Admiral Group plc
Group Solvency and Financial Condition
Report31 December 2017

1|PageCONTENTS
Summary ................................................................................................................................................. 5
Statement of Directors’ Responsibilities................................................................................................. 9
Audit Opinion ........................................................................................................................................ 10
A.

Business and Performance............................................................................................................ 13
A.1. Business ................................................................................................................................. 13
A.2. Underwriting performance .................................................................................................... 17
A.3. Investment performance ....................................................................................................... 19
A.4. Performance of other activities ............................................................................................. 20
A.5. Any other information ........................................................................................................... 21

B.

System of Governance .................................................................................................................. 22
B.1. General information on the system of governance ............................................................... 22
B.2. Fit and proper requirements ................................................................................................. 25
B.3. Risk management system including the own risk and solvency assessment (ORSA) ............ 26
B.4. Internal control system .......................................................................................................... 27
B.5. Compliance function .............................................................................................................. 28
B.6. Internal audit function ........................................................................................................... 29
B.7. Actuarial function .................................................................................................................. 30
B.8. Outsourcing............................................................................................................................ 30
B.9. Any other information ........................................................................................................... 31

C.

Risk Profile..................................................................................................................................... 32
C.1. Underwriting risk ................................................................................................................... 35
C.2. Market risk ............................................................................................................................. 37
C.3. Counterparty Default risk ...................................................................................................... 39
C.4. Liquidity risk ........................................................................................................................... 39
C.5. Operational risk...................................................................................................................... 39
C.6. Other material risks ............................................................................................................... 40
C.7. Any other information ........................................................................................................... 40

D.

Valuation for Solvency Purposes (Audited) .................................................................................. 42
D.1. Assets ..................................................................................................................................... 43
D.2. Liabilities ................................................................................................................................ 44
D.3. Technical provisions .............................................................................................................. 45
D.4. Alternative methods of valuation.......................................................................................... 48
D.5. Any other information ........................................................................................................... 48

E.

Capital Management (Audited) .................................................................................................... 49
E.1. Own funds .............................................................................................................................. 49
E.2. Solvency capital requirement and Minimum Capital Requirement ...................................... 54

2|PageE.3. Use of the duration-based equity sub-module in the calculation of the Solvency Capital
Requirement ................................................................................................................................. 56
E.4. Differences between the standard formula and any internal model used............................ 56
E.5. Non compliance with the Minimum Capital Requirement and non-compliance with theSolvency Capital Requirement ...................................................................................................... 56
E.6. Any other information ........................................................................................................... 56
Appendix 1 – Glossary........................................................................................................................... 58
Appendix 2 – Quantitative Reporting Templates ................................................................................. 59

3|PageINTRODUCTION
This Admiral Group plc Solvency and Financial Condition Report (SFCR) has been prepared incompliance with Solvency II regulatory requirements. It contains a range of regulatory disclosuresthat support the information presented in the Quantitative Reporting Templates (QRTs) shown inAppendix 2.
The report is not intended to provide a comprehensive review of the Group’s businesses and themarkets in which they operate, how these businesses are managed, or performance of thesebusinesses during the year. This information is detailed in the Group’s 2017 Annual Report. Where
relevant, specific references to the Annual Report are made throughout this SFCR. It can be found at:https://www.admiralgroup.co.uk/sites/default/files_public/annual-report/2018/02/2017-full-yearresults-annual-report.pdf

STRUCTURE AND CONTENTS
This Group SFCR has been prepared in accordance with Article 359 and Articles 290 to 298 of theSolvency II delegated acts. The structure of the report is in accordance with Annex XX of thedelegated acts.
The Group has obtained a supervisory waiver to prepare a single Group SFCR. As such this report
also contains Solvency information relating to Solvency II regulated solo entities Admiral Insurance
Company Limited (AICL) and Admiral Insurance (Gibraltar) Limited (AIGL). The waiver was obtained
as the nature of the Group’s governance structure, with the Group Board and its Committees leading
the Group’s management and control framework, means that there is significant overlap in thedisclosures for the Group and the solo entities. The single Group SFCR waiver therefore allows
stakeholders to access concise disclosures for all relevant entities in one report.
All amounts in this report are presented in pounds sterling, rounded to the nearest £0.1 million,
which is the Group’s presentation currency. Unless otherwise stated, information in this report isunaudited.

4|Page

SUMMARYSECTION A – BUSINESS PERFORMANCE
Admiral Group plc ‘the Group’ is one of the UK’s largest car insurance providers. In addition tooffering car insurance in the UK, the Group also writes household, van and travel insurance businessin the UK, and car insurance in four countries outside of the UK; Italy, Spain, France and the USA.
The Group and its Solvency II regulated solo entities AICL and AIGL recorded statutory profits of£404m, £31m and £118m respectively in 2017. The table below splits the statutory results between
underwriting (as reported in the premiums, claims and expenses QRTs in Appendix 2 to this report),
investment and other activities:
31-Dec-17

Group

AICL

AIGL

Net Underwriting Results as per Section A.2

164.2

22.7

148.2

Net Investment Result as per A.3

41.7

2.9

29.6

Net Result Arising from Other Activities (Including
Profit Commissions) as per A.4

197.6

5.4

(60.0)

Statutory Profit Before Tax

403.5

31.0

117.9

Taxation expense(71.9)

(5.6)

(8.8)

Statutory Profit After Tax

331.6

25.4

109.1

The table below shows the comparative statutory results from 2016:
31-Dec-16

Group

AICL

AIGL

Net Underwriting Results as per Section A.2

60.3

7.2

53.9

Net Investment Result as per A.3

53.1

3.6

35.7

Net Result Arising from Other Activities (Including
Profit Commissions) as per A.4

165.0

4.4

(34.2)

Statutory Profit Before Tax

278.4

15.2

55.4

Taxation expense(64.3)

(2.4)

(2.0)

Statutory Profit After Tax

214.1

12.9

53.4

The 2016 statutory results noted above were impacted by the change in the Ogden discount rate(the rate used for calculating the value of lump sum personal injury compensation in the UK) from
2.5% to minus 0.75%, announced by the UK Government on 27 February 2017.
The estimated cost to Admiral, net of tax and reinsurance, of the change is approximately £150
million. Most of the impact was reflected in the income statements of 2016 and 2017.

SECTION B – SYSTEM OF GOVERNANCE
Section B to this report focuses on the Group’s system of Governance. The Group Board is theprincipal decision-making forum for the Group providing entrepreneurial leadership, both directly
and through its Committees, and delegating authority to the Executive team. There solo entities AICL
and AIGL have respective individual Board meetings that act in the same manner as the Group
Board. The Group Board and its Committees also have oversight of AICL and AIGL.

5|Page

The Board has delegated authority to a number of permanent Committees to deal with matters inaccordance with written Terms of Reference. The principal Committees of the Board - Audit,
Remuneration, Group Risk and Nomination all comply fully with the requirements of the Corporate
Governance Code.
There were no material changes in the system of governance during the year, aside from changes inmembership of the Group Board and its Committees during the usual course of business.
Section B reports in detail as to how the system of governance works in practice, including a focus on
the Group’s remuneration policy, the system of internal control and the Solvency II key functions of
Risk Management, Compliance, Internal Audit and Actuarial.

SECTION C – RISK PROFILE
The Admiral Group Board is responsible for determining risk strategy and risk appetite across theGroup, and for the Group’s system of risk management and internal control. The Board hasdelegated the development, implementation and maintenance of the Group’s risk management
framework to the Group Risk Committee, which reports its activities to both the Board and also to
the Group Audit Committee, for the purposes of reviewing and reporting on the overall effectivenessof this system.
Section C discussed the Group’s risk assessment and risk management approach in more detail. It
also provides information on the Group’s material risks, as shown by the Solvency Capital
Requirements of the Group and its solo entities in the table below.
31-Dec

GROUP

AICL

AIGL

2017

2016

2017

2016

2017

2016

Market Risk

70.2

77.2

6.2

8.0

48.8

51.2

Counterparty Risk

48.0

35.5

5.0

4.8

23.3

22.5

Life Underwriting Risk

2.9

2.8

0.4

0.0

2.5

2.4

Non-Life Underwriting Risk

350.7

325.0

78.8

73.7

213.7

206.5

Diversification(70.3)(68.4)

(7.2)

(7.9)

(44.4)(45.1)

Basic SCR

401.5

372.1

83.3

78.6

243.7

237.4

Operational Risk

72.7

60.6

11.3

9.4

59.1

48.3

Loss absorbing capacity ofdeferred taxes(26.9)(22.4)(11.4)(9.9)(15.5)(9.3)

SCR excluding Capital AddOn

447.3

410.3

83.2

78.1

287.3

276.4

Capital Add-On

81.0

75.8

-

-

-

-

SCR

528.3

486.1

83.2

78.1

287.3

276.4

6|PageAs can be noted from the table, the material risk category for the Group and its solo entities is nonlife insurance risk which (before diversification with other risk types) represents 66%, 95% and 74%of the SCRs of the Group and its solo entities, AICL and AIGL respectively.

SECTION D – VALUATION FOR SOLVENCY PURPOSES
Section D focuses on the Solvency II balance sheet and the valuation of assets and liabilities. In linewith Solvency II rules, assets and liabilities on the Solvency II balance sheet are held at fair value, i.e.
the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the valuation date.
The material classes in the Group and solo entity Solvency II balance sheets are shown in the tablebelow. Each class is discussed in further detail in section D
Solvency II Balance Sheet, 31-Dec-17

Group

AICL

AIGL

-

-

-

Property, plant and equipment

29.6

-

-

Investments excl Participations

2,702.1

371.8

2,037.2

Investment in Participations

72.8

-

-

Loans and Mortgages

67.7

-

-

Reinsurance recoverables

1,208.6

113.8

1,039.9

Receivables and other assets

547.9

27.8

221.6

Cash

270.7

52.3

34.5

Total Assets

4,899.5

565.7

3,333.3

Technical Provisions - best estimate

2,464.7

381.5

1,997.7

Technical Provisions - risk margin

71.8

12.8

54.9

Deposits from reinsurers

644.0

-

639.3

Deferred tax liabilities

76.5

7.4

7.6

Other payables and liabilities

461.4

22.9

217.2

Subordinated liabilities

229.2

-

-

Total Liabilities

3,947.6424.7

2,916.7

Excess of Assets over Liabilities

951.9

141.0

416.5

Goodwill, DAC and Intangible Assets

SECTION E – CAPITAL MANAGEMENTThe Group manages its capital to ensure that all entities within the Group are able to continue as
going concerns and also to ensure that regulated entities meet regulatory requirements with anappropriate margin. Excess capital above these levels within subsidiaries is paid up to the Groupholding company in the form of dividends on a regular basis.
The Group and its regulated subsidiaries report strong solvency positions at 31 December 2017. The
solvency positions reported in the Annual QRTs for 2017 and 2016 are summarised in the tablebelow:

7|Page31-Dec

GROUP

AICL

AIGL

2017

2016

2017

2016

2017

2016

SCR

528.3

486.1

83.2

78.1

287.3

276.4

Eligible Own Funds

1,018.1

891.3

131.0

127.7

436.5

532.1

Surplus

489.7

405.2

47.8

49.6

149.2

255.7

Solvency Ratio

193%

183%

158%

164%

152%

193%

The Group solvency ratio presented in this report is different to the solvency ratio reported in theGroup’s annual report as it is prepared at a different valuation date and it excludes the impact ofchanges made arising from the reporting finalisation process. The chart below shows the impact ofthese moves:
Reconciliation to previously reported Solvency Ratio:

8|PageSTATEMENT OF DIRECTORS’ RESPONSIBILITIESThe Directors are responsible for ensuring that the SFCR is properly prepared in all material respects
in accordance with the Prudential Regulatory Authority (PRA) rules and SII Regulations.
The PRA Rulebook for SII firms in Rule 6.1(2) and Rule 6.2(1) of the Reporting Part requires that theGroup must have in place a written policy ensuring the ongoing appropriateness of any information
disclosed and that the Group must ensure that its SFCR is subject to approval by the Directors.
The Board of Directors confirm that, to the best of their knowledge:(a) Throughout the financial year in question, the Group and its solo insurance undertakings havecomplied in all material respects with the requirements of the PRA rules and SII Regulations asapplicable; and(b) It is reasonable to believe that, at the date of the publication of the SFCR, the Group and its solo
insurance undertakings continue to comply, and will continue so to comply in future.
By Order of the Board
Geraint Jones
Chief Financial Officer
17 May 20189|PageAUDIT OPINION
Report of the external independent auditor to the Directors of Admiral Group PLC (‘theCompany’) pursuant to Rule 4.1 (2) of the External Audit Chapter of the PRA Rulebook
applicable to Solvency II firms
Report on the Audit of the relevant elements of the Group Solvency and Financial
Condition Report (‘SFCR’)
OpinionExcept as stated below, we have audited the following documents prepared by the Company as at
31 December 2017:•••The ‘Valuation for solvency purposes’ and ‘Capital Management’ sections of the Group SFCR
of the Company as at 31 December 2017, (‘the Narrative Disclosures subject to audit’);Group templates S.02.01.02, S.23.01.22, S.25.01.22 and S.32.01.22 (‘the Group Templates
subject to audit’); andSolo templates S.02.01.02, S.12.01.02, S.17.01.02, S.23.01.01, S.25.01.21 and S.28.01.01
in respect of Admiral Insurance Company Limited and Admiral Insurance (Gibraltar) Limited(‘the Solo Templates subject to audit’).

The Narrative Disclosures subject to audit and the Group Templates and Solo Templates subject toaudit are collectively referred to as the ‘relevant elements of the Group SFCR’.
We are not required to audit, nor have we audited, and as a consequence do not express an
opinion on the Other Information which comprises:
•
•
•
•
•

•

the ‘Executive Summary’, ‘Business and performance’, ‘System of governance’ and ‘Risk
profile’ elements of the Group SFCR;
Solo templates S.05.01.02, S.05.02.01 and S.19.01.21;
Group templates S.05.01.02 and S.05.02.01;
the written acknowledgement by management of their responsibilities, including for the
preparation of the Group SFCR (‘the Responsibility Statement’);
Information which pertains to an undertaking that is not a Solvency II undertaking and has
been prepared in accordance with PRA rules other than those implementing the Solvency II
Directive or in accordance with an EU instrument other than the Solvency II regulations (‘thesectoral information’);Elements of the Narrative Disclosures subject to audit identified as ‘unaudited’.

To the extent the information subject to audit in the relevant elements of the Group SFCR
includes amounts that are totals, sub-totals or calculations derived from the Other Information,
we have relied without verification on the Other Information.
In our opinion, the information subject to audit in the relevant elements of the Group SFCR of theCompany as at 31 December 2017 is prepared, in all material respects, in accordance with thefinancial reporting provisions of the PRA Rules and Solvency II regulations on which they arebased, as modified by relevant supervisory modifications, and as supplemented by supervisory
approvals and determinations.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK),including ISA (UK) 800 and ISA (UK) 805, and applicable law. Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the relevant
elements of the Group Solvency and Financial Condition Report section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the Group SFCR in the UK, including the FRC’s Ethical Standard as applied to public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

10 | P a g e

Emphasis of Matter – Basis of Accounting
We draw attention to the ‘Valuation for solvency purposes’ section of the Group SFCR, which
describes the basis of accounting. The Group SFCR is prepared in compliance with the financial
reporting provisions of the PRA Rules and Solvency II regulations, and therefore in accordancewith a special purpose financial reporting framework. The Group SFCR is required to be published,
and intended users include but are not limited to the PRA. As a result, the Group SFCR may not
be suitable for another purpose. Our opinion is not modified in respect of these matters.
Conclusions relating to going concern
We are required by ISAs (UK) to report in respect of the following matters where:••

the Directors’ use of the going concern basis of accounting in the preparation of the GroupSFCR is not appropriate; orthe Directors have not disclosed in the Group SFCR any identified material uncertainties that
may cast significant doubt about the Company’s ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months from the date when theGroup SFCR is authorised for issue.

We have nothing to report in relation to these matters.

Other Information
The Directors are responsible for the Other Information.
Our opinion on the relevant elements of the Group SFCR does not cover the Other Information
and we do not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the Group SFCR, our responsibility is to read the Other
Information and, in doing so, consider whether the Other Information is materially inconsistent
with the relevant elements of the Group SFCR, or our knowledge obtained in the audit, orotherwise appears to be materially misstated. If we identify such material inconsistencies orapparent material misstatements, we are required to determine whether there is a material
misstatement in the relevant elements of the Group SFCR or a material misstatement of the Other
Information. If, based on the work we have performed, we conclude that there is a material
misstatement of this Other Information, we are required to report that fact.
We have nothing to report in relation to these matters.
Responsibilities of Directors for the Group Solvency and Financial Condition Report
The Directors are responsible for the preparation of the Group SFCR in accordance with thefinancial reporting provisions of the PRA rules and Solvency II regulations which have been
modified by the modifications, and supplemented by the approvals and determinations made by
the PRA under section 138A of FSMA, the PRA Rules and Solvency II regulations on which they arebased.
The Directors are also responsible for such internal control as they determine is necessary toenable the preparation of a Group SFCR that is free from material misstatement, whether due tofraud or error.
Auditor’s Responsibilities for the Audit of the relevant elements of the Group Solvency
and Financial Condition Report
It is our responsibility to form an independent opinion as to whether the relevant elements of theGroup SFCR are prepared, in all material respects, with financial reporting provisions of the PRA
Rules and Solvency II regulations on which they are based.
Our objectives are to obtain reasonable assurance about whether the relevant elements of theGroup SFCR are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are

11 | P a g e

considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the decision making or the judgement of the users taken on the basis of the Group SFCR.
A further description of our responsibilities for the audit of the financial statements is located on
the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. The
same responsibilities apply to the audit of the Group SFCR.

Use of our Report
This report is made solely to the Directors of Admiral Group PLC in accordance with Rule 4.1 (2) ofthe External Audit Chapter of the PRA Rulebook for Solvency II firms. We acknowledge that ourreport will be provided to the PRA for the use of the PRA solely for the purposes set down by
statute and the PRA’s rules. Our audit work has been undertaken so that we might state to theinsurer’s Directors those matters we are required to state to them in an auditor’s report on therelevant elements of the Group SFCR and for no other purpose. To the fullest extent permitted bylaw, we do not accept or assume responsibility to anyone other than the Company and the PRA,
for our audit work, for this report or for the opinions we have formed.
Report on Other Legal and Regulatory Requirements
Sectoral Information
In our opinion, in accordance with Rule 4.2 of the External Audit Chapter of the PRA Rulebook, thesectoral information has been properly compiled in accordance with the PRA rules and EU
instruments relating to that undertaking from information provided by members of the group andthe relevant insurance group undertaking.
Other Information
In accordance with Rule 4.1 (3) of the External Audit Chapter of the PRA Rulebook for Solvency IIfirms we are also required to consider whether the Other Information is materially inconsistent
with our knowledge obtained in the audit of Admiral Group PLC’s statutory financial statements. If,
based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in relation to this matter.

Mark McQueen
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
17 May 201812 | P a g e

A. BUSINESS AND PERFORMANCE
A.1. BUSINESSGENERAL INFORMATION
Admiral Group plc ‘the Group’ is one of the UK’s largest car insurance providers. In addition tooffering car insurance in the UK, the Group also writes household, van and travel business in the UK,
and car insurance in four countries outside of the UK; Italy, Spain, France and the USA.
Outside of insurance, the Group also has price comparison businesses in the UK, Spain, France andthe USA, with the UK price comparison business, Confused.com, being one of the UK’s leading
comparison websites for the last 16 years.
The Group is a company incorporated in the United Kingdom. Its registered office is at Tŷ Admiral,
David Street, Cardiff CF10 2EH and its shares are listed on the London Stock Exchange.
The Group is subject to supervision by the Prudential Regulation Authority ‘PRA’ and the Financial
Conduct Authority ‘FCA’ in the UK. The contact details for these supervisory authorities are as
follows:
PRA

FCA

Name

Prudential Regulation Authority

Financial Conduct Authority

Address

Bank of EnglandThreadneedle Street
LondonEC2R 8AH

25 The North Colonnade
Canary Wharf
E14 5HS

Where relevant, Group subsidiaries outside of the UK are subject to financial supervision by the local
supervisory authority. The Group’s insurance entity registered in Gibraltar, Admiral Insurance(Gibraltar) Limited ‘AIGL’ is subject to Solvency II regulation and is supervised by the Gibraltar
Financial Services Commission. The contact details for this supervisory authority are as follows:
Gibraltar FSC
Name

Gibraltar Financial Services Commission

Address

PO Box 940
Suite 3, Ground Floor
Atlantic Suites
Europort Avenue
GX11-1AA
Gibraltar

Details of the Group’s auditor are as follows:

Name

Deloitte LLP

Address

2 New Street Square
LondonEC4A 3BZ

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As noted above, the Group is listed on the London Stock Exchange. At 31 December 2017, theCompany's issued share capital comprised a single class of shares referred to as ordinary shares.
Details of the share capital and shares issued during the year can be found in the Group’s 2017
Annual Report (note 11d to the Group financial statements). Major shareholders as at 31 December
2017 were as follows:
Major shareholders% Shareholding at 31 December 2017

H Engelhardt & Family

10.6%

Munich Re

10.3%

GROUP STRUCTURE
The chart below shows the major subsidiaries of the Group’s Parent Company, grouped by Solvency
II classification. For further details of the subsidiary undertakings, country of incorporation and classof shares held by the parent company refer to the Group’s 2017 Annual Report (note 11f to theGroup financial statements).

14 | P a g e

Admiral Group plc

SII Insurance Undertakings•Admiral Insurance Company Limited (EEA insurer)•Admiral Insurance (Gibraltar) Limited (EEA insurer)

Third Country Insurance Undertakings•Elephant Insurance Company (Non EEA insurer)

Ancillary Service Undertakings•EUI Limited•EUI (France) Limited•Elephant Insurance Services Limited

Strategic Participations•Inspop.com Limited•Inspop.com (France) Limited•Able Insurance Services Limited•Rastreator.com Limited•Inspop USA LLC•Admiral Law Limited•BDE Law Limited•Preminen Price Comparison Holdings Limited

Other•Admiral Financial Services Limited•Admiral Europe Compania De Seguros S.A.
•Admiral Intermediary Services S.A.

The Group’s major activities are summarised in the following sections:
Insurance Undertakings (SII and Third Country undertakings)
At 31 December 2017, the Group had car insurance businesses in five geographical locations (UK,
Italy, Spain, France and the USA), and Household, Van and Travel insurance businesses in the UK. As
noted above, two of the Group’s insurance undertakings (AICL and AIGL), are SII insurers whilst thethird Elephant Insurance Company (EIC), is registered in the USA and therefore classified as a Third
Country undertaking.
Admiral Europe Compania De Seguros S.A. and Admiral Intermediary Services S.A. are companies
registered during the year as part of the Group’s plans to establish a new insurer and intermediary in
Spain post Brexit. These entities have not yet been granted regulatory permissions. Admiral
Financial Services Limited did not trade in 2017.
15 | P a g e

The table below summarise the Group’s material Solvency II lines of business:

Motor Vehicle Liability

Private motor insurance, capturing bodily injury liabilities (including liabilities thatmay potentially settle by way of Periodic Payment Order in the future) and third
party property damage.

Motor Vehicle Other

Private motor insurance, capturing accident damage liabilities (including fire andtheft and windscreen liabilities).

Fire and damage to otherproperty

Household insurance, capturing accidental damage, escape of water, fire, weather
and subsidence liabilities.

General Liability

Household insurance capturing public liability risks.

Assistance and Misc Financial
Loss

Any other risks arising from insurance products that supplement the core private
motor and household insurance products.

Life (Periodic Payment Orders)Private motor insurance liabilities arising through claims settled as Periodic
Payment Orders.

Ancillary Services Undertakings
The Group’s insurance intermediaries are classified as Ancillary Services Undertakings for Solvency II
purposes. These entities are non-regulated (as per the definition in Article 2(4) of Directive 2002)
with principal activities that are deemed to be ancillary to the Group’s insurance undertakings. The
most material entity is EUI Limited which provides intermediary services for insurance underwritingin the UK, Spain and Italy.
Strategic Participations
All non-insurance related operations in the Group are classified as Strategic Participations. The
principal activity is Price Comparison, where Admiral’s strategy is to develop websites that allow
consumers to compare a range of general insurance, financial services and other products. Theinternational strategy is to exploit the UK expertise in price comparison and export it overseas.
The Group’s UK price comparison site, branded as Confused.com (Inspop.com Limited) was launchedin 2002 and is one of the UK’s leading comparison websites. International price comparison
operations in Europe (Rastreator.com in Spain and Lelynx.fr in France) and in the USA(compare.com) have subsequently been launched in 2009, 2010 and 2013 respectively. Morerecently, the Group has established Preminen, a Price Comparison incubator that looks to establish
price comparison businesses in a number of new markets around the world.
The Group’s UK based law firms, Admiral Law and BDE Law, provide a range of legal services, withthe companies’ legal experts primarily specialising in road traffic accident claims, and the Group’scommercial van broker, Able Insurance Services Limited (branded as ‘Gladiator’) offers policyholders
a wide range of commercial van insurance products from across the market.

SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
Change in UK discount rate (‘Ogden’)On 27 February 2017, the UK Government announced the outcome of the review of the discountrate (referred to as the Ogden discount rate) used for calculating the value of lump sum personal
injury compensation. The new rate is minus 0.75% and applies to all unsettled and new claims from20 March 2017.
16 | P a g e

The change in rate was treated as an adjusting post balance sheet event in the Group’s 2016
financial statements. The UK motor actuarial best estimates and Solvency II technical provisions usedin the calculation of the solvency position were prepared based on the new rate in both the prioryear and current year. The booked reserves in the financial statements continue to include a prudent
and significant margin above the actuarial best estimates in line with the Group’s reserving
methodology.
The estimated cost to Admiral, net of tax and reinsurance, of the change is approximately £150
million. Most of the impact was reflected in the income statements of 2016 and 2017.
On 20 March 2018, the Government introduced the Civil Liability Bill into the House of Lords. This Bill
includes plans to review the discount rate and the process by which it is set. The Group looks
forward to following the progress of the Bill and reviewing the conclusions once more certainty over
the outcome is obtained.

A.2. UNDERWRITING PERFORMANCEThe tables below show the Group’s underwriting performance (premiums, claims and expenses inline with QRTs S.05.01 and S.05.02) summarised by Solvency II line of business and by geographicallocation. The tables are prepared on a financial statement basis and are reconciled to the Groupstatutory profit in section A.4 below. Total Group net premiums written of £627.2m (which does notform part of the profit reconciliation) can be agreed to note 5 of the Group Financial statements
within the 2017 Annual Report.
31-Dec-17

Total

Net
Premiums
Written

Net
Premiums
EarnedNet
ClaimsIncurredNet
Expenses
Incurred

Motor Vehicle Liability

440.7

438.1

227.1

96.9

114.1

Motor Vehicle Other

118.5

118.1

64.3

31.6

22.2

Fire and damage to other property

26.6

23.1

17.0

4.8

1.3

General Liability

0.1

0.1

-

-

-

Assistance and Misc Financial Loss

41.4

39.8

21.3

3.3

15.1

-

-

6.1

2.2

(8.3)

627.2

619.1

335.9

138.8

Life
Total 2017

Other
Expenses*1(19.8)

164.2

Other
Expenses*1

Total

The following table shows the comparative underwriting performance for 2016:
31-Dec-16

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

Motor Vehicle Liability

422.7

391.0

270.0

88.6

32.4

Motor Vehicle Other

115.0

104.8

76.5

26.3

2.1

Fire and damage to other property

20.4

16.9

12.9

5.8

(1.8)

General Liability

0.1

-

-

-

-

Assistance and Misc Financial Loss

40.4

36.1

15.5

3.1

17.4

-

-

8.4

2.1

(10.5)

598.4

548.8

383.3

125.9

Life
Total 2016(20.8)

60.3

17 | P a g e

*1
Other expenses represent intra-group price comparison expenses that are eliminated for the
purposes of the Group financial statements.
Analysis by Line of Business
The first table shows that the Group achieved an underwriting profit of £164.2 million. The tables
provide a split of underwriting profit by Solvency II line of business. As noted on the QRTs in
Appendix 2 it should be noted that premiums, claims and expenses within Group insurance
businesses are not typically allocated to these individual lines of business for the purposes ofinternal or external reporting and so therefore simplifications have been utilised to make thisallocation for the purposes of QRT disclosure. One such assumption is that the Life (PPO) line ofbusiness does not attract premiums and therefore a loss totalling allocated claims and expenses isreported.
The split of underwriting profit by line of business shows that the motor insurance lines of business(motor vehicle liability, motor vehicle other and Life (relating to Periodic Payment Orders ‘PPOs’))
report a combined profit of £136 million.
The Fire and Damage to Property and General Liability lines can be attributed to the UK Householdbusiness. A total underwriting profit of £1.3 million is reported.
Finally, the Assistance and Miscellaneous Financial Loss lines of business primarily relate to the UK
motor policy upgrade products underwritten by the Group, and contribute an underwriting profit of£15 million.

Analysis by Geographical Location
31-Dec-17

Net
Premiums
Written

Net
Premiums
EarnedNet
ClaimsIncurredNet
Expenses
Incurred

UK

494.0

491.6

239.0

78.8

173.8

USA

53.0

54.9

42.3

30.7

(18.1)

Italy

52.5

48.0

33.7

12.7

1.5

Spain

13.7

13.1

10.8

7.6

(5.2)

France

14.0

11.6

10.0

9.0

(7.5)

Total

627.2

619.1

335.9

138.8

Other
Expenses*1(19.8)

Total

164.2

*1
Other expenses represent intra-group price comparison expenses that are eliminated for the
purposes of the Group financial statements.
The table above analyses the Group underwriting performance by geographical location. The UK
Insurance business generates over 100% of the Group underwriting profit (£174 million), with theGroup’s International businesses in total contributing an underwriting loss of £29 million.
The underwriting performance analysis excludes other revenue generated from the sale ofadditional products alongside the core motor insurance policy. Therefore, the combined

18 | P a g e

international underwriting loss is different to the International Car Insurance segment loss of £14.3
million reported in note 4 to the Group financial statements in the Group’s 2017 Annual Report.
Other revenue generated by the UK and International businesses is reported within Section A.4
below (Performance of Other Activities).
Solo Entity Premiums, Claims and Expenses
31-Dec-17

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

AICL

179.7

172.4

116.9

32.9

22.7

AIGL

394.5

391.8

176.7

66.9

148.2

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

AICL

158.1

147.8

107.6

33.0

7.2

AIGL

391.0

359.8

235.1

70.8

53.9

31-Dec-16

Other
Expenses

Total 2017

Other
Expenses

Total 2016

As detailed in the QRTs in Appendix 2 to this report, total non-life and life premiums, claims for theGroup’s two SII solo entities AICL and AIGL are shown in the table above. Both entities report anunderwriting profit, with the more material underwriting profits in AIGL reflecting its higher net
share of UK motor insurance and profits generated by the motor policy upgrade products.

A.3. INVESTMENT PERFORMANCEThe tables below show a breakdown of investment income by type for both 2017 and 2016:
31-Dec-17

Group

AICL

AIGL

2017

2016

2017

2016

2017

2016

Investment return on assets classified as‘Fair value through profit and loss’

2.1

2.9

0.5

0.8

1.6

1.0

Gains on forward contracts
Interest income on ‘Available for sale’
debt securities

(2.3)

6.5

-

-

-

-

32.4

23.4

1.8

2.0

25.4

22.1

Interest income on term deposits

3.4

4.7

0.7

0.8

2.3

3.4

Realised gains on sale of gilt assets
Interest income on ‘Held to Maturity’ gilt
assets

5.4

-

-

-

-

-

-

6.2

-

-

-

Unwind of discount on gilt assets

-

(0.8)

-

-

-

-

9.2

-

-

9.2

0.8

1.0

(0.1)

-

0.4

-

41.7

53.1

2.9

3.6

29.6

35.7

Release of accrual for reinsurers share of
returns
Interest receivable on cash and cash
equivalents
Total 201719 | P a g e

Group Investment and interest income in 2017 was £41.7 million. £5.4 million of income is due tothe gain recognised on the partial sale of gilt holdings during the year. As a result of this sale,interest income on gilt assets is now recognised on an ‘Available for Sale’ basis. In the current year,
losses made on forward contracts offset investment income by £2.3 million.
The underlying rate of return for the year on the Group’s cash and investments was 1.4% (comparedwith 1.4% in 2016 excluding the release of reinsurance accrual).
In addition to the investment income recognised in the IFRS income statement, the Group also
recorded a gain of £8.3 million (2016: gain of 30.3 million) in the Fair Value reserve within Equity as aresult of unrealised gains arising on the valuation of ‘Available for Sale’ financial assets. This
unrealised gain includes the revaluation of the gilt holding resulting from the reclassification to‘Available for Sale’ following the partial sale of the holding discussed previously.
Investment income in the solo entities was £2.9m and £29.6m for AICL and AIGL respectively.

A.4. PERFORMANCE OF OTHER ACTIVITIESThe table below summarises revenue and expenses from other activities and also provides areconciliation of the information in Sections A.2, A.3 and A.4 to the statutory profit as per the
Financial Statements of the Group and solo entities.

31-Dec-17

Group

AICL

AIGL

2017

2016

2017

2016

2017

2016

Net Underwriting Results as per Section
A.2

164.2

60.3

22.7

7.2

148.2

53.9

Net Investment Result as per Section A.3

41.7

53.1

2.9

3.6

29.6

35.7

Other Revenue

420.9

360.6

5.4

4.4

40.4

33.1

Profit Commission

67.0

54.3

-

-

(99.9)(65.6)

Other Net Costs(279.0)(238.5)

-

-

(0.5)

(1.6)

Finance Costs(11.4)(11.4)----

Statutory Profit Before Tax

403.5

278.4

31.0

15.2

117.9

55.4

Taxation expense(71.9)(64.3)

(5.6)

(2.4)

(8.8)

(2.0)

Statutory Profit After Tax

331.6

214.1

25.4

12.9

109.1

53.4

Other Activities:

Outside of underwriting and investment activities, the Group’s other activities performed strongly
during 2017 with strong growth in net contribution from other revenue and associated costs. The
material financial statement line items are discussed individually below:
Other revenue
The two primary sources are:i.

Contribution from additional products and fees, including revenues earned on the sale ofproducts supplementing the core insurance policies, administration and other charges paid
20 | P a g e

by policyholders, referral fees, revenues from policies paid by instalments and vehiclecommission charges paid by reinsurers and co-insurers.
Revenue increased to £207 million from £199m in 2016, primarily as a result of growth in thepolicy base of the UK motor insurance business.
ii.

Price comparison revenue totalled £144 million in 2017 (compared with £129 million in2016). The main contribution to revenue is from Confused.com in the UK.

Profit Commission
Profit commission receivable from co-insurers and reinsurers in 2017 was £67 million at Group level.
AIGL reports negative profit commission of £100m as intra-group profit commission payable morethan offsets profit commission receivable from quota share reinsurers.
Other Net Costs
Other costs primarily relate to the other revenue noted above, being internal costs allocated to thegeneration of contribution from other products and fees, and also price comparison expenses. These
costs increased with the growth in the revenue lines noted above.
This category also includes central group costs that are not allocated to individual businesses – net
share scheme charges being the most significant.
Operating Lease Commitments
The Group is committed to total minimum obligations under operating leases on land and buildings
as follows:
31-Dec-17

2017

2016

Within one year

12.1

12.0

Within two to five years

40.8

42.1

Over five years

113.7

119.3

Total commitments

166.6

173.4

Operating lease payments represent rentals payable by the Group for its office properties. There are
no leasing arrangements in place for the solo entities.

A.5. ANY OTHER INFORMATION
None.

21 | P a g e

B. SYSTEM OF GOVERNANCE
B.1. GENERAL INFORMATION ON THE SYSTEM OF GOVERNANCESTRUCTURE OF THE ADMINISTRATIVE, MANAGEMENT OR SUPERVISORY BODY
The Board is the principal decision-making forum for the Group providing entrepreneurial
leadership, both directly and through its Committees, and delegating authority to the Executive
team. There solo entities AICL and AIGL have respective individual Board meetings that act in thesame manner as the Group Board. The Group Board and its Committees also have oversight of AICL
and AIGL.
The Group’s 2017 Annual report (Governance section) provides further detail of the role of theBoard and other information such as Board activity during the period.
The Board has delegated authority to a number of permanent Committees to deal with matters inaccordance with written Terms of Reference. The principal Committees of the Board - Audit,
Remuneration, Group Risk and Nomination (as shown in the diagram below) - all comply fully withthe requirements of the Corporate Governance Code.

Board of Directors

Audit
Committee

Group Risk
Committee

Nomination
Committee

Remuneration
Committee

All Committees are chaired by an independent Non-Executive Director, except the Nomination
Committee which is chaired by the Chairman of the Board, and comprise a majority of independent
Non-Executive Directors. Appointments to the Committees are made on the recommendation of theNomination Committee and are for a period of up to three years, which may be extended for two
further three year periods, provided the Director remains independent.
The Committees are constituted with written Terms of Reference that are reviewed annually toensure that they remain appropriate and reflect any changes in good practice and governance.
These Terms of Reference are available on request from the Company Secretary and can also befound on the Company’s website: www.admiralgroup.co.uk. Directors are fully informed of all
Committee matters by the Committee Chairmen reporting on the proceedings of their Committee atthe subsequent Board meeting. Copies of Committee minutes are also distributed to the Board.
The AICL and AIGL subsidiary Boards are also chaired by independent Non Executive Directors.

22 | P a g e

MATERIAL CHANGES IN THE SYSTEM OF GOVERNANCE
There were no material changes in the system of governance during the year. During the year thefollowing changes in membership of the Group Board and its Committees were made:
•
•
•
•
•

Alastair Lyons stepped down from the Group Board with effect from 26 April 2017.
Annette Court was appointed Chairman of the Board with effect from 26 April 2017 andstepped down from the Audit Committee from that date.
Penny James stepped down from the Group Board with effect from 8 September 2017.
Justine Roberts joined the Remuneration Committee with effect from 26 April 2017.
Andy Crossley joined the Audit Committee with effect from 27 February 2018.

The following changes were also made in respect of the AICL and AIGL solo entity Boards during the
year:
•
•
•
•
•
•
•
•

Lorna Connelly stepped down from the AICL Board with effect from 16 May 2017.
Alberto Schiavon stepped down from the AICL Board with effect from 16 May 2017.
Linda Wells stepped down from the AICL Board with effect from 16 May 2017.
Carsen Prussog joined the AICL Board with effect from 16 May 2017.
Geraint Jones stepped down from the AIGL Board with effect from 20 March 2017.
Peter Marissen stepped down from the AIGL Board with effect from 20 March 2017.
Rachel Lewis joined with AIGL Board with effect from 21 March 2017.
James Armstrong joined with AIGL Board with effect from 21 March 2017.

REMUNERATION POLICYKey Principles of Admiral Remuneration Arrangements
Admiral is committed to the primary objective of maximising shareholder value over time andensuring that there is a strong link between performance, risk and reward. This is reflected in theGroup’s approach of paying competitive, performance-linked and shareholder-aligned remuneration
packages comprising basic salaries coupled with participation in performance-based share schemes
to generate competitive total reward packages.
Fixed remuneration at Admiral comprises base salaries, benefits and pension. In line with theprinciples outlined above, base salaries are fixed and reflect the individual’s responsibilities, role, job
size and performance. Market and economic conditions and developments in governance are also
considered when setting base salaries and determining the appropriate benefits and pension
provisions.
Longer-term performance-based reward is provided through the Discretionary Free Share Scheme
which is outlined below. The balance between fixed and variable remuneration ensures that anelement of overall reward is linked to longer-term Group Strategy and risk management as well as toshareholder and customer value.
Two share schemes are operated within the Group, as follows:

23 | P a g e

(i) The Approved Share Incentive Plan (the SIP)
All eligible employees qualify for awards under the SIP based upon the performance of the Group ineach half-year period. The maximum award for each year is £3,600 per employee. The awards are
made with reference to the Group’s performance against prior year profit before tax. Employees
must remain in employment for the holding period (three years from the date of award) otherwise
the shares are forfeited.
(ii) The Discretionary Free Share Scheme (the DFSS)
Employees across the Group receive DFSS awards based upon role and individual performance.
Under the DFSS, individuals receive an award of free shares at no charge.
One third to 50% of the shares awarded at the start of the three-year vesting period are guaranteed
to vest subject to continued employment until the vesting date.
The remaining percentage are subject to the Group performance criteria which are the threemeasures below with equal weighting.
1) Earnings per Share (EPS) growth vs. LIBOR
If the Group’s EPS grows at a rate below the LIBOR return over the three-year period, none of the
EPS element will vest. 10% of the element will vest for EPS growth in line with LIBOR, increasing on astraight-line basis to 100% vesting for growth of 10% p.a. in excess of LIBOR.
2) Return on Equity (ROE)
If the Group’s ROE is less than 25%, none of the ROE element will vest. 25% of the element will vest
for ROE of 25%, increasing on a straight-line basis to 100% vesting for ROE of 55%.
3) Total Shareholder Return (TSR) for Admiral vs. FTSE350
If Admiral’s TSR is below the median of the group, none of the TSR element will vest. 25% of theelement will vest for TSR in line with median, increasing on a straight-line basis to 100% vesting for
TSR in line with the upper quartile of the group.
DFSS bonus
The Company does not pay annual cash bonuses in the traditional sense and instead has in place a
simple cash award that is directly linked to the number of DFSS awards which have yet to vest andactual dividends paid out to shareholders. This structure contributes to a culture of focussing oncollective, rather than individual, and long-term, rather than short-term, success, and is aligned with
the Company’s philosophy around the efficient use of capital and distribution of surplus profits. The
DFSS bonus is also subject to a ±20% adjustment based on performance against a set of risk metrics.
Pension Provisions
The Group operates a Defined Contribution Scheme which is available to all employees following
completion of their probationary period. In the UK, the Group matches employee contributions to a
maximum of 6% of base salary subject to a maximum employer contribution of £15,000.

24 | P a g e

The Remuneration Report within the Group’s 2017 Annual Report contains further information
about the DFSS scheme and the Remuneration Policy for Executive Directors of the Group.

MATERIAL RELATED PARTY TRANSACTIONS
Details relating to the remuneration and shareholdings of key management personnel are set out in
the Directors’ Remuneration Report within the Group’s 2016 Annual Report. Key management
personnel are able to obtain discounted motor insurance at the same rates as all other Group staff,
typically at a reduction of 15%.
The Board considers that only the Executive Directors of Admiral Group plc are key management
personnel. Aggregate compensation for the Executive Directors is disclosed in the Directors’
Remuneration Report within the Group’s 2017 Annual Report.

B.2. FIT AND PROPER REQUIREMENTS
The Admiral Group Nominations Committee owns and approves the Admiral Group Plc Fit andProper Policy. The policy aims to ensure that all senior individuals who represent the organisation
meet the fit and proper requirements in terms of qualifications, capability, honesty and integrity. As
per the Policy, all prospective senior management appointments shall fill out a checklist prior to anoffer being made. The checklist includes details of the candidate’s knowledge, competence andexperience to perform the role, and a declaration from the senior manager responsible for the
recruitment to confirm the assessment of the candidate’s fitness and propriety was carried out inline with this Policy. In addition, the candidate will be subject to interviews with appropriate
members of staff, who will help complete the assessment of the candidate’s fitness and propriety inrelation to that role.
In order to ensure that the individuals running the organisation are fit and proper a number ofchecks are undertaken including;
•
•
•
•
•
•
•
•
•
•

Previous employment history
Educational background check
Professional qualifications and membership check
Notification of appointment to regulator
Information on potential conflicts of interest
Criminal history checks
Credit checks
Identity checks
Directorship check
Financial sanctions checks

The Head of People Services is responsible for ensuring the Fit and Proper policy, approved by
Admiral Group Nominations Committee, is adhered to when senior management appointments are
made by the firm. The policy is reviewed annually by Compliance to ensure it is line with all relevant
regulations and remains fit for purpose. In addition, all senior management are subject torequirements laid out by the UK regulators (FCA and PRA), through the Senior InsuranceManagement Regime.

25 | P a g e

B.3. RISK MANAGEMENT SYSTEM INCLUDING THE OWN RISK AND SOLVENCY ASSESSMENT (ORSA)The Group has a ‘three lines of defence’ approach to Risk Management, the scope of which also
applies to the solo entities AICL and AIGL. The ‘first line of defence’ describes the controls the Grouphas in place to deal with the day-to-day business. Controls, which are designed to appropriately
mitigate risk, are managed by the business unit and overseen by the business unit Risk Management
Committees who ensure compliance and review control breakdowns, inadequacy of process andunexpected events.
The ‘second line of defence’ describes the Committees (primarily the GRC) and functions that are inplace to provide an oversight of the effective operation of the internal control framework. These
committees review the management of risk in relation to the particular risk appetite of the business,
as determined by the Board. The ‘second line’ is reinforced by the advisory and monitoring
functions of Risk and Compliance. Risk defines and prescribes risk assessment processes for thebusiness, maintains risk registers and undertakes regular reviews of these risks and controls in
conjunction with line management. Compliance advises on all areas of regulatory principles, rules
and guidance, including leading on any changes, and undertakes monitoring activity on key areas ofregulatory risk and policy adherence.
The ‘third line of defence’ describes the independent assurance provided by the Audit Committee
and the Group Internal Audit function that reports to that committee. Internal Audit undertakes a
programme of risk based audits covering all aspects of both the first and second lines of defence.
The findings from these audits are reported to all three lines, i.e. line management, the executive
and oversight committees and the Audit Committee.
The Group’s Enterprise Risk Management Framework is described in Section C (Risk Profile) below.
ORSA
Admiral Group Plc’s Risk Strategy is directly linked to its business plan and model. The approach isembedded in the ORSA and links to the business planning process.
The Group Risk Function defines and prescribes the financial and operational risk assessment
processes for the business; performs second line reviews, including reserving and capital modelling
processes; maintains the risk registers; undertakes regular reviews of these risks in conjunction withline management; delivers the Own Risk and Solvency Assessment (ORSA); and records any actual
losses or near misses that occur as a consequence of the realisation of risk.
The Chief Risk Officer has responsibility for ensuring that managers are aware of their risk
management obligations, providing them with support and advice, and ensuring that the risk
management strategy is properly communicated. Reports are produced showing the most significant
risks identified and the controls in place. Internal Audit uses the risk registers to plan and informtheir programme of audits around the most significant risks to the Group to ensure that theprescribed controls are in place and are operating effectively.
ORSA Approval Process
On an annual basis, or following significant changes in the risk profile of the business, the Group Risk
Function will produce an Own Risk and Solvency Assessment (ORSA) Report, in line with the ORSA

26 | P a g e

Policy and Solvency II regulations. The report is reviewed and challenged at the GRC prior to
submission to the Group and subsidiary Board Committees.
The report is also submitted to the PRA for information purposes, and to receive feedback on thequality and suitability of the report.
Group Determination of Solvency Requirements
Within the ORSA, the Solvency Capital Requirement is calculated on two bases; Regulatory andEconomic (ultimate). The ORSA considers both bases in order to provide a quantification of thedifferences between the two viewpoints. In addition, analyses of the key drivers of economic(ultimate) capital needs and regulatory capital requirements are also considered.
Admiral is currently developing an internal model and intends to seek approval from the PRA andthe FSC to calculate the regulatory SCR using a Partial Internal Model (PIM) for Group and AIGL.
Whilst Admiral completes this development, the Group’s regulatory capital requirement is based on
the Solvency II standard formula with a capital add-on to reflect recognised limitations in thestandard formula, (predominantly in respect of profit commission arrangements within co- andreinsurance contracts and risks arising from Periodic Payment Order (PPOs) claims).
Refer to section C for a review of the Group’s basis for calculating Regulatory capital requirements.

B.4. INTERNAL CONTROL SYSTEM
The Admiral Group Internal Control Policy documents the procedures in place within the Group (thatalso cover the solo entities AICL and AIGL), to ensure there is an effective internal control system
operating. The internal control system is managed through both the effective operation of thesystems of governance in place within the Group, as well as through the three lines of defence
strategy adopted by the Group.
The Internal Control framework is broadly defined as continually operating processes, effected by
the Board of Directors, management and all levels of personnel, designed to provide reasonableassurance regarding the achievement of objectives in the following categories:•••

Effectiveness and efficiency of operations in view of its risks and objectives
Availability and reliability of financial and non financial information
Compliance with applicable laws, regulations and administrative provisions

Internal control consists of four interrelated components:
•
•
•

•

Control environment – sets the tone of an organisation through the business plan, risk
appetite and risk profile
Control activities – policies and procedures that help ensure necessary actions are taken toaddress risks to achieve the business’ objectives.
Information and Communication – Pertinent information must be identified, captured andcommunicated in a form and timeframe that allows relevant individuals to carry out their
responsibilities.
Monitoring – Internal control systems need to be monitored to assess the quality of theinternal control system over time. This is accomplished through ongoing monitoring

27 | P a g e

activities, with deficiencies in the internal control framework reported to senior
management and the Board.
The Group’s control environment is determined by the Admiral Group Board of Directors, supported
by a number of Committees who have set the tone of the organisation through the Admiral culture,
principles, business plan and risk appetite.
Key control activities are mapped to primary risks held within the Group’s risk universe.
Line 1 (operational functions) are responsible for monitoring all the risks facing their operation,
whether this be through Call monitoring, file reviews or audit reviews. Results on monitoring
activities are provided to operation managers, and subsequently reported on through the AdmiralGroup Governance structure.
Line 2 (Risk & Data Protection, Compliance and Actuarial functions) are responsible for the oversightof the Line 1 monitoring. This is done through:•••Risk reviews – business unit risk and controls discussed at RMCs with material risks and KRIs
presented to Group Risk Committee in the Consolidated Risk ReportCompliance Advice and Compliance Monitoring Reviews presented to Group Risk Committee
Actuarial and validation reviews

Line 3 (Internal Audit) are responsible for conducting an objective and independent appraisal of all
the Group's activities, financial and otherwise, through a risk based plan, approved annually by theGroup Audit Committee.
External Reviewers are responsible for the oversight of specific processes within the Group,
depending on the scope of the review they are required to undertake. This includes:••

External Auditors - responsible for the review of accounting and financial processes
presented to Audit Committee
External Consultancies – review of a number of key processes

B.5. COMPLIANCE FUNCTION
The Group has a Line 2 compliance function within each operation that reports directly to the Group
Risk Committee, both in relation to the Group as a whole, and the solo entities AIGL and AICL. EachCompliance Function is responsible for reviewing Line 1’s compliance with the control activities andreporting these to the Group Risk Committee for external challenge and oversight by the Non
Executive Directors.
In addition, each Compliance function must design and implement their own control activities tomitigate their risks and test the operating effectiveness of these prior to being reported to theGroup Risk Committee for challenge. The Compliance report combines both of these responsibilities
and the attendance of the Head of Compliance at the Group Risk Committee acts as acommunication line to the other Compliance Functions.
The Line 2 Compliance team works to ensure the business has effective systems and controls tofacilitate adherence to the rules and guidelines set by the Financial Conduct Authority (FCA) &Prudential Regulation Authority (PRA), along with other regulatory bodies as applicable.

28 | P a g e

B.6. INTERNAL AUDIT FUNCTION
The Group Internal Audit function is responsible for conducting an objective and independent
appraisal of the Group's activities and controls, financial and otherwise, through a risk based plan,
approved annually by the Group Audit Committee. It is responsible for evaluating and reporting to
the Board and the Audit Committee, and thereby providing them with assurance on the operating
effectiveness of controls that management has put in place.
Internal Audit is also responsible for providing assurance over the arrangements for risk
management, control and governance, compliance with internal policies, procedures and controls,and value for money. The Group Internal Audit department shall report to the relevant
Board/Committee the findings and recommendations from their review, including the time period
envisaged to remedy any shortcomings, and follow up on any recommendations made on a timely
basis. It remains the duty of management to operate these arrangements, to determine whether or
not to accept audit recommendations and to recognise and accept the risks of not taking action.
Management need to provide an appropriate level of justification and where applicable supporting
documentation to justify their reasoning, when choosing to accept the given risk, or decline arecommendation.
The Annual Audit Plan is based on a methodical risk analysis, taking into account all activities and thecomplete system of governance, as well as expected developments of activities andinnovations. Significant areas of risk, identified as Tier One risks, per the Risk Register, areconsidered for inclusion in the Annual Audit Plan each year. Any audits graded red in colour are
reviewed within a 12 month period until they are in a non-red status. Outside of these, a plan,
extending over four years, is in place.
Independence and Objectivity of the Internal Audit Function
The Group’s internal audit policy states that the Internal Audit department and all of its employees
must be functionally and organisationally independent of the business processes, events andtransactions of the company. The Internal Audit department will carry out its assignments with
impartiality and is free to express its opinions in their reports. Amongst many matters, the Internal
Audit department must have direct access to the Board of Directors, Audit Committee and the Chief
Executive Officer and be able to report directly to these levels when they deem this necessary. Such
independent structure should enable the internal auditor to render impartial and unbiased
judgement, essential to the proper conduct of their work.
Internal Audit activity must be free from interference in determining the scope of internal auditing,performing work and communicating results.
An Internal Auditor will not perform an audit review in an area where they had a consultancy /operational role in the previous twelve months.
Where practical, areas under review are rotated amongst the staff in Internal Audit to avoid any
potential conflict of interest.

29 | P a g e

B.7. ACTUARIAL FUNCTION
The Actuarial Function has a number of responsibilities in the area of Technical provisions and also inproviding an opinion on the adequacy of re-insurance and underwriting.
Solvency II requirements state that the Actuarial Function shall be carried out by persons who haveknowledge of actuarial and financial mathematics, commensurate with the nature, scale andcomplexity of the risks inherent in the business, and who are able to demonstrate their relevant
experience with applicable professional and other standards. The Actuarial Function should be freefrom influences that may compromise its ability to undertake its duties in an objective, fair andindependent manner.
The Actuarial Function produces a written report (“The Actuarial Function Report”) which is
submitted to the Board, at least annually, documenting all tasks undertaken, identifying deficiencies
and making recommendations to remedy these deficiencies. The report is designed to include thecalculation of technical provisions, an opinion on overall underwriting policy and an opinion on theadequacy of reinsurance arrangements.
The responsibilities that fall under the remit of the Actuarial Function are segregated from otherbusiness activities to allow independent review and challenge, allowing the Actuarial Function toprovide an independent opinion of the areas of Technical Provisions, Reinsurance and Underwriting.
The review and challenge is carried out by the 2nd line Group Risk Function which enables clearer
separation of activities and strengthens the independence. The Actuarial Function is made up ofsuitably qualified actuaries who have the skills and knowledge to make the decisions without the
influence of others.

B.8. OUTSOURCINGThe Group’s Procurement and Outsourcing Policy ensures that any third party arrangement enteredinto by the Group does not lead to impairment of either the group’s systems of governance andinternal control, or the relevant supervisory authority in monitoring compliance risks, does not
unduly increase the operational risk and does not undermine continuous and satisfactory service tocustomers.
The Group outsources a number of critical and important functions across all businesses, to various
third parties. The Group Procurement and Outsourcing Policy provides a clear guide to identify andmanage outsourced relationships to a minimum standard based on the strategic risk the supplierposes to the Group.
Material intra-group outsourcing arrangements include the provision of insurance services by theGroup’s insurance intermediaries EUI Limited, EUI (France) Limited and Elephant Insurance Services
LLC to the Group’s regulated insurance entities. In addition, the Group has a number of shared IT
development centres that provide services to both the Group’s insurers and price comparison
websites. Intra-group outsourcing arrangements fall within the scope of the Group’s outsourcing
policy in a consistent manner to outsourcing arrangements external to the Group.

30 | P a g e

B.9. ANY OTHER INFORMATION
Assessment of the adequacy of the system of governance
The Board is ultimately responsible for the Group’s system of governance, including the system ofrisk management and internal control. As noted in the Group’s 2017 Annual Report, the Board
confirms the Group’s compliance with the principles and provisions of the UK Corporate Governance
Code 2014 (the code) which is applicable to the year under review, and is considered to represent
best practice for UK listed companies. This covers both the Group as a whole, and also the solo
entities AIGL and AICL.

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C. RISK PROFILERISK ASSESSMENT AND RISK MANAGEMENT
The Admiral Group Board is responsible for determining risk strategy and risk appetite across theGroup, and for the Group’s system of risk management and internal control. The Board hasdelegated the development, implementation and maintenance of the Group’s risk management
framework to the Group Risk Committee, which reports its activities to both the Board and also to
the Group Audit Committee, for the purposes of reviewing and reporting on the overall effectivenessof this system.
The Group’s 2017 Annual Report (pages 56 – 59) contains detailed information on the activities of
the Group Risk Committee during 2016 along with the Committee’s duties and responsibilities andthe Group’s Risk Management and Internal Control statement.
Risk management is a continuous process which forms an essential part of Admiral Group’s business
operations with successful risk taking required to achieve the Group’s business objectives in the
short, medium and long term. Admiral has always sought to protect its downside and this ischaracterised by: the reinsurance model; a prudent approach to claims reserving; an organic growthstrategy; a test and learn approach of taking measured steps before investing further; and aconservative approach to investment management.
The Group’s Enterprise Risk Management Framework (ERMF) is designed to identify, evaluate andmanage the risks to which Admiral is exposed. Risk appetite is a central element of the ERMF - thisseeks to determine the level of risk the Group Board deem appropriate for the business to accept,
net of controls and mitigating factors such as reinsurance and other management actions.
There are six key components of the Admiral Group Risk Appetite:
i.
ii.
iii.
iv.
v.
vi.

The Key Risks to the business are identified
Risk Classifications are assigned to each key risk on a materiality basis.
Risk Drivers are identified for each key risk.
Risk Appetite Statements are then assigned to define the risk and the Boards approach to
managing the risk.
Key Risk Indicators are monitored for each risk driver.
Triggers and Limits are defined to reflect early warning indicators and risk limits.

MATERIAL RISKS
The material, or Key Risks to the Group are listed below, and may be mapped to the main categories
of risk within the Solvency II Solvency Capital Requirement (SCR):

32 | P a g e

Key Risk

Risk Overview

Insurance, or Underwriting Risk

Uncertainty over the occurrence, amount or timing of claims arising on insurance
contracts issued by the Group.

Market Risk

Fluctuations in the value of market prices of the Group’s investment assets andliabilities, or in the income and expenses generated from these assets and liabilities.

Counterparty, or Credit Risk

The risk that counterparties (primarily either reinsurers or banks or other investment
counterparties) default on obligations.

Operational Risk

Risks arising through operational processes and procedures. These include risks related
to people, processes, IT systems, information security, business continuity andcustomer outcomes.

Group Risk

Risks, other than those captured within categories above arising across the Group’s
operations. These may relate to the Group’s non insurance businesses (such as Price
Comparison) or to other risks relating to the insurance businesses (such as loss ofadditional revenues from customers).

Each of these risk categories is discussed in further detail in sections C1 – C7 below, along withdetails of risk mitigating actions taken by the Group Board in respect of each risk. Pages 33 – 37 of
the Group’s 2017 Annual Report also provides further information on the Group’s ‘Principal Risks
and Uncertainties’, their impacts and the associated mitigating actions.
The Group’s Solvency II SCR reflects the profile of these material risks. The chart below evidencesthat insurance, or underwriting risk is the Group’s material risk concentration, comprising 66% of theYE 2017 SCR. There has not been a material change to this risk profile over the course of 2017 andthere is not expected to be a material change during 2018.

2017 Group Solvency Capital Requirement – by risk type

The Group’s core and dominant line of business is UK motor and therefore the insurance, or
underwriting risk is concentrated on the applicable SII lines of business for UK motor (primarily, nonlife ‘liability’ and ‘other’ risks).
33 | P a g e

The composition of the SCR for the solo entities AICL and AIGL is shown in the charts below:

2017 AICL Solvency Capital Requirement – by risk type2017 AIGL Solvency Capital Requirement – by risk type

REGULATORY SOLVENCY CAPITAL REQUIREMENTS
The Group’s Solvency Capital Requirement presented in the first chart above, is the Regulatory SCR
which is prepared on a Standard Formula (SF) plus Capital Add-on (CAO) approach, as shown by thetable below:

34 | P a g e

Regulatory SCR Calculation
Approach (2016)

Group

AICL

AIGL

SF
SF plus Undertaking SpecificParameters (USP)SF plus CAO

As previously disclosed, the Group is preparing to make a Partial Internal Model submission to the
UK and Gibraltar regulators. Ahead of the start of the Solvency II regime, the Group applied for a
CAO to the standard formula to reflect recognised limitations in the standard formula with respect
to Admiral’s risk profile. These predominately relate to profit commission arrangements in coinsurance and reinsurance contracts and risks arising from claims including PPO claims. The Group
anticipates applying for an update to the CAO on an annual basis until the Group Partial Internal
Model is approved. For further detail, please refer to sections C6 and E2 below.
The Regulatory SCRs for the Group’s Solvency II regulated subsidiaries AICL and AIGL, are calculated
on a standard formula basis. For the UK regulated subsidiary, AICL, the Group considers the standard
formula to appropriately reflect the Company’s risk profile.
For the Gibraltar regulated subsidiary, the interaction of profit commission arrangements withexternal reinsurers and intra-group profit commission arrangements means limitations of thestandard formula with respect to these risks cannot be addressed with a CAO as the add-on would
reflect a deduction to the standard formula, which is not permitted within Solvency II regulation.
AIGL has obtained approval from the Gibraltar regulator (Gibraltar Financial Services Commission) touse Undertaking Specific Parameters (USPs) in its calculation of underwriting risk.

C.1. UNDERWRITING RISKThe Group’s underwriting risk consists of Non-life and Life components. As noted above, thematerial concentration of risk is within Non-life underwriting risk, given the Group’s focus on generalinsurance lines of business. Life underwriting risk arises through the settlement of claims on a
Periodic Payment Order (PPO) basis, where annual index-linked settlements to claimants exposes
the Group to life risks such as the claimant’s life expectancy (longevity) and inflation.

NON-LIFE UNDERWRITING RISKS
Non- life underwriting risk consists of the following components of risk:••••

Non-life premium risk
Non-life reserve risk
Lapse risk
Catastrophe risk

The valuation of non-life underwriting risk is driven by the premium and reserve risk component,with small contributions made by lapse and catastrophe risk.
The majority of non-life underwriting risk is accepted by the Group’s regulated subsidiaries in the UK
and Gibraltar, AICL and AIGL. As a result, there is little difference between the sum of thecomponents of non-life insurance for AICL and AIGL and the Group valuation. The key exception to

35 | P a g e

this is catastrophe risk; the difference here is driven by exposure to natural weather catastrophes(primarily through hail and flood) in the USA due to risks underwritten within EIC.
Non-life Reserve risk is driven by adverse development in the valuation of the liabilities which ismainly related to longer tailed bodily injury claims, arising from the Group’s UK Motor business,
which have greater uncertainty associated with the ultimate cost of claims than, for example,
property damage claims (across both Motor and Household businesses). These claims can develop
over a number of years so the reserve risk figure relates to several underwriting years.
The Group’s retention of risk across underwriting years for the core UK motor business varies
depending on the co-insurance and quota share reinsurance contracts in place for each year. The
Group has historically used reinsurance (in the form of both co-insurance and quota sharereinsurance, as well as excess of loss reinsurance) as a risk mitigation tool across all lines of business- refer to the risk mitigation section below for further detail. In addition, the Group’s annual reportcontains further information about the co-insurance and reinsurance arrangements in place forbusinesses across the Group (page 26 for UK Insurance and page 33 for International Insurance).
Premium risk is the risk that the Group incurs losses on risks arising in the 12 months after thevaluation date. Premium risk consists of a lower proportion of bodily injury exposure, and therefore
has a higher proportion of property damage in future claims experience which increases thediversification between claim types compared to reserve risk. This is due to premium risk
considering the future occurrence and severity of claims, rather than the development of existingclaims, of which property damage claims generally settle quickly.

LIFE UNDERWRITING RISKS
As noted above, the Group is exposed to life underwriting risks in respect of claims that have settled
by way of a PPO. The risks relevant to the Group within the standard formula calculation of life risk
are longevity risk and life expense risk. In addition, the Group’s CAO captures inflation risk (refer tosection C6).
The Group has a relatively low number of settled PPO claims, and therefore, life underwriting risk
does not reflect a significant contribution of risk. In addition diversification against the significant
non life insurance risks further reduces the element of the SCR attributable to life underwriting risk.

RISK MITIGATION
Underwriting risk is the Group’s material risk and as noted above, a key part of the Group’s risk
mitigation strategy with respect to underwriting risk is the use of Co-insurance and reinsurance(both proportional quota share reinsurance and non-proportional excess of loss reinsurance). In thecore UK motor business, quota share reinsurance contracts are utilised to mitigate risk
In respect to proportional risk sharing agreements, the Group’s net retained share of business after
proportional co-insurance and reinsurance arrangements, for material businesses in the 2018
underwriting year, and at 31 December 2017 in relation to 2017, 2016 and 2015 underwriting years,
is as follows:

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Business

Net Retained
Share2018 UW Year22%

Net Retained
Share2017 UW Year22%

Net Retained
Share2016 UW Year25%

Net Retained
Share2015 UW Year48%

UK Household

30%

30%

30%

30%

UK Other

100%

100%

100%

100%

Italian Motor

35%

35%

35%

35%

Spanish Motor

30%

30%

30%

30%

French Motor

30%

30%

30%

30%

US Motor

33%

33%

33%

33%

UK Motor

In line with the standard formula approach, underwriting risk capital requirements are calculated netof co-insurance and reinsurance. However, for UK Motor contracts, both co-insurance andproportional quota share reinsurance contracts allow Admiral to participate in the profitability of
those portions of the book through profit commission arrangements. The additional risks that theGroup is exposed to through these contracts is captured in the Group’s CAO – refer to section C6
below.

C.2. MARKET RISKThe Group’s investment strategy is primarily focused on capital preservation with additional
priorities being low volatility of returns and high levels of liquidity. The strategy and resulting
portfolio was materially unchanged during 2017, with money market funds, and fixed income debt
securities comprising the majority of the total portfolio.
Further information on the IFRS classification of the Group’s cash and investments is included in theGroup’s 2017 Annual Report.

PRUDENT PERSONS PRINCIPLE
Solvency II has introduced the Prudent Person Principle for managing investments. It has replaced
the previous ‘admissible assets’ rules and is the requirement to invest so as to ensure the security,
quality, liquidity and profitability of the investment portfolio as a whole. It is an example of how risk
management and strategic decision making may be owned by an insurer and its governanceframework.
The Prudent Person Principle seeks to ensure that the industry understands and is capable ofmanaging its investment risks. Specifically, insurers must be able to demonstrate that they canproperly identify measure, monitor, manage, control and report on their investment risks and notplace reliance upon information provided by third parties.
Admiral’s risk management and strategic decision making process in respect of asset investment iscentred on the Group’s Investment Committee. The Investment Committee is a Management
committee that includes Non –Executive representation. The governance process for material asset
investment decisions can be summarised as follows:

37 | P a g e•Review of prospective asset class, prospective providers, and proposed assets from a capital andincome perspective•Senior Management review, including Group Chief Financial Officer and Group Chief Risk Officer•Proposal to Investment Committee•Proposal to Group Board and to relevant subsidiary Boards•Investment implementation

At each stage of the process the proposal is subject to review by senior management independent of
the proposal. Implementation of an investment decision is performed only once all stages ofapproval have been achieved. The quantitative analysis is considered but also the experience of thesenior management allows for a material qualitative investigation.
Once the purchase has occurred the asset is then part of the ongoing valuation, income and capital
process. The Group Investment Committee meets on a quarterly basis and reviews detailed
Management Information presented on a look-through basis that covers the security, quality,
liquidity and profitability of the portfolio.

MARKET RISK COMPONENTS
Market risk comprises 13% of the Group’s 2017 regulatory SCR. The largest contribution at YE’17 isfrom spread risk, primarily reflecting the risk of valuation changes in the Group’s fixed income debt
securities resulting from credit spread changes. Interest rate risk, Equity risk (in relation to thevaluation of the parent company’s holdings in Strategic Participations), Concentration risk andSpread risk also contribute as noted in the table below. Market risk comprises 8% and 17% of the
SCRs for AICL and AIGL respectively.

38 | P a g e

Risk

Description

Interest Rate Risk

The risk of a fall in the value of assets and/or an increase in the value of
liabilities, due to changes in the level of interest rates. The standard formulainterest rate module captures the net movement of both the Group’s
investment portfolio and the Insurance Technical Provisions.

Strategic Participation Risk

The risk of a change in the value of the holdings in non-insurance subsidiary
undertakings of Admiral Group. This consists of the investments made in, forexample, the Group’s price comparison businesses.

Spread Risk

The risk that the value of an investment holding falls, following a change in theriskiness (predominantly credit risk) of the issuing company.

Currency Risk

The risk of exchange rate movements that adversely impact the net value ofoverseas assets and liabilities.

Concentration Risk

The risk that Admiral Group holds a concentration of investments within aparticular asset class or with a particular counterparty.

C.3. COUNTERPARTY DEFAULT RISK
Credit or Counterparty risk represents the risk of default by reinsurance partners and investment
counterparties holding the Group’s cash balances, in line with the standard formula approach. It
reflects 8% of the Group SCR and is mainly comprised of Type 1 counterparty risk – the risk relating
to default by reinsurance partners.
It is a relatively small component of risk because the Group only enters into reinsurance
arrangements with counterparties of appropriate credit ratings (A- or higher), and because theGroup has ‘funds withheld’ arrangements in place with its largest motor quota share reinsurance
partners in the UK which mitigates a significant proportion of the risk faced.

C.4. LIQUIDITY RISK
Liquidity risk is not a key risk for the Group as both the UK Motor and Household Insurance havesignificant cash in-flows of income in advance of claims and expenses being paid, which are expected
to be less than the total premiums received. This reduces the risk of a liquidity strain.
The total amount of expected profit included in future premiums as calculated in accordance with
Article 260 of the Delegated Acts is £41.5 million for the Consolidated Group and £9.3m and £35.8m
for AICL and AIGL respectively.
As noted in section C2 above, one of the Group’s strategic considerations when determining
investment strategy is liquidity and a significant proportion of the funds invested sit in instant accessmoney market funds.

C.5. OPERATIONAL RISK
Operational risk arises within all areas of the business. The Group, through its ERMF, implements,
maintains and monitors a series of internal controls that aim to mitigate the range of operationalrisks that the Group faces.
The operational risk capital requirement is calculated using the standard formula.

39 | P a g e

C.6. OTHER MATERIAL RISKSCAPITAL ADD-ON
As noted earlier in this section, the Group has applied for a Capital Add-on as a result of limitationsin the standard formula with respect to the Group’s risk profile. The CAO reported in the 2017 Groupannual QRT is £81.0m, following approval in August 2017.
The CAO primarily reflects the following risks:
Risk

Description

Profit Commission

Admiral has extensive profit commission arrangements within its co-insurance
and quota share reinsurance arrangements. Under stressed conditions, there isa risk that profit commission income recognised in the Solvency II balance
sheet will need to be de-recognised, reducing the value of Own Funds.

PPO (Potential and Settled)

Admiral-specific parameters for both reserve and premium risk uncertainty arederived to reflect the risk associated with both future and potential PPOs,
which is not deemed to be appropriately reflected in the standard formula
parameters. In addition the inflation risk related to settled PPOs is captured inrecognition of the limitations of the standard formula life underwriting risk
module.

C.7. ANY OTHER INFORMATIONLOSS ABSORBING CAPACITY OF DEFERRED TAXES (LACDT)At YE’17, the Group’s regulatory SCR is reduced by £26.9 million to reflect the tax losses arising as aresult of the 1 in 200 year event, that may be utilised against current or deferred tax liabilities. The
resulting LACDT can primarily be attributed to the Group’s regulated insurance entities in the UK and
Gibraltar. No LACDT benefit has been recognised on the basis of the potential to offset tax losses
against profits on business that will be written in the future.

RISK SENSITIVITY
The Group has established processes to undertake stress and scenario testing on an ongoing basis,
with testing undertaken at least annually. The stress testing processes operate in collaboration with
the Corporate Governance Committees and involve a number of members of senior and operational
management. The results of the tests undertaken improve the Boards understanding of risk,
influence business decisions and form a key part of the Enterprise Risk Management Framework.
In addition, solvency ratio sensitivities are reported to the Group Board and its Committees on aregular basis. The following Group solvency ratio sensitivities (as reported in the 2017 Annual
Report) are were reviewed for YE’17.

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Solvency Ratio Sensitivities 2017

Movement in Solvency Ratio(percentage pts)

UK Motor – incurred loss ratio +5%-26%

UK Motor – 1 in 200 catastrophe event-3%

UK Household – 1 in 200 catastrophe event-2%

Interest rate – yield curve down 50 bps-11%

Credit spreads widen 100bps-4%

Currency – 25% movement in euro and US dollar-3%

ASHE – long term inflation assumption up 0.5%

-4%

TREATMENT OF ADMIRAL LOANS
Admiral’s lending business (Admiral Loans) was in 2017 conducted out of the legal entity EUI Limited(EUI) which, through its primary function as insurance intermediary, is treated as an Ancillary
Services Undertaking (ASU) within the Group Solvency II calculation. In 2018 it is anticipated that EUI
will transfer the loans business to a separate legal entity known as Admiral Financial Services Limited(AFSL).
The outstanding loans balance at YE’17 is £68m, and is separately reported within the Group
Solvency II balance sheet due to EUI’s classification as an ASU. Refer to Section D for further detail.
As a result the capital requirement for the Loans business has been calculated through inclusion ofthis asset balance within the Group standard formula calculation; primarily through counterparty
default risk. The incremental increase to the diversified Group capital requirement as a result of the
inclusion of the Loans business at YE’17 is £6m.

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D. VALUATION FOR SOLVENCY PURPOSES (AUDITED)
Section D focuses on the Solvency II balance sheet and the valuation of assets and liabilities. For
each material class of assets, technical provisions and other liabilities, the following information isprovided:••a description of the bases, methods and main assumptions used in arriving at the valuation
for solvency purposes
Quantitative and qualitative explanations of material differences between the bases,
methods and main assumptions used for the valuation for solvency and financial statement
purposes.

The material classes in the Group and solo entity Solvency II balance sheets are shown in the tablebelow.
Summary Solvency II Balance Sheets – Consolidated Group, AICL and AIGL
Solvency II Balance Sheet, 31-Dec-17

Group

AICL

AIGL

1. Goodwill, DAC and Intangible Assets

-

-

-

2. Property, plant and equipment

29.6

-

-

3. Investments excl Participations

2,702.1

371.8

2,037.2

4. Investments in Participations

72.8

-

-

5. Loans and Mortgages

67.7

6. Reinsurance recoverables

1,208.6

113.8

1,039.9

7. Receivables and other assets

547.9

27.8

221.6

8. Cash

270.7

52.3

34.5

Total Assets

4,899.5

565.7

3,333.3

9. Technical Provisions - best estimate

2,464.7

381.5

1,997.7

10. Technical Provisions - risk margin

71.8

12.8

54.9

11. Deposits from reinsurers

644.0

-

639.3

12. Deferred tax liabilities

76.5

7.4

7.6

13. Other payables and liabilities

461.4

22.9

217.2

14. Subordinated liabilities

229.2

-

-

Total Liabilities

3,947.6424.7

2,916.7

Excess of Assets over Liabilities

951.9

141.0

416.5

Section E of this document contains a reconciliation from the IFRS net assets to the Solvency II
excess of assets over liabilities that forms part of Tier 1 Own Funds.
The individual material classes of assets, technical provisions and liabilities are considered in sections
D1, D2, and D3 respectively.

42 | P a g e

D.1. ASSETS
Material Class

1. Goodwill, DAC and Intangible
AssetsGoodwill, deferred acquisition costs and intangible assets (primarily internallygenerated software assets) have no economic value and are therefore eliminated in thetransition from IFRS to Solvency II. This has a total impact of £157.8m for Group, and£6.0m and £10.0m for AICL and AIGL respectively.

2. Property, plant andequipment

Property plant and equipment, PPE (primarily leasehold improvements) are held at the
IFRS value of cost less depreciation. This valuation is not considered to differ materiallyfrom its economic market value.
Financial assets and liabilities are held at Fair Value where level 1 inputs can beenobtained. Level 1 refers to the first level of the Fair Value hierarchy which categorises
valuation inputs into three levels. The hierarchy gives the highest priority (Level 1) toquoted prices in an active market, and the lowest priority to unobservable inputs (Level
3).
Level 1 inputs
Level 1 inputs are quoted prices in active markets for identical assets or liabilities thatthe entity can access at the measurement date.
A quoted market price in an active market provides the most reliable evidence of fairvalue and is used without adjustment to measure fair value whenever available, withlimited exceptions.
Level 2 inputs
Level 2 inputs are inputs other than quoted market prices included within Level 1 thatare observable for the asset or liability, either directly or indirectly.
Level 2 inputs include:

3. Investments and 8. Cash

•
•
•

•

quoted prices for similar assets or liabilities in active markets
quoted prices for identical or similar assets or liabilities in markets that are
not active
inputs other than quoted prices that are observable for the asset or liability,
for example
o interest rates and yield curves observable at commonly quoted
intervals
o implied volatilities
o credit spreads
inputs that are derived principally from or corroborated by observable market
data by correlation or other means ('market-corroborated inputs').

The Group currently categorises its valuation of investments in money market funds
fixed income debt securities, and government gilts as Level 1.
Level 1 valuations for money market funds, fixed income debt securities andgovernment gilts reflect the fair value (the amount a third party would pay for the asseton the valuation date), and are obtained externally from observable market
information. This valuation is consistent with the IFRS valuation.
Cash and term deposits are held at amortised cost which is materially consistent with asfair value. This is in line with the IFRS valuation.

4. Investments in Participations

Participations are valued and accounted for using the adjusted net equity method forsolvency II purposes. This is different to the IFRS valuation which is based on an
unadjusted IFRS net asset valuation – the differences therefore relate to theadjustments noted in these valuation policies. The impact of revaluation to the adjusted
net equity method is a reduction of £13.6m.

5. Loans and Mortgages

Loans and Mortgages reflect advances to customers through Admiral’s unsecured
personal lending business ‘Admiral Loans’. The YE’17 balance is £67.7m, net of provision

43 | P a g eand is valued at it’s IFRS valuation of amortised cost, with the provision valued inaccordance with the loan loss provisioning rules in IAS 39.
6. Reinsurance Recoverables

Refer to Technical Provisions section (D.3).

7. Receivables and other assets

The fair value of receivables is based on the amortised cost valuation, in line with Level
2 of the FV hierarchy noted above. This amortised cost valuation approximates to fairvalue and therefore there are no valuation differences between IFRS and SII valuation.

D.2. LIABILITIESMaterial Class
9. Technical Provisions - best
estimate
10. Technical Provisions - risk
margin11. Deposits from reinsurers

12. Deferred tax liabilities

Refer to Technical Provisions section (D.3).
Refer to Technical Provisions section (D.3).
Deposits from reinsurers reflect amounts held in relation to reinsurance contracts. Thebalances are valued on a historic cost basis.
The deferred tax liability in the Group Solvency II balance sheet reflects the net
deferred tax liability on a Solvency II basis using the valuation rules within IAS 12. The
total Group revaluation of £76.5m reflects the deferred tax impact of the revaluations
made between IFRS and Solvency II in the other balance sheet line items, primarily therelease of margin in the Technical Provisions and Profit Commission balances. The
corresponding revaluation for AICL and AIGL is £7.1m and £7.6m respectively.
The IFRS deferred tax balance is a net deferred tax asset.

13. Other payables and liabilities

Other payables and liabilities primarily reflect other balances with co-insurers andreinsurers, not classified elsewhere and balances between the entities within the scopeof the Solvency II Group and related participations.
The balances are valued on an amortised cost basis which is materially consistent withfair value; this valuation is the same as the IFRS valuation.

14. Subordinated liabilities

Subordinated liabilities reflects the Groups’ 10 year subordinated bonds. For Solvency II
purposes it is included at fair value (excluding the impact of changes in Admiral’s own
credit quality). On an IFRS basis, it is held at amortised cost.

44 | P a g e

D.3. TECHNICAL PROVISIONSTECHNICAL PROVISIONS – BEST ESTIMATEBest estimate technical provisions for Group and solo entity material lines of business are as follows:2017 Best estimate technical provisions - Group
31-Dec-17

Motor
VehicleLiability

Motor
VehicleOther

Gross - Best
Estimate
Recoverable fromreinsurers

2,232.1

Net - Best Estimate

GeneralLiability

Life

Other

Total

111.7

Fire and
Other
Damage toProperty
57.2

3.3

40.9

19.6

2,464,7

1,074.9

84.6

36.2

2.2

10.5

0.3

1,208.6

1,157.3

27.2

21.0

1.1

30.3

19.3

1,256.1

2017 Best estimate technical provisions – AICL
31-Dec-17

Gross - Best
Estimate
Recoverable fromreinsurers
Net - Best Estimate

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
Damage toProperty

GeneralLiability

Life

Other

Total

357.0

18.4

-

-

6.1

-

381.5

105.9

6.3

-

-

1.6

-

113.8

251.1

12.1

-

-

4.5

-

267.7

GeneralLiability

Life

Other

Total

3.3

34.8

19.6

1,997.72017 Best estimate technical provisions - AIGL
31-Dec-17

Motor
VehicleLiability

Motor
VehicleOther

Gross - Best
Estimate
Recoverable fromreinsurers

1,807.1

75.8

Fire and
Other
Damage toProperty
57.2

925.8

66.6

36.2

2.2

8.9

0.3

1,039.9

881.4

9.2

21.0

1.1

25.9

19.3

957.8

Net - Best Estimate

Bases, Methods and Main Assumptions
Best estimate technical provisions are comprised of a claims provision and premium provision. The
claims and premium provision combined give the expected cost of settling all future claims arisingfrom business that the Group is contractually obliged to cover. This includes an allowance for the
expenses of both running the company and of servicing claims such as claims handling staff costs.
The allowance for future income is based on business already written, as well as business that has
not yet incepted, but where the Group is obliged to offer cover i.e. renewals already offered orquoted (Bound But Not Incepted – BBNI)

45 | P a g e

The claims provision is the discounted best estimate of all future cash-flows relating to claim events
which occurred prior to the valuation date. These cash-flows are made up of:
Outgoing cash-flows:•

Claim paymentsoSettling reported claimsoSettling claims not yet reported•

Expenses•

ENID (Events not in Data) allowance

Minus Incoming cash-flows•

Future premiums, such as uncollected/overdue premium•

Reinsurance recoveries on all claimsowith an allowance for reinsurance bad debt

The premium provision is the discounted best estimate of all future cash-flows relating to future
claim events arising from policies that the insurer is obligated to cover at the valuation date. Again
these cash-flows are made up of:
Outgoing cash-flows:•

Claim payments, including BBNI policies•

Expenses•

ENID (events not in data) allowance•

Reinsurance premium

Minus incoming cash-flows:•

Future premiums due on incepted business, from monthly premium payers, with anallowance for cancellations•

Future premiums due on new and renewal business, as well as from BBNI policies.

•

Reinsurance recoveries on all claims (with an allowance for reinsurance bad debt)•

Recoveries from future salvage and subrogation•

Income from reinsurers and co-insurers to cover a portion of the expense costs

Reinsurance Recoverables
Reinsurance recoveries are a significant element within the technical provisions. The reinsurance
premium paid out, and recoveries received for both claims and expenses are required to be captured
within the technical provisions, along with the possibility of default of the reinsurers leading to a
reduction in potential recoveries.
The reinsurance recoverables within the Group Technical Provisions reflect the following contractual
reinsurance arrangements that the Group has in place:•

Excess of loss reinsurance
46 | P a g e•Quota share reinsurance

TECHNICAL PROVISIONS – RISK MARGIN
31-Dec-17

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
Damage toProperty

GeneralLiability

Life

Other

Total

Net Risk Margin - Group

66.4

1.9

1.2

0.1

1.2

1.1

71.8

Net Risk Margin – AICL

12.0

0.6

0.0

0.0

0.2

0.0

12.8

Net Risk Margin - AIGL

51.0

0.5

1.2

0.1

1.0

1.1

54.9

The risk margin is defined within Article 77 of the Directive as:
The risk margin shall be such as to ensure that the value of the technical provisions is equivalent tothe amount that insurance and reinsurance undertakings would be expected to require in order totake over and meet the insurance and reinsurance obligations.
The risk margin calculation uses the first simplification within the delegated acts, which is applied asfollows:•

The one-year SCR is run off in line with the level of claims and premium provisions expected
to remain at each year-end position,•

The prescribed cost of capital of 6% is applied to each SCR

The SCRs are then discounted to the valuation date using the prescribed EIOPA yield curve.
Material Changes in Assumptions
Other than those changes that relate to the change in Ogden discount rate referenced earlier in thisreport, there have been no material changes in assumptions applied to the technical provisions
during the period.
Key Uncertainties
There are many areas of uncertainty within the technical provisions. Estimation techniques are
therefore used in the calculation of the ultimate cost of settling both claims that have occurred prior
to the balance sheet date and remain unsettled at the balance sheet date and claims costs that willarise in relation to events that have not happened at the balance sheet date.
The projected ultimate cost of claims is calculated using a variety of different actuarial projection
techniques (including incurred and paid chain ladder and an average cost of claim approach) to allow
an actuarial assessment of their potential outcome. They include allowance for unreported claims.
The most significant sensitivity in the use of the projection techniques arises from any future stepchange in claims costs, which would cause future claim cost inflation to deviate from historic trends.
This is most likely to arise from a change in the regulatory or judicial regime that leads to an increase
in awards or legal costs for bodily injury claims that is significantly above or below the historical
trend.

47 | P a g e

An example of this is the change in Ogden discount rate that was announced in February 2017 and isdiscussed earlier in this report.

RECONCILIATION TO IFRS VALUES
The best estimate Solvency II technical provisions for the Group and solo entities are lower than theequivalent provisions held on an IFRS basis for financial statement purposes.
This is primarily due to the following:•••

Removal of margin held above best estimate in IFRS reserves, partially offset by the
introduction of additional SII reserves for loss adjustment expenses, and Events Not in Data.
The SII approach to calculation of the premium provision (including the transfer of futurepremium cash-flows into technical provisions from other financial statement line items)
The approach to discounting, with SII technical provisions being discounted using the EIOPA
yield curve.

The overall impact of moving from an IFRS to a Solvency II basis is around £270.7m excluding risk
margin. The corresponding impacts for AICL and AIGL are £57.6m and £216.5m respectively.
The introduction of the SII risk margin reduces the net impact of the reduction in provisions ontranslation from IFRS to SII by £71.9m. The corresponding SII risk margin for AICL and AIGL is £12.8m
and £54.9m.

ADJUSTMENTS AND SIMPLIFICATIONSThe Matching Adjustment has not been applied in the calculation of Technical Provisions at 31
December 2017.
The Volatility Adjustment (VA) is not applied in the calculation of Technical Provisions at 31
December 2016. In February 2017, the Group obtained approval to use the VA in the calculation oftechnical provisions for the Group and its regulated subsidiaries from the UK and Gibraltar
regulators. The impact of applying the VA adjustment to the calculation of Group Technical
Provisions is a reduction of around 10.7m. The corresponding impacts for AICL and AIGL are £1.5m
and £9.1m respectively.
The transitional risk-free interest rate term structure as per Article 308c of the Directive has notbeen applied in the calculation of Technical Provisions at 31 December 2016.
The transitional deduction as per Article 308d of the Directive has not been applied in the calculationof Technical Provisions at 31 December 2016.

D.4. ALTERNATIVE METHODS OF VALUATIONNo alternative methods for valuation have been applied.

D.5. ANY OTHER INFORMATION
None.

48 | P a g e

E. CAPITAL MANAGEMENT (AUDITED)METHOD OF CALCULATION OF GROUP SOLVENCYGroup solvency is calculated as the ratio of Eligible Group Own Funds to the Group Solvency Capital
Requirement.
Articles 230 and 233 of the Directive prescribe that one of the following methods must be used to
calculate Group solvency:••

Method 1 – Standard method based on Consolidation of financial statements
Method 2 – Alternative method based on a deduction and aggregation approach

The Group applies Method 1 for the calculation of Group solvency. The basis for the consolidation isa Solvency II Group consisting of the following entities:
EntityDescription

Admiral Group plc (Parent)

Insurance holding company

Admiral Insurance Company Limited

UK regulated insurance entity

Admiral Insurance (Gibraltar) Limited

Gibraltar regulated insurance entity

Elephant Insurance Company Limited

Third country insurance entity

EUI Limited

Ancillary services undertaking

EUI France Limited

Ancillary services undertaking

Elephant Insurance Services Limited

Ancillary services undertaking

All remaining Group subsidiaries are included as strategic participation investments in the parent
company.

E.1. OWN FUNDSCAPITAL MANAGEMENT OBJECTIVESThe Group manages its capital to ensure that all entities within the Group are able to continue as
going concerns and also to ensure that regulated entities meet regulatory requirements with anappropriate margin. Excess capital above these levels within subsidiaries is paid up to the Groupholding company in the form of dividends on a regular basis. Forward looking assessments of Capitalare performed over a three-year planning horizon and are reported with the Group’s annual ORSA
process.
The Group’s dividend policy is to pay 65% of IFRS post-tax profits as a normal dividend and to pay afurther special dividend comprising earnings not required to be held in the Group for solvency orother potential uses of Capital.

49 | P a g e

The strength of the Group’s capital position at YE’17 allowed the Board to propose, and shareholders
approve, a 2017 final dividend of 58.0 pence per share (£163 million), as follows:••

39.5 pence per share representing a normal element, based on the dividend policy of
distributing 65% of post-tax profits; andA special element of 18.5 pence per share.

This dividend has been deducted from Tier 1 Own Funds as noted in the following section. The
payment date is 1 June 2018.
Since 31 December 2017 dividends of £10 million and £40 million to the Group parent from AICL and
AIGL respectively, have been proposed and approved by the respective Boards. As such these havebeen included as foreseeable dividends at the reporting date and deducted from available own
funds.

CLASSIFICATION OF OWN FUNDS BY TIER
The classification of Own Funds for the Group and solo entities at 31 December 2017 is as follows:
Group

AICL

AIGL

31-Dec-17

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVER
MCR

Ordinary Share Capital

0.3

0.3

37.3

37.3

0.1

0.1

Share Premium Account

13.1

13.1

-

-

14.9

14.9

Reconciliation Reserve

775.5

775.5

93.7

93.7

361.5

361.5

Tier 1 Own Funds

788.9

788.9

131.0

131.0

376.5

376.5

Subordinated Liabilities

229.2

229.2

-

-

-

-

Tier 2 Own Funds

229.2

229.2

0.0

0.0

0.0

0.0

Total Basic Own Funds

1,018.1

1,018.1

131.0

131.0

376.5

376.5

Ancillary Own Funds
Total Available Own
Funds

-

-

-

-

60.0

-

1,018.1

1,018.1

131.0

131.0

436.5

376.5

Total Eligible Own Funds

1,018.1

825.0

131.0

131.0

436.5

376.5

The equivalent classification at 31 December 2016 was as follows:

50 | P a g e

GroupAICL

AIGL

31-Dec-16

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVER
MCR

Ordinary Share Capital

0.3

0.3

37.3

37.3

0.1

0.1

Share Premium Account

13.1

13.1

-

-

14.9

14.9

Reconciliation Reserve

671.6

671.6

90.4

90.4

397.1

397.1

Deductions

(6.7)

(6.7)

-

-

-

-

Tier 1 Own Funds

678.4

678.4

127.7

127.7

412.1

412.1

Subordinated Liabilities

212.9

212.9

-

-

-

-

Tier 2 Own Funds

212.9

212.9

0.0

0.0

0.0

0.0

Total Basic Own Funds

891.3

891.3

127.7

127.7

412.1

412.1

Ancillary Own Funds
Total Available Own
Funds

-

-

-

-

120.0

-

891.3

891.3

127.7

127.7

532.1

412.1

Total Eligible Own Funds

891.3

707.3

127.7

127.7

532.1

412.1

Movement in Own Funds
The main movements in Own Funds for Group, AICL and AIGL over the period are as follows:
31-Dec-17

GROUP

AICL

AIGL

Own Funds as at 31 Dec 2016

891.3

127.7

532.1

Capital generation

430.5

28.3

84.4

Dividends
Valuation Movement –Subordinated Liabilities
Movement in Ancillary Own
Funds(320.0)(25.0)(120.0)

16.3

-

-

-

-

(60)

Own Funds as at 31 Dec 2017

1,018.1

131.0

436.5

Tier 1 Own Funds
Tier 1 Own Funds consist of Ordinary Share Capital, Share Premium and the Reconciliation Reserve,
which includes a deduction for foreseeable dividends. Total Tier 1 Own Funds may be reconciled tothe excess of assets over liabilities in the Solvency II balance sheet (as documented in section D) as
follows:

51 | P a g e

2017 Tier 1 Group Own Funds – composition

The excess of asset over liabilities of £951.9m can be reconciled to the equity shown in the Group’s
2017 financial statements of £655.9m as follows:2017 Reconciliation of IFRS Net Assets to Excess of assets over liabilities – GroupAs noted in section D, the primary valuation difference (£564.4 million) arises on the transition fromnet IFRS insurance liabilities and amounts due to and from co-insurers and reinsurers in relation to
profit commission, to Solvency II technical provisions and profit commission balances. The majorityof the change in deferred tax (-£71.9 million) relates to the additional liability that arises from therelease of profit on the transfer to SII best estimate technical provisions and profit commissions.
The other material adjustment is the elimination of the Group’s intangible assets (goodwill, softwareand deferred acquisition costs) which totals £157.8 million.
For both AICL and AIGL, the ‘excess of assets over liabilities’ is equivalent to Tier 1 Own Funds. The
reconciliations of IFRS Net Assets to the SII excess of assets over liabilities are as follows

52 | P a g e

2017 Reconciliation of IFRS Net Assets to Excess of assets over liabilities – AICL

2017 Reconciliation of IFRS Net Assets to Excess of assets over liabilities – AIGLFUNGIBILITY AND TRANSFERABILITY OF GROUP OWN FUNDSThe Group has not identified any material restrictions to the fungibility and transferability of GroupOwn Funds.
Tier 2 Own Funds
Tier 2 Own Funds consist of subordinated liabilities in the form of the Group’s 10 year dated, listed
subordinated debt with a market value at the end of the current period of £229.2m, an increase of£16.3m compared with the previous reporting period. The debt was issued in July 2014 and maturesin July 2024 and pays a fixed rate of interest of 5.5%. On issuance, the Group obtained confirmationfrom the UK regulator, the PRA that the debt qualifies as Solvency II Tier 2 Own Funds.
Tier 2 Own Funds for AIGL are Ancillary Own Funds and represent a £60 million Equity Commitment
from the Group’s parent company, Admiral Group plc. The commitment allows AIGL to call a capital
contribution (up to a maximum of £60 million) from the Group parent, Admiral Group plc during the

53 | P a g e

term of the agreement without encumbrance. The commitment was reduced from £120m to £60m
during the year, resulting in the £60m reduction in Tier 2 Ancillary Own Funds for AIGL in the current
reporting period.
The arrangement has no impact at Group level – there is no contingent liability in the parent
company as the possibility of the commitment being called is considered to be remote. Furthermore,
the tier 2 intra-group capital that is created is eliminated on consolidation of the SII Group.

E.2. SOLVENCY CAPITAL REQUIREMENT AND MINIMUM CAPITAL REQUIREMENTCALCULATION OF THE GROUP CONSOLIDATED SOLVENCY CAPITAL REQUIREMENTThe Group Solvency Capital Requirement is calculated on the basis of consolidated data. The
reported Solvency Capital Requirement as at 31 December 2017 and 31 December 2016 for Group,
AICL and AIGL is as follows:
31-Dec

GROUP

AICL

AIGL

2017

2016

2017

2016

2017

2016

Market Risk

70.2

77.2

6.2

8.0

48.8

51.2

Counterparty Risk

48.0

35.5

5.0

4.8

23.3

22.5

Life Underwriting Risk

2.9

2.8

0.4

0.0

2.5

2.4

Non-Life Underwriting Risk

350.7

325.0

78.8

73.7

213.7

206.5

Diversification(70.3)(68.4)

(7.2)

(7.9)

(44.4)(45.1)

Basic SCR

401.5

372.1

83.3

78.6

243.7

237.4

Operational Risk

72.7

60.6

11.3

9.4

59.1

48.3

Loss absorbing capacity ofdeferred taxes(26.9)(22.4)(11.4)(9.9)(15.5)(9.3)

SCR excluding Capital AddOn

447.3

410.3

83.2

78.1

287.3

276.4

Capital Add-On (Unaudited)

81.0

75.8

-

-

-

-

SCR

528.3

486.1

83.2

78.1

287.3

276.4

The calculation of SCR for AIGL applies Undertaking Specific Parameters (USPs) for both Non-Life
Premium Risk and Non-Life Reserve Risk in respect of the Motor Vehicle Liability and Other Motorlines of business. The approval for the use of USPs was received from the Gibraltar Financial Services
Commission in December 2015. The parameters are updated on an annual basis.
The Group Capital Add-On of £81m was approved by the PRA in August 2017.

54 | P a g e

Movement in SCR
The solvency capital requirements for Group, AICL and AIGL have increased over the period. The
increases are primarily related to growth of all the Group’s insurance businesses, with non-life
insurance risk reflecting the largest increases.
Counterparty risk has also increased following an increased in the proportion of the UK car insurance
booked ceded to quota share reinsurers for the 2017 underwriting year. In addition, the Groupcounterparty risk reflects the inclusion of the Admiral loans book.
The Group capital add-on was updated during the year, the increase to £81m from £75.8m primarilyreflects growth in the profit commission risk for UK Car Insurance business.
Solvency Ratio
When combined with the Eligible Own Funds, the resulting reported solvency positions are as
follows:
31-Dec

GROUP

AICL

AIGL

2017

2016

2017

2016

2017

2016

SCR

528.3

486.1

83.2

78.1

287.3

276.4

Eligible Own Funds

1,018.1

891.3

131.0

127.7

436.5

532.1

Surplus

489.7

405.2

47.8

49.6

149.2

255.7

Solvency Ratio

193%

183%

158%

164%

152%

193%

CALCULATION OF THE MINIMUM CAPITAL REQUIREMENTThe Group Minimum Capital Requirement at 31 December 2017 is £180.4 million. It is calculated inline with Article 230 of the Directive as the minimum of:••

The Minimum Capital Requirement, calculated for the Group as per Article 129 of the
Directive; andThe Group’s proportional share of the MCR of the related undertakings

The Minimum Capital Requirement for the solo entities is calculated as per Article 129 of the
Directive.
The coverage of eligible own funds to MCR at 31 December 2017 is as follows:
31-Dec

GROUP

AICL

AIGL

2017

2016

2017

2016

2017

2016

MCR

180.4

144.7

37.4

34.2

117.8

110.5

Eligible Own Funds

825.0

707.3

131.0

127.7

376.5

412.1

Surplus

644.6

562.6

93.6

93.5

258.7

301.6

Solvency Ratio

457%

489%

350%

373%

320%

373%

55 | P a g e

E.3. USE OF THE DURATION-BASED EQUITY SUB-MODULE IN THE CALCULATION OF THE SOLVENCY CAPITALREQUIREMENT
The duration based equity sub-module has not been used in the calculation of the Solvency Capital
Requirement.

E.4. DIFFERENCES BETWEEN THE STANDARD FORMULA AND ANY INTERNAL MODEL USEDNot applicable – no internal model has been used during the reporting period.

E.5. NON COMPLIANCE WITH THE MINIMUM CAPITAL REQUIREMENT AND NON-COMPLIANCE WITH THE
SOLVENCY CAPITAL REQUIREMENT
There have been no instances of non compliance with the Minimum Capital Requirement or the
Solvency Capital Requirement during the period.

E.6. ANY OTHER INFORMATION
Reconciliation to previously reported Solvency Ratio (unaudited)
The Group solvency ratio presented in this report is different to the solvency ratio reported in theGroup’s annual report as it is prepared at a different valuation date and it excludes the impact ofchanges made arising from the reporting finalisation process. The chart below shows the impact ofthese moves:

56 | P a g e

Change in Valuation Date

Other (Including the impact ofproposed CAO)

The solvency ratio in this report excludes the projected growth ineconomic capital between the year end and the date of theAnnual Report (which was previously reported)
Other changes to both SCR and Own Funds calculations arisingfrom the reporting finalisation process.
This includes the impact of the proposed Capital Add-On. The
solvency ratio reported in the Group’s annual report reflected
the draft revised to the Group Capital Add-on (CAO) which isunder discussion with the Group regulator, the PRA. This wasreported as ‘subject to regulatory approval’ and ‘unaudited’. The
ratio reported in this SFCR reflects the previous CAO for which
regulatory approval was in place at the valuation date.
The proposed revision to the CAO remains under discussion with
the PRA. The Group expects the process to be completed prior to
the Group HY’18 interim results announcement and an updatewill be provided at this time.

57 | P a g e

APPENDIX 1 – GLOSSARY
Term

Definition

Accident year

The year in which an accident occurs, also referred to as the earned basis.

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 calculationinflation 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 tothe policyholder for their proportional share.
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 tendency for the insurance market to swing between highs and lows of profitability overtime, with the potential to influence premium rates (also known as the “underwriting cycle”).

Commutation

Insurance market cycle
Net claims

The cost of claims incurred in the period, less any claims costs recovered under reinsurance
contracts. It includes both claims payments and movements in claims reserves.

Net insurance premium
revenue

Also referred to as net earned premium. The element of premium, less reinsurance premium,earned in the period.

Ogden discount rate

The discount rate used in calculation of personal injury claims settlements. The rate is set by
the Lord Chancellor, the most recent rate of minus 0.75% being announced on 27 February
2017.
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.
A series of payments are made by the policyholder, typically monthly or annually, for part ofor all of the duration of the contract. Written premium refers to the total amount thepolicyholder has contracted for, whereas earned premium refers to the recognition of thispremium over the life of the contract.
A clause found in some reinsurance and coinsurance agreements that provides for profit
sharing.

Periodic Payment Order (PPO)

Premium

Profit commission
Reinsurance

Ultimate loss ratio

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 ofpremiums, claims and expenses) or an excess of loss basis (full reinsurance for claims over anagreed value).
The projected ratio for a particular accident year or underwriting year, often used in thecalculation of underwriting profit and profit commission.

Underwriting year

The year in which the policy was incepted.

Underwriting year basis

Also referred to as the written basis. Claims incurred are allocated to the calendar year inwhich the policy was underwritten. Underwriting year basis results relate to the 2015
underwriting year, are calculated on the whole account (including co-insurance andreinsurance shares) and include all premiums, claims, expenses incurred and other revenue(for example instalment income and commission income relating to the sale of products thatare ancillary to the main insurance policy) relating to policies incepting in the relevant
underwriting year.
A policy can be written in one calendar year but earned over a subsequent calendar year.

Written/Earned basis

58 | P a g e

APPENDIX 2 – QUANTITATIVE REPORTING TEMPLATESThe Group and its subsidiaries are required to disclose the following templates as set out in theCommission Implementing Regulation (EU) 2015/2452 of 2 December 2015 laying down
implementing technical standards with regard to the procedures, formats and templates of thesolvency and financial condition report in accordance with Directive 2009/138/EC of the European
Parliament and of the Council:
Group
Template Code
S.02.01.02
S.05.01.02
S.05.02.01
S.22.01.22
S.23.01.22
S.25.01.22
S.32.01.22

Template Name
Balance sheet
Premiums, claims and expenses by line of businessPremiums, claims and expenses by country
Impact of long term guarantees measures and transitionals
Own Funds
Solvency Capital Requirement – for Groups on standard formula
Undertakings in the scope of the Group

Admiral Insurance Company Limited (AICL)
Template CodeTemplate Name
S.02.01.02
Balance sheet
S.05.01.02
Premiums, claims and expenses by line of businessS.05.02.01
Premiums, claims and expenses by country
S.12.01.02
Life and Health SLT technical provisions
S.17.01.02
Non-life technical provisions
S.19.01.21
Non- life insurance claims
S.22.01.21
Impact of long term guarantees measures and transitionals
S.23.01.01
Own Funds
S.25.01.21
Solvency Capital Requirement – for undertakings on standard formula
S.28.01.01
Minimum Capital Requirement – only life or non-life insurance or reinsurance
activity
Admiral Insurance (Gibraltar) Limited (AIGL)
Template CodeTemplate Name
S.02.01.02
Balance sheet
S.05.01.02
Premiums, claims and expenses by line of businessS.05.02.01
Premiums, claims and expenses by country
S.12.01.02
Life and Health SLT technical provisions
S.17.01.02
Non-life technical provisions
S.19.01.21
Non- life insurance claims
S.22.01.21
Impact of long term guarantees measures and transitionals
S.23.01.01
Own Funds
S.25.01.21
Solvency Capital Requirement – for undertakings on standard formula
S.28.01.01
Minimum Capital Requirement – only life or non-life insurance or reinsurance
activity

59 | P a g e

Admiral Group Plc
Solvency and Financial
Condition Report
Disclosures

31 December

2017(Monetary amounts in GBP thousands)

General information
Participating undertaking name

Admiral Group Plc

Group identification code

213800FGVM7Z9EJB2685

Type of code of group

LEI

Country of the group supervisor

GB

Language of reportingen

Reporting reference date

31 December 2017

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the group SCR

Standard formula

Method of group solvency calculation

Method 1 is used exclusively

Matching adjustment

No use of matching adjustment

Volatility adjustment
Transitional measure on the risk-free interest rate
Transitional measure on technical provisions

Use of volatility adjustment
No use of transitional measure on the risk-free interest rate
Use of transitional measure on technical provisions

List of reported templates
S.02.01.02 - Balance sheet
S.05.01.02 - Premiums, claims and expenses by line of businessS.05.01.02 - Premiums, claims and expenses by line of businessS.05.02.01 - Premiums, claims and expenses by country
S.05.02.01 - Premiums, claims and expenses by country
S.22.01.22 - Impact of long term guarantees measures and transitionals
S.23.01.22 - Own Funds
S.25.01.22 - Solvency Capital Requirement - for groups on Standard Formula
S.32.01.22 - Undertakings in the scope of the group

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

R0030 Intangible assets
R0040 Deferred tax assets
R0050 Pension benefit surplus
R0060 Property, plant & equipment held for own use
R0070 Investments (other than assets held for index-linked and unit-linked contracts)
R0080

Property (other than for own use)

R0090

Holdings in related undertakings, including participations

R0100

Equities

R0110
R0120
R0130

29,6122,774,870
072,7870Equities - listed
Equities - unlisted
Bonds

1,493,401

R0140

Government Bonds

245,457

R0150

Corporate Bonds

1,079,086

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

168,858
1,069,054
2,382
137,246
0R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages
R0240

Loans on policies

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

67,740067,740

R0270 Reinsurance recoverables from:

1,208,601

R0280

1,198,071

Non-life and health similar to non-life

R0290

Non-life excluding health

R0300

Health similar to non-life

R0310
R0320
R0330
R0340

Life and health similar to life, excluding index-linked and unit-linked

1,198,071
10,530

Health similar to life
Life excluding health and index-linked and unit-linked

10,530Life index-linked and unit-linked

R0350 Deposits to cedants

0

R0360 Insurance and intermediaries receivables

323,647

R0370 Reinsurance receivables

128,618

R0380 Receivables (trade, not insurance)

95,645

R0390 Own shares (held directly)

0

R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in

0R0410 Cash and cash equivalents
R0420 Any other assets, not elsewhere shown
R0500 Total assets

270,732-3
4,899,462

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

2,494,543

R0520

2,494,543

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

R0550

Risk margin

R0560

Technical provisions - health (similar to non-life)

R0570

TP calculated as a whole

R0580

Best Estimate

R0590

Risk margin

R0600 Technical provisions - life (excluding index-linked and unit-linked)
R0610

Technical provisions - health (similar to life)

R0620

TP calculated as a whole

R0630

Best Estimate

R0640
R0650

2,423,858
70,685042,0160

Risk margin
Technical provisions - life (excluding health and index-linked and unit-linked)

42,016

R0660

TP calculated as a whole

R0670

Best Estimate

40,856

R0680

Risk margin

1,160

R0690 Technical provisions - index-linked and unit-linked
R0700

TP calculated as a whole

R0710

Best Estimate

R0720

Risk margin

0

R0740 Contingent liabilities
R0750 Provisions other than technical provisions
R0760 Pension benefit obligations
R0770 Deposits from reinsurers

643,957

R0780 Deferred tax liabilities

76,455

R0790 Derivatives
R0800 Debts owed to credit institutions1
20,000R0810 Financial liabilities other than debts owed to credit institutions
R0820 Insurance & intermediaries payables

2,873

R0830 Reinsurance payables
R0840 Payables (trade, not insurance)

438,524

R0850 Subordinated liabilities

229,206

R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

229,206

R0880 Any other liabilities, not elsewhere shown
R0900 Total liabilities
R1000 Excess of assets over liabilities

3,947,575
951,887

S.05.01.02

Premiums, claims and expenses by line of business
Non-life

Line of business for: accepted non-proportional
reinsuranceLine of Business for: non-life insurance and reinsurance obligations (direct business and accepted proportional reinsurance)

Medicalexpenseinsurance

Incomeprotection
insurance

C0010

C0020

Workers'
Motor vehicle
Other motor
compensation
liability
insurance
insurance
insurance

C0030

C0040

C0050

Marine,Fire andaviation and other damage
to propertytransport
insurance
insurance
C0060

C0070

Total

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

AssistanceMisc.
financial loss

HealthCasualty

Marine,aviation andtransport

Property

C0080

C0090

C0100

C0110

C0120

C0130

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct BusinessR0120 Gross - Proportional reinsurance accepted
R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net
Premiums earned
R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted
R0230 Gross - Non-proportional reinsurance accepted
R0240 Reinsurers' share

1,406,201

382,647

96,262

253

16,62625,732

1,927,720
00965,542

264,130

69,657

183

962

0

1,300,473

440,659

118,517

26,60670

15,66325,732627,247

1,259,102

345,540

84,326

221

16,524

24,213

1,729,927
00820,985

227,461

61,255

161

963

0

1,110,825

R0300 Net
Claims incurred

438,117

118,079

23,071

61

15,561

24,213

619,102

R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

853,648

240,119

56,908149

7,302

14,753

1,172,879

R0330 Gross - Non-proportional reinsurance accepted
R0340 Reinsurers' share
R0400 Net
Changes in other technical provisions
R0410 Gross - Direct BusinessR0420 Gross - Proportional reinsurance accepted00623,279

174,960

39,955

105

721

0

839,019

230,370

65,158

16,95344

6,581

14,753

333,860

0

0

0

0

0

0

0
0

R0430 Gross - Non-proportional reinsurance accepted
R0440 Reinsurers' share

0

0

0

0

0

0

R0500 Net

0

0

0

0

0

0

0

98,04831,889

4,808

13

1,106

2,241

138,103

R0550 Expenses incurred

00R1200 Other expenses-19,805

R1300 Total expenses

118,297

S.05.01.02

Premiums, claims and expenses by line of business
Life
Line of Business for: life insurance obligations

Healthinsurance

Insurance withprofitparticipation

Index-linked
and unitlinked
insurance

Other life
insurance

C0210

C0220

C0230

C0240

Life reinsurance obligations

Annuities
stemming from
Annuities
non-life insurance
stemming fromcontracts andnon-life insurance
relating tocontracts andinsurance
relating to healthobligations otherinsurance
than healthobligations
insurance
obligations
C0250

C0260

HealthreinsuranceLife
reinsurance

Total

C0270

C0280

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

Claims incurred
R1610 Gross

8,238

R1620 Reinsurers' share

6,203

R1700 Net

2,035

8,238
6,203
0

2,035

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0

0

0

722

0

722

R2500 Other expenses
R2600 Total expenses

722

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

C0050

Top 5 countries (by amount of gross premiums written) non-life obligations

Home Country
R0010
C0080

C0060

C0070

Top 5 countries (by amount of grosspremiums written) - non-life
obligations

US

IT

ES

FR

C0090

C0100

C0110

C0120

Total Top 5 andhome country

C0130

C0140

Premiums written
R0110 Gross - Direct Business

1,540,292

159,593

128,478

47,201

52,157

1,927,720

R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net0
1,046,252

106,61075,95633,50838,147494,040

52,98352,521

13,69314,0101,357,855

165,231

117,920

45,141

43,7801,300,473
0627,247

Premiums earned
R0210 Gross - Direct Business

1,729,927

R0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share

866,249

110,368

69,95532,02332,230R0300 Net

491,605

54,86447,965

13,118

11,550891,108

127,111

85,23235,98833,4401,110,825
0619,102

Claims incurred
R0310 Gross - Direct Business

1,172,879

R0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

654,132

84,79051,49725,193

23,408R0400 Net

236,976

42,32133,736

10,795

10,032

0

0

0

0

0

839,0190333,860

Changes in other technical provisions
R0410 Gross - Direct Business0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share

0

0

0

0

0

R0500 Net

0

0

0

0

0

78,082

30,69012,728

7,553

9,048

R0550 Expenses incurred000
138,101

R1200 Other expenses
R1300 Total expenses

138,101

S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

C0190

Top 5 countries (by amount of gross premiums written) - life
obligations

Home Country
R1400
C0220

C0200

C0210

Top 5 countries (by amount of grosspremiums written) - life obligations

US

IT

ES

FR

C0230

C0240

C0250

C0260

Total Top 5 andhome country

C0270

C0280

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

0

0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

0

0

0

0

R1610 Gross

8,238

0

0

0

0

8,238

R1620 Reinsurers' share

6,203

0

0

0

0

6,203

R1700 Net

2,035

0

0

0

0

Claims incurred

0

2,035

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share
R1800 NetR1900 Expenses incurred

0
0
722

0

0

0

0

0

0
722

R2500 Other expenses

0

R2600 Total expenses722

S.22.01.22

Impact of long term guarantees measures and transitionals

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

C0010

C0030

Impact oftransitional oninterest rate
C0050

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0070

C0090

R0010 Technical provisions

1,327,958

00

10,6990R0020 Basic own funds

1,018,093

00-10,6990R0050 Eligible own funds to meet Solvency Capital Requirement

1,018,093

00-10,6990528,333

0

0

3,429

0

R0090 Solvency Capital Requirement

S.23.01.22

Own Funds

Basic own funds before deduction for participations in other financial sector

R0010 Ordinary share capital (gross of own shares)

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

C0050

287

0

13,145

13,1450R0040 Initial funds, members' contributions or the equivalent basic own-fund item for mutual and mutual-type undertakings

00R0050 Subordinated mutual member accounts

0

R0060

0

R0020

Non-available called but not paid in ordinary share capital at group levelR0030 Share premium account related to ordinary share capital

Non-available subordinated mutual member accounts at group level

287

Tier 30R0070 Surplus funds

0

0

R0080

0

0

Non-available surplus funds at group levelR0090 Preference shares

0

R0100

0

Non-available preference shares at group levelR0110 Share premium account related to preference shares

0

R0120

0

Non-available share premium account related to preference shares at group levelR0130 Reconciliation reserve775,455

R0140 Subordinated liabilities

229,206

R0150

Non-available subordinated liabilities at group level

0
0

0

0

0

0

0

0

0

0

0

229,206

0775,455

0R0160 An amount equal to the value of net deferred tax assets

0

0

R0170

0

0

The amount equal to the value of net deferred tax assets not available at the group levelR0180 Other items approved by supervisory authority as basic own funds not specified above

0

R0190

0

Non available own funds related to other own funds items approved by supervisory authority

R0200 Minority interests (if not reported as part of a specific own fund item)

0

R0210

0

Non-available minority interests at group level

0

0

0

0

0

R0220 Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria to be classified as Solvency II own funds
R0230 Deductions for participations in other financial undertakings, including non-regulated undertakings carrying out financial activities

0

R0240

0

whereof deducted according to art 228 of the Directive 2009/138/EC

R0250 Deductions for participations where there is non-availability of information (Article 229)

0R0260 Deduction for participations included by using D&A when a combination of methods is used

0R0270 Total of non-available own fund items

0

0

0

0

R0280 Total deductions

0

0

0

0

0

1,018,093

788,8870229,206

0

0

0

0

0

R0290 Total basic own funds after deductions
Ancillary own funds
R0300 Unpaid and uncalled ordinary share capital callable on demand

0R0310 Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type undertakings, callable on demand

0

R0320 Unpaid and uncalled preference shares callable on demand

0R0330 A legally binding commitment to subscribe and pay for subordinated liabilities on demand

0

R0340 Letters of credit and guarantees under Article 96(2) of the Directive 2009/138/EC

0R0350 Letters of credit and guarantees other than under Article 96(2) of the Directive 2009/138/EC

0R0360 Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0370 Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0380 Non available ancillary own funds at group level0R0390 Other ancillary own funds

0R0400 Total ancillary own funds

0

Own funds of other financial sectors
R0410 Credit Institutions, investment firms, financial institutions, alternative investment fund managers, UCITS management companies

0

R0420 Institutions for occupational retirement provision0

R0430 Non regulated entities carrying out financial activities

0

R0440 Total own funds of other financial sectors

0

0

0

S.23.01.22

Own Funds

Basic own funds before deduction for participations in other financial sector

Tier 1
unrestricted
C0020

Total
C0010

Tier 1
restricted
C0030

Tier 2Tier 3

C0040

C0050

Own funds when using the D&A, exclusively or in combination of method 1
R0450 Own funds aggregated when using the D&A and combination of method

0R0460 Own funds aggregated when using the D&A and combination of method net of IGT

0

R0520 Total available own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the undertakings included via D&A )1,018,093

788,8870229,206

R0530 Total available own funds to meet the minimum consolidated group SCR

1,018,093

788,8870229,206

R0560 Total eligible own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the undertakings included via D&A )1,018,093

788,8870229,206

824,962

788,887

036,075788,8870229,206

R0570 Total eligible own funds to meet the minimum consolidated group SCR (group)
R0610 Minimum consolidated Group SCR

180,373

R0650 Ratio of Eligible own funds to Minimum Consolidated Group SCR

457.37%

R0660 Total eligible own funds to meet the group SCR (including own funds from other financial sector and from the undertakings included via D&A )1,018,093

R0680 Group SCR

528,333

R0690 Ratio of Eligible own funds to group SCR including other financial sectors and the undertakings included via D&A

192.70%Reconcilliation reserve
R0700 Excess of assets over liabilities

C0060
951,887

R0710 Own shares (held directly and indirectly)
R0720 Forseeable dividends, distributions and charges

163,000

R0730 Other basic own fund items

13,432

R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds

0R0750 Other non available own funds
R0760 Reconciliation reserve775,455

Expected profits
R0770 Expected profits included in future premiums (EPIFP) - Life business
R0780 Expected profits included in future premiums (EPIFP) - Non- life business

41,507

R0790 Total Expected profits included in future premiums (EPIFP)

41,507000

S.25.01.22

Solvency Capital Requirement - for groups on Standard Formula

Gross solvency
capitalrequirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

70,156R0020 Counterparty default risk

47,994R0030 Life underwriting risk

2,942

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

350,659

R0060 Diversification-70,275

R0070 Intangible asset risk
R0100 Basic Solvency Capital Requirement
Calculation of Solvency Capital Requirement
R0130 Operational risk
R0140 Loss-absorbing capacity of technical provisions
R0150 Loss-absorbing capacity of deferred taxes
R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC
R0200 Solvency Capital Requirement excluding capital add-on

0401,476
C0100
72,716
0-26,8580447,333

R0210 Capital add-ons already set

81,000R0220 Solvency capital requirement for undertakings under consolidated method

528,333

Other information on SCR
R0400 Capital requirement for duration-based equity risk sub-module0

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

R0420 Total amount of Notional Solvency Capital Requirements for ring fenced funds

0R0430 Total amount of Notional Solvency Capital Requirements for matching adjustment portfolios

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304
R0470 Minimum consolidated group solvency capital requirement0180,373

Information on other entities
R0500 Capital requirement for other financial sectors (Non-insurance capital requirements)

0

R0510

Credit institutions, investment firms and financial institutions, alternative investment funds
managers, UCITS management companies

0

R0520

Institutions for occupational retirement provisions

0

R0530

Capital requirement for non- regulated entities carrying out financial activities

0

R0540 Capital requirement for non-controlled participation requirements

0R0550 Capital requirement for residual undertakings

0Overall SCR
R0560 SCR for undertakings included via D&A
R0570 Solvency capital requirement0528,333

S.32.01.22

Undertakings in the scope of the groupCountry

Identification code of theundertaking

Type of codeof the ID of theundertaking

C0020

Legal Name of the undertaking

Type of undertaking

C0030

C0040

LEI

Admiral Group plc (Group)

C0050
Insurance holding company as defined in Article 212(1)(f) of Directive 2009/138/EC

Row

C0010

1

GB

213800FGVM7Z9EJB2685

2

GB213800QUKWO9N6CT2J31

LEI

Admiral Insurance Company Limited

Non life insurance undertaking

3GI

2138003FZ569I9YPG680

LEI

Admiral Insurance Gibraltar Limited

Non life insurance undertaking

4US

2138001MLQW5AEJISF95

LEI

Elephant Insurance Company

Non life insurance undertaking

5GB

213800FGVM7Z9EJB2685GB00001

Specific code

Able Insurance Services Limited

6GB

213800FGVM7Z9EJB2685GB00002

Specific code

Admiral Law Limited

7GB

213800FGVM7Z9EJB2685GB00003

Specific code8US213800FGVM7Z9EJB2685GB00004

Specific code

Other
Comparaseguros Correduría de Seguros, S.L., Sociedad Unipersonal
Ancillary services undertaking as defined in Article 1
Elephant Insurance Services LLC(53) of Delegated Regulation (EU) 2015/35
Ancillary services undertaking as defined in Article 1
EUI (France) Limited(53) of Delegated Regulation (EU) 2015/35
Ancillary services undertaking as defined in Article 1
EUI Limited(53) of Delegated Regulation (EU) 2015/35

Legal form

Category(mutual/non
mutual)

C0060

C0070

Company limited by shares or by guarantee or unlimited

Non-mutual

Prudential Regulation Authority

Company limited by shares or by guarantee or unlimited

Non-mutual

Prudential Regulation Authority

Company limited by shares or by guarantee or unlimited

Non-mutual

Financial Services Comission

Company limited by shares or by guarantee or unlimited

Non-mutual

Va Bureau of Insurance and NAIC

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

BDE Law limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutualComparenow.com Insurance Agency LLC

OtherCompany limited by shares or by guarantee or unlimited

Non-mutualCompany limited by shares or by guarantee or unlimited

Non-mutualCompany limited by shares or by guarantee or unlimited

Non-mutualCompany limited by shares or by guarantee or unlimited

Non-mutual

Financial Conduct Authority

Company limited by shares or by guarantee or unlimited

Non-mutual

Financial Conduct Authority

9ES

213800FGVM7Z9EJB2685ES00005

Specific code10GB213800FGVM7Z9EJB2685GB00006

Specific code11GB213800FGVM7Z9EJB2685GB00007

Specific code

12GB213800ALB9B7LCZLU632

13

IN

213800FGVM7Z9EJB2685IN00008

Specific code

Inspop Technologies Private Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

14US213800FGVM7Z9EJB2685US00009

Specific code

Inspop USA LLC

OtherCompany limited by shares or by guarantee or unlimited

Non-mutual

15GB213800FGVM7Z9EJB2685GB00010

Specific code

Inspop.com (France) Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

16GB213800FGVM7Z9EJB2685GB00011

Specific code

Inspop.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

17GB213800FGVM7Z9EJB2685GB00012

Specific code

Rastreator.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

18GB213800FGVM7Z9EJB2685GB00013

Specific code

Admiral Life Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

19GB213800FGVM7Z9EJB2685GB00014

Specific code

Admiral Syndicate Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

20GB213800FGVM7Z9EJB2685GB00015

Specific code

Admiral Syndicate Management Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

21GB213800FGVM7Z9EJB2685GB00016

Specific code

Bell Direct Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

22GB213800FGVM7Z9EJB2685GB00017

Specific code

Confused.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

23GB213800FGVM7Z9EJB2685GB00018

Specific code

Diamond Motor Insurance Services Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

24GB213800FGVM7Z9EJB2685GB00019

Specific code

Elephant Insurance Services Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

25

GB213800FGVM7Z9EJB2685GB00020

Specific code

Preminen Price Comparison Holdings Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

26ES

213800FGVM7Z9EJB2685ES00021

Specific code

Admiral Europe Compania De Seguros S.A.

Non life insurance undertaking

Company limited by shares or by guarantee or unlimited

Non-mutual27ES

213800FGVM7Z9EJB2685ES00022

Specific code

Admiral Intermediary Services S.A.

Company limited by shares or by guarantee or unlimited

Non-mutual28

GB213800FGVM7Z9EJB2685GB00023

Specific code29GB213800FGVM7Z9EJB2685GB00024

Specific code

LEI

Supervisory Authority

Admiral Financial Services Limited
Preminen Dragon Price Comparison Limited

Ancillary services undertaking as defined in Article 1(53) of Delegated Regulation (EU) 2015/35
Credit institution, investment firm and financial
institution
Other

Company limited by shares or by guarantee or unlimited

Non-mutualCompany limited by shares or by guarantee or unlimited

Non-mutual

C0080

Financial Conduct Authority

S.32.01.22

Undertakings in the scope of the group
Inclusion in the scope of Groupsupervision

Criteria of influence

Country

Identification code of theundertaking

Type of codeof the ID of theundertaking% capital share% used for theestablishment ofconsolidated
accounts% voting rights

Other criteria

Level of influence

Proportional shareused for groupsolvency calculation

C0020

C0030

C0180

C0190

C0200

C0210

C0220

C0230

Row

C0010

1

GB

213800FGVM7Z9EJB2685

2

GB213800QUKWO9N6CT2J31

LEI

3

GI

2138003FZ569I9YPG680

LEI

4

US

2138001MLQW5AEJISF95

LEI

100.00%5GB213800FGVM7Z9EJB2685GB00001

Specific code6GB213800FGVM7Z9EJB2685GB00002

Specific code7GB213800FGVM7Z9EJB2685GB00003

Specific code8US213800FGVM7Z9EJB2685GB00004

Specific code

LEI

YES/NO

Date of decision
if art. 214 isapplied

C0240

C0250

Group solvency calculation

Method used and under method 1, treatment of theundertaking

C0260

Included in the scope

Method 1: Full consolidation

100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

90.00%

90.00%

90.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

90.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

71.10%

Dominant

Included in the scope

Method 1: Adjusted equity method

100.00%100.00%90.00%
71.10%

100.00%100.00%90.00%
71.10%

9ES

213800FGVM7Z9EJB2685ES00005

Specific code

75.00%

75.00%

75.00%

Dominant

Included in the scope

Method 1: Adjusted equity method10GB213800FGVM7Z9EJB2685GB00006

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

11GB

213800FGVM7Z9EJB2685GB00007

Specific code

100.00%Dominant

Included in the scope

Method 1: Full consolidation

12

GB

Included in the scope

Method 1: Full consolidation

213800ALB9B7LCZLU632

100.00%100.00%LEI

100.00%100.00%100.00%Dominant

13

IN

213800FGVM7Z9EJB2685IN00008

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

14

US213800FGVM7Z9EJB2685US00009

Specific code

71.10%

71.10%

71.10%

Dominant

Included in the scope

Method 1: Adjusted equity method

15

GB213800FGVM7Z9EJB2685GB00010

Specific code

100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

16

GB213800FGVM7Z9EJB2685GB00011

Specific code

100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

17GB213800FGVM7Z9EJB2685GB00012

Specific code

75.00%

75.00%

75.00%

Dominant

Included in the scope

Method 1: Adjusted equity method18GB213800FGVM7Z9EJB2685GB00013

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method19GB213800FGVM7Z9EJB2685GB00014

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method20

GB213800FGVM7Z9EJB2685GB00015

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method21

GB213800FGVM7Z9EJB2685GB00016

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method22GB213800FGVM7Z9EJB2685GB00017

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method23

GB213800FGVM7Z9EJB2685GB00018

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method24

GB213800FGVM7Z9EJB2685GB00019

Specific code

100.00%Dominant

Included in the scope

Method 1: Adjusted equity method25

GB213800FGVM7Z9EJB2685GB00020

Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

26

ES

213800FGVM7Z9EJB2685ES00021

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

27

ES

213800FGVM7Z9EJB2685ES00022

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

28

GB

213800FGVM7Z9EJB2685GB00023

Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method29

GB213800FGVM7Z9EJB2685GB00024

Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

100.00%100.00%100.00%100.00%100.00%100.00%S.32.01.22

Undertakings in the scope of the groupCountry

Identification code of theundertaking

Type of codeof the ID of theundertaking

Legal Name of the undertaking

Type of undertaking

C0040

Legal form

Category(mutual/non
mutual)Supervisory Authority

C0080

Row

C0010

C0020

C0030

C0050

C0060

C0070

30

MX

213800FGVM7Z9EJB2685MX00025

Specific code

Preminen Mexico Sociedad Anonima de Capital Variable

Other

Company limited by shares or by guarantee or unlimited

Non-mutual31

TR213800FGVM7Z9EJB2685TR00026

Specific code

Preminen Online Fiyat Karsilastirma Hizmetleri Anonim Sirketi

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

S.32.01.22

Undertakings in the scope of the group
Inclusion in the scope of Groupsupervision

Criteria of influence

Country

Identification code of theundertaking

Type of codeof the ID of theundertaking% capital share% used for theestablishment ofconsolidated
accounts% voting rights

Other criteria

C0180

C0190

C0200

C0210

Level of influence

Proportional shareused for groupsolvency calculation

C0220

C0230

YES/NO

Date of decision
if art. 214 isapplied

C0240

C0250

Group solvency calculation

Method used and under method 1, treatment of theundertaking

Row

C0010

C0020

C0030

30

MX

213800FGVM7Z9EJB2685MX00025

Specific code

51.25%

51.25%

51.25%

Dominant

Included in the scope

Method 1: Adjusted equity method

C0260

31

TR

213800FGVM7Z9EJB2685TR00026

Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

ADMIRAL INSURANCECOMPANY LIMITED
Solvency and Financial
Condition Report
Disclosures

31 December

2017(Monetary amounts in GBP thousands)

General information
Undertaking name

ADMIRAL INSURANCE COMPANY LIMITED

Undertaking identification code

213800QUKWO9N6CT2J31

Type of code of undertaking

LEI

Type of undertaking

Non-life undertakings

Country of authorisation

GB

Language of reportingen

Reporting reference date

31 December 2017

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the SCR

Standard formula

Matching adjustment

No use of matching adjustment

Volatility adjustment
Transitional measure on the risk-free interest rate
Transitional measure on technical provisions

Use of volatility adjustment
No use of transitional measure on the risk-free interest rate
Use of transitional measure on technical provisions

List of reported templates
S.02.01.02 - Balance sheet
S.05.01.02 - Premiums, claims and expenses by line of businessS.05.01.02 - Premiums, claims and expenses by line of businessS.05.02.01 - Premiums, claims and expenses by country
S.05.02.01 - Premiums, claims and expenses by country
S.12.01.02 - Life and Health SLT Technical Provisions
S.17.01.02 - Non-Life Technical Provisions
S.19.01.21 - Non-Life insurance claims
S.22.01.21 - Impact of long term guarantees measures and transitionals
S.23.01.01 - Own Funds
S.25.01.21 - Solvency Capital Requirement - for undertakings on Standard Formula
S.28.01.01 - Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

R0030 Intangible assets
R0040 Deferred tax assets
R0050 Pension benefit surplus
R0060 Property, plant & equipment held for own use
R0070 Investments (other than assets held for index-linked and unit-linked contracts)

0371,824

R0080

Property (other than for own use)

0

R0090

Holdings in related undertakings, including participations

0

R0100

Equities

0

R0110
R0120
R0130

Equities - listed
Equities - unlisted
Bonds

104,859

R0140

Government Bonds

1,516

R0150

Corporate Bonds

98,448

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

4,895
241,965
25,0000R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages

0

R0240

Loans on policies

0

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

R0270 Reinsurance recoverables from:113,772

R0280

112,174

Non-life and health similar to non-life

R0290

Non-life excluding health

112,174

R0300

Health similar to non-life

0

R0310
R0320
R0330
R0340

Life and health similar to life, excluding index-linked and unit-linked
Health similar to life
Life excluding health and index-linked and unit-linked
Life index-linked and unit-linked

R0350 Deposits to cedants
R0360 Insurance and intermediaries receivables

1,599
0
1,599
0
0
23,169

R0370 Reinsurance receivables
R0380 Receivables (trade, not insurance)

4,626

R0390 Own shares (held directly)

0

R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in

0R0410 Cash and cash equivalents
R0420 Any other assets, not elsewhere shown
R0500 Total assets

52,287
7565,686

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

388,041R0520

388,041

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

375,442

R0550

Risk margin

12,599

R0560

Technical provisions - health (similar to non-life)

0

0

R0570

TP calculated as a whole

0

R0580

Best Estimate

0

R0590

Risk margin

R0600 Technical provisions - life (excluding index-linked and unit-linked)
R0610

Technical provisions - health (similar to life)

0
6,278
0

R0620

TP calculated as a whole

0

R0630

Best Estimate

0

R0640
R0650

Risk margin
Technical provisions - life (excluding health and index-linked and unit-linked)

0
6,278

R0660

TP calculated as a whole

0

R0670

Best Estimate

6,075

R0680

Risk margin204

R0690 Technical provisions - index-linked and unit-linked

0

R0700

TP calculated as a whole

0

R0710

Best Estimate

0

R0720

Risk margin

0

R0740 Contingent liabilities
R0750 Provisions other than technical provisions
R0760 Pension benefit obligations
R0770 Deposits from reinsurers
R0780 Deferred tax liabilities

7,412

R0790 Derivatives
R0800 Debts owed to credit institutions
R0810 Financial liabilities other than debts owed to credit institutions
R0820 Insurance & intermediaries payables

0R0830 Reinsurance payables

5,752

R0840 Payables (trade, not insurance)

17,185

R0850 Subordinated liabilities
R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

R0880 Any other liabilities, not elsewhere shown

00
0R0900 Total liabilities

424,669

R1000 Excess of assets over liabilities

141,017

S.05.01.02

Premiums, claims and expenses by line of business
Non-life
Line of business for: accepted non-proportional
reinsuranceLine of Business for: non-life insurance and reinsurance obligations (direct business and accepted proportional reinsurance)

Medicalexpenseinsurance

Incomeprotection
insurance

C0010

C0020

Workers'
Motor vehicle
Other motor
compensation
liability
insurance
insurance
insurance

C0030

C0040

C0050

Marine,Fire andaviation and other damagetransport
to property
insurance
insurance
C0060

C0070

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

C0080

C0090

C0100

AssistanceMisc.
financial loss

Health

C0110

C0120

C0130

Total

Casualty

Marine,aviation andtransport

Property

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct BusinessR0120 Gross - Proportional reinsurance accepted
R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share

201,705

52,255

253,9600057,677

16,56374,240R0200 Net
Premiums earned

144,027

35,692

179,719

R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

191,701

49,823

241,523

R0230 Gross - Non-proportional reinsurance accepted
R0240 Reinsurers' share0053,426

15,672

69,098R0300 Net
Claims incurred

138,275

34,151

172,425

R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

129,891

34,975

164,866

R0330 Gross - Non-proportional reinsurance accepted
R0340 Reinsurers' share
R0400 Net
Changes in other technical provisions

00
38,837

11,88650,72391,05523,088114,143

R0410 Gross - Direct BusinessR0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted
R0440 Reinsurers' share

0

R0500 Net
R0550 Expenses incurred

0
0
0

0

0

25,326

6,841

32,167

R1200 Other expenses
R1300 Total expenses

32,167

S.05.01.02

Premiums, claims and expenses by line of business
Life
Line of Business for: life insurance obligations

Healthinsurance

Insurance withprofitparticipation

Index-linked
and unitlinked
insurance

Other life
insurance

C0210

C0220

C0230

C0240

Life reinsurance obligations

Annuities
stemming from
Annuities
non-life insurance
stemming fromcontracts andnon-life insurance
relating tocontracts andinsurance
relating to healthobligations otherinsurance
than healthobligations
insurance
obligations
C0250

C0260

HealthreinsuranceLife
reinsurance

Total

C0270

C0280

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share0

R1500 Net000

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share0

R1600 Net000

Claims incurred
R1610 Gross
R1620 Reinsurers' share
R1700 Net

2,723

2,723

4
2,719

4
0

2,719

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0

0

0

725

0

725

R2500 Other expenses
R2600 Total expenses

725

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

C0050

Top 5 countries (by amount of gross premiums written) non-life obligations

Home Country
R0010
C0080

IT

ES

C0090

C0100

C0110

C0060

C0070

Top 5 countries (by amount of grosspremiums written) - non-life
obligations

C0120

Total Top 5 andhome country

C0130

C0140

Premiums written
R0110 Gross - Direct Business

145,591

61,167

47,201

253,960

R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net

03,235

37,49733,508142,356

23,67013,693140,146

56,23645,141

74,240000179,719

Premiums earned
R0210 Gross - Direct Business

241,523

R0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share
R0300 Net

2,580

34,49632,023

137,567

21,74013,11888,04940,82935,98869,098000172,425

Claims incurred
R0310 Gross - Direct Business

164,866

R0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted
R0340 Reinsurers' share
R0400 Net0134

25,38825,19387,915

15,441

10,79500050,71500

0114,151

Changes in other technical provisions
R0410 Gross - Direct Business0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share

0

0

0

R0500 Net00

023,451

4,281

4,434

R0550 Expenses incurred

0
0

0

0

0
32,167

R1200 Other expenses
R1300 Total expenses

32,167

S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

C0190

Top 5 countries (by amount of gross premiums written) - life
obligations

Home Country

C0200

C0210

Top 5 countries (by amount of grosspremiums written) - life obligations

Total Top 5 andhome country

R1400
C0220

C0230

C0240

C0250

C0260

C0270

C0280

Premiums written
R1410 Gross

0

R1420 Reinsurers' share0

R1500 Net

0

0

0

0

0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

2,723

0

0

4

0

0

2,719

0

0

0

0

0

0

Claims incurred
R1610 Gross
R1620 Reinsurers' share
R1700 Net

2,723
4
0

0

0

2,719

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0
725

0

0

0

0

0

0
725

R2500 Other expenses
R2600 Total expenses725

S.12.01.02

Life and Health SLT Technical Provisions

Index-linked and unit-linked insurance

Insurancewith profit
participation

C0020

C0030

Contracts
without
options andguarantees

Contractswith options
or guarantees

C0040

C0050

Annuities
stemming from
non-life
Total
insurance(Life othercontracts andAccepted than healthrelating toContracts
reinsurance insurance,
insurancewith options
includingobligationotheror guarantees
Unit-Linked)
than healthinsurance
obligations

Other life insurance

Contracts
without
options andguarantees

C0060

C0070

C0080

C0090

C0100

R0010 Technical provisions calculated as a whole
Total Recoverables from reinsurance/SPV and Finite Re after
the adjustment for expected losses due to counterparty default
R0020 associated to TP calculated as a whole

C0150
0

0

Best estimate
R0030 Gross Best Estimate

6,075

6,075

Total Recoverables from reinsurance/SPV and Finite Re after
R0080 the adjustment for expected losses due to counterparty default

1,599

1,599

4,476

4,476

204

204

Best estimate minus recoverables from reinsurance/SPVand Finite Re

R0100 Risk margin
Amount of the transitional on Technical Provisions
R0110 Technical Provisions calculated as a whole0R0120 Best estimate

0R0130 Risk margin

0

R0200 Technical provisions - total

6,278

Annuities
stemming from
non-life
insurance
Contracts
Contracts
contracts andwithout
with options
relating tooptions andorhealthguarantees guarantees
insurance
obligations

C0160

Technical provisions calculated as a sum of BE and RM

R0090

Health insurance (direct business)

6,278

C0170

C0180

C0190

Healthreinsurance(reinsurance
accepted)

Total (Healthsimilar to life
insurance)

C0200

C0210

S.17.01.02

Non-Life Technical Provisions

Direct business and accepted proportional reinsurance

R0010 Technical provisions calculated as a whole

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

C0020

C0030

C0040

C0050

C0060
0

0

Total Recoverables from reinsurance/SPV and Finite Re after
R0050 the adjustment for expected losses due to counterparty default
associated to TP calculated as a whole

Accepted non-proportional reinsurance

Marine,aviation andtransport
insurance

Fire and otherdamage toproperty
insurance

Generalliability
insurance

Credit andsuretyshipinsurance

Legal expenses
insurance

Assistance

C0070

C0080

C0090

C0100

C0110

C0120

Miscellaneous
financial loss

Nonproportional
healthreinsurance

Nonproportional
casualty
reinsurance

Nonproportional
marine,aviation andtransport
reinsurance

Nonproportional
property
reinsurance

Total Non-Life
obligation

C0130

C0140

C0150

C0160

C0170

C0180
0
0

Technical provisions calculated as a sum of BE and RM
Best estimate
Premium provisions
R0060

Gross

73,887

17,06090,947

R0140

Total recoverable from reinsurance/SPV and Finite Re
after the adjustment for expected losses due tocounterparty default

28,9903,980

32,97044,89813,08057,977283,158

1,337

284,495

76,925

2,279

79,204

206,233-942

205,291

R0260 Total best estimate - gross

357,045

18,397375,442

R0270 Total best estimate - net

251,130

12,138263,268

R0280 Risk margin

12,018581

12,599R0150

Net Best Estimate of Premium Provisions
Claims provisions

R0160
R0240
R0250

Gross
Total recoverable from reinsurance/SPV and Finite Re
after the adjustment for expected losses due tocounterparty default
Net Best Estimate of Claims Provisions

Amount of the transitional on Technical Provisions
R0290 Technical Provisions calculated as a whole0R0300 Best estimate

0R0310 Risk margin

0

R0320 Technical provisions - total

369,064

18,978388,041

Recoverable from reinsurance contract/SPV and
R0330 Finite Re after the adjustment for expected losses due tocounterparty default - total

105,915

6,259

112,174

263,149

12,719275,868

R0340

Technical provisions minus recoverables fromreinsurance/SPV and Finite Re - total

S.19.01.21

Non-Life insurance claims
Total Non-life business

Z0020

Underwriting Year

Accident year / underwriting year

Gross Claims Paid (non-cumulative)(absolute amount)
C0010

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

C0100

C0110

C0170

C0180

10 & +In Currentyear

Sum of years(cumulative)

Development year

Year
0

1

2

3

4

5

6

7

8

9

R0100

Prior

2,809

R0160

2008

12,49430,824

7,126

3,300

2,758

2,021

441

699

725

R0170

2009

13,312

28,231

8,491

4,376

3,757

2,008

508

818

-2,130

R0180

2010

16,39239,43012,028

6,509

4,109

1,992

925

-3,140

R0190

2011

21,67748,08813,712

7,849

4,507

4,033

-1,915

R0200

2012

23,102

49,736

14,393

6,604

5,808

-2,552

R0210

2013

22,56650,576

15,518

8,900

1,323

R0220

2014

24,55753,475

17,884

8,030

R0230

2015

24,15755,063

12,351

R0240

2016

28,30555,979

R0250

2017

31,856

1,378

R0260

Total

2,809

2,809

1,378

61,767-2,13059,371-3,14078,244-1,91597,953-2,552

97,0901,323

98,882

8,030

103,946

12,351

91,571

55,97984,28431,85631,856

103,989

807,772

Gross Undiscounted Best Estimate Claims Provisions(absolute amount)
C0360
C0200

C0210

C0220

C0230

C0240

C0250

C0260

C0270

C0280

C0290

C0300

6

7

8

9

10 & +

0

1

2

3

4

5

R0100

Prior

R0160

2008

0

0

0

0

0

0

0

0

1,420

R0170

2009

0

0

0

0

0

0

0

3,581

2,230

R0180

2010

0

0

0

0

0

0

7,144

4,600

R0190

2011

0

0

0

0

0

15,841

9,702

R0200

2012

0

0

0

0

24,72913,790

R0210

2013

0

0

0

34,29021,776

R0220

2014

0

0

60,216

39,203

R0230

2015

0

86,992

46,645

R0240

2016

67,04481,006

R0250

2017

70,069

R0260

Year end(discounted
data)

Development year

Year

4,480
468

4,094
627
2,344
4,036
9,527
12,932
20,74837,71645,41478,855
68,203

Total

284,495

S.22.01.21

Impact of long term guarantees measures and transitionals

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

C0010

C0030

Impact oftransitional oninterest rate
C0050

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0070

C0090

R0010 Technical provisions

238,583

0

0

2,088

0

R0020 Basic own funds

131,01700-2,0880R0050 Eligible own funds to meet Solvency Capital Requirement

131,01700-2,0880R0090 Solvency Capital Requirement

83,178

0

0

349

0

R0100 Eligible own funds to meet Minimum Capital Requirement

131,01700-2,0880R0110 Minimum Capital Requirement

37,430

0

0

157

0

S.23.01.01

Own Funds

Basic own funds before deduction for participations in other financial sector as foreseen in article 68 of Delegated Regulation 2015/35

R0010 Ordinary share capital (gross of own shares)

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

Tier 3C0050

37,30037,3000R0030 Share premium account related to ordinary share capital

0

0

0

R0040 Initial funds, members' contributions or the equivalent basic own-fund item for mutual and mutual-type undertakings

0

0

0

R0050 Subordinated mutual member accounts

0R0070 Surplus funds

0R0090 Preference shares

0R0110 Share premium account related to preference shares

93,717

R0140 Subordinated liabilities

0

R0160 An amount equal to the value of net deferred tax assets

0R0180 Other own fund items approved by the supervisory authority as basic own funds not specified above

0

R0220 Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria to be classified as Solvency II own funds

0R0230 Deductions for participations in financial and credit institutions

0

R0290 Total basic own funds after deductions

131,017

0

0

0

0

0

0

0

0

0

0

0

0

0

R0130 Reconciliation reserve

0

93,717
0
0

0

0

0

131,017

0

0

0

0

0

0

Ancillary own funds
R0300 Unpaid and uncalled ordinary share capital callable on demand

0R0310 Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type undertakings, callable on demand

0

R0320 Unpaid and uncalled preference shares callable on demand

0R0330 A legally binding commitment to subscribe and pay for subordinated liabilities on demand

0

R0340 Letters of credit and guarantees under Article 96(2) of the Directive 2009/138/EC

0R0350 Letters of credit and guarantees other than under Article 96(2) of the Directive 2009/138/EC

0R0360 Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0370 Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0390 Other ancillary own funds

0R0400 Total ancillary own funds

0

Available and eligible own funds
R0500 Total available own funds to meet the SCR

131,017

131,01700R0510 Total available own funds to meet the MCR

131,017

131,01700R0540 Total eligible own funds to meet the SCR

131,017

131,01700R0550 Total eligible own funds to meet the MCR

131,017

131,01700R0580 SCR

83,178R0600 MCR

37,430R0620 Ratio of Eligible own funds to SCR

157.51%

R0640 Ratio of Eligible own funds to MCR

350.03%

Reconcilliation reserve
R0700 Excess of assets over liabilities
R0710 Own shares (held directly and indirectly)

C0060
141,0170R0720 Foreseeable dividends, distributions and charges

10,000R0730 Other basic own fund items

37,300R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds
R0760 Reconciliation reserve

0
93,717

Expected profits
R0770 Expected profits included in future premiums (EPIFP) - Life business
R0780 Expected profits included in future premiums (EPIFP) - Non- life business

9,289

R0790 Total Expected profits included in future premiums (EPIFP)

9,289

0

S.25.01.21

Solvency Capital Requirement - for undertakings on Standard Formula

Gross solvency
capital requirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

6,159

R0020 Counterparty default risk

5,041

R0030 Life underwriting risk

435

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

78,788R0060 Diversification-7,183

R0070 Intangible asset risk

0

R0100 Basic Solvency Capital Requirement
Calculation of Solvency Capital Requirement
R0130 Operational risk
R0140 Loss-absorbing capacity of technical provisions
R0150 Loss-absorbing capacity of deferred taxes
R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC
R0200 Solvency Capital Requirement excluding capital add-on
R0210 Capital add-ons already set
R0220 Solvency capital requirement

83,240C0100
11,291
0-11,353
083,178083,178Other information on SCR
R0400 Capital requirement for duration-based equity risk sub-module0

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

R0420 Total amount of Notional Solvency Capital Requirements for ring fenced funds

0R0430 Total amount of Notional Solvency Capital Requirements for matching adjustment portfolios

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304

0S.28.01.01

Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity

Linear formula component for non-life insurance and reinsurance obligations

C0010

R0010 MCRNL Result

38,472

Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (of reinsurance)
written premiums in
the last 12 months

C0020

C0030

R0020 Medical expense insurance and proportional reinsurance

0R0030 Income protection insurance and proportional reinsurance

0R0040 Workers' compensation insurance and proportional reinsurance

0R0050 Motor vehicle liability insurance and proportional reinsurance

251,130

144,027

R0060 Other motor insurance and proportional reinsurance

12,13835,692

R0070 Marine, aviation and transport insurance and proportional reinsurance

0R0080 Fire and other damage to property insurance and proportional reinsurance

0

R0090 General liability insurance and proportional reinsurance

0

R0100 Credit and suretyship insurance and proportional reinsurance

0

R0110 Legal expenses insurance and proportional reinsurance

0

R0120 Assistance and proportional reinsurance

0R0130 Miscellaneous financial loss insurance and proportional reinsurance

0

R0140 Non-proportional health reinsurance

0

R0150 Non-proportional casualty reinsurance

0

R0160 Non-proportional marine, aviation and transport reinsurance

0

R0170 Non-proportional property reinsurance0Linear formula component for life insurance and reinsurance obligations

C0040

R0200 MCRL Result98

Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (ofreinsurance/SPV) total
capital at risk

C0050

C0060

R0210 Obligations with profit participation - guaranteed benefits
R0220 Obligations with profit participation - future discretionary benefits
R0230 Index-linked and unit-linked insurance obligations
R0240 Other life (re)insurance and health (re)insurance obligations

4,680

R0250 Total capital at risk for all life (re)insurance obligations
Overall MCR calculation

C0070

R0300 Linear MCR

38,570R0310 SCR

83,178R0320 MCR cap

37,430R0330 MCR floor

20,794

R0340 Combined MCR

37,430R0350 Absolute floor of the MCR

2,196

R0400 Minimum Capital Requirement

37,430Admiral Insurance
Gibraltar Limited
Solvency and Financial
Condition Report
Disclosures

31 December

2017(Monetary amounts in GBP thousands)

General information
Undertaking name

Admiral Insurance Gibraltar Limited

Undertaking identification code

2138003FZ569I9YPG680

Type of code of undertaking

LEI

Type of undertaking

Non-life undertakings

Country of authorisation

GI

Language of reportingen

Reporting reference date

31 December 2017

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the SCR

Standard formula

Matching adjustment

No use of matching adjustment

Volatility adjustment
Transitional measure on the risk-free interest rate
Transitional measure on technical provisions

Use of volatility adjustment
No use of transitional measure on the risk-free interest rate
Use of transitional measure on technical provisions

List of reported templates
S.02.01.02 - Balance sheet
S.05.01.02 - Premiums, claims and expenses by line of businessS.05.01.02 - Premiums, claims and expenses by line of businessS.05.02.01 - Premiums, claims and expenses by country
S.05.02.01 - Premiums, claims and expenses by country
S.12.01.02 - Life and Health SLT Technical Provisions
S.17.01.02 - Non-Life Technical Provisions
S.19.01.21 - Non-Life insurance claims
S.22.01.21 - Impact of long term guarantees measures and transitionals
S.23.01.01 - Own Funds
S.25.01.21 - Solvency Capital Requirement - for undertakings on Standard Formula
S.28.01.01 - Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

R0030 Intangible assets
R0040 Deferred tax assets
R0050 Pension benefit surplus
R0060 Property, plant & equipment held for own use
R0070 Investments (other than assets held for index-linked and unit-linked contracts)

02,037,232

R0080

Property (other than for own use)

0

R0090

Holdings in related undertakings, including participations

0

R0100

Equities

0

R0110
R0120
R0130

Equities - listed
Equities - unlisted
Bonds

1,179,404

R0140

Government Bonds

62,047

R0150

Corporate Bonds

960,559

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

156,798
772,82785,0000R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages

0

R0240

Loans on policies

0

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

R0270 Reinsurance recoverables from:1,039,902

R0280

1,030,971

Non-life and health similar to non-life

R0290

Non-life excluding health

1,030,971

R0300

Health similar to non-life

0

R0310
R0320
R0330
R0340

Life and health similar to life, excluding index-linked and unit-linked
Health similar to life
Life excluding health and index-linked and unit-linked
Life index-linked and unit-linked

R0350 Deposits to cedants
R0360 Insurance and intermediaries receivables

8,931
0
8,931
0
0
170,900

R0370 Reinsurance receivables
R0380 Receivables (trade, not insurance)

50,719R0390 Own shares (held directly)

0

R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in

0R0410 Cash and cash equivalents

34,515

R0420 Any other assets, not elsewhere shown
R0500 Total assets

3,333,268

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

2,016,876

R0520

2,016,876

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

R0550

Risk margin

R0560

Technical provisions - health (similar to non-life)

0
1,962,907
53,9690R0570

TP calculated as a whole

0

R0580

Best Estimate

0

R0590

Risk margin

R0600 Technical provisions - life (excluding index-linked and unit-linked)
R0610

Technical provisions - health (similar to life)

035,7380R0620

TP calculated as a whole

0

R0630

Best Estimate

0

R0640
R0650

Risk margin
Technical provisions - life (excluding health and index-linked and unit-linked)

R0660

TP calculated as a whole

R0670

Best Estimate

R0680

Risk margin

035,738034,781956

R0690 Technical provisions - index-linked and unit-linked

0

R0700

TP calculated as a whole

0

R0710

Best Estimate

0

R0720

Risk margin

0

R0740 Contingent liabilities

0

R0750 Provisions other than technical provisions
R0760 Pension benefit obligations
R0770 Deposits from reinsurers

639,334

R0780 Deferred tax liabilities

7,569

R0790 Derivatives
R0800 Debts owed to credit institutions
R0810 Financial liabilities other than debts owed to credit institutions
R0820 Insurance & intermediaries payables

109,849

R0830 Reinsurance payables
R0840 Payables (trade, not insurance)
R0850 Subordinated liabilities
R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

107,36700R0880 Any other liabilities, not elsewhere shown
R0900 Total liabilities
R1000 Excess of assets over liabilities

2,916,731
416,537

S.05.01.02

Premiums, claims and expenses by line of business
Non-life

Line of business for: accepted non-proportional
reinsuranceLine of Business for: non-life insurance and reinsurance obligations (direct business and accepted proportional reinsurance)

Medicalexpenseinsurance

Incomeprotection
insurance

C0010

C0020

Workers'
Motor vehicle
Other motor
compensation
liability
insurance
insurance
insurance

C0030

C0040

C0050

Marine,Fire andaviation and other damage
to propertytransport
insurance
insurance
C0060

C0070

Total

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

AssistanceMisc.
financial loss

HealthCasualty

Marine,aviation andtransport

Property

C0080

C0090

C0100

C0110

C0120

C0130

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct BusinessR0120 Gross - Proportional reinsurance accepted
R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share

1,108,108

267,187

96,262

253

16,62625,732

1,514,168
00843,476

205,345

69,657

183

962

0

1,119,623

R0200 Net
Premiums earned

264,632

61,842

26,60670

15,66325,732394,545

R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

967,608

230,280

84,326

221

16,524

24,213

1,323,173

R0230 Gross - Non-proportional reinsurance accepted
R0240 Reinsurers' share00700,901

168,079

61,255

161

963

0

931,359

R0300 Net
Claims incurred

266,70762,201

23,071

61

15,561

24,213391,814

R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

633,855

151,459

56,908149

7,302

14,753

864,426

R0330 Gross - Non-proportional reinsurance accepted
R0340 Reinsurers' share
R0400 Net
Changes in other technical provisions
R0410 Gross - Direct BusinessR0420 Gross - Proportional reinsurance accepted00523,353

126,976

39,955

105

721

0

691,109110,50224,483

16,95344

6,581

14,753

173,317

0

0

0

0

0

0

0
0

R0430 Gross - Non-proportional reinsurance accepted
R0440 Reinsurers' share

0

0

0

0

0

0

R0500 Net

0

0

0

0

0

0

0

46,641

10,667

4,808

13

1,104

2,241

65,473

R0550 Expenses incurred

00R1200 Other expenses
R1300 Total expenses

65,473

S.05.01.02

Premiums, claims and expenses by line of business
Life
Line of Business for: life insurance obligations

Healthinsurance

Insurance withprofitparticipation

Index-linked
and unitlinked
insurance

Other life
insurance

C0210

C0220

C0230

C0240

Life reinsurance obligations

Annuities
stemming from
Annuities
non-life insurance
stemming fromcontracts andnon-life insurance
relating tocontracts andinsurance
relating to healthobligations otherinsurance
than healthobligations
insurance
obligations
C0250

C0260

HealthreinsuranceLife
reinsurance

Total

C0270

C0280

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

Claims incurred
R1610 Gross

21,991

R1620 Reinsurers' share

18,604

R1700 Net

3,387

21,991
18,6040

3,387

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0

0

0

1,405

0

1,405

R2500 Other expenses
R2600 Total expenses

1,405

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

C0050

Top 5 countries (by amount of gross premiums written) non-life obligations

Home Country
R0010
C0080

IT

FR

C0090

C0100

C0110

C0060

C0070

Top 5 countries (by amount of grosspremiums written) - non-life
obligations

C0120

Total Top 5 andhome country

C0130

C0140

Premiums written
R0110 Gross - Direct Business

1,394,701

67,31052,1570R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net

1,514,168
01,043,017

38,45938,147

351,684

28,851

14,0101,217,708

61,68443,7801,119,623
000394,545

Premiums earned
R0210 Gross - Direct Business

1,323,173

R0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share

863,670

35,45932,230R0300 Net

354,039

26,225

11,550786,582

44,40433,440931,359000391,814Claims incurred
R0310 Gross - Direct Business

864,426

R0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

641,592

26,10923,408R0400 Net

144,990

18,295

10,03200691,109000173,317

Changes in other technical provisions
R0410 Gross - Direct Business0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share00R0500 Net00

052,001

5,866

7,606

R0550 Expenses incurred

0
0

0

0

0
65,473

R1200 Other expenses
R1300 Total expenses

65,473

S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

C0190

Top 5 countries (by amount of gross premiums written) - life
obligations

Home Country

C0200

C0210

Top 5 countries (by amount of grosspremiums written) - life obligations

Total Top 5 andhome country

R1400
C0220

C0230

C0240

C0250

C0260

C0270

C0280

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

0

0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

0

0

0

0

Claims incurred
R1610 Gross

21,991

21,991

R1620 Reinsurers' share

18,60418,604

R1700 Net

3,387

0

0

0

0

0

3,387

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share
R1800 NetR1900 Expenses incurred

0
0
1,405

0

0

0

0

0

0
1,405

R2500 Other expenses
R2600 Total expenses

1,405

S.12.01.02

Life and Health SLT Technical Provisions

Index-linked and unit-linked insurance

Insurancewith profit
participation

C0020

C0030

Contracts
without
options andguarantees

Contractswith options
or guarantees

C0040

C0050

Annuities
stemming from
non-life
Total
insurance(Life othercontracts andAccepted than healthrelating toContracts
reinsurance insurance,
insurancewith options
includingor guarantees obligation other
Unit-Linked)
than healthinsurance
obligations

Other life insurance

Contracts
without
options andguarantees

C0060

C0070

C0080

C0090

C0100

R0010 Technical provisions calculated as a whole
Total Recoverables from reinsurance/SPV and Finite Re after
the adjustment for expected losses due to counterparty default
R0020 associated to TP calculated as a whole

C0150

0

Best estimate
R0030 Gross Best Estimate

34,781

34,781

Total Recoverables from reinsurance/SPV and Finite Re after
R0080 the adjustment for expected losses due to counterparty default

8,931

8,931

25,85025,850956

956Best estimate minus recoverables from reinsurance/SPVand Finite Re

R0100 Risk margin
Amount of the transitional on Technical Provisions
R0110 Technical Provisions calculated as a whole0R0120 Best estimate

0R0130 Risk margin
R0200 Technical provisions - total

035,738Annuities
stemming from
non-life
insurance
Contracts
Contracts
contracts andwithout
with options
relating tooptions andorhealthguarantees guarantees
insurance
obligations

C0160
0

Technical provisions calculated as a sum of BE and RM

R0090

Health insurance (direct business)

35,738

C0170

C0180

C0190

Healthreinsurance(reinsurance
accepted)

Total (Healthsimilar to life
insurance)

C0200

C0210

S.17.01.02

Non-Life Technical Provisions

Direct business and accepted proportional reinsurance

R0010 Technical provisions calculated as a whole

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

C0020

C0030

C0040

C0050

C0060
0

0

Accepted non-proportional reinsurance

Marine,aviation andtransport
insurance

Fire and otherdamage toproperty
insurance

Generalliability
insurance

C0070

C0080

C0090
0

0

Credit andsuretyshipinsurance

Legal expenses
insurance

Assistance

C0100

C0110

C0120
0

Miscellaneous
financial loss

Nonproportional
healthreinsurance

Nonproportional
casualty
reinsurance

Nonproportional
marine,aviation andtransport
reinsurance

Nonproportional
property
reinsurance

Total Non-Life
obligation

C0130

C0140

C0150

C0160

C0170

C0180

0

Total Recoverables from reinsurance/SPV and Finite Re after
R0050 the adjustment for expected losses due to counterparty default
associated to TP calculated as a whole00Technical provisions calculated as a sum of BE and RM
Best estimate
Premium provisions
R0060

Gross

289,02182,74826,478626

R0140

Total recoverable from reinsurance/SPV and Finite Re
after the adjustment for expected losses due tocounterparty default

222,043

60,117

14,885342

66,97822,631

11,593284

1,518,105-6,962

30,690

2,635

1,921

R0150

Net Best Estimate of Premium Provisions

4,487

5,738

409,098

0

206

297,593

4,487

5,532

111,505

7,419

1,553,809
733,378

Claims provisions
R0160
R0240

Gross
Total recoverable from reinsurance/SPV and Finite Re
after the adjustment for expected losses due tocounterparty default
Net Best Estimate of Claims Provisions

703,717

6,456

21,283

1,815

0

108

814,388-13,418

9,407

821

1,921

7,311

820,431

R0260 Total best estimate - gross

1,807,126

75,78657,168

3,261

6,408

13,156

1,962,907

R0270 Total best estimate - net

881,366

9,213

21,000

1,104

6,408

12,843931,935

R0280 Risk margin

51,041

534

1,216

64

371

744

53,969R0290 Technical Provisions calculated as a whole

0

0

0

0

0

0

0

R0300 Best estimate

0

0

0

0

0

0

0

R0310 Risk margin

0

0

0

0

0

0

0

1,858,166

76,32058,384

3,325

6,779

13,9002,016,876

925,760

66,57336,168

2,157

0

313

1,030,971

932,407

9,747

22,216

1,168

6,779

13,587985,904

R0250

Amount of the transitional on Technical Provisions

R0320 Technical provisions - total
Recoverable from reinsurance contract/SPV and
R0330 Finite Re after the adjustment for expected losses due tocounterparty default - total
R0340

Technical provisions minus recoverables fromreinsurance/SPV and Finite Re - total

S.19.01.21

Non-Life insurance claims
Total Non-life business

Accident year / underwriting year Underwriting Year

Z0020

Gross Claims Paid (non-cumulative)(absolute amount)
C0010

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

0

1

2

3

2008

41,48280,772

17,487

10,937

9,512

7,830

1,750

1,963

3,447

R0170

2009

53,864

101,579

25,936

15,412

13,607

7,970

1,897

3,425

674

R0180

2010

71,710161,683

42,94926,28018,462

9,640

3,685

3,839

R0190

2011

108,372

213,095

56,106

39,632

22,42625,860

3,159

R0200

2012

116,536

205,50760,97635,51230,254

4,789

R0210

2013

108,649

191,803

69,323

48,999

9,364

R0220

2014

109,069

211,547

76,62930,509

R0230

2015

118,569

239,963

63,197

R0240

2016

141,234

277,595

R0250

2017

190,485

R0100

Prior

R0160

C0100

C0110

C0170

C0180

10 & +In Currentyear

Sum of years(cumulative)

Development year

Year

4

5

6

7

8

9

125
100

Total

R0260

125

125

100

175,279674

224,363

3,839

338,248

3,159

468,650

4,789

453,574

9,364

428,137

30,509427,754

63,197421,728

277,595

418,828

190,485

190,485

583,837

3,547,172

Gross Undiscounted Best Estimate Claims Provisions(absolute amount)
C0360
C0200

C0210

C0220

C0230

0

1

2

3

C0240

C0250

C0260

C0270

C0280

C0290

C0300

6

7

8

9

10 & +Development year

Year

4

5

R0100

Prior

R0160

2008

0

0

0

0

0

0

0

0

5,778

R0170

2009

0

0

0

0

0

0

0

13,172

10,905

R0180

2010

0

0

0

0

0

0

32,702

23,343

R0190

2011

0

0

0

0

0

80,74060,184

R0200

2012

0

0

0

0

114,554

79,938

R0210

2013

0

0

0

156,993

141,660

R0220

2014

0

0

255,786

219,488

R0230

2015

0

362,775

285,359

R0240

2016

322,577

413,914

R0250

2017

398,456

R0260

Year end(discounted
data)

22,001
2,624

20,036
2,576
10,41022,05357,392
74,285130,188
206,040
259,605
389,633
381,592

Total

1,553,809

S.22.01.21

Impact of long term guarantees measures and transitionals

R0010 Technical provisions

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

C0010

C0030

Impact oftransitional oninterest rate

C0050

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0070

C0090

1,748,532

0

0

9,146

0

R0020 Basic own funds

376,53700-9,1460R0050 Eligible own funds to meet Solvency Capital Requirement

436,53700-9,1460R0090 Solvency Capital Requirement

287,270

0

0

2,458

0

R0100 Eligible own funds to meet Minimum Capital Requirement

376,53700-9,1460R0110 Minimum Capital Requirement

117,8270012,5500

S.23.01.01

Own Funds

Basic own funds before deduction for participations in other financial sector as foreseen in article 68 of Delegated Regulation 2015/35

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

R0010 Ordinary share capital (gross of own shares)
R0030 Share premium account related to ordinary share capital

58

0
0

14,944

14,94400R0050 Subordinated mutual member accounts

0R0070 Surplus funds

0R0090 Preference shares
R0110 Share premium account related to preference shares

0
0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

376,537000R0130 Reconciliation reserve361,535

R0140 Subordinated liabilities

0

R0160 An amount equal to the value of net deferred tax assets

0R0180 Other own fund items approved by the supervisory authority as basic own funds not specified above

0

R0220 Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria to be classified as Solvency II own funds

0R0290 Total basic own funds after deductions

C0050

58

R0040 Initial funds, members' contributions or the equivalent basic own-fund item for mutual and mutual-type undertakings

R0230 Deductions for participations in financial and credit institutions

Tier 3

0361,53500376,537

Ancillary own funds
R0300 Unpaid and uncalled ordinary share capital callable on demand

0R0310 Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type undertakings, callable on demand

0

R0320 Unpaid and uncalled preference shares callable on demand

0R0330 A legally binding commitment to subscribe and pay for subordinated liabilities on demand

0

R0340 Letters of credit and guarantees under Article 96(2) of the Directive 2009/138/EC

0R0350 Letters of credit and guarantees other than under Article 96(2) of the Directive 2009/138/EC

0R0360 Supplementary members calls under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0370 Supplementary members calls - other than under first subparagraph of Article 96(3) of the Directive 2009/138/EC

0R0390 Other ancillary own funds

60,00060,000R0400 Total ancillary own funds

60,00060,00000

Available and eligible own funds
R0500 Total available own funds to meet the SCR

436,537

376,537060,000R0510 Total available own funds to meet the MCR

376,537

376,53700R0540 Total eligible own funds to meet the SCR

436,537

376,537060,000R0550 Total eligible own funds to meet the MCR

376,537

376,53700R0580 SCR

287,270

R0600 MCR

117,827

R0620 Ratio of Eligible own funds to SCR

151.96%

R0640 Ratio of Eligible own funds to MCR
Reconcilliation reserve
R0700 Excess of assets over liabilities
R0710 Own shares (held directly and indirectly)

319.57%
C0060
416,5370R0720 Foreseeable dividends, distributions and charges

40,000R0730 Other basic own fund items

15,002

R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds
R0760 Reconciliation reserve

0361,535

Expected profits
R0770 Expected profits included in future premiums (EPIFP) - Life business
R0780 Expected profits included in future premiums (EPIFP) - Non- life business

35,839R0790 Total Expected profits included in future premiums (EPIFP)

35,8390

S.25.01.21

Solvency Capital Requirement - for undertakings on Standard Formula

Gross solvency
capital requirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

48,755R0020 Counterparty default risk

23,253R0030 Life underwriting risk

2,508

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

213,653

R0060 Diversification-44,437

R0070 Intangible asset risk

0

R0100 Basic Solvency Capital Requirement
Calculation of Solvency Capital Requirement
R0130 Operational risk
R0140 Loss-absorbing capacity of technical provisions
R0150 Loss-absorbing capacity of deferred taxes
R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC
R0200 Solvency Capital Requirement excluding capital add-on
R0210 Capital add-ons already set
R0220 Solvency capital requirement

243,732
C0100
59,044
0-15,506
0287,2700287,270

Other information on SCR
R0400 Capital requirement for duration-based equity risk sub-module0

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

R0420 Total amount of Notional Solvency Capital Requirements for ring fenced funds

0R0430 Total amount of Notional Solvency Capital Requirements for matching adjustment portfolios

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304

06,8

S.28.01.01

Minimum Capital Requirement - Only life or only non-life insurance or reinsurance activity

Linear formula component for non-life insurance and reinsurance obligations

C0010

R0010 MCRNL Result

117,264

Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (of reinsurance)
written premiums in
the last 12 months

C0020

C0030

R0020 Medical expense insurance and proportional reinsurance

0R0030 Income protection insurance and proportional reinsurance

0R0040 Workers' compensation insurance and proportional reinsurance

0R0050 Motor vehicle liability insurance and proportional reinsurance

881,366

264,632

9,213

61,842R0060 Other motor insurance and proportional reinsurance
R0070 Marine, aviation and transport insurance and proportional reinsurance

0R0080 Fire and other damage to property insurance and proportional reinsurance

21,00026,606R0090 General liability insurance and proportional reinsurance

1,104

70

R0100 Credit and suretyship insurance and proportional reinsurance

0

R0110 Legal expenses insurance and proportional reinsurance

0

R0120 Assistance and proportional reinsurance

6,408

15,663

R0130 Miscellaneous financial loss insurance and proportional reinsurance

12,84325,732

R0140 Non-proportional health reinsurance

0

R0150 Non-proportional casualty reinsurance

0

R0160 Non-proportional marine, aviation and transport reinsurance

0

R0170 Non-proportional property reinsurance0Linear formula component for life insurance and reinsurance obligations

C0040

R0200 MCRL Result563

Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (ofreinsurance/SPV) total
capital at risk

C0050

C0060

R0210 Obligations with profit participation - guaranteed benefits
R0220 Obligations with profit participation - future discretionary benefits
R0230 Index-linked and unit-linked insurance obligations
R0240 Other life (re)insurance and health (re)insurance obligations

26,807

R0250 Total capital at risk for all life (re)insurance obligations
Overall MCR calculation

C0070

R0300 Linear MCR

117,827

R0310 SCR

287,270

R0320 MCR cap

129,272

R0330 MCR floor

71,818R0340 Combined MCR

117,827

R0350 Absolute floor of the MCR
R0400 Minimum Capital Requirement

2,196
117,827