.9 |
879.4 |
|
Cash and cash equivalents |
313.6 |
353.1 |
|
Total financial assets |
6,445.2 |
5,442.6 |
|
Financial liabilities |
|
|
| Subordinated
notes |
258.9 |
315.2 |
| Loan backed
securities |
937.7 |
759.6 |
| Other
borrowings |
117.4 |
55.0 |
|
Derivative financial instruments |
8.2 |
— |
|
Subordinated and other financial liabilities |
1,322.2 |
1,129.8 |
| Trade and other
payables3 |
175.3 |
305.8 |
|
Lease liabilities |
79.6 |
81.2 |
|
Total financial liabilities |
1,577.1 |
1,516.8 |
1Other funds include funds which
primarily invest in fixed income securities are recognised as
fair value through profit and loss
2 Government debt securities include £0.6 million of
short term UK government bonds held for collateral against foreign
exchange hedging derivatives
3 Trade and other payables include
deferred income, accruals and other tax and social
security.
The table below shows how the financial assets and liabilities
held at fair value have been measured using the fair value
hierarchy:
|
|
31 December 2024 |
31 December 2023 |
|
|
FVTPL
£m |
FVOCI
£m |
FVTPL
£m |
FVOCI
£m |
|
Level one (quoted prices in active markets) |
1,221.2 |
3,183.1 |
888.8 |
2,560.1 |
| Level two (use of
observable inputs) |
(2.4) |
— |
17.6 |
— |
|
Level three (use of significant unobservable inputs) |
202.2 |
152.3 |
12.4 |
265.8 |
|
Total |
1,421.0 |
3,335.4 |
918.8 |
2,825.9 |
Level three investments consist of debt investments and equity
investments.
Debt investments are comprised primarily of investments in funds
which invest in debt securities, these are valued at the proportion
of the Group’s holding of the Net Asset Value (NAV) reported
by the investment vehicle. These include funds that invest in
corporate direct lending, residential and commercial mortgages,
infrastructure debt and other private debt. In addition, there is a
small allocation of privately placed bonds which do not trade on
active markets, these are valued using discounted cash-flow models
designed to appropriately reflect the credit and illiquidity of
these instruments; these valuations are performed by the external
fund managers. The key unobservable input across private debt
securities is the discount rate which is based on the credit
performance of the assets. A deterioration of the credit
performance or expected future performance will result in higher
discount rates and lower values.
As these debt investments are held within investment funds where
appropriate the Group elects to treat these investments as equity
through OCI. Debt investments in which the funds are closed ended
are classified as FVTPL within Other funds (2024: £154.8
million).
Equity securities are primarily comprised of investments in
Private Equity and Infrastructure Equity funds, which are valued at
the proportion of the Group’s holding of the NAV reported by the
investment vehicle. These are based on several unobservable inputs
including market multiples and cashflow forecasts. These are held
at FVTPL, with realised and unrealised gains/losses flowing through
the P&L.
There were no significant inter-relationships between
unobservable inputs that materially affect fair values.
The table below presents the movement in the period relating to
financial instruments valued using a level three valuation:
31 December 2024
£m |
|
Level Three Investments |
Equity Investments |
Debt Investments |
Total |
|
Balance as at 1 January 2024 |
35.5 |
242.7 |
278.2 |
| Gains/(losses)
recognised in the Income Statement |
(4.5) |
9.6 |
5.1 |
| Gains/(losses)
recognised in Other Comprehensive Income |
— |
(2.8) |
(2.8) |
| Purchases |
16.1 |
94.9 |
111.0 |
|
Disposals |
(0.2) |
(36.8) |
(37.0) |
|
Balance as at 31 December 2024 |
46.9 |
307.6 |
354.5 |
31 December 2023
£m |
|
Level Three Investments |
Equity Investments |
Debt Investments |
Total |
|
Balance as at 1 January 2023 |
31.6 |
166.6 |
198.2 |
| Gains/(losses)
recognised in the Income Statement |
(0.1) |
10.0 |
9.9 |
| Gains/(losses)
recognised in Other Comprehensive Income |
(1.0) |
0.8 |
(0.2) |
| Purchases |
6.1 |
89.6 |
95.7 |
|
Disposals |
(1.1) |
(24.3) |
(25.4) |
|
Balance as at 31 December 2023 |
35.5 |
242.7 |
278.2 |
7. Loans and Advances to Customers
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Loans and advances to customers – gross carrying amount |
1,174.0 |
956.8 |
|
Loans and advances to customers – provision |
(84.3) |
(81.7) |
|
Total loans and advances to customers – Admiral
Money |
1,089.7 |
875.1 |
|
Total loans and advances to customers – Other |
17.2 |
4.3 |
|
Total loans and advances to customers |
1,106.9 |
879.4 |
Loans and advances to customers are comprised of the
following:
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Unsecured personal loans |
1,155.6 |
937.7 |
| Finance
leases |
18.4 |
19.1 |
|
Other |
18.6 |
4.4 |
|
Total loans and advances to customers, gross |
1,192.6 |
961.2 |
Forward-looking information
Under IFRS 9 the provision must reflect an unbiased and
probability-weighted amount that is determined by evaluating a
range of possible outcomes. The means by which the Group has
determined this is to run scenario analysis.
Management judgment has been used to define the weighting and
severity of the different scenarios based on available data.
As at December 2024 there are three key economic drivers of
credit losses factored into the scenarios, as follows:
- UK Unsecured Debt to Income
(‘DTI’)
- UK Employment Hazard Rates
- Annual UK GDP % Change
The variables are combined using a statistical model which will
estimate the relative change in the PD of an account for each
scenario over the life of the loan. The Group has moved from a
single variable model as at December 2023 (Unemployment)
to model containing three drivers in recognition of the fact
that there are multiple macroeconomic drivers which can influence
the direction of default rates.
The scenario weighting assumptions used are detailed below,
along with the annual peak for each economic driver assumed in each
scenario at 31 December 2024.
| |
For the Forecast Year Ended |
| At 31
December 2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
|
|
% |
% |
% |
% |
% |
|
Base - 50% |
|
|
|
|
|
| Gross domestic
product |
1.6 |
1.6 |
1.6 |
1.7 |
1.7 |
| Unemployment
rate |
4.4 |
4.3 |
4.1 |
4.1 |
4.1 |
|
UK Household Unsecured Debt to Income |
13.2 |
13.7 |
14.1 |
14.4 |
14.5 |
|
Upside - 10% |
|
|
|
|
|
| Gross domestic
product |
2.7 |
3.0 |
1.8 |
1.6 |
1.8 |
| Unemployment
rate |
4.2 |
3.8 |
3.8 |
3.8 |
3.8 |
|
UK Household Unsecured Debt to Income |
12.6 |
12.3 |
11.9 |
12.2 |
12.3 |
|
Downside - 30% |
|
|
|
|
|
| Gross domestic
product |
0.9 |
0.1 |
3.0 |
3.0 |
2.7 |
| Unemployment
rate |
5.6 |
6.0 |
5.6 |
4.9 |
4.6 |
|
UK Household Unsecured Debt to Income |
13.4 |
14.5 |
15.0 |
15.1 |
15.1 |
|
Severe - 10% |
|
|
|
|
|
| Gross domestic
product |
0.8 |
(1.1) |
2.6 |
3.4 |
3.1 |
| Unemployment
rate |
6.6 |
8.0 |
7.9 |
6.8 |
6.1 |
|
UK Household Unsecured Debt to Income |
13.6 |
15.0 |
15.7 |
15.9 |
16.1 |
|
Probability-weighted |
|
|
|
|
|
| Gross domestic
product |
1.4 |
1.0 |
2.1 |
2.3 |
2.1 |
| Unemployment
rate |
5.0 |
5.1 |
4.9 |
4.6 |
4.4 |
| UK Household
Unsecured Debt to Income |
13.2 |
13.9 |
14.3 |
14.5 |
14.6 |
| |
For the Forecast Year Ended |
| At 31
December 2023 |
2025 |
2026 |
2027 |
2028 |
2029 |
|
|
% |
% |
% |
% |
% |
|
Base - 50% |
|
|
|
|
|
| Gross domestic
product |
1.5 |
1.6 |
1.6 |
1.8 |
1.9 |
| Unemployment
rate |
4.7 |
4.2 |
4.1 |
4.1 |
4.1 |
|
UK Household Unsecured Debt to Income |
13.8 |
14.2 |
14.4 |
14.5 |
14.5 |
|
Upside - 10% |
|
|
|
|
|
| Gross domestic
product |
2.7 |
2.4 |
2.1 |
1.6 |
1.4 |
| Unemployment
rate |
3.6 |
3.7 |
3.8 |
3.9 |
3.9 |
|
UK Household Unsecured Debt to Income |
12.5 |
12.4 |
12.5 |
12.5 |
12.4 |
|
Downside - 30% |
|
|
|
|
|
| Gross domestic
product |
0.1 |
3.0 |
3.0 |
3.0 |
2.3 |
| Unemployment
rate |
6.0 |
5.7 |
4.9 |
4.6 |
4.5 |
|
UK Household Unsecured Debt to Income |
14.5 |
14.8 |
15.0 |
15.2 |
15.2 |
|
Severe - 10% |
|
|
|
|
|
| Gross domestic
product |
(1.8) |
3.0 |
3.9 |
3.9 |
3.0 |
| Unemployment
rate |
8.0 |
8.0 |
6.7 |
5.9 |
5.4 |
|
UK Household Unsecured Debt to Income |
15.1 |
15.7 |
15.9 |
16.1 |
16.2 |
|
Probability-weighted |
|
|
|
|
|
| Gross domestic
product |
0.8 |
2.2 |
2.3 |
2.3 |
2.1 |
| Unemployment
rate |
5.3 |
4.9 |
4.6 |
4.4 |
4.3 |
| UK Household
Unsecured Debt to Income |
14.0 |
14.4 |
14.6 |
14.7 |
14.7 |
The economic scenarios and forecasts have been updated in
conjunction with a third party economics provider. The probability
weightings reflect the view that there is a probability of 40%
attached to recessionary outcomes.
Sensitivities to key areas of estimation
uncertainty
The key areas of estimation uncertainty identified, as per note
2 to the financial statements, are in the probability of default
(‘PD’) and the forward-looking scenarios.
|
|
31 December 2024
Weighting |
31 December 2024
Sensitivity |
31 December 2023
Weighting |
31 December 2023
Sensitivity |
|
Base |
50% |
(1.7) |
50% |
(1.1) |
|
Upturn |
30% |
(3.3) |
10% |
(5.2) |
|
Downturn |
10% |
2.9 |
30% |
2.5 |
|
Severe |
10% |
6.3 |
10% |
8.2 |
The sensitivities in the above tables show the variance to
expected credit loss (‘ECL’) that would be expected if the given
scenario unfolded rather than the weighted position the provision
is based on. At 31 December 2024 the implied weighted peak
unemployment rate is 5.0%: the table shows that in a downturn
scenario with a 5.6% peak unemployment rate the provision would
increase by £2.9 million, whilst the upturn would reduce the
provision by £3.3 million, base case reduce by £1.7 million and
severe increase the provision by £6.3 million.
Stage 1 assets represent 86.6% of the total loan assets; 0.1%
increase in the stage 1 PD, i.e. from 2.3% to 2.4% would result
in a £0.8 million increase in ECL.
Judgements required – Post Model Adjustments
(‘PMA’s)
As at 31 December 2024, the expected credit loss allowance
included PMAs totalling £4.6 million (2023: £9.2 million).
|
Post Model Adjustments |
31 December 2024
£m |
31 December 2023
£m |
|
Model performance |
1.5 |
2.0 |
| Cost of
Living |
1.3 |
6.5 |
|
Economic scenarios |
1.8 |
0.7 |
|
|
4.6 |
9.2 |
PMAs are calculated using management judgement
and analysis. The key categories of PMAs are as follows:
Model performance
The Loss Given Default (‘LGD’) model considers long run
recoveries over a period of up to five years post default. A
potential shortfall has been identified for customers that roll
straight through the arrears buckets up the point of write off.
Although this shortfall is immaterial, an adjustment has been made
to ensure it is accounted for in our expected credit loss.
Cost of Living
This PMA captures the risk of customers falling into a negative
affordability position, whereby customers are no longer able to
meet their credit commitments due to higher expenditure driven by
increased mortgage payments, when their standard variable or fixed
term rate comes to an end. A PMA is held to acknowledge this, using
both external and internal data.
Economic scenarios
A new econometric model has been implemented to derive our
forward-looking view of ECL’s. The model is sensitive to the timing
of forecasted peaks in, for example, unemployment rates. Given
increased uncertainty driven by geo-political events, management
has made an adjustment equivalent to a six-month advancement in the
peak point of each scenario.
Write off policy
Loans are written off where there is no reasonable expectation
of recovery. The Group considers there to be no reasonable
expectation of recovery where an extensive set of collections
processes has been completed, the debt is statute barred, the
debtor cannot be traced or is deceased, or in situations involving
significant financial hardship. The Group’s policy is to write down
balances to their estimated net realisable value. Write offs are
actioned on a case-by-case basis taking into account the
operational position and the collections strategy.
Credit grade information
|
|
|
|
|
31 December 2024 |
31 December 2023 |
|
|
Stage 1
12 month ECL
£m |
Stage 2
Lifetime ECL
£m |
Stage 3
Lifetime ECL
£m |
Total
£m |
Total
£m |
|
Credit Grade1 |
|
|
|
|
|
| Higher |
786.5 |
67.6 |
— |
854.1 |
649.3 |
| Medium |
171.2 |
21.3 |
— |
192.5 |
186.6 |
| Lower |
53.9 |
9.1 |
— |
63.0 |
65.4 |
|
Credit impaired |
— |
— |
64.4 |
64.4 |
55.5 |
|
Gross carrying amount |
1,011.6 |
98.0 |
64.4 |
1,174.0 |
956.8 |
|
Expected credit loss allowance |
(15.5) |
(19.8) |
(48.5) |
(83.8) |
(81.1) |
|
Other loss allowance2 |
(0.5) |
— |
— |
(0.5) |
(0.6) |
|
Carrying amount – Admiral Money |
995.6 |
78.2 |
15.9 |
1,089.7 |
875.1 |
|
Carrying amount – Other |
16.8 |
0.3 |
0.1 |
17.2 |
4.3 |
|
Carrying amount |
1,012.4 |
78.5 |
16.0 |
1,106.9 |
879.4 |
1 Credit grade is the internal credit
banding given to a customer at origination. This is based on
external credit rating information.
2 Other loss allowance covers losses due
to a reduction in current or future vehicle value or costs
associated with recovery and sale of vehicles and those as a result
of changes in the performance of the EIR asset.
8. Other revenue and co-insurer profit
commission
|
|
31 December 2024 |
|
|
UK Insurance
£m |
International Insurance
£m |
Admiral Money
£m |
Other
£m |
Total Group
£m |
|
Major products/service line |
|
|
|
|
| Fee and
commission revenue |
119.5 |
0.1 |
0.2 |
0.2 |
120.0 |
| Revenue from law
firm |
16.3 |
— |
— |
— |
16.3 |
|
Comparison income |
— |
— |
— |
— |
— |
|
Total other revenue |
135.8 |
0.1 |
0.2 |
0.2 |
136.3 |
|
Profit commission from co-insurers |
53.3 |
— |
— |
— |
53.3 |
|
Total other revenue and co-insurer profit
commission |
189.1 |
0.1 |
0.2 |
0.2 |
189.6 |
|
|
|
|
|
|
|
| Timing of
revenue recognition |
|
|
|
|
|
| Point in
time |
139.0 |
0.1 |
0.2 |
0.2 |
139.5 |
|
Over time |
50.1 |
— |
— |
— |
50.1 |
|
|
189.1 |
0.1 |
0.2 |
0.2 |
189.6 |
|
|
31 December 2023 |
|
|
UK Insurance
£m |
International Insurance
£m |
Admiral Money
£m |
Other
£m |
Total Group
£m |
|
Major products/service line |
|
|
|
|
| Fee and
commission revenue |
107.2 |
— |
0.1 |
— |
107.3 |
| Revenue from law
firm |
18.3 |
— |
— |
— |
18.3 |
|
Comparison income |
— |
— |
— |
1.6 |
1.6 |
|
Total other revenue |
125.5 |
— |
0.1 |
1.6 |
127.2 |
|
Profit commission from co-insurers |
76.5 |
2.0 |
— |
— |
78.5 |
|
Total other revenue and co-insurer profit
commission |
202.0 |
2.0 |
0.1 |
1.6 |
205.7 |
|
|
|
|
|
|
|
| Timing of
revenue recognition |
|
|
|
|
|
| Point in
time |
160.4 |
2.0 |
0.1 |
1.6 |
164.1 |
|
Over time |
41.6 |
— |
— |
— |
41.6 |
|
|
202.0 |
2.0 |
0.1 |
1.6 |
205.7 |
Profit commission
The cumulative profit commission recognised at each point in
time is calculated in aggregate across the contract, in line with
contract terms, based on a number of detailed inputs for each
individual underwriting year, the most material of which are as
follows:
- Premiums, defined as gross premiums
ceded including any instalment income, less reinsurance premium
(for excess of loss reinsurance).
- Insurance expenses incurred.
- Claims costs incurred.
- The Group uses the expected value
method for the initial calculation of profit commission revenue,
based on known premiums and expenses, and the best estimate of
claims costs.
- The variable revenue estimated using
the expected value method above is constrained through the
inclusion of the risk adjustment within the claims cost element of
the calculation, with the profit commission recognised aligned to
the IFRS 17 booked loss ratios, discounted at locked-in rates, and
inclusive of finance expense. The inclusion of the risk adjustment
constrains the cumulative profit commission revenue recognised to a
level where there is a high probability of no significant
reversal.
The key methods, inputs and assumptions used to estimate the
variable consideration of profit commission are therefore in line
with those used for the calculation of claims liabilities, as set
out in note 3 to the financial statements, with further detail also
included in note 5. There are no further critical accounting
estimates or judgements in relation to the recognition of profit
commission.
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Underwriting year |
|
|
| 2020 &
prior |
51.7 |
76.5 |
| 2021 |
— |
— |
| 2022 |
— |
— |
| 2023 |
— |
— |
|
2024 |
1.6 |
— |
|
Total UK motor profit commission |
53.3 |
76.5 |
9. Directly attributable and other expenses
|
|
31 December 2024 |
|
|
Directly attributable expenses
£m |
Other operating expenses
£m |
Total expenses
£m |
|
Administration and acquisition expenses |
1,015.9 |
121.3 |
1,137.2 |
| Expenses relating
to additional products and fees |
— |
46.2 |
46.2 |
| Share scheme
expenses |
58.6 |
35.3 |
93.9 |
| Loan expenses
(excluding movement on ECL provision) |
— |
29.9 |
29.9 |
| Movement in
expected credit loss provision |
— |
34.6 |
34.6 |
| Profit on
disposal of Insurify share option |
— |
(12.5) |
(12.5) |
|
Other1 |
— |
73.4 |
73.4 |
|
Total |
1,074.5 |
328.2 |
1,402.7 |
|
|
31 December 2023 |
|
|
Directly attributable expenses
£m |
Other operating expenses
£m |
Total expenses
£m |
|
Administration and acquisition expenses |
836.8 |
100.8 |
937.6 |
| Expenses relating
to additional products and fees |
— |
41.4 |
41.4 |
| Share scheme
expenses |
55.3 |
28.5 |
83.8 |
| Loan expenses
(excluding movement on ECL provision) |
— |
23.0 |
23.0 |
| Movement in
expected credit loss provision |
— |
31.0 |
31.0 |
|
Other1 |
— |
57.1 |
57.1 |
|
Total |
892.1 |
281.8 |
1,173.9 |
1 Other includes centralised costs primarily for employees
and projects (2024: £49.9 million, 2023: £34.5 million), business
development costs (2024: £19.9 million, 2023: £15.3 million) and
other costs (2024: £3.6 million, 2023: £7.3 million).
10. Taxation
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Current tax |
|
|
| Corporation tax
on profits for the year |
139.3 |
91.6 |
| Under provision
relating to prior periods |
1.8 |
21.3 |
|
Pillar Two income taxes |
15.4 |
— |
|
Current tax charge |
156.5 |
112.9 |
| Deferred
tax |
|
|
| Current period
deferred taxation movement |
16.4 |
0.7 |
|
Under/(over) provision relating to prior periods |
3.4 |
(8.0) |
|
Total tax charge per Consolidated Income
Statement |
176.3 |
105.6 |
Factors affecting the total tax charge are:
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Profit before tax |
839.2 |
442.8 |
|
Corporation tax thereon at effective UK corporation tax rate of 25%
(2023: 23.5%) |
209.8 |
104.1 |
| Expenses and
provisions not deductible for tax purposes |
4.1 |
3.0 |
| Non-taxable
income |
(21.3) |
(13.4) |
| Impact of change
in UK tax rate on deferred tax balances |
— |
(0.4) |
| Adjustments
relating to prior periods |
5.2 |
13.5 |
| Impact of Pillar
Two income taxes |
15.4 |
— |
| Impact of
different overseas tax rates |
(45.5) |
(8.9) |
|
Unrecognised deferred tax |
8.6 |
7.7 |
|
Total tax charge for the period as above |
176.3 |
105.6 |
Corporation tax assets as at 31 December 2024 totaled £18.1
million, with corporation tax liabilities of £35.0 million (2023:
£20.4 million asset and £4.9 million liabilities). Corporation tax
liabilities includes £15.4 million (2023: £nil) relating to Pillar
Two income taxes.
The UK corporation tax rate for 2024 is 25% (2023: 23.5%).
The Group are within the scope of the OECD Pillar Two model
rules which aims to ensure that large, multinational corporations
pay their fair share of tax in the countries in which they operate
by introducing a new global minimum corporate income tax rate of
15%. Under the new rules, top-up taxes can be payable either by the
UK ultimate parent company or by an overseas entity if a
jurisdiction has an effective tax rate of less than 15%, as
calculated under the rules. Legislation has been enacted in various
countries (including the United Kingdom), with the rules first
coming into effect for the Group from 1 January 2024.
A current tax expense of £15.4 million has been included in the
total tax charge for the year ended 31 December 2024, which
relates to estimated top-up taxes payable by a subsidiary
undertaking in Gibraltar, where the statutory corporate tax rate
applicable for the year ended 31 December 2024 is 13.8% (due to a
change in the rate from 12.5% to 15% from 1 July 2024). No top-up
taxes for the year ended 31 December 2024 are expected to arise in
relation to operations in other countries. The Pillar Two rules are
complex and the Group continues to monitor ongoing developments in
legislation and guidance to assess the impact.
The Group has applied the temporary mandatory exception to
recognising and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes, as provided in
the amendments to IAS 12 issued in May 2023.
11. Other Assets and Other Liabilities
11a. Intangible assets
Renewal Rights (included within Customer contracts,
relationships and brand)
Renewal rights are recognised as an intangible asset and
amortised using the reducing balance method over an expected useful
life determined as ranging between nine and fourteen years. Renewal
rights on initial recognition have been recognised at fair value
arising through an acquisition.
The carrying value of renewal rights is reviewed every six
months for evidence of impairment, with the value being written
down if any impairment exists. Impairment may be reversed if
conditions subsequently improve.
Brand (included within Customer contracts, relationships and
brand)
Brand rights are recognised as an intangible asset and amortised
using the straight line method over an expected useful life of
fifteen years. Brand rights on initial recognition have been
recognised at its fair value arising through an acquisition.
The carrying value of brand rights is reviewed every six months
for evidence of impairment, with the value being written down if
any impairment exists. Impairment may be reversed if conditions
subsequently improve.
Goodwill
All business combinations are accounted for using the
acquisition method. Goodwill has been recognised on acquisitions of
trade and assets representing a business and/or acquisition of
subsidiaries and represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets
acquired.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash generating units (CGUs)
according to business segment and is reviewed every six months for
evidence of impairment and tested annually for impairment.
|
|
Goodwill
£m |
Customer contracts, relationships and brand
£m |
Software – Internally generated
£m |
Software – Other
£m |
Total
£m |
|
At 1 January 2023 |
62.3 |
— |
136.4 |
18.9 |
217.6 |
| Additions |
— |
7.9 |
51.1 |
7.7 |
66.7 |
| Amortisation
charge |
— |
— |
(34.8) |
(5.5) |
(40.3) |
| Disposals |
— |
— |
(0.1) |
— |
(0.1) |
| Impairment |
— |
— |
(0.2) |
— |
(0.2) |
|
Foreign exchange movement & other movements |
— |
— |
(0.4) |
(0.4) |
(0.8) |
|
At 31 December 2023 |
62.3 |
7.9 |
152.0 |
20.7 |
242.9 |
| Additions |
49.8 |
44.5 |
48.8 |
3.1 |
146.2 |
| Amortisation
charge |
— |
(2.8) |
(54.5) |
(4.3) |
(61.6) |
| Disposals |
— |
— |
(0.3) |
(0.4) |
(0.7) |
| Impairment |
— |
— |
(3.5) |
(0.9) |
(4.4) |
| Transfers |
— |
— |
6.2 |
(6.2) |
— |
|
Foreign exchange movement & other movements |
— |
(0.3) |
(0.6) |
(0.5) |
(1.4) |
|
At 31 December 2024 |
112.1 |
49.3 |
148.1 |
11.5 |
321.0 |
Customer contracts, relationships and brand includes Home and
Pet renewal rights which has a net carrying value of £34.5 million
as at 31 December 2024 and an amortisation period of 9 years for
Home renewal rights and 14 years for Pet renewal rights. See note
13 for further information. Internally generated software includes
a new claims system implemented within the UK business in the year
which has a carrying amount of £33.2 million as at 31 December 2024
and a remaining amortisation period of 2.8 years.
Goodwill relates to the acquisition of Group subsidiary EUI
Limited (formerly Admiral Insurance Services Limited) in November
1999, and on the purchase of the direct Home and Pet renewal rights
from the RSA Insurance Group Limited (‘RSA’) in April 2024. The
carrying amount of goodwill as at 31 December 2024 is £112.1
million (2023: £62.3 million).
11b. Trade and other payables
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Trade payables |
52.4 |
42.3 |
| Other tax and
social security |
12.5 |
11.9 |
| Amounts owed to
co-insurers |
— |
156.9 |
| Other
payables |
34.0 |
42.5 |
|
Accruals and deferred income |
76.4 |
52.2 |
|
Total trade and other payables |
175.3 |
305.8 |
| |
|
|
| Analysis
of accruals and deferred income |
|
|
| Accruals |
48.2 |
28.3 |
|
Deferred income |
28.2 |
23.9 |
|
Total accruals and deferred income as above |
76.4 |
52.2 |
11c. Contingent liabilities
The Group’s legal entities operate in numerous tax jurisdictions
and on a regular basis are subject to review and enquiry by the
relevant tax authority.
One of the Group’s previously owned subsidiaries was subject to
a Spanish Tax Audit which concluded with the Tax Authority denying
the application of the VAT exemption relating to insurance
intermediary services. The Company has appealed this decision
via the Spanish Courts and is confident in defending its position
which is, in its view, in line with the EU Directive and is also
consistent with the way similar supplies are treated throughout
Europe. Whilst the Company is no longer part of the Admiral Group,
the contingent liability which the Company is exposed to has been
indemnified by the Admiral Group up to a cap of €24 million.
No material provisions have been made in these financial
statements in relation to the matters noted above.
The Group notes the ongoing Court of Appeal ruling relating to
non-disclosure of commission to dealers in relation to motor
finance. Prior to the Group's re-launch of motor finance lending,
all lending was through price comparison websites. The Group had no
lending through dealers and no discretionary commission structures
in place. Accordingly the Group does not have an ongoing exposure
to commission arrangements of this nature and therefore has not
recognised any contingent liability in relation to the case.
The Group continues to monitor regulatory developments,
including the Supreme Court decision which is expected later in
2025, ensuring the customer acquisition practices remain fully
aligned with legal and regulatory requirements and industry best
practices.
The Group is, from time to time, subject to threatened or actual
litigation and/or legal and/or regulatory disputes, investigations
or similar actions both in the UK and overseas. All potentially
material matters are assessed, with the assistance of external
advisors if appropriate, and in cases where it is concluded that it
is more likely than not that a payment will be made, a provision is
established to reflect the best estimate of the liability. In some
cases it will not be possible to form a view, for example if the
facts are unclear or because further time is needed to properly
assess the merits of the case or form a reliable estimate of its
financial effect. In these circumstances, specific disclosure of a
contingent liability and an estimate of its financial effect will
be made where material, unless it is not practicable to do so.
The Directors do not consider that the final outcome of any such
current case will have a material adverse effect on the Group’s
financial position, operations or cashflows, and as such, no
material provisions are currently held in relation to such
matters.
A number of the Group’s contractual arrangements with reinsurers
include features that, in certain scenarios, allow for reinsurers
to recover losses incurred to date. The overall impact of such
scenarios would not lead to an overall net economic outflow from
the Group.
12. Dividends, Earnings and Related Parties
12a. Dividends
Dividends were proposed, approved and paid as follows:
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Proposed March 2023 (52.0 pence per share, approved April 2023 and
paid June 2023) |
— |
154.9 |
| Declared August
2023 (51.0 pence per share, paid October 2023) |
— |
152.2 |
| Proposed March
2024 (52.0 pence per share, approved April 2024 and paid May
2024) |
156.2 |
— |
|
Declared August 2024 (71.0 pence per share, paid October 2024) |
213.6 |
— |
|
Total dividends |
369.8 |
307.1 |
The dividends proposed in March (approved in April) represent
the final dividends paid in respect of the 2022 and 2023 financial
years. The dividends declared in August are interim distributions
in respect of 2023 and 2024.
A 2024 final dividend of 121.0 pence per share (approximately
£366.6 million) has been proposed. Refer to the financial narrative
for further detail.
12b. Earnings per share
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Profit for the financial year after taxation attributable to equity
shareholders |
663.3 |
338.0 |
|
Weighted average number of shares – basic |
306,304,676 |
303,989,170 |
|
Unadjusted earnings per share – basic |
216.6p |
111.2p |
|
Weighted average number of shares – diluted |
306,304,676 |
305,052,941 |
|
Unadjusted earnings per share – diluted |
216.6p |
110.8p |
The difference between the basic and diluted number of shares at
the end of 2024 (being nil; 2023: 1,063,771) relates to awards
committed, but not yet issued under the Group’s share schemes.
Refer to note 9 for further detail.
12c. Share capital
|
|
31 December 2024
£m |
31 December 2023
£m |
|
Authorised |
|
|
|
500,000,00 ordinary shares of 0.1 pence |
0.5 |
0.5 |
|
Issued, called up and fully paid |
|
|
|
306,304,676 ordinary shares of 0.1 pence |
0.3 |
0.3 |
12d. Related party transactions
The Board considers that only the Executive and Non-Executive
Directors of Admiral Group plc are key management personnel.
Further detail on the remuneration and shareholdings of key
management personnel will be set out in the Directors’ Remuneration
Report in the Group’s 2024 Annual Report.
12e. Post balance sheet events
During February 2025, the Group entered into an agreement with a
third party which resulted in the sale of back book loans with a
total carrying value of around £150 million. This agreement, signed
after the reporting date, provides for the transfer of these loans
to the counterparty in accordance with the agreed terms.
Accordingly, no adjustment has been made to the financial
statements for the year ended 31 December 2024.
The financial impact of the sale, including any gain arising
from the transaction, will be recognised in the Group’s financial
statements for the year ending 31 December 2025.
In early March 2025, Admiral entered into a memorandum of
understanding with a counterparty with a view to signing a purchase
agreement to sell Elephant. The agreement, if signed, would be
subject to regulatory approval.
No further events have occurred since the reporting date that
materially impact these financial statements.
13. Business combinations
As at 2nd April 2024, Admiral successfully completed the
purchase of the direct Home and Pet renewal rights from the RSA
Insurance Group Limited (‘RSA’), a general insurer based in the UK.
The transaction includes the renewal rights, the “More Than” brand
and the transfer of more than 280 people but does not include
liabilities relating to existing policies which will remain with
RSA. The acquisition is closely aligned to Admiral’s strategy to
diversify its product offering and build multi-product customer
relationships in its core markets. It will strengthen Admiral’s
home business and accelerate its direct pet proposition launched
in 2022.
The consideration included an initial cash payment of £82.5
million with contingent consideration of £32.5 million. The
contingent consideration has a range of £nil to a maximum of £32.5
million dependent on the number of policies successfully migrated
to Admiral. The fair value of the contingent consideration has a
value of £2.7 million and is based on a probability weighted
scenario including an element of discounting relating to the timing
of payments.
The amounts recognised in respect of the identifiable assets
acquired at at the acquisition date are as set out in the table
below:
| |
£m |
| Total
consideration |
|
| Amount settled in
cash |
82.5 |
|
Fair value of contingent consideration |
2.7 |
|
Total consideration |
85.2 |
|
|
|
|
Identifiable assets acquired |
|
| Renewal
Rights |
36.4 |
|
Brand |
8.1 |
|
Total identifiable assets acquired |
44.5 |
|
|
|
| Purchase
price recognised as Goodwill |
40.7 |
|
Additional Goodwill recognised on Deferred Tax Liability |
9.1 |
|
Total Goodwill recognised on acquisition |
49.8 |
A deferred tax liability has been recognised of £9.1million
based upon a tax base cost of £36.4 million representing the fair
value of the renewal rights. A corresponding increase in
goodwill of £9.1 million is recognised as a result. The goodwill
and brand are not considered deductible for tax purposes. The
deferred tax liability will unwind in line with the amortisation of
the renewal rights acquired.
The recognition of goodwill reflects the synergies arising
through the transaction including operational, capital, pricing and
risk synergies, as well as the attributable value to the workforce
in place.
The policies in relation to the acquisition started renewing in
July 2024. As at 31 December 2024, transaction costs of £6.5
million have been recognised within operating expenses, along with
integration costs of £11.9 million within insurance expenses. The
impact of the acquisition if it had happened as at the start of the
reporting period is impractical for disclosure given the nature of
the trade and assets acquired for integration.
The acquisition contributed £42.3 million of total premiums
written and £9.9 million of insurance revenue, and £3.8 million of
expenses for the period between the date of acquisition and the
reporting date. Due to the acquired renewal rights being fully
integrated into the existing business lines, it is impracticable to
separately identify the specific profit contributions.
14. Reconciliation of turnover to reported insurance
premium and other revenue as per the financial
statements
The following table reconciles turnover, a significant Key
Performance Indicators (KPIs) and non-GAAP measure presented within
the Strategic Report, to insurance revenue, as presented in note 4
to the financial statements.
|
|
Consolidated Financial Statement Note |
31 December 2024
£m |
31 December 2023
£m |
| Insurance
revenue related movement in liability for remaining
coverage |
5b |
4,776.2 |
3,486.1 |
| Less other
insurance revenue |
|
(281.7) |
(202.8) |
| Insurance
premium revenue |
|
4,494.5 |
3,283.3 |
| Movement in
unearned premium and cancellations |
|
346.7 |
528.3 |
| Premiums written
after coinsurance |
|
4,841.2 |
3,811.6 |
|
Co-insurer share of written premiums |
|
778.4 |
577.8 |
|
Total premiums written |
|
5,619.6 |
4,389.4 |
| Other insurance
revenue |
5b |
281.7 |
202.8 |
| Other
revenue |
8 |
136.3 |
127.2 |
|
Interest income on loans to customers |
|
109.1 |
92.1 |
|
Turnover as per note 4 of financial
statements |
|
6,146.7 |
4,811.5 |
APPENDIX 1 TO THE GROUP FINANCIAL STATEMENTS
(unaudited)
1a: Reconciliation of reported loss and expense ratios:
Group
|
|
|
|
|
31 December 2024 |
|
£m |
Consolidated Financial Statement Note |
Core product |
Ancillary income |
Total gross |
Total, net of XoL reinsurance |
|
Insurance premium revenue |
|
4,329.9 |
164.6 |
4,494.5 |
4,329.4 |
|
Administration fees, instalment income and non-separable ancillary
commission |
|
— |
281.7 |
281.7 |
281.7 |
|
Insurance revenue (A) |
5b/5d |
4,329.9 |
446.3 |
4,776.2 |
4,611.1 |
|
Insurance expenses (B) |
5c |
(951.4) |
(64.5) |
(1,015.9) |
(1,015.9) |
| Claims incurred
(C) |
5c/5d |
(2,976.9) |
(61.1) |
(3,038.0) |
(2,980.7) |
|
Claims releases (D) |
5c/5d |
556.8 |
3.2 |
559.9 |
425.1 |
|
Claims incurred and releases excluding Ogden1 (E) |
|
|
|
|
(2,661.7) |
|
Quota share reinsurance result2 4 |
|
|
|
|
(294.1) |
|
Onerous loss component movement3 |
|
|
|
|
1.5 |
|
Underwriting result (F) |
|
|
|
|
747.0 |
|
Net share scheme costs4 |
|
|
|
|
(36.7) |
|
Insurance service result |
|
|
|
|
710.3 |
|
Reported loss ratio ((C+D)/A) |
|
|
|
|
55.4% |
|
Reported loss ratio excluding
Ogden1
(E/A) |
|
|
|
|
57.7% |
|
Reported expense ratio (B/A) |
|
|
|
|
22.0% |
|
Insurance service margin (F/A) |
|
|
|
|
16.2% |
|
|
|
|
|
31 December 2023 |
|
£m |
Consolidated Financial Statement Note |
Core product |
Ancillary income |
Total gross |
Total, net of XoL reinsurance |
|
Insurance premium revenue |
|
3,152.3 |
131.0 |
3,283.3 |
3,170.6 |
|
Administration fees, instalment income and non-separable ancillary
commission |
|
— |
202.8 |
202.8 |
202.8 |
|
Insurance revenue (A) |
5b/5d |
3,152.3 |
333.8 |
3,486.1 |
3,373.4 |
|
Insurance expenses (B) |
5c |
(795.2) |
(41.6) |
(836.8) |
(836.8) |
| Claims incurred
(C) |
5c/5d |
(2,624.6) |
(40.5) |
(2,665.1) |
(2,605.8) |
| Claims releases
(D) |
5c/5d |
440.6 |
— |
440.6 |
447.3 |
| Quota share
reinsurance result2 4 |
|
|
|
|
(40.4) |
|
Onerous loss component movement3 |
|
|
|
|
4.9 |
|
Underwriting result (E) |
|
|
|
|
342.6 |
|
Net share scheme costs4 |
|
|
|
|
(36.8) |
|
Insurance service result |
|
|
|
|
305.8 |
|
Reported loss ratio ((C+D)/A) |
|
|
|
|
63.9% |
|
Reported expense ratio (B/A) |
|
|
|
|
24.8% |
|
Insurance service margin (E/A) |
|
|
|
|
10.2% |
1 Excludes benefit from the Ogden discount rate
change
2 Quota share reinsurance result excludes quota share
reinsurers’ share of share scheme costs and movement in onerous
loss-recovery component
3 Onerous loss component movement is shown net of all
reinsurance
4 Net share scheme costs of £36.7 million (2023: £36.8
million), being gross costs of £58.6 million (2023: £55.3 million,
see note 5c) less reinsurers’ share of share scheme costs of £21.9
million (2023: £18.5 million) are excluded from the underwriting
result.
1b. Reconciliation of reported loss and expense ratios:
UK Motor
|
|
|
|
|
|
31 December 2024 |
|
£m |
Consolidated Financial Statement Note |
Core product |
Ancillary income1 |
Total gross |
Total, net of XoL reinsurance |
Core product, net of XoL |
|
Total premiums written |
|
4,006.6 |
151.1 |
4,157.7 |
4,033.3 |
3,882.2 |
|
Gross premiums written |
|
3,234.1 |
151.1 |
3,385.2 |
3,284.7 |
3,133.6 |
|
Insurance premium revenue |
|
3,020.7 |
139.8 |
3,160.5 |
3,062.4 |
2,922.5 |
|
Instalment income |
|
— |
155.9 |
155.9 |
155.9 |
— |
|
Administration fees & non-separable ancillary commission |
|
— |
53.1 |
53.1 |
53.1 |
— |
|
Insurance revenue (A) |
5b/5d |
3,020.7 |
348.8 |
3,369.5 |
3,271.4 |
2,922.5 |
| Insurance expenses
(B) |
5c |
(530.9) |
(55.9) |
(586.8) |
(586.8) |
(530.9) |
|
Claims incurred (C) |
5c/5d |
(2,051.5) |
(55.6) |
(2,107.2) |
(2,078.1) |
(2,022.5) |
|
Claims incurred excluding Ogden (D) |
|
(2,078.5) |
(55.6) |
(2,134.1) |
(2,105.1) |
(2,049.5) |
|
Claims releases (E) |
5c/5d |
493.4 |
2.7 |
496.1 |
374.6 |
371.9 |
|
Claims releases excluding Ogden (F) |
|
414.2 |
2.7 |
416.9 |
295.4 |
292.7 |
|
Insurance service result, gross of quota share
reinsurance |
|
931.7 |
240.0 |
1,171.7 |
981.1 |
741.0 |
| Quota share
reinsurance result2 |
|
|
|
|
(228.8) |
(228.8) |
|
Onerous loss component movement |
|
|
|
|
1.1 |
1.1 |
|
Underwriting result (G) |
|
|
|
|
753.4 |
513.3 |
|
Current period loss ratio (C/A) |
|
|
|
|
63.5% |
69.2% |
|
Claims releases (E/A) |
|
|
|
|
(11.4)% |
(12.7)% |
|
Reported loss ratio ((C+E)/A) |
|
|
|
|
52.1% |
56.5% |
|
Reported expense ratio (B/A) |
|
|
|
|
17.9% |
18.2% |
|
Insurance service margin (G/A) |
|
|
|
|
23.0% |
17.6% |
Current period loss ratio excluding
Ogden (D/A) |
|
|
|
|
64.3% |
70.1% |
|
Claims releases excluding Ogden (F/A) |
|
|
|
|
(9.0)% |
(10.0)% |
Reported loss ratio excluding
Ogden ((D+F)/A) |
|
|
|
|
55.3% |
60.1% |
|
|
|
|
|
|
31 December 2023 |
|
£m |
Consolidated Financial Statement Note |
Core product |
Ancillary income1 |
Total gross |
Total, net of XoL reinsurance |
Core product, net of XoL |
|
Total premiums written |
|
3,004.3 |
113.9 |
3,118.2 |
3,016.8 |
2,903.0 |
|
Gross premiums written |
|
2,453.9 |
113.9 |
2,567.8 |
2,485.0 |
2,371.1 |
|
Insurance premium revenue |
|
2,007.6 |
107.8 |
2,115.4 |
2,053.8 |
1,946.0 |
|
Instalment income |
|
— |
99.0 |
99.0 |
99.0 |
— |
| Administration fees
non-separable ancillary commission |
|
— |
35.8 |
35.8 |
35.8 |
— |
| Insurance revenue
(A) |
5b/5d |
2,007.6 |
242.6 |
2,250.2 |
2,188.6 |
1,946.0 |
| Insurance expenses
(B) |
5c |
(416.8) |
(34.4) |
(451.2) |
(451.2) |
(416.8) |
| Claims incurred
(C) |
5c/5d |
(1,719.9) |
(35.6) |
(1,755.5) |
(1,729.0) |
(1,693.4) |
|
Claims releases (D) |
5c/5d |
406.9 |
— |
406.9 |
392.8 |
392.8 |
|
Insurance service result, gross of quota share
reinsurance |
|
277.8 |
172.6 |
450.4 |
401.2 |
228.6 |
| Quota share
reinsurance result2 |
|
|
|
|
(16.8) |
(16.8) |
|
Onerous loss component movement |
|
|
|
|
4.1 |
4.1 |
|
Underwriting result (E) |
|
|
|
|
388.5 |
215.9 |
|
Current period loss ratio (C/A) |
|
|
|
|
79.0% |
87.0% |
|
Claims releases (D/A) |
|
|
|
|
(17.9)% |
(20.2)% |
|
Reported loss ratio ((C+D)/A) |
|
|
|
|
61.1% |
66.8% |
|
Reported expense ratio (B/A) |
|
|
|
|
20.6% |
21.4% |
|
Insurance service margin (E/A) |
|
|
|
|
17.8% |
11.1% |
1 Ancillary income combined with other net income is
presented as part of UK motor insurance other revenue in reporting
“Other revenue per vehicle”. Total other revenue was £321.8 million
(2023: £247.3 million).
2 Net share scheme costs of £29.6 million (2023: £32.1
million), being gross costs of £40.7 million (2023: £43.2 million,
see note 5c) less reinsurers’ share of share scheme costs of £11.1
million (2023: £11.1 million) are excluded from the underwriting
result.
1c. Reconciliation of reported loss and expense ratios:
UK Non-Motor
|
|
31 December 2024 |
|
£m |
Consolidated Financial Statement Note |
UK Household |
UK Travel & Pet |
UK Non-Motor |
UK Household, net of XoL reinsurance |
|
Insurance revenue (A) |
5b/5d |
399.6 |
104.3 |
503.9 |
376.4 |
|
Insurance expenses (B) |
5c |
(102.9) |
(56.0) |
(158.9) |
(102.9) |
|
Claims incurred in the period (C) |
5c/5d |
(233.7) |
(64.5) |
(298.2) |
(225.7) |
|
Changes in liabilities for incurred claims (releases) (D) |
5c/5d |
46.3 |
5.1 |
51.4 |
37.0 |
|
Insurance service result, gross of quota share reinsurance |
|
109.3 |
(11.1) |
98.2 |
84.8 |
| Quota share
reinsurance result1 |
|
|
|
|
(61.2) |
|
Onerous loss component movement |
|
|
|
|
— |
|
Underwriting result (E) |
|
|
|
|
23.6 |
|
Current period loss ratio (C/A) |
|
|
|
|
60.0% |
|
Claims releases (D/A) |
|
|
|
|
(9.9)% |
|
Reported loss ratio ((C+D)/A) |
|
|
|
|
50.1% |
|
Reported expense ratio (B/A) |
|
|
|
|
27.3% |
|
Insurance service margin (E/A) |
|
|
|
|
6.3% |
|
|
31 December 2023 |
|
£m |
Consolidated Financial Statement Note |
UK Household |
UK Travel & Pet |
UK Non-Motor |
UK Household, net of XoL reinsurance |
|
Insurance revenue (A) |
5b/5d |
292.8 |
53.8 |
346.6 |
275.3 |
|
Insurance expenses (B) |
5c |
(80.9) |
(27.4) |
(108.3) |
(80.9) |
|
Claims incurred in the period (C) |
5c/5d |
(223.5) |
(31.4) |
(254.9) |
(199.8) |
|
Changes in liabilities for incurred claims (releases) (D) |
5c/5d |
8.3 |
0.8 |
9.1 |
6.4 |
|
Insurance service result, gross of quota share reinsurance |
|
(3.3) |
(4.2) |
(7.5) |
1.0 |
| Quota share
reinsurance result1 |
|
|
|
|
(1.4) |
|
Onerous loss component movement |
|
|
|
|
— |
|
Underwriting result (E) |
|
|
|
|
(0.4) |
|
Current period loss ratio (C/A) |
|
|
|
|
72.6% |
|
Claims releases (D/A) |
|
|
|
|
(2.4)% |
|
Reported loss ratio ((C+D)/A) |
|
|
|
|
70.2% |
|
Reported expense ratio (B/A) |
|
|
|
|
29.4% |
|
Insurance service margin (E/A) |
|
|
|
|
(0.1)% |
1Net share scheme costs of £1.6 million (2023: £0.7
million), being gross costs of £5.4 million (2023: £2.4 million,
see note 5c) less reinsurers’ share of share scheme costs of £3.8
million (2023: £1.7 million) are excluded from the underwriting
result.
1d. Reconciliation of reported loss and expense ratios:
International
|
|
31 December 2024 |
|
£m |
Consolidated Financial Statement Note |
Total gross |
Total, net of XoL reinsurance |
|
Insurance revenue (A) |
5b/5d |
829.5 |
794.2 |
| Insurance expenses
(B) |
5c |
(236.5) |
(236.5) |
|
Claims incurred in the period less changes in liabilities for
incurred claims (C) |
5c/5d |
(572.6) |
(564.5) |
|
Insurance service result, gross of quota share reinsurance |
|
20.4 |
(6.8) |
| Quota share
reinsurance result1 |
|
|
(4.1) |
|
Onerous loss component movement |
|
|
0.4 |
|
Underwriting result (D) |
|
|
(10.5) |
|
Reported loss ratio (C/A) |
|
|
71.1% |
|
Reported expense ratio (B/A) |
|
|
29.8% |
|
Insurance service margin (D/A) |
|
|
(1.3)% |
|
|
31 December 2023 |
|
£m |
Consolidated Financial Statement Note |
Total gross |
Total, net of XoL reinsurance |
|
Insurance revenue (A) |
5b/5d |
842.6 |
811.8 |
|
Insurance expenses (B) |
5c |
(249.4) |
(249.4) |
|
Claims incurred in the period less changes in liabilities for
incurred claims (C) |
5c/5d |
(596.9) |
(565.2) |
|
Insurance service result, gross of quota share reinsurance |
|
(3.7) |
(2.8) |
| Quota share
reinsurance result1 |
|
|
(22.1) |
|
Onerous loss component movement |
|
|
0.6 |
|
Underwriting result (D) |
|
|
(24.3) |
|
Reported loss ratio (C/A) |
|
|
69.6% |
|
Reported expense ratio (B/A) |
|
|
30.7% |
|
Insurance service margin (D/A) |
|
|
(3.0)% |
1 Net share scheme costs of £4.3 million (2023: £3.2
million), being gross costs of £11.1 million (2023: £8.9 million,
see note 5c) less reinsurers’ share of share scheme costs of £6.8
million (2023: £5.7 million) are excluded from the underwriting
result.
APPENDIX 2 TO THE GROUP FINANCIAL STATEMENTS
(unaudited)
The following table of non-GAAP measures illustrates the
sensitivity of profit and loss (before tax) arising from the impact
of 100 and 200 basis point increases and decreases in interest
rates over the financial year 2024.
2a. Additional sensitivities to interest rate
risk
|
|
31 December 2024 |
|
|
Insurance contract liabilities and reinsurance contract
assets |
Cash and investments |
|
£m |
Impact on profit before tax gross of
reinsurance |
Impact on profit before tax net of
reinsurance |
Impact on profit before tax |
|
Increase of 100 basis points |
25.9 |
25.9 |
19.9 |
| Decrease of 100
basis points |
(28.5) |
(28.5) |
(19.9) |
| Increase of 200
basis points |
49.8 |
49.8 |
39.8 |
|
Decrease of 200 basis points |
(60.6) |
(60.6) |
(39.8) |
Changes impact profit before tax as follows:
- Interest revenue and other finance
costs on floating-rate financial instruments (assuming that
interest rates had varied by 100 basis points during the year)
- Interest revenue and other finance
costs on floating-rate financial instruments (assuming that
interest rates had varied by 100 basis points during the year)
- Changes in the discounted fulfilment
cashflows of onerous contracts
- Insurance claims expenses,
reinsurance claims recoveries and finance income or expenses
recognised in profit or loss, as a result of discounting future
cashflows at a revised locked-in rate for the current period (i.e.
assuming that interest rates had varied by 100 basis points
during the year).
Glossary
Alternative Performance Measures
Throughout this report, the Group uses a number of Alternative
Performance Measures (APMs); measures that are not required or
commonly reported under International Financial Reporting
Standards, the Generally Accepted Accounting Principles (GAAP)
under which the Group prepares its financial statements.
These APMs are used by the Group, alongside GAAP measures, for
both internal performance analysis and to help shareholders and
other users of the Annual Report and financial statements to better
understand the Group’s performance in the period in comparison to
previous periods and the Group’s competitors.
The table below defines and explains the primary APMs used in
this report. Financial APMs are usually derived from financial
statement items and are calculated using consistent accounting
policies to those applied in the financial statements, unless
otherwise stated. Non-financial KPIs incorporate information that
cannot be derived from the financial statements but provide further
insight into the performance and financial position of the
Group.
APMs may not necessarily be defined in a consistent manner to
similar APMs used by the Group’s competitors. They should be
considered as a supplement rather than a substitute for GAAP
measures.
|
Turnover |
Turnover is defined as total premiums written (as below), Other
insurance revenue, Other revenue and interest income from Admiral
Money. It is reconciled to financial statement line items in note
14 to the financial statements.
This measure has been presented by the Group in every Annual Report
since it became a listed Group in 2004. It reflects the total value
of the revenue generated by the Group and analysis of this measure
over time provides a clear indication of the size and growth of the
Group.
The measure was developed as a result of the Group’s business
model. The UK Car insurance business has historically shared a
significant proportion of the risks with Munich Re, a third party
reinsurance Group, through a co-insurance arrangement, with the
arrangement subsequently being replicated in some of the Group’s
international insurance operations. Premiums and claims accruing to
the external co-insurer are not reflected in the Group’s income
statement and therefore presentation of this metric enables users
of the Annual Report to see the scale of the Group’s insurance
operations in a way not possible from taking the income statement
in isolation. |
|
Total Premiums Written |
Total premiums written are the total forecast premiums, net of
forecast cancellations written in the underwriting year within the
Group, including co-insurance. It is reconciled to financial
statement line items in note 14 to the financial statements.
This measure has been presented by the Group in every Annual Report
since it became a listed Group in 2004. It reflects the total
premiums written by the Group’s insurance intermediaries and
analysis of this measure over time provides a clear indication of
the growth in premiums, irrespective of how co-insurance agreements
have changed over time.
The reasons for presenting this measure are consistent with that
for the Turnover APM noted above. |
|
Underwriting result (profit or loss) |
For each insurance business an underwriting result is presented.
This shows the insurance segment result before tax excluding
investment income, finance expenses, co-insurer profit commission
and other net income. It excludes both gross share scheme costs and
any assumed quota share reinsurance recoveries on those share
scheme costs.
The calculations and compositions of the underwriting result are
presented within Appendix 1 to these financial
statements. |
|
Loss Ratio |
Loss ratios are reported as follows:
Reported loss ratios are expressed as a percentage, of claims
incurred, on a gross basis net of XoL reinsurance, divided by
insurance revenue net of XoL reinsurance premiums ceded.
The reported loss ratios use the total claims, and earned premium
and related income (instalment income, administration fees and
ancillary income where it is highly correlated to the core
product). It is understood that this is consistent with the
approach taken by peers, and it is considered to reflect the true
profitability of products sold.
Core product loss ratios use the total claims and earned premiums
for the core product only (insurance premiums excluding instalment
income, administration fees & ancillary income).
This measure is more consistent with that used previously, and
are reflective of the performance of the core product in a line of
business.
The calculations and compositions of the loss ratios are presented
within Appendix 1 to these financial statements. |
|
Expense Ratio |
Expense ratios are reported as follows:
Reported expense ratios are expressed as a percentage, of expenses
incurred, on a gross basis excluding share scheme costs, divided by
insurance revenue net of XoL reinsurance premiums ceded.The
reported expense ratios use the total expenses (excluding share
scheme costs), and earned premium and related income (instalment
income, administration fees and ancillary income where it is highly
correlated to the core product). It is understood that this is
consistent with the approach taken by peers, and it is considered
to reflect the true profitability of products sold.
Core product expense ratios use the total expenses (excluding share
scheme costs) and earned premiums for the core product only
(insurance premiums excluding instalment income, administration
fees & ancillary income). This measure is more consistent with
that used previously, and are reflective of the performance of the
core product in a line of business.
Written expense ratios are calculated using total expenses
(excluding share scheme costs) and written premiums, net of
cancellation provision, for the core product only.
The calculations of the reported expense ratios are presented
within Appendix 1 to the financial statements. |
|
Combined Ratio |
Combined ratios are the sum of the loss and expense ratios as
defined above. Explanation of these figures is noted above. |
|
Insurance service margin |
This is the reported insurance segment underwriting result, divided
by insurance revenue net of excess of loss premiums ceded.
Reconciliation of the calculations are provided in Appendix 1. |
|
Quota share result |
The total result (ceded premiums minus ceded recoveries) from
contractual quota share arrangements, excluding the quota share
reinsurer’s share of share scheme expenses, finance expenses and
onerous loss component. Reconciliation of the calculations are
provided in Appendix 1. |
|
Segment result |
The profit or loss before tax reported for individual business
segments, which exclude net share scheme costs and other central
expenses. |
|
Return on Equity |
Return on equity is calculated as profit after tax for the period
attributable to equity holders of the Group divided by the average
total equity attributable to equity holders of the Group in the
year. This average is determined by dividing the opening and
closing positions for the year by two. It excludes the impact
of discontinued operations. |
|
Group Customers |
Group customer numbers reflect the total number of cars, vans,
households and pets on cover at the end of the year, across
the Group, and the total number of travel insurance, Admiral Money
and Admiral Business customers.
This measure has been presented by the Group in every Annual Report
since it became a listed Group in 2004. It reflects the size of the
Group’s customer base and analysis of this measure over time
provides a clear indication of the growth. It is also a useful
indicator of the growing significance to the Group of the different
lines of business and geographic regions.
The measure has been restated from 2022 onwards to exclude Veygo
policies, given the significant fluctuations that can arise at a
point in time as a result of the short-term nature of the
product. |
|
Solvency Ratio |
The Solvency UK regulatory framework requires insurers to hold
funds in excess of the Solvency Capital Requirement (SCR). Own
funds are available capital resources determined under Solvency UK.
The SCR is calculated at a Group level using the standard formula,
to reflect the cost of mitigating the risk of insolvency to a 99.5%
confidence level over a one-year time horizon – equivalent to a 1
in 200 year event – against financial and non-financial
shocks. |
Additional Terminology
There are many other terms used in this report that are specific
to the Group or the markets in which it operates. These are defined
as follows:
|
Accident year |
The year in which an accident occurs. Claims incurred may be
presented on an accident year basis or an underwriting year basis,
the latter sees the claims attach to the year in which the
insurance policy incepted. |
|
Actuarial best estimate |
The probability-weighted average of all future claims and cost
scenarios calculated using historical data, actuarial methods and
judgement. |
|
ASHE |
‘Annual Survey of Hours and Earnings’ – a statistical index that is
typically used for calculating the inflation of annual payment
amounts under Periodic Payment Order (PPO) claims settlements. |
|
Claims reserves |
A monetary amount set aside for the future payment of incurred
claims that have not yet been settled, thus representing a balance
sheet liability. |
|
Co-insurance |
An arrangement in which two or more insurance companies agree to
underwrite insurance business on a specified portfolio in specified
proportions. Each co-insurer is directly liable to the policyholder
for their proportional share. |
|
Commutation |
An agreement between a ceding insurer and the reinsurer that
provides for the valuation, payment, and complete discharge of all
obligations between the parties under a particular reinsurance
contract.
The Group typically commutes UK motor insurance quota share
contracts after 24-36 months from the start of an underwriting year
where it makes economic sense to do so. |
|
Earnings per share |
Earnings per share represents the profit after tax attributable to
equity shareholders, divided by the weighted average number of
basic shares. |
|
Effective Tax Rate |
Effective tax rate is defined as the approximate tax rate derived
from dividing the tax charge going through the income statement by
the Group’s profit before tax. It is a measure historically
presented by the Group and enables users to see how the tax cost
incurred by the Group compares over time and to current corporation
tax rates. |
|
EIOPA |
European Insurance and Occupational Pensions Authority: EIOPA is
the European supervisory authority for occupational pensions and
insurance. |
|
Expected credit loss (ECL) |
Expected Credit Loss (ECL) is the probability-weighted estimate of
credit losses over the expected life of a Financial
Instrument. |
|
Insurance market cycle |
The tendency for the insurance market to swing between highs and
lows of profitability over time, with the potential to influence
premium rates (also known as the “underwriting cycle”). |
|
Claims net of XoL reinsurance |
The cost of claims incurred in the period, less any claims costs
recovered via salvage and subrogation arrangements or under XoL
reinsurance contracts. It includes both claims payments and
movements in claims reserves. |
|
Excess of Loss (‘XoL’) reinsurance |
Contractual arrangements whereby the Group transfers part or all of
the insurance risk accepted to another insurer on an excess of loss
(‘XoL’) basis (full reinsurance for claims over an agreed
value). |
|
Insurance premium revenue |
Insurance premium revenue reflects the expected premium receipts
allocated to the period based on the passage of time, adjusted for
seasonality if required. It excludes “Other insurance revenue” as
defined below. |
|
Insurance premium revenue net of XoL |
Insurance premium revenue less the ceded XoL reinsurance earned in
the period. |
|
Other Insurance revenue |
Insurance revenue minus insurance premium revenue as defined above.
Other insurance revenue is comprised of revenue that is considered
non-separable from the core insurance product sold and therefore
under IFRS 17 is reported within insurance revenue. For the Group,
this is typically the instalment income, administration fees and
any other non-separable income related to the Group’s retained
share of the underwritten products. |
|
Net promotor score |
NPS is currently measured based on a subset of customer responding
to a single question: On a scale of 0-10 (10 being the best score),
how likely would you recommend our Company to a friend, family or
colleague through phone, online or email. Answers are then placed
in 3 groups; Detractors: scores ranging from 0 to 6;
Passives/neutrals: scores ranging from 7 to 8; Promoters: scores
ranging from 9 to 10 and the final NPS score is : % of promoters -
% of detractors |
|
Ogden discount rate |
The discount rate used in calculation of personal injury claims
settlements in the UK. |
|
Periodic Payment Order (PPO) |
A compensation award as part of a claims settlement that involves
making a series of annual payments to a claimant over their
remaining life to cover the costs of the care they will
require. |
|
Premium |
A series of payments are made by the policyholder, typically
monthly or annually, for part of or all of the duration of the
contract. Written premium refers to the total amount the
policyholder has contracted for, whereas earned premium refers to
the recognition of this premium over the life of the contract. |
|
Profit commission |
A clause found in some reinsurance and co-insurance agreements that
provides for profit sharing. Co-insurer profit commission is
presented separately on the income statement whilst reinsurer
profit commissions are presented within the reinsurance result, as
a part of any recovery for incurred claims. |
|
Quota share reinsurance result |
Admiral’s quota share (QS) reinsurance result reflects the net
movement on ceded premiums, reinsurer margins and expected
recoveries (claims and expenses, excluding share scheme charges)
for underwriting years on which quota share reinsurance is in
place. |
|
Regulatory Solvency Capital Requirement (‘SCR’) |
The Group’s Regulatory Solvency Capital Requirement (SCR) is an
amount of capital that it should hold in addition to its
liabilities in order to provide a cushion against unexpected
events. In line with the rulebook of the Group’s regulator, the
PRA, the Group’s SCR is calculated using the Solvency II Standard
Formula, and includes a fixed capital add-on to reflect limitations
in the Standard Formula with respect to Admiral’s risk profile
(predominately in respect of co-and reinsurance profit commission
arrangements and risks relating to Periodic Payment Orders (PPOs).
The Group’s current fixed capital add-on of £24 million was
approved by the PRA during 2023.
The Group is required to maintain eligible Own Funds ( Solvency II
capital) equal to at least 100% of the Group SCR. Both eligible Own
Funds and the Group SCR are reported to the PRA on a quarterly
basis and reported publicly on an annual basis in the Group’s
Solvency and Financial Condition Report.
Admiral separately calculates a ‘dynamic’ capital add-on and has
used this this to report a solvency capital requirement and
solvency ratio at the date of this report. A reconciliation between
the regulatory solvency ratio and that calculated on a dynamic
basis is included in note 3 to the Group financial statements. |
|
Reinsurance |
Contractual arrangements whereby the Group transfers part or all of
the insurance risk accepted to another insurer. This can be on a
quota share basis (a percentage share of premiums, claims and
expenses) or an excess of loss (‘XoL’) basis (full reinsurance for
claims over an agreed value). |
|
Scaled Agile |
Scaled Agile is a framework that uses a set of organisational and
workflow patterns for implementing agile practices at an enterprise
scale. Scaled agile at Admiral represents the ability to drive
agile at the team level whilst applying the same sustainable
principles of the group. |
|
Securitisation |
A process by which a group of assets, usually loans, is aggregated
into a pool, which is used to back the issuance of new securities.
A Company transfer assets to a special purpose entity (SPE) which
then issues securities backed by the assets. |
|
Solvency ratio |
A ratio of an entity’s Solvency II capital (referred to as Own
Funds) to Solvency Capital Requirement. Unless otherwise stated,
Group solvency ratios include a reduction to Own Funds for a
foreseeable dividend (i.e. dividends relating to the relevant
financial period that will be paid after the balance sheet
date) |
|
Special Purpose Entity (SPE) |
An entity that is created to accomplish a narrow and well-defined
objective. There are specific restrictions or limited around
ongoing activities. The Group uses an SPE set up under a
securitisation programme. |
|
Ultimate loss ratio |
A projected actuarial best estimate loss ratio for a particular
accident year or underwriting year. |
|
Underwriting year |
The year in which an insurance policy was incepted. |
|
Underwriting year basis |
Also referred to as the written basis. Claims incurred are
allocated to the calendar year in which the policy was
underwritten. Underwriting year basis results are calculated on the
whole account (including co-insurance and reinsurance shares) and
include all premiums, claims, expenses incurred and other revenue
(for example instalment income and commission income relating to
the sale of products that are ancillary to the main insurance
policy) relating to policies incepting in the relevant underwriting
year. |
|
Written/Earned basis |
An insurance policy can be written in one calendar year but earned
over a subsequent calendar year. |
Admiral (LSE:ADM)
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Admiral (LSE:ADM)
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