Admiral Group plc
2024 Half Year Results
15th August 2024

Overview
Milena Mondini de Focatiis, Group CEOGroup Financials
Geraint Jones, Group CFO

UK Insurance
Cristina Nestares, UK Insurance CEO

International Insurance
Costantino Moretti, Head of International Insurance

Wrap-upMilena Mondini de Focatiis, Group CEO

Q&A
All

1

At Admiral, we have been putting our customers and people first since 1993 and it has made us the business we are today

Overview
Milena Mondini de Focatiis, Group CEO
2

Growth in profits, revenues and customers with strong capital position
•

•
•
•

Sustained growth and improved margins from disciplined portfolio
management
Main driver UK Motor, leveraging favourable market positioning
Improved results on international business with a different mix
Positive momentum in Beyond Motor diversification•

Prudently reserved and strongly capitalised•

Well-positioned moving into H2+43%Group turnover £3.2bn+12%Group customers 10.5m+32%Group pre-tax profit £310m-9pts
Improved group COR 80%

198%
Group SII ratio

3Strong results in UK motor; different mix in International

International

UK Motor

Highlights• Substantial turnover growth, driven by higher
average premiums and customer growth• Leveraged enhanced competitiveness from earlypricing response and sustained discipline• Good performance in France. US profitable.
• Italy results negatively impacted by challenging
market and Milan Court BI rate update• Progressing on new distribution channels andeconomies of scale

Looking ahead> 50%
Turnover growth-11%
NB market1 prices in H1£3m
US pre-tax profit+16%
Italian BI settlement
reference values2(1) Confused 2024 Q2 market average NB premium tracker (2) Change to Milano Court tables in Italy: Bodily injury rating tables re compensation associated with a given degree of permanent disability• Inflation and prices reducing, market
increasingly competitive• Expecting slower rate of growth in
H2• Continued focus on margins, expecting
positive contribution from all businesses• US: considering the right outcome; will
update as soon as possible

4

Steady progress beyond Motor in the UK
UK Household, Admiral Money and UK Travel
Customers and TurnoverPre-tax profit

2.8m

+17%

£310m

+37%

2.4m
1.9m
£226m
£164m

• Nearly 30% of total group customers at H1,+40% 2014-24 CAGR
• c.10% of group total turnover• More established businesses Household,
Admiral Money and Travel delivered £18m
profit in H1, 6% margin on turnover• UK Pet: customer numbers x3 vs. HY23
• More Than acquisition completed; expected
to strengthen Household and accelerate Pet

HY22

HY23

Turnover

HY24

Customers• Focus on transferring core strengths into new
businesses, lifetime value and improving
customer experience100k; Turnover x2.5 vs.
HY23
5Continued progress on our strategy
Business diversification

Motor evolution

Increase customer engagement and business resilience,enriching our proposition beyond motor

Evolve our propositions for changes in mobility• EVs: sustained growth and favourable performance inthe UK with mid-teens market share1• L’olivier: higher profits and >500k customers,of which c.15% in Household• Broker Motor: c.20% of Seguros customers• Completed More Than renewal rights acquisition

Admiral 2.0
Leverage data and analytics to enhance ouragility, efficiency and speed of delivery on
customer needs• Doubled number of new released MachineLearning models in the UK

The Customer,
The Customer,
The Customer• New partnership with Flock bringing real-time risk
management to fleet insurance

The Team,
The Team,
The Team• Generative AI: successful pilots moving into
production this year; widespread use of AI
tools for office and engineering work

(1) Management estimate based on active vehicle base (EV only) and external sources (2) +20% higher average number of releases in the UK since YE23

• Scaled agile: improved release cycle
by 20%2

6

Continued focus on our Customers, People and Society; grouptargets approved by Science Based Targets initiative
Our Customers
Our Society

Top 2 Trustpilot (or equivalent) UK & Europe>451Group average NPS2

• AAA MSCI (upgraded in July 2024)• 23 Sustainalytics (upgraded in H1 2024)

Admiral Group’s
science based targets3

Our People*• 6th GPTW Best Workplaces in the UK•

3rd GPTW Best Workplaces in Italy•

2nd GPTW Best Workplaces in Spain• Approved by SBTi in July 2024 following 2023 submission• Another significant milestone in our decarbonisation journey• Commitment to reduce absolute scope 1 & 2 greenhouse gases
emissions by 70% by 2030

• 6th GPTW Best Workplaces for Women in the UK• 18th GPTW Best Workplaces for Wellbeing in the UK(1) Trustpilot for UK, ConTe, Seguros and Admiral Money (H1 2024 monthly average score); #1 Opinion Assurance for L’olivier (2) Relational NPS (HY23: c.50; FY23: >45) (3) vs. 2021 baseline; for scope 3 (category 15), we commit to 48.6% of corporate bonds aligned to invested value setting SBTi
validated targets by 2028 from a 2021 baseline of 40% *) 2024 Great Place to Work® survey

7Our pricing and underwriting excellence, and strong focus on data, supported our performance in a challenging cycle

Group Financials
Geraint Jones, Group CFO
8

Effective response to cycle leads to strong profit andcustomer growth

£310m

77.5p

198%

45%

71.0p

+32%

+35%

+16pts

+6pts

+39%

Profit before tax

EPS

SII ratio

ROE

DPS

HY23: £234m

HY23: 57.6p

HY23: 182% / FY23: 200%

HY23: 39%

HY23: 51.0p

Turnover1

Customers
UK Motor£2,403m+58%

UK Household

£215m

+37%

+43%

International£450m

Loan balances

Admiral Money£1.03bn£3,208m

10.5m

UK Motor

5.48m

+15%

UK Household

1.81m

+8%

-3%

+12%

International

2.12m

-4%

-

HY23: 9.4m
FY23: 9.7m

Admiral Money

0.15m

-5%

(1) Turnover comprises total premiums written plus ‘other insurance revenue’, ‘other revenue’, and interest income from Admiral Money

9

Group profit up 32%, led by UK Motor growthGroup profit before tax (£m)

H1 2024

H1 2023

ChangeUK Insurance1

363.3

303.9

59.4

European Insurance

(1.3)

2.8

(4.1)

US Insurance

3.0(10.4)

13.4• Home £11m v £9m – higher revenue, better current
year loss ratio, substantial releases

Admiral Money

6.8

2.7

4.1

• Other: £(7)m v £(3)m – good growth in Travel andPet offset by More Than integration costs in Pet

Admiral Pioneer(5.0)(12.7)

7.7

Share scheme cost

(27.4)(22.7)(4.7)• EU Insurance result modestly worse at £(1)m v £3m:

Other Group items(29.6)(29.7)

0.1

Total

309.8

233.9

75.9

• Higher loss ratio in Italy, including £12m impact
from updated BI reserves due to Milan Court tablechangeReported loss ratio2

57.3%

63.5%

(6.2)pts

Reported expense ratio2

23.1%

26.3%

(3.2)pts

2

80.4%

89.8%

(9.4)pts

Reported combined ratio(1) UK Insurance includes UK Motor (Car+Van), Home, Travel, Pet (2) Reported ratios based on total claims or expenses (excl. share scheme costs) net of excess of loss reinsurance
recoveries, divided by total insurance revenue (premiums and other insurance revenue) net of excess of loss premiums (incl. core and ancillaries)• UK Insurance profit +£59m (+20%)• Motor: £359m v £298m – higher revenue, muchbetter combined ratio, higher net investment return• Good performance in France (topline growth andimproved combined ratio)• Spain close to break-even with continued progressin distribution diversification

10Group profit up 32%, led by UK Motor growthGroup profit before tax (£m)

H1 2024

H1 2023

ChangeUK Insurance1

363.3

303.9

59.4

European Insurance

(1.3)

2.8

(4.1)

US Insurance

3.0(10.4)

13.4

Admiral Money

6.8

2.7

4.1

Admiral Pioneer(5.0)(12.7)

7.7

Share scheme cost

(27.4)(22.7)(4.7)

Other Group items(29.6)(29.7)

0.1

Total

309.8

233.9

75.9

Reported loss ratio2

57.3%

63.5%

(6.2)pts

Reported expense ratio2

23.1%

26.3%

(3.2)pts

Reported combined ratio2

80.4%

89.8%

(9.4)pts• US Insurance: £3m profit v £10m loss

• Substantial improvement due to intense focus on loss
ratio and expenses (portfolio ~30% smaller v June ’23)
• Admiral Money: £7m v £3m• Higher interest income and net margins; 39% costincome ratio• £1bn loan balances (+8% v YE23; stable v HY23);
expectation £1bn to £1.2bn at YE24
• Cautious IFRS9 loss provision at 8.5% of balances (YE23:
8.5%; HY23: 7.2%) and positive credit performance inperiod• Pioneer: improved performance and continued growth in
Veygo• Improved vesting assumptions from better results driving
increased share scheme cost
• ‘Other’ largely stable, still featuring some non-recurring
items (~£13m benefit from selling minority share in Insurify
offset by ~£9m More Than transaction costs and higher
finance costs following July 23 refinancing)• See further analysis in appendix(1) UK Insurance includes UK Motor (Car+Van), Home, Travel, Pet (2) Reported ratios based on total claims or expenses (excl. share scheme costs) net of excess of loss reinsurance
recoveries, divided by total insurance revenue (premiums and other insurance revenue) net of excess of loss premiums (incl. core and ancillaries)

11UK Motor: strong H1 with market share gain and improved
combined ratio
UK Motor income statement (£m)

H1 2024

Turnover2,402.7

1,520.9

881.8

Underwriting result

260.5

189.5

71.0

Investment income

69.5

50.9

18.6

Finance expenses (discount unwind)(38.3)(25.3)(13.0)

Co-insurer profit commission

24.5

44.8

(20.3)

Other net income

42.7

38.3

4.4

Profit before tax

358.9

298.2

60.7

H1 2023

Change

1

54.5%

60.1%

(5.6)pts

Reported Motor expense ratio1

19.3%

22.2%

(2.9)pts

Reported Motor combined ratio1

73.8%

82.3%

(8.5)pts

Core Motor loss ratio2

59.2%

65.8%

(6.6)pts

Core Motor expense ratio2

19.7%

23.4%

(3.7)pts

Core Motor combined ratio2

78.9%

89.2%

(10.3)pts

Reported Motor loss ratio

1

Turnover up 58% from higher average premiums and +15% growth incustomer numbers vs. HY23 (+11% vs. YE)

2Higher rates driving higher investment returns (3.9% v 3.0% groupannualised) and discount unwind

3

Profit commission driven by 2020 UWY and prior (lower levels vs.
HY23); 2021/22 UWYs improved but booked CORs remain above 100%

4Core LR ~7pts better as premium increases earn through; core ER~4pts favourable reflecting higher average premiums; written ER of
15.5%

5

Lower PYD % contribution to LR due to materially higher premiums;
HY24 releases of £219m v £237m at HY23; risk adjustment strength
stable in HY24

1

2

3

4

5

H1 2024

H1 2023

ChangeCY core LR

75.3%

92.7%

(17.4)pts

PY releases(16.1)%(26.9)%

10.8pts

Core Motor LR

59.2%

65.8%

(6.6)pts(1) Reported ratios based on total claims or expenses (excl. share scheme costs) net of excess of loss reinsurance recoveries, divided by total insurance revenue (premiums and other insurance revenue) net of excess of loss premiums (incl. core and ancillaries) (2) Core product ratios based on total
claims or expenses (excl. share scheme costs) net of excess of loss reinsurance recoveries, divided by total insurance premium revenue net of excess of loss premiums (core product only)

12

Loss ratios developing positively; risk adjustment prudence
held flat in H1
UK Motor projected ultimate loss ratio (discounted)1

UK Motor booked loss ratio (discounted)1()pts movement since December 2023()pts movement since December 2023

Booked LR at HY24

Ultimate LR at HY24

Booked LR at end of Y1First projection of ultimate LR at end of Y1

86%

Ultimate LR at end of Y2

80%

82%

69%

80%

65%

76%
(-1pt)

83%

UWY2 2019

•

97%

78%

72%
(-6pts)74%

63%(-2pts)
2021

2022

UWY2 2019

2023

2023 ultimate 6pts better than first projection as premium increases continue
to earn through•Favourable BI claims costs development leads to steady improvement in priorunderwriting years (2020 and older expected to be stable)•

Current estimate of Admiral FY24 severity v PY: high single-digits (FY23: 10%);market claims inflation remains high but reducing and uncertainty remains•

Ogden discount rate review underway; outcome expected by Jan ’25; continuing
to reserve at -0.25%; sensitivities included in appendix

74%
67%

55%
(-1pt)
2020

92%
86%

91%

82%
(-1pt)

60%
63%(-1pt)

Booked LR at end of Y2

79%(-2pts)88%85%(-3pts)86%78%(-8pts)56%(-1pt)
2020

2021

2022

2023

•

First booking of 2024 underwriting year (73%) reflects positive H1 margin•

Motor reserves risk adjustment prudent and stable at 93rd percentile (YE23: 93rd;
HY23: 94th; YE22: 95th); Accounting policy is for booked reserves to sit in 85th to 95th
percentile confidence level corridor•

Reserve releases: £219m v £237m in HY23; lower percentage of premiums at 16pts(HY23: 27pts) following significant revenue growth in H1

Note: all numbers on an IFRS17 basis. (1) Actuarial projection of ultimate LR, and booked LR, both shown on an UWY basis. Discounted LRs are based on cumulative claims costs recognised in retained earnings at transition (01/01/22), plus claims costs reported through insurance expenses line inincome statement since 01/01/22, therefore exclude unwind of finance expense from 01/01/22 (2) For UWY 2020 and prior, ultimate projection after 1 & 2Y and first booking after 1 & 2Y are illustrative estimates as IFRS17 basis financial statements not available for these periods

13

Continued financial strength and strong H1 results lead to ahigher interim dividend
198% SII ratio1
59%

Interim dividend3%

Pay-out ratio

90%

Normal+Special DPS

60p

89%

92%

CY: 47%200%-25%
PY: 12%

-11%

198%
-28%

YE23
SII surplus £0.71bn
Own Funds 1.42
(0.71)
SCR
•
•
•
•
•

Own Fundgeneration

Marketimpacts2

Changein SCR(mainly
growth)More Thanacquisition

Interimdividend

HY241
HY24
£0.77bn
1.56(0.79)

HY22

71p
51p

HY23

HY24

SII ratio strong and broadly stable vs. YE (+16pts vs. HY23): very favourable UK
motor capital generation and adverse More Than acquisition impact (intangible
asset has no economic value under SII)
Efficient business model: SCR ~£80m (11%) higher despite writing £0.6bn (25%)
more turnover than H2 23, and £0.9bn (44%) more than H1 23
Expect to continue to run with significant headroom above 150% risk appetite
until internal model certainty•

Interim normal DPS of 51p (HY23: 38p) and special of 20p (HY23: 13p);
increase reflects H1 performance•

No change to dividend policy:

Internal model: entered regulatory pre-application; work continues
Stable regulatory fixed capital add-on at £24m•

(1) HY24: estimated (and unaudited) as at the date of this report; based on standard formula plus capital add-on (2) Incl. reversal of
unrealised losses as move closer to maturity‐

Pay 65% of post-tax profits as normal dividend‐

Further distribute earnings not required to be retained for solvency/
buffers/share purchases for share schemes

Now using existing shares within the trusts for employee share schemes (nolonger any EPS dilution); shares unlikely to be purchased in the market until
2026

14

Summary: Financials• Improved results and market share gain in UK Insurance from strong response tovery difficult cycle• Claims inflation reducing gradually; market becoming more competitive• Claims reserve strength position remains stable and very prudent• Very strong solvency position maintained after a higher interim dividend and payout ratio

15

Our commitment to delivering good customer outcomes has helped us reach the milestone of insuring over 8m policies in Britain

UK Insurance

Cristina Nestares, UK Insurance CEO
16

UK Insurance: very strong Motor performance and good progress
on non-motor diversification
Customers: 8.2m

Turnover: £2.7bn

PBT: £363m●+17% growth in customers vs. HY23:
‐
‐
‐

+17%

+57%
8.2m

+20%
£2.7bn£4m£0.3bn

7.0m
2.7m

£304m

‐

£363m
●

£6m

MultiCover – driving synergies across products
and better propositions for customers‐

2.3m£1.7bn£0.2bn£359m£2.4bn

●

£298m
4.8m

5.5m

‐

£1.5bn

HY24

HY23

Motor

HY24

HY23

HY24

●

Continued steady progress in H1 with +18%
customers vs. HY23; higher retention and moredata leading to improved insights

Completion of More Than Household and Pet
renewal rights acquisition:‐

HY23

Motor >5m, +15%
Household >1.8m, +8%
Travel >800k, +53%
Pet >100k, x2.9c.300 colleagues transitioned on April 2nd
Renewal process started in July as expected;
too early to comment on retention£363m pre-tax profit, up 20% driven by Motor

Non-Motor
17

Strong competitiveness drove motor growth in H1; market
prices decreased particularly in Q2
ABI NB/RN market prices

Confused NB market prices

YoY change1

QoQ change2

40%

40%

Admiral Times Top3
Indexed 100, Q1 22
140

30%

30%

20%

20%

120
100
80

10%

10%

0%

0%

60
40
20

-10%

Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24-10%

Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24• Market prices decreased particularly in Q2• ABI1 total premium: £622 in Q2, +21% YoY and -2% vs. Q1• Confused2 NB premium: £882 in Q2, +14% YoY and -11% vs. Q4 23 after
two consecutive QoQ decreases

0
Q1 22

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q2 24

Jul-24• Admiral very competitive in H2 23 as the market continued to catch up with
rate increases whilst Admiral kept prices broadly flat

• Admiral decreased rates by mid single-digits mostly towards the start of theyear, reflecting our improved claims experience and market inflation softening
trends, resulting in high Times Top numbers• Admiral: largely stable pricing in Q2• Admiral’s H1 growth supported by good retention & increased NB market size

(1) ABI 2024 Q2 motor premium tracker: total average premium for new business and renewal (2) Confused 2024 Q2 market average NB premium tracker (3) ‘Times Top’ represents the percentage of times Admiral brands appear in the top position on an aggregator search (average per quarter)18

UK Motor claims inflation remaining high but reducing
DamageMarket total claims frequency114%12%Pre-covid level●

Market frequency remains 10-15% below pre-Covid level despite overallroad usage having largely recovered●

Market claims inflation elevated but slowing down; repair costs increasing
at a slightly slower rate and second-hand car prices reducing●

Admiral strengthened its competitive advantage on claims costmanagement thanks to new repair network and claims expertise

10%
8%
6%

Bodily Injury

4%
Q2 20

Q4 20

Q2 21

Q4 21

Q2 22

Q4 22

Q2 23

Q4 23

Q2 24

Market residual car values2

Market damage claims severity3

Indexed 100, January 2020

Indexed 100, Q1 2021

160

150

140

140

ABI Damage: 3rd Party, Accidental●

Whiplash Supreme Court case outcome largely as expected with noreserve adjustments required●

Large BI inflation is in line with expectation; commercial care costs andincreases to general damages remain the primary drivers●

Ogden rate review started in July with decision expected no later thanJanuary 2025; no change to reserving

130

120

120

Total Loss

100
110
80

100

60

90

40
Jan20 Jul20 Jan21 Jul21 Jan22 Jul22 Jan23 Jul23 Jan24 Jul24

80
Q121

Q321

Q122

Q322

Q123

Q323

Q124

●

Ongoing review of settlements and related processes in light of FCA
multi-firm review; covers current practice and recent customer outcomes●Work is in progress; likely cost not expected to have a significant impact
on results; appropriate reserve included in H1(1) ABI 2024 Q2 total claims frequency (private car) (2) Residual car value intelligence by Glass’ Information Services Ltd. (Autovista); used 36-mth old and driven 60,000kms; indexed at Jan-20 (3) ABI average damage cost (Third Party and Accidental Damage), indexed to 2021

19

Household: good performance in improving market conditions
UK Household market rebuilding costs and average premiums• High building materials cost and claims inflation starting tostabilise

Indexed 100, average H1 2017160

ABI House Rebuilding Cost Index (HRCI)1• Increase in market claims costs outpacing market premium
growthABI NB/RN average premium2

140
120

• Market NB rates increased further in H1; Admiral continued toincrease prices slightly ahead of market

100
80
60

• High market NB switching with PCW sales
HY17 2H17 HY18 2H18 HY19 2H19 HY20 2H20 HY21 2H21 HY22 2H22 HY23 2H23 HY24

Admiral Household reported Combined Ratio• Admiral’s customer numbers up 8% to 1.8m from strong NB
volumes through PCW and MultiCover

101%
84%
Expense ratio

Loss Ratio

30%

30%

54%

HY22

77%

HY22

HY23

HY24

Loss ratio

54%

71%

49%

PY releases

(9)%

(3)%

(19)%

CY LR

63%

74%

68%

28%
71%
49%
HY23

• Higher pre-tax profit of £11m mainly due to improved CY LR
and material prior year releases; largely benign weather ineither period• Continued improvements to core capabilities, in particular
pricing and claims

HY24

20
(1) ABI: HRCI indicates the cost of rebuilding materials and labour indexed to 1988; averaged by half years, indexed H1 17 (2) ABI NB/RN average combined quarterly premiums, averaged by half years

Expect H2 market prices and inflation to soften further for Motor;
inflation expected to slow down in Household
Pricing outlook

Claims outlook

Motor

Motor

• Market prices continuing to come down early Q3, withcompetition increasing; uncertainty remains with different
strategies seen across players• Market damage inflation expected to remain high but reducing• Admiral expects to continue growing in H2 but at a slower rate
• We are comfortable with our current margins; we will continue
to manage COR performance and price to reflect inflation trends
and our own claims development• BI: volatility remains due to Ogden, Judicial College Guidelines,
and a new Whiplash tariff. Admiral remains prudently reserved• For Admiral, we expect overall severity inflation to slightly
improve in H2

HouseholdHousehold• Market rate increases anticipated to continue into H2 but at alower rate
• Admiral will continue to price to reflect inflation• Elevated cost inflation expected to slow through the remainderof the year

• Inflation trends subject to weather uncertainty

Admiral remains focused on pricing discipline, prioritising medium-term profitability,
and maintaining a prudent approach to claims reserving
21

Focusing on margin and expanding our propositions to deliver value to our 2m international customers

International Insurance
Costantino Moretti, Head of International Insurance
22

International Insurance highlights
Europe•Lower Motor profits largely due to conservative reserves in Italy for increased BI costs•

Good performance in France (L’olivier) and solid progress in Spain (Admiral Seguros) nearing breakeven•

Slower-than-expected market recovery, especially in Italy and Spain; focus on margins continues•

Improved expense metrics from efficiency focus; ongoing investment in digital, data, and analytics•

Good progress of diversification strategy with intermediary distribution in Italy and Spain, and Household inFranceUS•

Significantly improved performance from better risk selection and execution; profit and margin focus to continue•

Considering the right outcome for the business and our team; will update as soon as possible23

EU Insurance: continued focus on margins and efficiency
EU Total customers (m)1.74

EU Total turnover (€m)

1.99

1.96

0.46

0.50

375
L’olivier

316

0.46
0.40

0.44

Seguros

L’olivier

1.08

HY22

HY23

1.02

ConTe

HY24

•

Competitive and challenging markets, despite lower inflation

72

79

Seguros•

ConTe results impacted by tough market and higher BI costs:

137

168

175

ConTe

HY22

HY23

HY24

118
61

0.93

Customer and turnover trends reflect focus on margins andpricing ahead of both competitors and inflation

399
145

135

0.41

•

EU Motor average premium

EU Motor pre-tax result1•

2022-23 UWY LRs developed worse than expected in adifficult market (Direct market COR3 >120%)•

ConTe to continue to prioritise portfolio optimisation
over growth and focused on improving performance€14m adverse
impact from
Milan tables BI
reserve change2

+22%

•

Higher profit from L’olivier due to good LR performance andhigher average premiums; customers up 10% to >500k•

Improved H1 in Seguros, progressing towards break-even,with profit in Direct and lower losses on new investments•

Increased efficiency: EU Motor customers per FTE up 3% vs.
HY23 despite a smaller customer base

+21%

HY22
HY23

€1.3m

HY24

HY23

H1 includes conservative reserves for the full expected
impact from higher BI settlement costs (“Milano tables”)

+10%

€5.4m

-€1.9m
HY22

•

HY24

ConTe

Seguros

L’olivier(1) Admiral earned share of profit/loss (2) “Milano tables”: Bodily injury rating tables in Italy re compensation associated with a given degree of permanent disability (3) Management estimate for 2023 Direct Motor market COR based on IVASS 2022 Direct market COR of 128%24

US Insurance: materially improved performance and considering
the right long-term outcome
Customers and turnover
239k• Market: lower inflation and increased competition

224k
156k

$166m

$173m

HY22

HY23

$138m

HY24

• HY24 profit of $3.8m vs. -$12.8m loss at HY23
‐ Significant improvement driven by 2023 priceincreases ahead of market earning through,continued cost discipline, better risk selection andgood execution‐ No capital injection since 2022

• Adverse topline performance from reduced
competitiveness as we focused on margins

Pre-tax result1$4m• Looking ahead:‐ Maintaining margin and loss ratio focus

-$13m

HY23

(1) Admiral earned share of profit/loss‐ Considering the right outcome for the business andour team; will update as soon as possible

-$11m

2H23

HY24

25

Wrap-up
Milena Mondini de Focatiis, Group CEO
26

Strong results demonstrate agility and quality of the business•

Strong volumes and margin improvements in H1 from navigating changing market dynamics well•

Building optionality for the future beyond Motor, and continuing to strengthen our foundations
for faster delivery, enhanced operational excellence and improved customer experience•

The last few years have again demonstrated Admiral’s agility as we further built our track recordof resilient and profitable growth, and financial strength•

Our unique culture remains a key competitive advantage•

Admiral remains disciplined, prudently reserved and well-positioned for continued success

27

Appendix
28

Group Key Performance Indicators
KPIs
Group

HY24

HY23

FY23

FY22

Turnover £bn

3.21

2.24

4.81

3.68

Customers m

10.53

9.41

9.73

9.20

Group profit before tax £m

309.8

233.9

442.8

361.2

Earnings per share

77.5p

57.6p

111.2p

95.4p

Dividend per share (FY=total; HY=interim)

71.0p

51.0p

103.0p112.0pCustomers m

8.23

7.01

7.39

6.96

Total premiums written £m

2,512

1,582

3,503

2,555

Profit before tax £m

363.3

303.9

596.5

509.7

Reported Motor combined ratio

73.8%

82.3%

81.7%

88.9%

62

60

62

58

Customers m

2.12

2.21

2.17

2.08

Total premiums written £m

421

438

840

744

100.8%

99.6%

100.3%

109.5%

1.7(7.6)(18.0)(56.2)UK Insurance

Other revenue per vehicle £International Insurance

Reported combined ratio
Total profit/(loss) before tax £m

29Summary income statement£m

UK Insurance
HY24
HY23

FY23

International
HY24
HY23

FY23

Admiral Money
HY24
HY23

FY23

HY24

Other
HY23

FY23

50.4

92.1

32.0

21.3

48.5

3,207.8 2,237.5 4,811.5

27.5

19.7

44.4

2,004.2 1,469.8 3,170.6
128.5

91.5

202.8

(14.2)(27.9)(492.9)(411.7)(836.8)Turnover2,675.2

1,708.3

3,776.0

450.2

464.3

894.9

Insurance premium net of XoL

1,602.6

1,080.5

2,369.2

374.1

369.6

757.0

Other insurance revenue

43.6

Admiral Group
HY24
HY23

FY23

99.3

64.3

148.0

29.2

27.2

54.8

Expenses(360.6)(271.7)(559.5)(117.5)(125.8)(249.4)(14.8)

Claims net of XoL(917.1)(701.1)(1,560.2)(289.2)(269.7)(565.2)(15.9)(19.9)(33.1)(1,222.2)

Net of XoL UW result

424.2

172.0

397.5

(3.4)

1.3

(2.8)

(3.2)

(14.4)(16.6)

417.6

158.9

378.1

Quota share result(164.9)19.4(18.4)(0.9)(13.1)(22.1)(0.1)

0.1(165.8)6.2(40.4)

Movement on OLC

0.8

0.6

4.3

1.6

0.8

0.6

2.4

1.4

4.9

Underwriting result

260.1

192.0

383.4

(2.7)

(11.0)(24.3)(3.2)(14.5)(16.5)

254.2

166.5

342.6

6.4

2.4

4.9

Investment income

72.5

52.8

115.6

6.9

3.7

9.6

Net finance expenses(39.5)(27.3)(60.4)

(2.4)

(1.8)

(5.3)

Net investment income

33.0

25.5

55.2

4.5

1.9

4.3

Profit commission

24.5

44.8

76.5

Other income and expenses

45.7

41.6

81.4

(0.1)

1.5

Total other income

70.2

86.4

157.9

(0.1)

1.5

6.4

2.4

4.9

2.0
2.0
6.8

Admiral Money result

2.7

10.2

(990.7) (2,158.5)

85.8

58.9

130.1

(41.9)(29.1)(65.6)

43.9

29.8

64.4

24.5

44.8

78.5

45.6

43.1

81.4

70.1

87.9

159.9

6.8

2.7

10.2

Other Group Costs(37.8)(30.3)(79.9)(37.8)(30.3)(79.9)

Share scheme costs
Profit/(loss) before tax(27.4)(62.0)(22.7)(65.1)(54.4)(145.9)(27.4)
309.8(22.7)
233.9(54.4)
442.8

363.3

303.9

596.5

1.7

(7.6)

(18.0)

6.8

2.7

10.2

30

Balance sheet
£m

HY24

HY23

FY23

FY22

ASSETS
Property, plant and equipment
Intangible assets
Corporation tax asset
Reinsurance contract assets
Financial investments
Deferred tax asset
Other receivables
Loans and advances to customers
Cash and cash equivalents

82.0
335.7
16.2
1,055.6
4,435.9
20.8
481.8
952.1
363.6

81.4
241.8
—
1,113.4
3,583.4
12.2
373.2
961.1
462.7

90.1
242.9
20.4
1,191.9
3,862.4
46.1
409.9
879.4
353.1

89.8
217.6
9.1
1,015.4
3,411.2
28.4
316.4
823.9
297.0

Total assets

7,743.7

6,829.2

7,096.2

6,208.8

EQUITY
Share capital
Share premium account
Retained earnings
Other reserves
Total equity (shareholders)
Non-controlling interests

0.3
13.1
1,129.7(32.8)
1,110.3
0.8

0.3
13.1
968.7
(54.7)
927.4
1.2

0.3
13.1
1,018.9(40.5)
991.8
1.0

0.3
13.1
922.6
(50.2)
885.8
1.2

Total equity

1,111.1

928.6

992.8

887.0

LIABILITIESInsurance contract liabilities
Subordinated and other financial liabilities
Trade and other payables
Lease liabilities
Corporation tax liabilities

4,946.6
1,204.1
384.9
73.1
23.9

4,139.7
1,187.3
480.3
83.2
10.1

4,581.7
1,129.8
305.8
81.2
4.9

4,025.4
939.1
254.9
88.5
13.9

Total liabilities

6,632.6

5,900.6

6,103.4

5,321.8

Total liabilities and equity

7,743.7

6,829.2

7,096.2

6,208.831Admiral Money: continued strong performance, delivering controlled growthand higher profit whilst maintaining prudence
Outstanding loans balances+8%£1.03bn

HY23£0.96bn

FY23

HY24

£75m

HY23

FY23

●

Net interest income up 10% to £34m from higher
net margins and a reduced provision charge fromhigh quality risk selection and reduced macro risk●

Increase in overall net interest income●

Flat loans balances vs. HY23 but +8% vs. YE23●

Maintaining a cautious approach to loans loss
provisions at £87m (HY23: £75m); coverage at
8.5%●

Stable credit performance●

Expected balances remain £1-1.2bn at YE24

8.5%

7.2%

£82m

£7m profit vs. £3m in HY23, with efficient costincome ratio of 39%£1.03bn

Total loan loss provision and coverage
8.5%

●

£87m

HY24
32

Investment update
June 2024

June 2023

Dec 2023

2% 6%

3%

8%

7%

8%

23%

11%

48%

£4,789m£4,215m

49%

21%

12%

9%

8%

42%

20%

11%
£4,044m
22%

24%
39%

10%

16%

£4,215m£4,789m

Corporate bonds
Government bonds
Money market funds & other FV
Cash
Deposit
Other1

16%

12%

11%

46%

£4,044m
16%

13%

17%

8%

3%

19%

AAA
AA
A
BBB
Other240%(1) ‘Other’ comprises of private debt, derivatives, and equity investments; (2) ‘other’ comprises of sub-BBB ratings and unrated securities; unrated securities consist of an AAA-rated money market fund backed by government securities and other unrated debt. Sub-BBB rated securities make up lessthan 1% of the total portfolio.

33

Investment update

£m

HY24

HY23

•

No change in investment strategy in period or forthcoming

Underlying investment income yield

3.9%

3.0%

•

Broadly similar allocations and ratings

Investment income£86.1m

£58.4m•Higher investment income reflects increased market yields

Unrealised losses on derivatives(£0.2m)(£0.2m)•Increase in interest rates in H1 resulted in a reduction inmarket value of portfolio of £8m (HY23: £22m)

Movement in provision for expected credit losses(£2.8m)(£0.5m)•Movements due to interest rates well matched withchanges in liability valuation for solvency measurement

Total investment return£83.1m£57.7m•Unrealised losses on investments(£8.4m)(£22.4m)

Average duration of bond portfolio at 30 June 24 = ~3.1
years (30 June 23 = ~3.0 years)

34Analysis of Other Group items

£m

HY24

HY23

Other central costs(20.2)(15.2)

Business development costs(13.9)(7.9)

Finance charges1(14.1)(6.3)

Compare.com loss before tax

—

(2.6)

Sale of shares in Insurify

12.5

—

Other interest and investment income

6.1

2.3

Total

(29.6)(29.7)•

Other central costs increased primarily from project costs relating to the internal model,
the US strategic review, and increased allocation of group employee expenses to central
costs

•

Business development costs increased primarily as a result of non-recurring transaction
costs of £8.5m related to the More Than acquisition•

Finance charges primarily related to interest on the £250 million subordinated notes
issued in July 2023 at a rate of 8.5%. The increase in charges is partially offset by anincrease in other interest and investment income•

A loss of £2.6m was attributed to Compare.com in HY23 following its disposal. As part ofthe disposal, the Group received shares as a minority interest shareholder of the acquirer.
In HY24, the Group was able to exercise the sale of those shares, resulting in a one-off
gain of £12.5m(1) Finance charges within other group items include £0.9m (HY23: £0.9m, FY23: £1.7m) that relate to intra-group arrangements, with the corresponding income presented within the UK insurance result.

35

Solvency ratio movements – HY23 to HY24
20%

7%

80%

3%
-33%

-11%

-50%

198%

182%

HY23

Own Fundgeneration - CY

Own Fundgeneration - PY

Market impacts

Change in SCR

UK Risk marginreforms

More Thanacquisition

Interim dividend

HY24

36

Solvency ratio sensitivities
The sensitivities below have been selected to show a range of impacts on the reported base case solvency ratio. They cover the two main material risk
types - insurance risk and market risk. Within each risk type the sensitivities performed cover the underlying drivers of the risk profile. The sensitivities
have not been calibrated, unless stated, to individual return periods.
0%

Base
Scenario 1

50%

100%

150%

200%
198%

178%

250%

Mvt vs. base (in pts)

Scenarios

HY24

YE23

1.

UK Motor – incurred loss ratio +5%1

-20

-11

2.

UK Motor – 1 in 200 catastrophe event

Scenario 2

195%

-3

-1

3.

UK Household – 1 in 200 catastrophe event

Scenario 3

195%

-3

-5

4.

Interest rate – yield curve up 100bps

Scenario 4

196%

-2

-1

5.

Interest rate – yield curve down 100bps

Scenario 5

199%

+1

+1

6.

Credit spreads widen 100bps2

Scenario 6

195%

-3

-5

Scenario 7

194%

7.

Currency – 25% adverse movement in euro and US dollar vs. sterling-4-3

Scenario 8

197%

-1

-3

8.

ASHE – long-term inflation assumption up 50bps

Scenario 9

197%

-1

-1

9.

Loans – 100% weighting to ‘severe’ scenario3(1) Increased sensitivity at HY24 due to growth in exposure and relative profitability of the most recent UWYs (2) The spread stress has been recalibrated to solely include assets in the portfolio that are materially exposed to corporate bond spread risk, resulting in a reduction in the overall impact onsolvency ratio. (3) Refer to note 7 to the financial statements for further information on the ‘severe’ scenario.

37

UK Motor: Ogden discount rate plus risk adjustment sensitivities£m

Impact on PBT gross of RI

Impact on PBT net of RI

Ogden discount rate sensitivities

HY24

FY23

HY24

FY23

Increase by 125bps to +1.00%

154.8

133.9

121.3

95.3

Increase by 75bps to +0.50%

99.5

82.8

75.5

57.4

Increase by 25bps to 0.00%

35.1

29.2

25.7

20.0

Decrease by 75bps to -1.00%(120.4)(104.4)(85.8)(70.2)

Impact on PBT gross of RI
Risk adjustment sensitivities

HY24

FY23

Impact on PBT net of RI
HY24

93rd

Position as at end of period

HY24 Ogden sensitivities:• Reflect impacts on HY24 pre-tax profit and equity for changes to the
Ogden discount rate from the current rate of -0.25%, with all otherassumptions (incl. absolute level of RA) remaining unchanged• Assume the change in rate takes place from 01/01/25• Note: some of the ultimate impact of a change in Ogden rate will flow into
future financial periods• Should the Ogden discount rate change in future periods, impacts on PBTand equity are likely to be slightly larger than those set out here, as a resultof including the impacts on claims arising in relation to premium written
and earned beyond 30/06/24

FY23
93rd

RA increase to 95th percentile(40.2)(54.4)(26.2)(25.6)RA decrease to 90th percentile

58.1

45.6

40.2

24.1

RA decrease to 85th percentile

117.2

108.8

85.1

57.6

38

UK Co- and reinsurance arrangements
Household

Car
Other

38%

38%

38%

38%
70%

70%

70%

70%

Quota Share

AdmiralMunich Re

40%

40%

40%

40%

Admiral

22%

22%

22%

22%

30%

30%

30%

30%

2021

2022

2023

2024

2021

2022

2023

2024

• Munich Re continues to underwrite 40% of the UK
business• 20% Quota share in place until 2026
• 20% Coinsurance in place until 2029
• Improvement in net cost to Admiral from 2022
underwriting year (see next slide)• Concluding in Q3 on extensions of 38% ‘Other’ quota share• 40% quota share contract extended until end 2026

• Good progress assessing renewal options for 30%
quota share contract expiring end 2024

• The Group has non-proportional reinsurance to cover
the risk of catastrophes stemming from weather events39

UK Car: co- and reinsurance arrangements1,2
Type

Munich Re Proportional co- insurance – 20% from 2022 underwriting year onwards

Proportional reinsurance (quota share) – 58% from 2022 underwriting year onwards(20% Munich Re, 38% other reinsurers)

Cost to Admiral

Variable, depending on combined ratio

Fixed – c.2% of premium

Risk protection

Co-insurance

Reinsurance, protection starts at 100% combined ratio + allowance for investment
incomeKey items in profit commission calculation include premium, claims, expenses,
share scheme costs
Profit commission

Profit share % variable based on combined ratio and calculated intranches. Admiral’s share of profit is c.65% at typical combined ratios under recent
contracts and c.75% from 2022 underwriting year onwards

Recognised on an expected cashflow basis, including risk adjustment: this means that on
funds withheld contracts (UK Motor) there is no recognition of profit commission (theonly cashflows are payments of margin to the reinsurer, and collections of claims
recoveries on unprofitable years)

Recoveries made when reinsurer’s proportional share of claims costs (incl. risk
adjustment) + expenses + margin – allowance for investment income exceeds premium
Recoveries

N/A
Reductions in booked loss ratio (i.e. including risk adjustment) can lead to reductions inrecoveries in subsequent periods

Funds withheld

No

All

Investment income

Munich Re

Admiral(although allowance for investment income is included when calculating recoveries if
combined ratio > c.100%)

Instalment income

AdmiralAdmiralCommutation

Not applicable

Admiral has option to commute contracts and typically does this 36 months after thestart of the underwriting year

(1) Admiral Van is on a quota share basis, all 75% with Munich Re. Similar cost to Admiral as the Car QS contract, on a funds withheld basis; (2) Information for current year reinsurance agreements40

UK Motor: HY24 Total premium to Core product earned premium
£m
2,251

1,802
-449
1,449
-353

1,384
-65

1,337
-47

Decrease
Total
Total written
premiums 1

Coinsurer share
Admiral Grossof total premiums written premiums

Movement
in unearned
premiums(1) As disclosed in Appendix 1b of Admiral Group’s financial statements; Total written premiums for UK Motor

Gross earned
premiums

Ancillary earned
premiums

Admiral core
motor earned
premiums

XoL earned
Admiral share of
ceded premiums earned premiums
net of XoL1

41

UK Motor: loss ratios, discounting and finance expenses
UK Motor: future finance expense remaining1,3
At financial year end
Best Estimate, net of XoL
FY 2022
FY 2023
HY 2024
BE+RA, net of XoL
FY 2022
FY 2023
HY 2024

Finance expense gradually
decreasing on prior UWYs,
as claims are paid andreserves decrease in size

Undiscounted loss ratios

2017

2018

2019

2020

2021

2022

14.0
10.7
8.4

12.3
9.8
5.3

15.3
15.7
12.9

16.4
13.8
12.6

46.0
41.1
36.6

53.0
85.1
69.2

74.3
101.3

22.3

15.6
10.8
8.7

14.4
9.9
5.5

18.9
16.4
13.5

20.5
14.8
13.4

55.2
47.4
41.0

62.2
99.4
79.4

86.7
119.0

26.7

As claims are incurred, theamount of discounting thatwill be unwound in futureyears increases

Unwind of Finance Expense
100%
80%
60%
40%

2023

2024

Difference between undiscounted anddiscounted LR larger on UWYs withhigher yield curves when accidents wereincurred, leading to larger future unwindof finance expense.
Cost of unwinding discounting (to reflect
full cost of paid claims) recognised as
insurance finance expenses and will alignto profile of undiscounted claims
liabilities.
Example profile of unwind2 for individual UWY as
a % of total finance expense to be recognised
shown opposite

20%
0%
1

2

3

4

5

6

7

8

9

•

No discounting for time value of money•

Reflective of expected ultimate cash
settlements (best estimate); plus
undiscounted risk adjustment (booked
LR)

Discounted loss ratios•

Based on discounted incurred claims
costs as reported through insurance
expenses in income statement•

Excludes unwind of finance expense(separately reported)•

Finance expense based on expected
payment of claims reserves (set at startof each financial year), at “locked-in”
yield curves rates i.e. the yield curves inplace when claim originally incurred

10

Years
(1) Figures based on finance expense left to unwind on ultimate (best estimate) loss ratio (2) Based on blended payment pattern: current profile of UK motor claims payments provided in note 5 to financial statements (3) Based on gross net of XoL (i.e. excludes quota share)42

UK Motor: undiscounted loss ratio development by
underwriting year
UK Motor: undiscounted booked LRs1,2,3
Development by financial year (colour-coded)
Split by underwriting year (x axis)

Undiscounted ultimate
LRs by UWY1
HY24

FY23

2023

78%

85%

2022

88%

90%

2021

80%

81%

2020

56%

57%

2019

64%

66%

104%
97%

95%

77%
73% 71%
67% 65%

96%
91%
86% 84%

94%

93%

UWY

85%
79%

74%
68%

65%
58% 57%

Financial Year
FY19
FY20
FY21
FY22
FY23
HY24
UWY

2019

2020

2021

2022

2023

2024

(1) Booked undiscounted LRs presented from the transition date of IFRS 17 (01/01/22) onwards, based on actuals. Booked LRs for financial periods 2020 and prior are proxy values, with assumptions being made around retrospective risk adjustment selections (2) Actuarial projection ofultimate, and booked loss ratio on an UWY basis; undiscounted LRs are reflective of ultimate cash settlements expected (ultimate) plus risk adjustment. (3) Please note that this is comparing HY vs YE

43

UK Motor: reserve releases by underwriting year
HY24: £216m

Net of XoL1

£56m

UWY

£29m

£24m

2018 & prior

2019

£17m
2020

£62m

£28m
2021

2022

2023

2024

FY23: £393m

£81m

UWY

2018 & prior

£98m
£65m

2019

(1) Excludes releases on non-core products

2020

HY23: £237m

£80m

2021

£69m

2022

£48m

UWY

2018 & prior

£62m
£39m

£45m

2019

2020

£43m

2021

2022

44

UK Motor: FY23 cumulative profit recognition
Underwriting years
Total written premium, net of XoL cost

2017
1,951

2018
2,077

2019
2,026

2020
2,166

2021
2,132

2022
2,105

2023
2,977

Total earned premium, net of XoL cost

1,951

2,077

2,026

2,166

2,132

2,105

1,403

Total Admiral premium net of XoL

1,373

1,480

1,456

1,562

1,551

1,722

1,115

Discounted combined ratio including RA
Cumulative Insurance service profit

76%
330

83%
259

84%
231

77%
361

103%
(41)

109%
(155)

123%
(257)

Quota share reinsurance

(17)

(18)

(23)

(24)

17

99

30

Net onerous loss component

0

0

0

0

0

1

0

Profit commission - Co-insurance

88

60

51

98

0

(3)

0

Net other revenue excl instalments

148

161

152

130

130

130

82

Instalment income

72

86

92

106

100

125

71

Investment income

33

32

43

38

42

53

112

Finance expenses

(3)

(6)

(7)

(6)

(21)

(30)

(14)

651

574

539

703

227

220

24

Booked discounted LR

60%

64%

65%

57%

81%

88%

86%

Booked undiscounted LR

61%

65%

67%

58%

86%

96%

94%

Cumulative earned basis profit (booked) by UWY

Prior

n/a

45

UK Motor: HY24 cumulative profit recognition
Underwriting years
Total written premium, net of XoL cost

2017
1,951

2018
2,077

2019
2,026

2020
2,166

2021
2,132

2022
2,105

2023
2,929

2024
2,096

Total earned premium, net of XoL cost

1,951

2,077

2,026

2,166

2,132

2,105

2,518

538

Total Admiral premium net of XoL

1,373

1,480

1,456

1,562

1,551

1,722

2,023

429

Discounted combined ratio including RA
Cumulative Insurance service profit

76%
335

82%
271

82%
255

76%
377

101%
(13)

106%
(99)

99%
29

136%
(156)

Quota share reinsurance

(17)

(18)

(23)

(24)

0

54

(29)

(11)

Net onerous loss component

0

0

0

0

0

0

0

0

Profit commission - Co-insurance

89

64

59

104

0

(3)

0

0

Net other revenue excl instalments

148

161

152

130

130

130

109

45

Instalment income

72

86

92

106

100

125

125

26

Investment income

33

32

43

38

42

53

112

70

Finance expenses

(3)

(7)

(8)

(7)

(26)

(40)

(31)

(2)

657

589

570

724

233

220

315

(28)

Booked discounted LR

59%

64%

63%

56%

79%

85%

78%

73%

Booked undiscounted LR

60%

64%

65%

57%

84%

93%

85%

79%

Cumulative earned basis profit (booked) by UWY

Prior

n/a

46

UK Motor: HY24 CY profit recognition
Total written premium, net of XoL cost
Total earned premium, net of XoL cost
Total Admiral premium net of XoL

Prior
0
0
0

2017
0
0
0

2018
0
0
0

2019
0
0
0

2020
0
0
0

2021
0
0
0

2022
0
0
0

2023
(48)
1,115
908

2024
2,096
538
429

TOTAL
2,048
1,653
1,337

Insurance service profit

11

5

12

24

16

28

56

286

(156)

282

Quota share reinsurance
Net onerous loss component

0
0

0
0

0
0

0
0

0
0

(17)
0

(45)
0

(59)
1

(11)
0

(132)
1

Profit commission - Co-insurance
Net other revenue excl instalments
Instalment income

5
0
0

1
0
0

4
0
0

8
0
0

6
0
0

0
0
0

0
0
0

0
27
54

0
45
26

24
72
80

Investment income
Finance expenses

0
(1)

0
0

0
(1)

0
(1)

0
(1)

0
(5)

0
(10)

0
(17)

70
(2)

70
(38)

Profit recognised current period

15

6

15

31

21

6

1

292

(28)

359

-1%
-1%

-1%
-1%

-2%
-2%

-1%
-1%

-2%
-2%

-3%
-3%

-8%
-9%

Sensitivities
1 point improvement
1 point deterioration

20
(20)

14
(14)

14
(14)

16
(18)

5 point improvement
5 point deterioration

98
(98)

69
(69)

72
(72)

85
(87)

10 point improvement
10 point deterioration

197
(197)

157
(138)

144
(144)

199
(172)

Movement in loss ratio – booked discounted
Movement in loss ratio – booked undiscounted

47

UK Motor: illustrative earning profile of underwriting year profit
Illustrative UK Motor underwriting profit
earning profile in a profitable year•

In a profitable underwriting year:‐

Y1 – expected to be slightly profitable on average with any
underwriting profit and other income largely offset by therecognition of all expenses‐

Y2 – significant underwriting profit expected to earn through, withno further expenses and some release of risk adjustment and BE
reserves; partly offset by unwind of discounting

60%‐

Y3-5 – further releases partly offset by discounting unwind

50%‐

Y5 onwards – small incremental profits40%‐

In a lower yield curve environment, Y1-2 would show lower profits,
but the earning pattern would be largely back in line by Y5

100%
90%
80%
70%

30%
20%

•

10%
0%

Y1

Y2

Y3

Y4

Y5

Y6

Y7

Y8

Y9

In an unprofitable underwriting year: expect a loss in Y1; a large profit
pick up in Y2; and an overall shorter earning trajectory

Y10

48

UK Motor: illustrative accounting for prior period reserve releases
Underwriting year
Admiral TWP net of XoL (A)1

2017
1,373

2018
1,480

2019
1,456

2020
1,562

2021
1,551

Illustrative: undiscounted and discounted LRs
95.0%

Discounted booked loss ratio
FY22 (B)FY23 (C)

61%
60%

67%
64%

69%
65%

63%
57%

86%
81%

85.0%

Reduction in booked discounted LR (D)

1%

3%

4%

6%

5%

75.0%

90.0%

80.0%

70.0%

Modelled reserve release (A*D)

14

44

58

94

20X1

77

20X2

20X3

20X4

Undiscounted loss ratio

20X5

2X6
20X6

20X7

20X8

Discounted loss ratio•

Claims releases are presented within the insurance service result, basedon developments in gross claims costs (but net of XoL)•

Difference between undiscounted and discounted loss ratios
recognised through finance expense over time•

Releases include development on both ultimate loss ratios and risk
adjustment••

Releases in each period can be modelled using development in theundiscounted or discounted booked LRs – see opposite

If LRs develop favourably, total finance expense recognised overtime will be lower, due to lower total claims cost resulting inlower total discounting benefit•

Quota share reinsurers’ share of reserve releases is recognised within thereinsurance result – only occurs where the contract is still in a recovery
position and not commuted (i.e. typically where COR > 100%)

Finance expense recognised in period not impacted byfavourable or adverse development within period, but based on
opening reserves and expected payment pattern instead•

Therefore, in year releases can be modelled using in-year
movement in LRs•(1) Illustrative example only49

UK Motor: illustrative quota-share accounting example
UWY 20X1

FY 20X1

Total written premium net of XoL 1

QS share of premium 2
QS margin to be paid (A)2

2%

FY 20X2

FY 20X3

Total

Value

Value

Value

2,000

2,000

2,000

1,200

1,200

1,200

(24)

(24)

(24)

Undiscounted booked loss ratio1

100%

90%

80%

Written expense ratio1

20%

20%

20%

Investment income allowance2

(2%)

(2%)

(2%)

Undiscounted combined ratio

118%

108%

98%

% recovered (>100%)2

18%

216

8%

96

-2%

-

Discounted claims and expense recovery (B)3

80%

173

80%

77

80%

-

Total written recovery/(cost) (A + B)
Earned at year end4

P+L impact in year

149
50%

74

74

53
100%

53

(21)

(24)
100%

(24)

(77)

•

UK Motor quota share recoveries earned
based on expected cashflows•

Lower premiums and recoveries: same
ultimate cost as IFRS 4•

Estimation of QS recoveries at each period
end, and P+L impact in year, can be madeusing use QS share of premiums, expenses
and claims•

Example illustration provided•

Key inputs / assumptions:• QS share of premium• Cost of margin• Combined ratio (undiscounted)• Discounting of net quota sharerecoveries• Earning profile(24)(1) Total written premium net of XoL, written expense ratio and undiscounted booked loss ratio provided at end of each underwriting year; to be estimated at initial recognition (2) Assumptions to be based on quota share contractual arrangements – purely illustrative examples assume ~60% QS
recoveries, ~2% reinsurer margin, 2% investment income allowance on funds withheld contracts (3) Undiscounted and discounted quota share assets provided at end of each year in claims triangles; to be estimated at initial recognition – illustrative example assumes discounted recoveries as 80%
of total (4) Earning profile estimated50

UK Motor: illustrative QS accounting commutation example
UWY 20X1

FY 20X1

FY 20X2

Value
Undiscounted combined ratio (CR)

118%

Value
108%

Total written recovery/(cost)
Earned at year end – no commutation

FY 20X3

74

Value
98%

149
50%

Total cost

100%

53

(24)

53

100% (24)(24)

P&L impact of movement in recoveries – nocommutation

74

(21)

(77)

(24)

Cumulative position – no commutation

74

53

(24)

(24)

Additional P&L impact if commuted – At FY 20X21(77)

Cumulative position – commuted at FY 20X2

(24)

Additional P&L impact if commuted – At FY 20X32
Cumulative position – commuted at FY 20X3

(24)
(24)

(24)

1. If commuted at 20X2, total cost of contract at that time is £24, leading to a total cost recognised in 20X2 of £98. Thisis comprised of a loss on commutation of £77m, being the difference between the asset that would be recognised(£53) if contract not commuted, and the total ultimate cost of the contract, being the reinsurer margin of £24.

• Uses illustrative example of QS accounting
for UK Motor• Impact of commutation depends on
booked combined ratio (CR) at point ofcommutation:‐ If CR < 100%, no additional impact‐ If CR > 100%, additional loss oncommutation being difference
between asset using booked combined
ratio, and total ultimate cost of thecontract, being the margin paid
• Any impact of commutation is recognised
within the reinsurance result: no impact ongross claims reserve releases or reported
loss ratios

2. No further impact of commutation recognised given that the underwriting year is in a profitable position and the fullcost of the contract (the cost of margin of £24) has been recognised already.
Note that if the discounted combined ratio remained at 108% and the contract was not commuted (given the expected
recoveries), the asset of £53 would remain on the balance sheet until settled at the point of commutation.
51

UK Motor: illustrative example of QS accounting for prior period
reserve releases
IFRS 17
Example 1

This illustrative example uses the QS
example set out on the previous slides
to illustrate the impact on QS recoveriesof favourable changes in loss ratio; they
are simplified to focus on the impact ofclaims development and as suchexclude the impact of investment
income allowance, discounting and costof the reinsurer margin.

Example 2

Example 3

QS premium (E)

1,200

1,200

1,200

CR start of period (B)Value > 100% (F)

108%
8%

103%
3%

98%
0%

CR end of period (C)CR> 100% (G)

103%
3%

98%
0%

94%
0%

QS impact offsetting gross release (E * (G-F))
Claims release
Profit commission

-60

-36

0

Total impact

-60

-36

0

Under IFRS 17: multiply QS proportional premium by movement in combined ratio, lower
limit of COR of 100% to reflect that recoveries are only recognised where CR > 100%52

Admiral Group’s ESG ratings

2023 score: C-

2024 score: 232024 score: AAA

upgraded2023 score: 41/100

upgraded2023 score: B

53

Dividend policy overview and dates
Dividend policy and guidance• Admiral will pay 65% of post-tax profits as a normal dividend each half-year• Admiral expects to continue to distribute all earnings not required to beretained for solvency, buffers or to purchase shares for employee shareschemes

Dividend dates
Ex-dividend date:

05 September 2024

Record date:

06 September 2024

Payment date:

04 October 2024

54

Admiral brands

55

Disclaimer
For the purposes of this disclaimer, "presentation" means this document, any oral presentation, any question and answer session and any written or oral material discussed or
distributed during the analyst presentation.
The information contained in this presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the company, advisers or representatives
shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection
with this presentation. Unless otherwise stated, all financial information contained herein is stated in accordance with applicable law and UK adopted international accounting
standards at the date hereof. All information in this presentation is subject to verification, correction, completion and change without notice. However, in giving thispresentation, the Group does not undertake any obligation to amend, correct or update this presentation or provide any additional information that may arise in connection
with it.
Certain statements made in this presentation are forward-looking statements. Such statements are based on current expectations and assumptions and are subject to anumber 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 presentation should not place undue reliance on forward-looking statements. Unless otherwise required by applicable law, regulation or accounting
standard, the Group does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments orotherwise.
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professionals as defined in article 19(5) of the Financial Services And Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (b) high net worth
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background information on the Group and is not intended to provide complete disclosure upon which an investment decision could be made.
The financial information set out in the presentation does not constitute the Company's statutory accounts in accordance with section 423 Companies Act 2006 for the fullyear period ending 31 December 2023. This presentation should be read in conjunction with the documents distributed by the Group through the Regulatory News Service(RNS).
56