7 March 2024
Admiral Group reports solid profits and strong growth in turnover2023 Results Highlights
2023

2022

% changevs. 2022£442.8m
111.2p£361.2m
95.4p

+23%
+17%

Dividend per share
Special dividend per share from sale ofPenguin Portals comparison businesses
Return on equity 1,2

103.0p112.0p

-8%

-

45.0p

nm

36%

29%

+7pts

Group turnover2
Insurance revenue£4.81bn£3.49bn£3.68bn£2.96bn+31%+18%

Group customers2,3
UK insurance customers2
International insurance customers2
Admiral Money gross loans balances

9.73m
7.39m
2.17m
£0.96bn

9.20m
6.96m
2.08m
£0.89bn

+6%
+6%
+4%
+8%

200%

180%

+20ptsGroup profit before tax 1
Earnings per share 1

Solvency ratio (post-dividend) 2

Over 10,000 employees each receive free share awards worth up to £3,600 under the employee share scheme
based on the full year 2023 results.
Comment from Milena Mondini de Focatiis, Group Chief Executive Officer:“Admiral achieved another good set of results, within the context of challenging market conditions, withGroup profit of £443 million and a 31% rise in turnover. The addition of over 500,000 customers andimproved loss ratios demonstrate our commitment to strengthening and diversifying our business.
“Our 30th anniversary is a good opportunity to remind ourselves of our growth story, from a Welsh startup
to a £4.8 billion business serving nearly ten million customers in five countries, driven by technicalcompetence and continuous innovation across service, pricing, products, and distribution. Our core values ofprioritising customers and people remain unchanged.

12022 Group profit before tax, Earnings per share, and Return on equity restated following the implementation of IFRS 17. Further information
follows later in the report.
2
Alternative Performance Measures – refer to the end of the report for definition and explanation.
32022 Customer numbers restated – refer to the end of the report for definition and explanation.

1

“In 2023, we accelerated our UK diversification. We announced the intention to acquire the renewal rights
for RSA’s pet and home insurance businesses, improved results in all our main lines of business, and achieved
double-digit growth in our electric vehicle book, supporting customers in transitioning to green mobility.
“Despite global uncertainties, our outlook is positive, benefitting from improved market conditions and astrengthened position, thanks to the discipline we maintained in the last year.
“I would like to thank our people for their hard work, and our customers for continuing to support us, as I
look forward to a positive 2024.”
Comment from Mike Rogers, Group Chair:“In my first year as Chair, I've personally witnessed the Group's exceptional ability to adapt, evolve, andconsistently deliver results. This resilience is a testament to our deliberate financial discipline and strategic
foresight.
“In the face of high inflation, Admiral remained resolute in ensuring peace of mind for our colleagues,
customers, and shareholders. We have confidence in our diversified portfolio, agile business model, andunwavering commitment to achieving optimal outcomes for our customers. These factors position us
strongly for continued success.”
Final Dividend
The Board has proposed a final dividend of 52.0 pence per share (2022 final: 52.0 pence per share)
representing a normal dividend (65% of post-tax profits) of 35.4 pence per share and a special dividend of
16.6 pence per share. The final dividend will be paid on 7 June 2024. The ex-dividend date is 9 May 2024 andthe record date is 10 May 2024.
Management presentation
Analysts and investors will be able to access the Admiral Group management presentation which commencesat 10.30 GMT on Thursday 7 March 2024 by registering at the following link to attend the presentation inperson, or access the presentation live via webcast or conference call: 2023 Full Year Results | Admiral Group
Plc. A copy of the presentation slides will be available at the following link: Results, reports and presentations| Admiral Group Plc (www.admiralgroup.co.uk).

Investors and Analysts: Admiral Group plc
Diane Michelberger
Diane.Michelberger@admiralgroup.co.uk
Media: Admiral Group plc
Claire Foster
Claire.Foster2@admiralgroup.co.uk
Media: FTI Consulting
Edward Berry+44 (0) 7703 330 199
Tom Blackwell+44 (0) 7747 113 919

2Chair Statement
As I reflect on the challenges and triumphs of the past year, I am pleased to present my inaugural Chairstatement for Admiral Group. This was certainly a challenging year, with high inflation and macro-economic
uncertainty. Against this backdrop, Admiral remained steadfast in its commitment to providing peace ofmind for our colleagues, customers and shareholders. Having worked in the insurance industry for a numberof years, I can say that there is an authenticity of culture and strong commercial thinking at Admiral. The
pace and passion for better consumer outcomes is infectious.
Exceptional leadership in difficult times
Milena and her Executive team have exhibited exceptional leadership throughout a challenging period within
the industry and economic cycle. Our customers, suppliers, colleagues and shareholders have all endured avery demanding year – our ability to not only weather these storms, but to adapt and grow is a testament tothe collective strength and strategic foresight of our management team.
Resilience in performance
Admiral’s vision to help more people look after their future is evident in the strong 2023 performance. The
Group demonstrated its traditional ability to adapt, evolve, and deliver results. This resilience is no accident;
it reflects our financial discipline and longstanding commitment to looking after our people and customers;
thereby safeguarding our shareholders' interests and ensuring the sustained success of Admiral Group.
Admiral retains outstanding competitive advantage in the UK motor market: defending and extending thisremains our number one priority.
We are also mindful of our opportunity to leverage our brand, capabilities and customer relationships into
new products and markets.
Presently, we cater to the needs of nearly ten million customers across five countries. We have made good
progress in Admiral Money and Household, Pet, Travel and Van insurance in the UK, along with our European
franchises. We believe that diversifying our income streams where we have competitive advantage will add
significant shareholder value.
Green transition
Our commitment to sustainability remains strong. Businesses, now more than ever, play a critical role in thetransition to a greener economy. Admiral recognises this responsibility and underscores its commitment in
our latest Sustainability Report. Our journey toward a greener future is not just a reflection of corporate
responsibility but a strategic imperative reflected in the Group’s Net Zero ambition. From supporting ourcustomers in the adoption of electric vehicles to using renewable energy in our sites, sustainability is
becoming embedded throughout the business.
30 years of growth
None of the Group’s achievements would be possible without the dedication and resilience of our thousandsof colleagues worldwide. Their energy, adaptability, and commitment have been the driving force behind
Admiral's success. From Cardiff to Rome, their commitment to each other and our customers is the beatingheart of our organisation.
This year marked a significant milestone as Admiral celebrated its 30th anniversary. The insurance industry
and the nature of work have evolved since Admiral’s inception in 1993, and the Group has consistently
adapted to remain a leader in the field.

3

I extend my thanks to Annette Court who joined the Board in 2012 and was appointed Chair in 2017. Annette
guided the management team through the transition from a founder-led business, strengthening leadershipdevelopment and succession, helping the business navigate regulatory, economic, and global challenges.
We also fondly remember Jean Park, who retired from the Board earlier this year and sadly passed awaysoon after. Jean's contributions, particularly as the Chair of the Group Risk Committee and Senior
Independent Director, were invaluable. Her legacy of steadfast support and wise counsel will be greatly
missed. I welcome the addition of Fiona Muldoon to the Board. Fiona enhances our collective expertise andstrengthens our customer-centric approach.
Staying true to our values
While the industry has undergone changes, Admiral's core values remain.
Looking ahead, we remain optimistic about the future. The Group’s strategic roadmap is designed to drive
long-term value for our shareholders. We are confident that our diversified portfolio, agile business model,
and unwavering commitment to achieve the best outcomes for our customers, will position us for continued
success.
I extend my gratitude to the Board, management team, and colleagues for their dedication and support.
Together, we will continue to shape the future and continue our journey of sustained growth and success.
Mike Rogers
Group Chair
6 March 2024

4

Group Chief Executive Officer’s Review
2023 was a strong year
In the context of challenging market conditions, we reported another set of solid results with strong Group
profit of £443 million and turnover up 31%. We welcomed more than 500,000 additional customers acrossthe Group, an increase of 6% and substantially improved our loss ratios, while continuing to strengthen anddiversify our business.
Over the past couple of years, the industry was hit by the worst inflation in recent history and we faced a
cost-of-living crisis in the UK. This had a negative impact on our customers and our people, who needed
more support too.
Once again, we maintained pricing discipline and acted ahead of the market to adapt to these trends. We
continued to build on our historical strengths and to look after our customers and our people, whilst at thesame time making positive progress on our strategic objectives.
The combination of these three things has left us well placed to achieve further growth, increase
underwriting margins and better provide for more customers’ needs.
Celebrating 30 years together
Our 30th anniversary served as a great reminder to reflect on Admiral’s journey. From a small start-up in
Wales, the Admiral team built a £4.8 billion business catering to over nine million customers across fivecountries. We became the market leader in UK Motor insurance, with cumulative profits of around £7 billion
over our 30 years and a dividend payout ratio of around 90% for our shareholders over the last few years.
We continued our historical trend of strong capital efficiency and a return on equity of 36% in 2023. This is a
growth story fueled by a strong combination of core technical competence and continuous innovation in
every part of the value chain: service, pricing, products and distribution.
Whilst so much has changed, I am proud that so much has also stayed the same. Our core values of putting
our customers and people first and enjoying what we do are as true today as they were in 1993.
A year of two halves
Something else that sets us apart is our ability to focus on the long term whilst being pragmatic in how westeer the business in different parts of the insurance cycle. We do not forego difficult decisions for short term
targets. This has been a year of two halves, and our approach serves as a perfect example of this mindset.
In January it felt like we were standing at the foot of a mountain. We knew we had a steep climb ahead of us.
As we entered 2023, we were still helping customers with the freeze events of 2022. The year began with aspike in inflation, which persisted, and the onset of new supply chain concerns.
As in 2022, we acted fast. We continued to increase premiums ahead of the market to account for inflation,even if this meant a further reduction of our UK Motor book, which was 7% down year on year at the end ofJune (albeit this reduction was more than compensated for by growth in other parts of the Group).
After a few challenging months we reached the summit of the mountain and started to get comfortable with
our pricing levels, but it still felt like we needed a stronger foothold amidst the macro-economic uncertainty.
As the summer arrived, we started to have a better outlook and a clear sight of the downward path. Inflationand claims trends started to stabilise. As the rest of the market followed by increasing their premiums, ourcompetitiveness and our retention improved and in the second half of the year we reversed our loss ofpolicies in UK Motor.

5Our strategic progress
One of Admiral’s historical characteristics is to navigate the ups and downs of the insurance cycle well,together with continuing to enhance our capabilities and preparing for the next climb. This year we madestrong progress in all of our three core strategic pillars: Admiral 2.0, business diversification and motor
evolution.
Customer experience and outcomes have remained our primary focus, including embracing the newConsumer Duty act in the UK. Something I’ve been particularly proud of was the smooth implementation ofsome large technology delivery projects, including Guidewire claims systems for our UK customers and a newplatform for lending. We completed the transformation to scaled agile across all our businesses, materiallyreducing the cost of technology change.
We continued to diversify the business with the number of policies beyond UK Motor up 12% and now
accounting for almost half of total Group customers. It has been pleasing to see, despite the challenging
market conditions, that all our businesses older than 3 years improved their results.
It wasn’t only organic growth that we achieved in 2023. We accelerated our diversification strategy in the UK
announcing our intention to acquire the renewal rights for RSA’s pet and home direct insurance businesses,
under the More Than brand. It marked our first acquisition of relevant size but more importantly, theopportunity was a perfect fit with our strategy.
We achieved double-digit growth in our electric vehicle book, supporting more of our customers to transition
to green mobility, and through Veygo we are offering differentiated propositions to customers to meet their
evolving mobility needs.
Our people
It was another memorable year of accolades for our culture. Not only were we voted as the number one Best
Company to work for in the UK and recognised as a diversity leader in Europe, we were also ranked 13 th
globally as one of the World’s Best Workplaces™ by 2023 Great Place to Work®. We now have over 13,000
amazing colleagues and we celebrated Admiral’s 30th birthday together with the first edition of the Admiral
Games sporting event.
Together, we also stepped up our contribution to ‘employability’ supporting around 2,000 people to find newjobs and volunteering over 14,000 impact hours.
2024 and beyond
Despite persistent geopolitical and macro-economic uncertainty, our outlook is more positive. We arebenefiting from better market conditions and a stronger position, thanks to the discipline we maintained
over the past year.
I am always mindful that the descent from a mountain can be more dangerous than the climb up. There is noroom for complacency or distractions. We will focus on every single step, with clear priorities, strong
execution and continuing to leverage on our historical competencies.
We are well positioned for further growth and diversification. Assuming no unforeseen market disruptions, I
am confident that we should expect stronger underwriting performance across all our geographies. And in
the long term, I look forward to seeing Admiral celebrate another 30 years of success.
Milena Mondini de Focatiis
Group Chief Executive Officer
6 March 2024

6

Group Chief Financial Officer’s Review
The past few years have surely been some of the most challenging in the Group’s 30-year history - exiting the
pandemic into two heavily inflationary years leading to tough conditions for the industry (and of course forour customers). And that’s not to mention several major UK regulatory changes in the past couple of years well navigated by our teams.
Our clear goal for 2023 was to significantly improve underlying insurance results and it’s very positive to see
clear evidence of that emerging through the year. I’ve been very satisfied with the disciplined approachtaken across the Group, even if that resulted in a shrinking customer base for a period in the UK motor
business.
The 2023 numbers are the first full year results reported under the major new insurance accounting
standard, IFRS 17. I want to repeat my huge thanks to the team involved in getting the Group ready to
produce these results, which was definitely no small achievement A really great team effort!
As usual I’ll begin with a quick review of the group profit versus last year*:£m

UK Insurance
Europe Insurance (motor & other lines)
US Insurance
Admiral Money
Admiral Pioneer
Share scheme cost
Other costs
Pre-tax profit

IFRS 172023

IFRS 172022

Change v
2022

IFRS 4
2022

597
2
(20)
10
(16)
(54)
(76)
443

510
(20)
(36)
2
(14)
(52)
(29)
361

+87
+22
+16
+8
(2)
(2)
(47)
+82

616
(5)
(49)
2
(16)
(52)
(27)
469

*See important footnote below on the basis of preparation of the 2022 IFRS 17 numbers. The original IFRS 4 numbers are also shown.

Considering the impact of the lower profitability of the 2021/22 years is still an important factor in the 2023
result, the near £600 million profit for the main business was very positive. Only three years have seen
higher UK profit and two of those were very impacted by reduced frequency during the pandemic. Criticallythe impact of significant price increases over 2022 and 2023 has led to much improved underwriting year
results which will feed into the results over the next few years. The business is well placed moving into 2024
too.
The UK Household business continued to grow and delivered a profit of around £8 million, benefitting fromreinsurer profit commission related to older years. Price increases led to higher average premiums whichshould improve margins as we head into 2024.
Outside the UK our businesses substantially improved their combined result compared to 2022, with theEuropean businesses returning to overall profit (despite continuing to invest in new products beyond motorand diversified distribution within motor). In the US, whilst the reported loss was still not small, underlying
results showed sharp improvement year-on-year thanks to the strong actions of our team there.
And a few observations on the other lines:•

Admiral Money’s £10 million profit was a clear highlight; the team took a cautious approach tovolume through the year and paused growth in the second half of the year to focus on high quality
risk selection.

7

We’re very comfortable with arrears trends and our cautious credit loss provision and the business iswell set to restart growth in 2024.
•

In Admiral Pioneer, the tremendous growth and continued steps forward in product in Veygo stoodout, though one particularly large claim impacted the bottom line. Pioneer continues to invest in
testing its small commercial insurance business line.

•

The cost of the Group’s share schemes was basically in line with the previous year, but otheroverheads and charges increased fairly notably. There are a number of factors explaining theincrease, many of which shouldn’t be repeated in 2024 (e.g. M&A project fees, adverse currency
movement, costs to settle a historic Italian tax matter). Fuller details later in the report. I definitely
expect a much lower number in 2024 (barring anything unexpected).

More Than acquisition
As mentioned through the report, Admiral’s first significant acquisition will complete during H1 2024. We
will fund the upfront payment of £82.5 million from free cash.
As the acquisition is entirely of intangible assets with no new capital raised to fund it, the transaction will
result in a reduction to the Group’s solvency ratio of around 10 points. Given the Group’s very strong capital
position, this is comfortably absorbed. More details on the accounting will feature in 2024’s accounts.
Internal model
The Group has been developing an internal model to calculate its solvency capital requirement (SCR) in a waythat reflects Admiral’s risk profile more accurately than the standard formula and allows management tobetter incorporate capital considerations into business decisions. The model will calculate the SCR for theGroup’s main UK lines of businesses and for most of market risk.
Progress to application and approval by the Group’s two main prudential regulators has been slower thanwe’d have liked, though huge effort from our team has gone, and continues to go into the project. We
expect to enter the regulatory pre-application process soon and will then hopefully have a clear path toapplication and approval thereafter. It’s too early to give concrete information on the exact timing of theapplication or likely financial outcome of the process and more information will follow at the appropriate
time.
DilutionStarting in 2024 we will make a change to the way we provide shares to the Group’s employee shareschemes. Historically we’ve issued new shares to the trusts each year, mindful of a 10% rolling ten-year cap.
We will no longer dilute shareholders to fund the share schemes, initially (probably for 2024 and 2025)
making use of shares already within the trusts and thereafter buying shares in the market, funded through areduction in special dividend. This change will increase earnings per share by around 1% per year from now
on compared to our previous approach.
Wrap-up
Whilst the current year reported profit won’t break many records, 2023 was clearly a year when the strong
actions taken since early 2022 started to bear fruit. We enter 2024 with much improved margins across our
insurance businesses and a strong position in Admiral Money. I look forward to seeing the improvements
start to feed through into the reported results in 2024.

8

Geraint Jones
Chief Financial Officer
6 March 2024
A note on the 2022 IFRS 17 comparatives: As explained more fully later in the report, the restated 2022 IFRS
17 insurance profits are lower than the originally reported IFRS4 numbers. This is due to differences in the
movements in reserve strength or risk adjustment position over 2022 under each standard.

92023 Group overview£mGroup turnover (£bn) *2

2023
4.81

2022
(restated)*1
3.68% change vs.
2022*1*5+31%

Net insurance and investment result
Net interest income from financial services
Other income and expenses
Operating profit*1

363.1
68.1
31.7
462.9

207.5
46.1
119.6
373.2

+75%
+48%
-73%
+24%

Group profit before tax*1

442.8

361.2

+23%

Analysis of profit
UK Insurance
International Insurance
International Insurance – European Motor
International Insurance – US Motor
International Insurance – Other
Admiral Money
Other
Group profit before tax*1

596.5(18.0)
6.1(19.6)(4.5)
10.2(145.9)
442.8

509.7
(56.2)(16.5)(36.4)(3.3)
2.1(94.4)
361.2

+17%
Nm
Nm
Nm
Nm
+386%
-55%
+23%

Key metrics
Reported Group loss ratio*1*2 *3Reported Group expense ratio*1*2 *3Reported Group combined ratio*1 *2*3
Insurance service margin*2 *3
Customer numbers (million)*2*4

63.9%
24.8%
88.7%
10.2%
9.73m

70.6%
26.2%
96.8%
7.4%
9.20m

-7pts
-1pts
-8pts
+3pts
+6%

Earnings per share *1
Dividend per share
Special dividend from sale of Penguin Portals
Return on equity*1*2
Solvency ratio*2

111.2p103.0p
36.0%
200%

95.4p
112.0p
45.0p
29.4%
180%

+17%
-8%
Nm
+7pts
+20pts*1 Operating profit, profit before tax (including analysis by segment), Earnings per share, return on equity, and reported group loss, expense ratio
and combined ratios restated following the implementation of IFRS 17. See later in the report for further details.
*2 Alternative Performance Measures – refer to the end of the report for definition and explanation.
*3 Reported Group loss and expense ratios are calculated on a basis inclusive of all insurance revenue – this includes insurance premium revenue,
net of excess of loss reinsurance plus revenue from underwritten ancillaries, an allocation of instalment and administration fees/related
commissions. See glossary for an explanation of the ratios and Appendix 1a for a reconciliation of reported loss and expense ratios, and insurance
service margin, to the financial statements.
*4 2022 Customer numbers restated – refer to the end of the report for definition and explanation.
*5 For % change vs 2022, + shows favourable movements, - shows unfavourable movements. Nm – not meaningful.

Group Highlights
Admiral reports another solid set of results in 2023 against a backdrop of continued elevated levels of claims
inflation and resulting significant rate increases. Highlights of the Group’s results for 2023 are as follows:•Businesses across the Group grew strongly in 2023, with customer numbers up 6% and turnover up
significantly more at 31% year-on-year:o

UK Motor customers were broadly flat at the end of 2023 having fallen in the first half.
Market price increases accelerated relative to Admiral in the second half, leading to
improved competitiveness and a return to growth

10

•

o

UK Household grew turnover by 33% as a result of an increase in customers of 12% andcontinued increases in average premium. Including Travel Insurance, (which reported its
first small profit), and Pet Insurance, overall UK insurance customers grew by 6%oOutside the UK, International Insurance customer numbers increased by 4%, made up of a
7% increase in Europe and a reduction in the US. Increases in average premiums to reflect
the level of claims inflation led to a growth in turnover of 12%oAdmiral Money has employed a controlled approach to growth, with a total loans balanceat the year end of £0.96 billion, 8% growth since December 2022 and slightly lower thanthe HY 2023 position.

Group pre-tax profit was £443 million, 23% higher than 2022, restated on an IFRS 17 basis:o

UK Motor insurance profit was £593 million, 13% higher than 2022 (£525 million) as thesignificant increases in average premium over the last year started to earn through, as wellas higher investment income due to the higher interest rate environmento

UK Household reported a profit of £8 million (2022: loss of £11 million), with 2023 less
impacted by severe weather events, and benefitting from the positive impact of acommutation of quota share arrangements on prior underwriting yearso

The International Insurance business reported a notably lower loss of £18 million (2022: £56
million):▪

The EU Motor business returned to a profit of £6 million for the year (2022: loss of£16 million), as a result of a lower current year combined ratio arising from higher
average premiums and small releases on prior underwriting years▪

The result in the US also improved from a loss of £36 million in 2022 to a loss of £20
million in 2023, following actions taken to improve the underwriting result throughlarge price increases and a focus on reducing costs.

•

Admiral Money reported a higher profit of £10 million (2022: £2 million), the increase in the averageloans portfolio year-on-year driving the positive result through increased net interest income•

Other Group costs increased to £146 million (2022: £94 million), the adverse movement driven byhigher central costs due to a number of one-off items, as well as higher business development costs
and finance charges.

Earnings per share
Earnings per share for 2023 is 111.2 pence (2022: 95.4 pence, restated on an IFRS 17 basis). The increase
from 2022 is aligned to the increase in pre-tax profit above, offset partly by a higher effective tax rate, with
the increase in the UK corporation tax rate to 25% (from 19%) from 1 April 2023 being a significant driver ofthe higher effective rate.
Return on equity
The Group’s return on equity was 36% in 2023, 7 points higher than the restated 29% for 2022. Average
equity for 2023 is lower than 2022 as a result of the transition to IFRS 17 and higher dividends were paid out
compared to profits recognised on an IFRS 17 basis. 2022 full year post-tax profits on an IFRS 17 basis were
£86 million lower than those reported under the previous standard, IFRS 4. Further information on the11restatement of 2022 financials follows later in the report.
Dividends
The Group’s dividend policy is to pay 65% of post-tax profits as a normal dividend and to pay a further special
dividend comprising earnings not required to be held in the Group for solvency or buffers.
The Board has proposed a final dividend of 52.0 pence per share (approximately £156 million) split asfollows:••

35.4 pence per share normal dividend
A special dividend of 16.6 pence per share

The 2023 final dividend reflects a pay-out ratio of 97% of second half earnings per share. 52.0 pence pershare is in line with the final 2022 dividend (52.0 pence per share).
The total 2023 dividend, including the interim dividend of 51.0 pence per share, declared with the Group’s
interim 2023 results is 103.0 pence per share, 8% lower than the 112.0 pence per share paid in 2022.
The total 2022 dividend also included the final additional special dividend of 45.0 pence per share arisingfrom the phased return to shareholders of the proceeds from the sale of the Penguin Portals comparison
businesses which completed in 2021. The total 2022 dividend was 157.0 pence per share.
The 2023 final dividend payment date is 7 June 2024, ex-dividend date 9 May 2024 and record date 10 May
2024.
Re-statement of prior period comparatives following IFRS 17 adoption
IFRS 17, the new insurance contracts accounting standard has been effective from 1 January 2023. As aresult, the opening balance sheet as at 1 January 2022, the 2022 comparative income statement and thebalance sheet as at 31 December 2022 have been restated under IFRS 17 using a fully retrospective
approach (i.e. as though IFRS 17 had always been in place).
The new accounting policies and choices adopted in the implementation of IFRS 17 are disclosed in thenotes to these financial statements. Both the policies and transition impact are consistent with the key
accounting policy decisions and transition impact set out on page 234 of the 2022 Annual Report.
Throughout this report, the Group’s results under IFRS 17 at 31 December 2023 are compared to the 31
December 2022 comparatives which have been restated under IFRS 17.
IFRS 17 reported profits for 2022 are lower than the previously reported IFRS 4 profits. The difference
primarily arises as a result of differences in the movements in reserve strength or risk adjustment position
over 2022 under each standard. Under IFRS 4, Admiral moved down to the 95th percentile over the course of2022, with a greater proportion of this move taking place in the second half of the year. Under IFRS 17,
Admiral moved down to the 95th percentile at the transition date of 1 January 2022, and remained at thatpercentile during 2022. This results in lower reserve releases under IFRS 17 in 2022, and therefore lower
profit.
Note 1 to the financial statements provides further information regarding the key factors driving thedifferences between the IFRS 4 and IFRS 17 reported results in 2022.

12

The Group’s results are presented in the following sections:•

UK Insurance – including UK Motor (Car and Van), Household, Travel and Pet•

International Insurance – including L’olivier (France), Admiral Seguros (Spain), ConTe (Italy),
and Elephant (US)•Admiral Money•

Other Group Items – including Admiral Pioneer and other central costs

Economic backdrop
Global inflation continued to impact claims inflation across Admiral’s markets in 2023, although with somepositive signs of improvement in the second half of the year, particularly in the Group’s main UK market.
The main drivers of this claims inflation continue to be higher repair costs, longer repair timescales and highlevels of wage inflation which impacts the projected costs of bodily injury claims. Used car prices continue
to be one of the largest contributors to damage inflation, although they stabilised in 2023 with inflation
easing in the latter part of the year.
Admiral continues to focus on medium term profitability, and has maintained a disciplined approach tobusiness volumes, increasing prices to reflect the elevated claims inflation. The Group customer base hascontinued to grow, although this disciplined approach has resulted in slower growth in some businesses. UK
Motor customers were broadly flat year-on-year at the end of 2023, having slowed in the first half as aresult of price increases ahead of the market since 2022, offset by growth during the second half of the year
as Admiral increased prices at a slower rate than the market. The Group continues to set claims reserves
cautiously.
Admiral Money grew its consumer loans book year-on-year, though the portfolio reduced in size in thesecond half due to a prudent approach reflecting the macroeconomic environment and potential financial
impact on consumers. The business continues to hold appropriately cautious provisions for credit losses.

13

UK Insurance Review – Cristina Nestares, CEO UK Insurance
2023 was a more encouraging year after a difficult 2022 for the industry. Inflationary pressures began tostabilise and our early and strong pricing response positions the business for a robust improvement inresults.
Product proposition and pricing enhancements and the Group’s commitment to helping more people tolook after their future, led to the growth of the UK customer base by 6% while achieving a Trustpilot ratingof 4.4 (one of the best in the industry). Further, to remain competitively priced, we continued to focus on
improving operational efficiencies and sustaining our leading position in claims management.
The cost-of-living crisis has created a lot of pressure for our people and in addition to the energy support
payments and package improvements in 2022, we officially recognised that we were paying our people thereal living wage by signing up to the Real Living Wage Foundation in 2023.
Our award winning culture was again recognised by being placed in the Top 10 Great Places to Work survey
and number three for Great Places to Work for women. A feature of our culture throughout our history is tosupport our communities and in 2023 our teams provided over 14,000 impact hours and helped over a
thousand people into work or helped them to gain new skills with funding and support for our community
partners.
We’re very pleased that our motor book has returned to growth in the last six months of 2023, after 12months of contraction following our disciplined approach of strong price increases to offset the impact ofinflation. Our relatively early pricing response led to a fall in our competitiveness and market share in thesecond half of 2022 and first half of 2023. We recognise that the market moves in cycles and there aretimes when it’s better to protect margin at the expense of growth, with a view to capturing volume whenthe market opportunity arises.
Inflation remained elevated compared to pre-pandemic years. Supply chain pressures across the global
repair network led to slower damage repair times during 2022 and early 2023, resulting in service pressuresacross the industry. In response, Admiral leveraged our scale and strong working relationships with ourrepair network partners to counter these effects, significantly improving leading to good improvements inrepair times and easing service challenges faced by our teams. Overall, damage inflation appears to havemoderated towards the end of the year from the levels seen during 2022, but higher wage inflation is likely
to feed into bodily injury claims over time, which we have provided for in our reserves.
Beyond motor, our diversification businesses continued to show growth and deliver against key objectives.
Our strong multi-product proposition and retention performance supported further growth in ourHousehold insurance business, despite unprecedented rate increases during the year to offset inflationpressures. Enhanced pricing capabilities and improvements to the Household proposition has established agreat platform to capitalise on future opportunities. The refreshed Pet proposition that was relaunched inlate 2022 appears to resonate with our customers and the book has grown strongly (albeit from a lowbase). The acquisition of the More Than Pet and Household renewal rights from Royal Sun Alliance (RSA)
will give a further boost to these businesses, significantly accelerating our growth ambitions for Pet.
Our Travel business has bounced back very well post-pandemic with record sales volumes and a growing
renewal book, and reports a profit for the first time.
To sustain our competitiveness and operational resilience, we’ve continued to invest to refresh ourtechnology estate and transform our channel and distribution capabilities. During the year, a key pillar of
the strategy was the migration of over 6.5 million customer risks to a new policy and billing centre on

14

Guidewire, which I’m proud to say was successfully completed.
2023 will be defined as the key turning point in the recent challenging insurance cycle and I believe we’rewell positioned with a strong team and good fundamentals to capture market opportunities for profitable
growth in 2024 and further earnings momentum.
UK Insurance financial performance2023

Turnover*1*2

3,776.02022(restated)
2,784.3

Total premiums written*1*3
Insurance revenue
Underwriting result including net investment income *1
Co-insurer profit commission and net other revenue
UK Insurance profit before tax*1

3,502.6
2,596.9
438.6
157.9
596.5

2,555.0
2,174.1
301.6
208.1
509.7

£m

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation.
*2 Alternative Performance Measures – refer to note 13 for explanation and reconciliation to statutory income statement measures.
*3 Total premiums restated for prior periods to include premiums for all underwritten ancillary products. There is a corresponding reduction in Other
net income, and no impact on turnover.

Split of UK Insurance profit before tax
2023

£m
Motor
HouseholdTravel and Pet
UK Insurance profit before tax

593.3
7.9
(4.7)
596.5

2022
(restated)
524.9(10.7)
(4.5)
509.7

2023
4.94m
1.76m
0.69m
7.39m

2022
4.94m
1.58m
0.44m
6.96m

Key performance indicators
Vehicles insured at period end
Households insured at period end
Travel and Pet policies at period end
Total UK Insurance customers

Highlights for the UK Insurance business include:• In UK Motor Insurance:o

Customer numbers grew in the second half of the year, to finish at 4.94 million, in line with ayear earlier. Admiral’s price increases to account for claims inflation in the second half of2022 and early 2023 were more significant than the wider market, but this gap closed overthe latter part of 2023. Turnover increased by 35% to £3.4 billion from £2.5 billionoProfit growth of 13% to £593 million (v £525 million) as the rate increases implemented overthe past year are now earning through, and the higher interest yield environment results inincreased investment income.

• In UK Household Insurance:o Customer numbers grew by 12% to 1.76 million (31 December 2022: 1.58 million). As in
Motor, price increases have led to higher average premiums which contributed to a strong
33% increase in turnoveroProfit was £7.9 million (2022: loss of £10.7 million) as a result of less severe impact of weather
in 2023 compared to 2022, along with the benefit of the commutation of quota share15

arrangements on prior underwriting years.
UK Motor Insurance financial review£mTurnover*1
Total premiums written*1*2*4
Gross earned premium*1
Gross other insurance revenue
Insurance revenue
Insurance revenue net of XoL*2
Insurance expenses*1*2*3
Insurance claims incurred net of XoL*2*5
Insurance claims releases net of XoL*2*5
Quota share reinsurance result*2*3
Movement in onerous loss component net of reinsurance*2
Underwriting result*2
Investment income
Net insurance finance expenses
Net investment income
Co-insurer profit commission
Other net income
UK Motor Insurance profit before tax*1

2023
3,371.8
3,118.2
2,115.4134.8
2,250.2
2,188.6(451.2)(1,729.0)
392.8(16.8)
4.1
388.5
111.8
(58.2)
53.6
76.5
74.7
593.3

2022
(restated)
2,493.0
2,271.3
1,795.7
114.0
1,909.7
1,865.1(389.6)(1,596.0)
327.2
95.2
5.2
307.1
53.8
(36.4)
17.4
127.5
72.9
524.9

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Alternative Performance Measures – refer to Appendix 1 for explanation and reconciliation to statutory income statement measures*3 Insurance expenses and quota share reinsurance result excludes gross and reinsurers’ share of share scheme charges respectively. For sharescheme charges refer to Other Group Items*4 Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding reduction in Other
net income, and no impact on Turnover*5 XoL refers to Excess of Loss (non-proportional) reinsurance; see glossary at end of report for further information

Key performance indicators
2023
Reported Motor loss ratio*1*2
Reported Motor expense ratio*1*3
Reported Motor combined ratio*1*2
Reported Motor Insurance service margin*1*4
Core motor loss ratio before releases*1*5
Core motor claims releases *1*5
Core motor loss ratio*1*5
Core motor expense ratio*1*6
Core motor combined ratio*1
Core motor written expense ratio*1*7
Vehicles insured at period end*1
Other revenue per vehicle*8

61.1%
20.6%
81.7%
17.7%
87.0%
(20.2%)
66.8%
21.4%
88.2%
17.8%
4.94m
£62

2022
(restated)
68.0%
20.9%
88.9%
16.5%
95.7%
(20.0%)
75.7%
21.6%
97.3%
20.8%
4.94m
£58

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation.
*2 Reported Motor loss ratio defined as insurance claims incurred and claims releases divided by insurance revenue, net of excess of loss
reinsurance. Reconciliation in Appendix 1b.
*3 Reported Motor expense ratio defined as insurance expenses divided by insurance revenue, net of excess of loss reinsurance. Reconciliation in
Appendix 1b.
*4 Reported Motor insurance service margin defined as underwriting result divided by insurance revenue, net of excess of loss reinsurance.
*5 Core motor loss ratio defined as insurance claims incurred and claims releases divided by core product insurance premium revenue, net of excess
of loss reinsurance. Presented to enable analysis of core motor result excluding other ancillary income. Reconciliation in Appendix 1b.
*6 Core motor expense ratio defined as insurance expenses divided by core product insurance premium revenue, net of excess of loss reinsurance.

16

Reconciliation in Appendix 1b.
*7 Core motor written expense ratio defined as insurance expenses divided by core product written insurance premium, net of excess of loss
reinsurance.
*8 Other revenue per vehicle includes other revenue included within insurance revenue. See “Other Revenue” section for explanation andreconciliation.

UK Motor profit increased by 13% to £593.3 million (2022: £524.9 million) as a result of a lower current
period loss ratio as the significant rate increases from late 2022 and early 2023 start to earn through, aswell as higher net investment income due to the higher interest rate environment. This was partly offset bylower quota share recoveries due to both the more favourable current period loss ratio and continued loss
ratio improvements on prior underwriting years, and lower co-insurer profit commission.
By year end 2023, customer numbers were flat when compared to the end of 2022, with growth in thesecond half of 2023 due to market price increases resulting in Admiral becoming increasingly competitive,
after lower customers earlier in the year due to the strong price increases implemented by Admiral aheadof the market in late 2022 and early 2023 reflecting the inflationary environment.
Gross earned premium at £2,115.4 million is 18% higher than 2022 (2022: £1,795.7 million), reflecting thesignificant increase in average earned premium as the price increases over the last year start to earn
through.
The UK Motor core expense ratio decreased to 21.4% (2022: 21.6%), with the written expense ratio
decreasing by 3 points to 17.8% (2022: 20.8%), as a result of the higher premiums noted above. Insurance
expenses are higher in 2023, driven by wage increases, higher amortisation of intangible assets from the
new systems that are now in use, and a short-term increased cost of claims handling as new claims systems
were implemented.
The movement in onerous loss component reflects the movement in the provision for projected claims
costs, inclusive of risk adjustment, on unearned premium. The onerous loss component at the start andend of 2023 was small (less than £2 million), with movements over the course of both years leading toimmaterial impacts in the income statement.
Claims incurred
Claims inflation remains high and continues to be influenced by the average costs of repairing vehicles, inturn due to the elevated cost of replacement parts and paint, as well as high labour costs and shortages.
Used car price inflation has stabilised, showing signs of slowing down in the second half of the year, andrepair times have also started to reduce resulting in stabilising costs for replacement vehicles.
Average claims cost inflation for 2023 is approximately 10%, with higher inflation in the first half of 2023,
easing modestly in the second half. Claims frequency was also slightly higher in 2023 compared to 2022 as aresult of increased miles driven, although remains below pre-Covid levels.
The longer-term impacts of inflation on bodily injury claims remain uncertain. Admiral has not observed
material changes in inflation for bodily injury claims settled in 2023 when compared to 2022. However, anallowance in the best estimate reserve to reflect the potential impacts of higher than historic levels of
future wage inflation on certain elements of large bodily injury claims reserves, is maintained.
There is still a relatively high level of uncertainty within motor claims across the market arising frominflation and the future developments relating to both whiplash reforms and the Ogden discount rate. The
review of the Ogden discount rate is due to start in mid-2024, with the new rate, and any change tomethodology, unlikely to be known until late 2024 or early 2025. Admiral’s assumption for the Ogden
discount rate within best estimate reserves continues to be the prevailing rate of minus 0.25 per cent.

17Admiral holds a significant and prudent risk adjustment above best estimate reserves, which has reduced(93rd percentile confidence level) when compared to the end of 2022 (95th percentile confidence level). The
movement is in line with expectations given the slightly less volatile inflationary environment and aperceived lower likelihood of an adverse movement in the Ogden discount rate, together with thecontinued diversification of the business. Whilst the underlying methods to calibrate the reserve risk
distribution from which the percentile is selected are consistent year on year, a number of developments in
the reserve risk modelling in 2023 result in a slightly less volatile distribution than at the end of 2022.
Further information is included in notes 2, 3 and 5 to the financial statements.
The core motor loss ratio has reduced to 66.8% (2022: 75.7%) as a result of a lower current period loss
ratio. Movements in the current period loss ratio and prior year reserve releases were as follows:

Core Motor loss ratio*1
2022
Change in current period loss ratio
Change in claims reserve release
2023

Core motor loss ratio
before releases
95.7%(8.7%)—
87.0%

Impact of claims Core motor loss
reserve releases
ratio(20.0%)
75.7%—(8.7%)(0.2%)(0.2%)(20.2%)
66.8%*1 Reported motor loss ratio shown on a discounted basis, excluding unwind of finance expenses.

The current period loss ratio improved by 8.7 points which can be primarily attributed to higher averagepremium in the period following significant price increases.
The benefit from prior period releases was flat at 20.2% (2022: 20.0%), with the absolute level of priorperiod releases increasing by £65.6 million or 20% to £392.8 million, from £327.2 million. The benefit
includes both favourable development of the best estimate reserve for prior period claims, and the
movement in the risk adjustment as set out above. Reserve releases as a percentage of premium areheavily impacted by the 18% increase in earned premium in the year.
Quota share reinsurance
Under IFRS 17, Admiral’s quota share reinsurance result reflects the net movement on ceded premiums,
reinsurer margins and expected recoveries (claims and expenses) for each underwriting year on which
quota share reinsurance is in place (primarily 2021 underwriting year onwards).
Admiral’s UK motor quota share contracts operate on a funds withheld basis, with Admiral retaining cededpremium (net of the reinsurer margin) which then covers claims and expenses. If an underwriting year is notprofitable, investment income is allocated to the withheld fund and used to delay the point at which cash
recoveries are collected from the reinsurer. Other features of the arrangements include expense ratio caps
and commutation options for Admiral that become available 24-36 months after the start of theunderwriting year.

18

The quota share reinsurance result by underwriting year is as follows:
Quota share reinsurance result
£m

2023

2020 & prior
2021
2022
2023
Total

2.3
(57.6)
8.2
30.3(16.8)

2022(restated)
(2.9)
7.1
91.0

—
95.2

The adverse quota share result in 2023 is therefore driven by:••

Lower recoveries of £30.3 million on the 2023 underwriting year (UWY 2023) compared to £91.0
million recoveries on the 2022 underwriting year (UWY 2022) in 2022 due to the significantly
improved loss ratio on UWY 2023 compared to UWY 2022
A significant reversal of recoveries that had been previously recognised on the 2021 underwriting
year, as a result of favourable developments in loss ratio.

Co-insurer profit commission
Co-insurer profit commission is lower in 2023 (£76.5 million) compared to 2022 (£127.5 million). In 2022, agreater proportion of the reserve releases were related to older underwriting years (2019 and prior) whichhave lower combined ratios, with the releases therefore attracting higher profit commission. In addition, in
2023 no profit commission has been recognised on underwriting years 2021 and 2022 due to the current
combined ratio positions on those years.
Net investment income
Net investment income benefitted significantly from the higher yield environment during 2023, increasing
to £53.6 million from £17.4 million in 2022. Investment income before insurance finance expense morethan doubled to £111.8 million (2022: £53.8 million) primarily as a result of the yield environment. Further
information on the Group’s investment portfolio and the income generated in the period is provided in theinvestments and cash section later in the report.
Net insurance finance expense reflects the unwind of the discounting benefit recognised when claims are
initially incurred. The expense has increased significantly in 2023 (£58.2 million; 2022 £36.4 million) as aresult of the significant increase in risk-free interest rates since the start of 2022, with a significant
proportion of the insurance finance expense in 2023 relating to claims incurred during 2022 and, to aslightly lesser extent, 2023.

19

Other revenue
UK Motor Insurance Other revenue
£m

2023

Premium and revenue from additional products & fees *1
Instalment income and administration fees*2
Other revenue
Claims costs and allocated expenses*3
Net other revenue
Other revenue per vehicle*4
Other revenue per vehicle net of internal costs

Within underwriting
result
107.8
134.8
242.6
(70.0)
172.6£m

Premium and revenue from additional products & fees *1
Instalment income and administration fees*2
Other revenue
Claims costs and allocated expenses*3
Net other revenue
Other revenue per vehicle*4
Other revenue per vehicle net of internal costs

Within underwriting
result
113.3
114.0
227.3
(63.4)
163.9

Other net
income
89.4
29.3
118.7
(44.0)
74.7

Total
197.2
164.1
361.3
(114.0)
247.3
£62
£52

2022 (restated)
Other net
income
Total
90.5
203.8
21.9
135.9
112.4
339.7
(39.5) (102.9)
72.9
236.8
£58
£48

*1 Premium from underwritten ancillaries is recognised within the insurance service result (underwriting result). Other income from non-underwritten
products and fees is included within other net income, below the underwriting result but part of the insurance segment result.
*2 Instalment income and administration fees are recognised within insurance revenue (% aligned to Admiral’s share of premium, net of co-insurance)and other revenue (% aligned to co-insurance share of premium).
*3 Claims costs relating to underwritten ancillary products, along with an allocation of related expenses, are recognised within the insurance result.
Expenses allocated to the generation of revenue from non-underwritten ancillaries are recognised within other net income.
*4 Other revenue per vehicle (before internal costs) divided by average active vehicles, rolling 12-month basis. Presented here based on all ancillary
income.

Admiral generates other revenue from a portfolio of insurance products that complement the core car
insurance product, and also fees generated over the life of the policy. The most material contributors toother revenue continue to be:•

Profit earned from Motor policy upgrade products underwritten by Admiral, including breakdown,
car hire and personal injury covers•

Revenue from other insurance products, not underwritten by Admiral•

Fees such as administration and cancellation fees•

Interest charged to customers paying for cover in instalments.

Under IFRS 17, income from underwritten ancillaries and an allocation of instalment income andadministration fees in line with Admiral’s gross share of the core motor product premium, are included within
Insurance Revenue in the underwriting result. The remaining income from instalment income and fees, aswell as income from other non-underwritten ancillary products is presented in other net income.
Overall contribution increased to £247.3 million (2022: £236.8 million), primarily as a result of increased
instalment income following an increase in the proportion of customers paying by instalment and theincrease in average premiums.

20Other revenue was equivalent to £62 per vehicle (gross of costs), with net other revenue per vehicle at £52
per vehicle, both favourable compared to 2022 as a result of the above-mentioned increases as well as abroadly flat customer base.
UK Household Insurance financial review
£m

2023

Turnover*1
Total premiums written*1*2
Insurance revenue
Insurance revenue net of XoL*1
Insurance expenses*1
Insurance claims incurred net of XoL*1
Insurance claims releases net of XoL*1
Underwriting result, net of XoL reinsurance *1
Quota share reinsurance result*1*3
Underwriting result *1
Net insurance investment income
Other income
UK Household Insurance result before tax*1

338.6
318.8
292.8
275.3
(80.9)(199.8)
6.4
1.0
(1.4)
(0.4)
1.6
6.7
7.9

2022
(restated)
255.4
245.7
236.9
222.8
(70.0)(198.1)
16.5(28.8)
9.2(19.6)
1.2
7.7(10.7)*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding reduction in Other
net income, and no impact on turnover*3 Quota share reinsurance result within the segment result excludes reinsurers’ share of share scheme costs

Key performance indicators
2023
70.2%

2022
(restated)
81.5%

Reported Household expense ratio*1*

29.4%

31.4%

Reported Household combined ratio

99.6%

112.9%(0.1%)(8.8%)

72.6%

88.9%

Reported Household loss ratio*1**1Household insurance service margin
Household loss ratio before releases
Impact of severe weather and subsidence on reported loss ratio

11.3%

29.0%

Impact of severe weather and subsidence on result before tax *1 (£m)

9.8

33.3

Households insured at period end (m)

1.76

1.58

*1

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation

The UK Household business enjoyed strong top line growth in 2023 with a 33% increase in turnover to£338.6 million (2022: £255.4 million) as a result of significant price increases in response to higher claims
inflation.
The number of households insured increased by 12% to just under 1.8 million with Admiral’s multicoveroffering contributing strongly to the growth.
The result for the year also improved materially, with the business delivering a profit of £7.9 million
compared to a loss of £10.7 million in 2022. The improvement was due to two factors:• The impact of severe weather and subsidence was significantly lower in 2023 than 2022. Whilst
the final quarter of 2023 saw a run of named storms which were the main contributor to the£9.8 million weather impact in the year, 2022 was impacted by a significant winter freeze event
which impacted the prior year result by £33.3 million.
• The 2023 result benefitted from a one-off recognition of reinsurer profit commission relating to21

prior period following a commutation. This benefit is recognised in the quota share reinsurance
result, with the prior period quota share result being negatively impacted by the original derecognition of that profit commission following significant weather events.
The reported loss ratio for the period was 70.2%, increasing to 72.6% when excluding prior period releases
which primarily reflect the reduction in risk adjustment in the current period. The impact of releases on the2023 reported loss ratio (benefit of 2.4 points) is lower than the prior period (benefit of 7.4 points) partly asa result of an increase in the estimate of the ultimate cost of the December 2022 freeze event.
The reported loss ratio - excluding prior period releases and the impact of severe weather - for 2023 was
61.3%, marginally higher than the equivalent ratio for 2022 of 59.9%. The impact of higher claims inflation
was largely matched by the increases in average premium, which earned through in the second half of theyear and are expected to continue earning through into 2024.
Admiral’s expense ratio improved to 29.4%, (2022: 31.4%) with the impact of continued investment intechnology, more than offset by increasing average premiums and the benefits of increased scale.
The quota share result for the period was a loss of £1.4 million (2022: £9.2 million profit). Despite thebenefit from the one-off recognition of reinsurer profit commission, the quota share result was materiallylower than 2022 as there was no repeat of the recoveries made from reinsurers following the December
2022 freeze event.
Overall, excluding the impact of severe weather, profit for the period was £17.7 million, £4.9 million lower
than 2022 (2022: £22.6 million), primarily as a result of the slightly higher attritional loss ratio.

22International Insurance
International Insurance – Costantino Moretti – CEO, International Insurance
In 2023, markets continued to be challenging with high claims severity inflation, and the Motor insurance
industry has reported high combined ratios. Within this context, we continued to prioritise margin overgrowth and managed to achieve solid customer and turnover growth, with average premiums finally growing
in all geographies.
Despite inflation decelerating compared to 2022 it remains high, placing pressure on claims, so it isimperative to continue to stay prudent and prioritise profitability.
The overall profit in Europe is a combined outcome of the positive contribution from Italy and France, while
Spain has reported a loss. France and Italy are now both profitable, and we will continue to grow the bookwith discipline and invest in diversification (distribution in Italy; product with Household in France). The
Spanish result is a function of the unprecedented high combined ratio of the Motor insurance industry, as
well as continued investment to build our distribution diversification capabilities. We have taken strong
action and have built good foundations, which we believe will result in improved performance in 2024.
The US has shown a strong improvement of all KPIs and has reported a lower loss compared to last year. We
are confident that the actions taken will continue to have a positive impact and contribute to move Elephantcloser to breakeven.
Due to those improvements, Elephant did not require a capital injection from the Group and we expect thiswill also be the case in 2024. We have made good progress on assessing strategic options and we are now
deep diving on a short list of them, aiming to get to a final decision in the first part of 2024.
I am grateful for the hard work of our employees who have made our companies a Great Place to Work. I am
also proud of the focus we have put on helping our customers and supporting the communities in which we
operate. Well done to the team, as we look forward to a positive 2024!
France – Pascal Gonzalvez – CEO, L’olivier
In 2023, L'olivier performed well in the context of challenging market conditions. Amidst escalating inflationand sluggish market volumes that fell short of projections, L’olivier navigated these uncertainties byprioritising margin protection. This approach inevitably moderated our growth trajectory, resulting in a 6%
year-on-year increase in our motor policy base up to 420,000 customers. Concurrently, our turnover saw a
15% increase to £219 million, bolstered by a robust average premium.
By proactively adjusting our pricing strategies ahead of competitors, we saw favourable loss ratio
development. This, combined with stringent expense control and continuous enhancements in operational
efficiency, culminated in our fifth year of written profits, achieving a robust 95% written combined ratio.
Looking ahead to 2024, L'olivier is set to further leverage our commitment to digitalisation and artificial
intelligence deployment (for example, pushing 100% of new claims notification online). This pivotal focus
aims to serve our customers faster and enables better service while increasing our cost efficiency.
We are also poised to expedite our product diversification with further development in household insurance,
continuing our 2023 trend when turnover grew by more than 100% (albeit from a low base). This aligns with
our ongoing strategy to enhance cross-selling and our multi-product offering.
Finally, I would like to thank all L’olivier staff for their energy, enthusiasm and great contribution to thesegood 2023 results.

23

Italy – Antonio Bagetta – CEO, ConTe
2023 was a positive year for ConTe, with continued focus on sustainable growth: +20% revenue increase led
by higher average premiums (+13%) and customer growth (+7%). Market conditions have been improving,following a challenging 2022 which saw the market combined ratio increase to 108% and 128% for the directchannel. These inflationary pressures, together with regulatory changes, led direct competitors to raise
prices materially.
Our key aim is to be a very profitable insurer in Italy through advanced technologies and analytics. We
strengthened our fundamentals with a new data platform which improves the time to market for analytics
model releases.
Sustainability has been a cornerstone of our operations making significant strides in being more efficient(4pp of written expense ratio reduction), responding to customers’ needs and expectations, investing in datacapabilities and ensuring long term-viability.
ConTe also achieved the highest NPS in the industry and the best Trustpilot score for online insurance, largely
reflecting our excellent operational service levels.
Our people remained a key priority in 2023. We implemented several wellbeing initiatives and increased our
GPTW Trust index by 9 points to 87 in 2023. We were also awarded by Milano Finanza for our innovative
approach to people management, and in particular for our Corporate Welfare, Employee Benefit and Family
Care Welfare.
It has been a year of operational successes, with sustainable growth of the Italian business driven by higher
average premium and number of customers, continuing to strengthen our data and technological innovationand the launch of new channels. In addition, we continued to focus on our customers and our people, and I
would like to thank the ConTe team for their continued commitment and hard work in 2023!
Spain – Sarah Harris – CEO, Admiral Seguros
Claims inflation was the major theme for the Spanish car insurance industry in 2023. Q4 market results
showed a market combined ratio1 exceeding 100% for the first time in two decades. Market price correction
started early in the year and accelerated in the second half; we expect this trend to continue into 2024.
Admiral Seguros was not immune to this market context. Inflation in the first two quarters was ahead of our
expectation, putting pressure on loss ratios for both the 2022 and 2023 underwriting years. We took strong
action, raising prices more than the market across all channels with a focus on protecting margin. Q4 averagepremium was up 16% vs a year earlier, despite a portfolio shift towards lower-risk profiles. The increasing
trend in income per policy contributed to an improved expense ratio and sets the business up well going into
2024.
With a more medium-term perspective, we continued to invest in new distribution channels as routes tofuture scale. June saw the successful launch of our digital insurance product for ING bank, “Seguro de Auto
NARANJA”. This has attracted positive feedback about both the product and purchase experience. In thebroker channel, we reinforced our commercial management team and made pleasing progress inunderwriting. We improved productivity, and enhanced our digital servicing platforms, increasing our digitalsales ratio by 30% becoming even more responsive to customer needs.
For another consecutive year, we were voted 2nd Great Place to Work in Spain, winning the special prize“Better for People” in recognition of a collaborative and open team culture. I would like to thank all of my
1 ICEA market data, net of reinsurance.

24

colleagues for their hard work and contribution during 2023.
US – Alberto Schiavon – CEO, Elephant
In 2023, Elephant materially improved its result with a reduced loss of £20 million from £36 million in 2022,
in line with our commitment to turn around our financial performance and despite very challenging market
conditions with sustained severity inflation. Our combined ratio decreased by around 9 points1 (compared to
an industry projection of 3.52 points lower) driven by improvements in both our loss and expense ratios.
Our expense ratio was 5 points3 better than 2022, benefitting from efficiency initiatives (including a
reduction in headcount) and a more favourable acquisition market. The latter was driven by reduced
competition in a difficult market, as many players lowered their growth appetite to protect their bottom line
while increasing rates.
Our loss ratio improved by 4 points4 as a result of strong rating action and intentional mix shift towards lower
loss ratio segments and away from newer channels and states. We increased base rates by an additional 38%
in 2023, compared to circa 16% across the top five players in our states5. Important to note is that the mostrecent underwriting quarters continue to show improving results compared to prior ones, at the same pointof development. It remains early days but this is promising.
Our significant rate increases over the last few years have led to an 18% reduction in vehicles insured
throughout 2023, but at a substantially higher average premium, leading to an overall growth in turnover of1%.
I am very grateful to the Elephant team for the dedication, hard work, and commitment in delivering
excellent customer service, modernising our technology stack, while improving our business fundamentals at
a much faster rate than the market.

1 Earned whole account basis net of XoL.
2

Data is from S&P Global Market Intelligence 2023 Auto Insurance Market Report.

3 Insurance expenses, excluding share schemes divided by insurance revenue net of XoL.
4 Insurance claims incurred and claims releases divided by insurance revenue net of XoL.
5 State filing rate changes for Virginia and Texas. Weighted average change from top 5 players based on market share.

25

International Insurance financial review
£m

2023

Turnover*1
Total premiums written*1*2
Insurance revenue
Insurance revenue net of XoL*1
Insurance expenses*1
Insurance claims net of XoL*1
Underwriting result, net of XoL*1
Quota share reinsurance result*1*3
Movement in net onerous loss component
Underwriting result*1
Net investment income
Net other revenue
International Insurance loss before tax*1*4

2022(restated)
795.9
744.2
750.0
732.0
(254.6)(547.1)(69.7)
13.9(1.0)(56.8)
1.1(0.5)(56.2)

894.9
840.0
842.6
811.8
(249.4)(565.2)(2.8)(22.1)
0.6(24.3)
4.3
2.0(18.0)*1 Alternative Performance Measures – refer to the end of this report for definition and explanation.
*2 Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding reduction in Other
net income, and no impact on turnover.
*3 Quota share reinsurance result within the segment result excludes reinsurers’ share of share scheme costs.
*4 Costs related to the settlement of a historic Italian tax matter during 2023 are excluded from the International Insurance result and presented
within Group other costs, given that these are not reflective of the underlying trading performance of the International Insurance business.

Key performance indicators
2023
Loss ratio*1
Expense ratio*1
Combined ratio*1
Insurance service margin*1
Customers insured at period end*1 (million)

2022(restated)
74.7%
34.8%
109.5%(7.8%)
2.08

69.6%
30.7%
100.3%(3.0%)
2.17*1 Alternative Performance Measures – refer to the end of this report for definition and explanation

International Motor Insurance – Geographical analysis*1
2023

Spain

Italy

France

US

Total

Vehicles insured at period end
Turnover (£m)

0.45m
121.8

1.04m
272.4

0.42m
219.1

0.19m
271.2

2.10m
884.5

2022
Vehicles insured at period end
Turnover (£m)

Spain
0.43m
104.6

Italy
0.97m
227.9

France
0.40m
190.4

US
0.24m
268.5

Total
2.04m
791.4

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation

Split of International Insurance result
£m

2023

European Motor
US Motor
Other
International Insurance loss before tax

6.1(19.6)(4.5)(18.0)

2022(restated)(16.5)(36.4)(3.3)(56.2)

Admiral’s International insurance businesses continued to grow, with customers increasing by 4% to 2.17

26

million (2022: 2.08 million) and turnover growth of 12% to £894.9 million (2022: £795.9 million).
The insurance service margin also improved to -3.0% (2022: -7.8%), driven by an improved combined ratio.
This, together with increased investment income, resulted in a lower reported loss before tax of £18.0
million (2022: £56.2 million).
The combined ratio improved to 100.3% (2022: 109.5%), due to the combined effect of higher premiums,
increased scale in the European businesses, and a strong focus on expense efficiency in Europe as well as a
reduced cost base in the US. This resulted in the loss ratio improving to 69.6% (2022: 74.7%) while theexpense ratio reduced to 30.7% (2022: 34.8%). Investment in diversification continued with a focus on
distribution in Italy and Spain, and Household insurance in France. This will further facilitate the long-term
growth and profitability of these businesses.
The European insurance operations in Spain, Italy and France insured 1.91 million vehicles at 31 December
2023 – 6% higher than a year earlier (2022: 1.80 million). Motor turnover was up 17% to £613.3 million(2022: £522.9 million), driven by strong price increases and the larger book sizes. The combined European
Motor profit was £6.1 million (2022: loss of £16.5 million), an improvement driven by higher averagepremium and an improved expense ratio despite continued inflationary pressures. The combined ratio
reduced to 95.4% (2022: 104.2%).
Inflation remained high throughout 2023 and had a material impact on the International results, driving
increased market premiums particularly in Italy, Spain and the US. Admiral continues to focus on medium
term profitability.
Admiral Seguros (Spain) grew its customer base by 3% to 0.45 million customers over the past year (2022:
0.43 million) despite strong price increases in a competitive market with high claims inflation. The business
continues to focus on improving margins, enhancing digital and data capabilities, as well as sustainablegrowth through distribution diversification through the broker channel and other partnerships.
The Group’s largest international operation, ConTe in Italy, increased vehicles insured by 7% to 1.04 million(2022: 0.97 million) and Motor turnover by 20% to £272.4 million (2022: £227.9 million) reflecting
disciplined growth and price increases. The business continued to focus on risk selection and expense
reduction as well as growth in the broker channel.
L’olivier (France) increased its customer base by 6% to 0.42 million (2022: 0.40 million). The business has
focused on margin protection in a difficult market with risk selection and loss ratio improvements, alongsidestrong cost control and the development of household insurance to leverage cross-selling opportunities andfurther support future growth.
In the US, Admiral underwrites motor insurance through its Elephant Auto business. After a disappointing
2022 and in a context of high inflationary pressures, Elephant focused on materially improving its
underwriting result in 2023 with strong rating action and cost reduction. The conscious decision to focus on
improving underwriting results led to a 18% decrease in the number of vehicles insured to 0.19 million(2022: 0.24 million), a moderately higher turnover of £271.2 million (2022: £268.5 million) and a reduced
loss before tax of £19.6 million (2022: loss of £36.4 million). In light of this early progress, the business did
not need further capital from the Group in 2023. Elephant will continue to prioritise improving the loss ratio
ahead of growth in the immediate future.

27

Admiral Money
Scott Cargill – CEO, Admiral Money
I’m pleased to be able to say it has been a positive 2023 for Admiral Money. Coming into the year we knew
there would be continued uncertainty with higher interest rates and inflation impacting on the cost of living.
I’m proud of how we have navigated these uncertain times and I am absolutely delighted with our first
double digit profit of £10 million. I would also draw particular attention to our cost income ratio which is
below 40% for the first time and which represents growing evidence of a likely long-term competitive
advantage.
Through the year we have continued to focus on high quality risk selection and a controlled and conservative
approach to growth. Our on-balance sheet loan book at end of December stands at £0.96 billion, 8% growthsince FY 2022 and slightly down on the HY 2023 position. Our net income of £66 million has increased by 49%
from 2022, largely reflecting the higher average balances through the year as well as margin improvements
to provide risk resiliency.
We retain a firm focus on prime lending and are seeing a high level of resilience from our customers despite
inflation and higher interest rates. Where loss experience has varied from our expectation, in true Admiral
fashion we have adapted our approach quickly and decisively and have remained well below our IFRS 9
expected credit loss (ECL) reserve position. Our NPS score of 68 and Trustpilot score of 4.5 provide continued
evidence that our commitment to being an efficient prime focused lender, providing certainty andtransparency to UK customers on their lending needs is a successful formula.
2023 has also been a year of significant and successful investment in our capabilities, particularly intechnology and data. We are especially looking forward to seeing the benefits of our new origination
platform in 2024. This new technology also provides us with options to broaden our participation in the
consumer lending market in the future.
We have also completed the delivery of several enablers for realising our goal to be the lender of choice for
Admiral insurance customers. This is a key pillar of our strategy and where we have the most significant andsustained competitive advantage. Over 50% of our new customer flows in 2023 came from either current or
recent Admiral Insurance customers.
Looking to 2024, we enter the year with good momentum. We expect to benefit from our strong position in a
growing market as we see a continued shift to comparison and credit score marketplaces. I expect to see
further growth in our loan balances towards the £1.2 billion range during 2024, assuming current economic
conditions. Combined with a tightly controlled cost base, we should see continued improvements in theeconomics in the coming years.
I’d like to finish by thanking our customers and all of my colleagues and wish everyone the best for 2024.

28

Admiral Money financial review
£m

2023

2022

Total interest income
Interest expense*1
Net interest income
Other fee income
Total income
Credit loss charge
Expenses
Admiral Money profit before tax*2

94.7(28.3)
66.4
0.1
66.5
(33.4)(22.9)
10.2

58.7(14.1)
44.6
0.3
44.9
(20.6)(22.2)
2.1*1

Includes £1.5 million intra-group interest expense (2022: £1.5 million).

*2 Alternative Performance Measures – refer to the end of this report for definition and explanation

Admiral Money distributes and underwrites unsecured personal loans and car finance products for UK
consumers through price comparison, credit scoring applications and direct channels. The proposition is
focused on offering real rates to provide customers with upfront transparency and certainty.
Admiral Money recorded a pre-tax profit of £10.2 million in 2023 (improved from £2.1 million profit in 2022),
continuing the positive trajectory seen since 2020.
Gross loan balances grew 8% to £0.96 billion (2022: £0.89 billion), with a £81.7 million (2022: £63.7 million)
credit loss provision, leading to a net loan balance of £875.1 million (2022: £823.7 million). The increase inaverage portfolio size year on year contributed to a 49% increase in net interest income to £66.4 million(2022: £44.6 million).
As with prior year, Admiral Money continued to carefully manage affordability and credit criteria for new
lending in 2023 to reflect the higher interest rate and elevated inflation environment. At the same timeinterest rates on new loans were increased to reflect the rising cost of funding. These measures will help
ensure sustainable financial performance into the future.
The credit loss charge increased to £33.4 million (2022: £20.6 million). Overall, an appropriately cautious
approach has been taken to calculating the credit loss provision, including post model adjustments for model
performance, cost of living, economic scenarios forecast uncertainty, reflecting the level of uncertainty in thecurrent economic environment. For further information, refer to note 7 in the financial statements.
Admiral Money is funded through a combination of internal and external funding sources. The externalfunding is secured against certain loans via transfer of the rights to the cash-flows to two special purpose
entities (SPEs). The securitisation and subsequent issue of notes via SPEs does not result in a significant
transfer of risk from the Group.

29Other Group Items
Other Group items financial review
£m

2023

Share scheme charges
Other central costs*1
Admiral Pioneer result*1
Business development costs*1
Finance charges*2
Compare.com loss before tax
Other interest and investment income*1(54.4)(41.7)(16.2)(15.3)(20.3)
(2.6)
4.6

2022
(restated)(51.7)(15.6)(13.5)(8.8)(12.1)
(2.8)
10.1

Total

(145.9)(94.4)*1

A number of small re-allocations of costs/ income have been made between these lines and UK insurance/ International insurance segment results for2022. These include moving costs related to the French fleet insurance business (closed in H1 2023) out of the Admiral Pioneer operating result, leading
to a lower loss in Admiral Pioneer than reported in 2022.
*2
Finance charges within other group items include £1.7 million (2022: £0.7 million) that relate to intra-group arrangements, with the corresponding
income presented within the UK Insurance result.

Share scheme charges relate to the Group’s two employee share schemes. The increase in the charge
compared to 2022 is driven primarily by the higher share price in 2023 relative to 2022, which increases theemployer’s national insurance cost on shares due to vest.
Other central costs consist of Group-related expenses and include the cost of a number of significant Groupprojects, such as the internal model development and other regulatory projects, central management
salaries and expenses, and additional expenses including gains and losses on amounts held in foreign
currencies. The significant increase in other central costs is driven primarily by costs incurred on interest andpenalties on settlement of a historic Italian tax matter (further details are provided in the taxation section
later in this report); an adverse impact of foreign exchange movements (compared to a gain on thesebalances recognised in 2022), and higher costs related to M&A activity.
Admiral launched Admiral Pioneer in 2020 to focus on new product diversification opportunities, as part ofthe investment in product diversification. Pioneer businesses include Veygo (flexible pay-as-you-go andlearner driver insurer in the UK) and small business insurance in the UK. Pioneer reported a loss of £16.2
million in 2023 (2022: £13.5 million). This was mainly driven by one particular large claim in Veygo, for whicha cautious reserving approach has been adopted, together with continued investment in small businessinsurance.
Business development costs increased to £15.3 million (2022: £8.8 million), primarily attributed to increased
investment in new businesses across the Group as part of the diversification strategy. Admiral took thedecision to close its small fleet insurance business in France, which also resulted in modest closure costs.
Finance charges of £20.3 million (2022: £12.1 million) primarily related to interest on subordinated notes, aswell as a small one-off charge in relation to the renewal of the Group’s revolving credit facility. In July 2023,
the Group issued £250 million subordinated loan notes, at a fixed rate of 8.5%, with a redemption date ofJanuary 2034. At the same time as the new issue, the Group made a tender offer for the existing £200 million
subordinated loans notes, with £145 million of the 2024 notes tendered. At 31 December 2023 the resulting
nominal value of subordinated liabilities on the balance sheet is £305 million, which will reduce to £250
million in July 2024.

30

A loss of £2.6 million (2022: £2.8 million) was attributed to compare.com in the first half of the year, which
was a combination of a small loss in the business together with a small loss recognised on disposal. The saleof this US comparison business completed during the period, with no cash exchange as a result, but Admiral
receiving a minority share in the acquiring business.
Other interest and investment income decreased to £4.6 million (2022: £10.1 million). In 2022, there was again of £4.7 million from the sale of UK government bonds which was not repeated in the current period, andthe current period also includes a loss of £3.6 million in 2023 related to the re-purchase of bonds as a resultof the debt restructure. Excluding these factors, underlying interest and investment income increased to £8.2
million from £5.4 million, in line with the higher interest rate environment.
Group capital structure and financial position
The Group manages its capital to ensure that all entities are able to continue as going concerns and that
regulated entities comfortably meet regulatory capital requirements. Surplus capital within subsidiaries is
paid up to the Group holding company in the form of dividends.
The Group’s regulatory capital is based on the Solvency II Standard Formula, with a capital add-on to reflect
recognised limitations in the Standard Formula with respect to Admiral’s business, predominantly in respectof profit commission arrangements in co- and reinsurance agreements.
The Group continues to develop its partial internal model to form the basis of future capital requirements.
Having taken time to review, update and extend the scope of the model as well as completing further cycles
of independent external validation, the Group expects to enter a pre-application process with its regulatorssoon. Once the pre-application process is complete, the Group expects to be able to communicate timelines
for a full application.
In the interim period before model approval, the current standard formula plus capital add-on basis willcontinue to be used to calculate the regulatory capital requirement.
The estimated and unaudited Solvency ratio for the Group at the date of this report is as follows:
Group capital position (estimated and unaudited)

Eligible Own Funds (post-dividend)*1
Solvency II capital requirement*2
Surplus over capital requirement
Solvency ratio (post-dividend)*3

2023
£bn
1.42
0.71
0.71
200%

2022
£bn
1.20
0.66
0.54
180%

*1 2023 Own Funds include approximately £250 million of Tier 2 capital following the Group’s recent issue of ten-year subordinatedloan notes. YE’22 Own Funds include approximately £200 million of Tier 2 capital.
*2 Solvency capital requirement includes updated, unapproved capital add-on.
*3 Solvency ratio calculated on a volatility adjusted basis.

The Group’s solvency ratio has improved over 2023 to a strong closing position at 200% (2022: 180%).
Strong generation of economic capital in the core UK motor business, in particular during the second half ofthe year, contributed to an increase in Own Funds of approximately £200 million. The increase in Tier 2
Capital of approximately £50 million (further detail below) also contributed to the Own Funds increase as
well as smaller favourable impacts from movements in yields and spreads in the year, and the impact ofchanges in the risk margin arising from the PRA’s introduction of the new UK prudential regime for insurers,‘Solvency UK’.

31

The SCR also increased over the year, though to a lesser extent. The increase of approximately £50 million
was primarily as a result of the increase in premiums across all Group businesses and the associated impact
on underwriting and operational risk elements of the capital requirement.
The SCR above includes an updated capital add-on which is recalculated at the end of each period. As aresult, it is different to the fixed Group capital add-on which is included in the regulatory Quantitative
Reporting Templates (QRTs) reported to the PRA.
During the second half of 2023, the PRA issued notice of an updated fixed Group capital add-on of £24
million, which is lower than the previously approved add-on of £81 million, but higher than the Group’s own
assessment of the capital add-on at the end of 2023.
The estimated solvency ratio including the fixed Group capital add-on of £24 million, that is calculated at thebalance sheet date rather than the date of this report, and will be reported in the Group’s 2023 Solvency and
Financial Condition Report (SFCR) is as follows:
Regulatory solvency ratio (estimated and unaudited)

2023

2022

Solvency ratio as reported above

200%

180%

Change in valuation date*1

(11%)

(11%)

Other (including impact of updated, unapproved capital add-on)

(6%)

(20%)

Solvency ratio to be reported (SFCR)

183%

149%

*1 The solvency ratio reported above includes additional own funds generated post year-end up to the date of this report.

Issue of subordinated loan notes
During July 2023, Group issued 10.5 year, 8.5% £250 million subordinated loan notes. At the same time as
the new issue, the Group made a tender offer for the existing £200 million subordinated loan notes, due tomature in 2024. £145 million of the 2024 notes were tendered, with the remaining £55 million of 2024 notes
not classified as Tier 2 Capital within Own Funds at the end of 2023.
Solvency ratio sensitivities
UK Motor – incurred loss ratio +5%
UK Motor – 1 in 200 catastrophe event
UK Household – 1 in 200 catastrophe event
Interest rate – yield curve up 100 bps
Interest rate – yield curve down 100 bps
Credit spreads widen 100 bps*1
Currency – 25% movement in euro and US dollar
ASHE – long term inflation assumption up 50 bps
Loans – 100% weighting to ‘severe’ scenario*2

2023
-11%
-1%
-5%
-1%
+1%
-5%
-3%
-3%
-1%

2022
-11%
-1%
-4%
-2%
+2%
-6%
-3%
-3%
-1%

*1 2022 credit spread sensitivity restated to include the benefit of offsetting movements in the volatility adjusted yield curve used for discounting
liabilities.
*2 Refer to note 7 to the financial statements for further information on the ‘severe’ scenario.

32

Investments and cash
Investment strategy
Admiral Group’s investment strategy focuses on capital preservation and low volatility of returns relative to
liabilities and follows an asset liability matching strategy to control interest rate, inflation and currency risk. A
prudent level of liquidity is held and the investment portfolio has a high-quality credit profile. In 2023, thefocus remained on matching, and cashflows were invested into high quality assets to take advantage of risingrisk-free rates, whilst being appropriately cautious on the credit outlook. The Group holds a range ofgovernment bonds, corporate bonds, alternative and private credit assets, alongside liquid holdings in cash
and money market funds.
A further aim of the strategy is to reduce the Environmental, Social, and Governance (ESG) related risks inthe portfolio whilst continuing to achieve sustainable long-term returns. In 2023, the portfolio weighted
average ESG score had an MSCI AA rating.
Investment return
£m

2023

Underlying investment income yield
Investment return
Unrealised (losses)/gains on derivatives
Movement in provision for expected credit losses
Total investment return

3.3%
124.4
(0.2)
2.5
126.7

2022
1.6%
64.1
0.5
1.8
66.4

Net investment income for 2023 was £126.7 million (2022: £66.4 million). Provisions for expected credit
losses developed favourably, leading to a £2.5 million release of provisions (2022: £1.8 million favourable
impact).
The investment return on the Group’s investment portfolio (excluding unrealised gains and losses and the
movement in provision for expected credit losses) was £124.4 million (2022: £64.1 million). The annualised
rate of return was higher at 3.3% (2022: 1.6%), due to higher reinvestment yields and higher returns on
floating rate securities as interest rates rose throughout the year.
An increase in the market value of the portfolio of £98.1 million (2021: £255.6 million reduction) primarily
relates to the reversal of losses recognised in 2022 as the bonds are held closer to maturity. That movement
is reflected in the Statement of Other Comprehensive Income.
Cash and investments analysis£mFixed income and debt securities
Money market funds and other fair value instruments
Cash deposits
CashTotal*12023
2,825.9
918.8
116.7
353.1
4,214.52022
2,372.7
934.7
101.4
297.0
3,705.8*1 Total Cash and Investments include £278.2 million (2022: £198.2 million) of Level 3 investments. Refer to note 6d for further information.

33

Cashflow£m
Operating cashflow, before movements in investments
Transfers to financial investments
Operating cashflow
Tax payments
Investing cashflows (capital expenditure)
Financing cashflows
Loans funding through special purpose entity
Foreign currency translation impact
Net cash movement
Unrealised gains/(losses) on investments
Movement in accrued interest, foreign exchange and unrealised
gains/(losses) on derivatives
Net increase in cash and financial investments

697.5(285.5)412.0(133.0)(75.9)(216.7)
44.9
24.8
56.1
98.1

2022
(restated)
379.1
189.0
568.1
(91.2)(101.0)(692.8)267.8(26.6)(75.7)(255.6)

69.0
508.7

113.2
(407.1)

2023

The main items contributing to the operating cash inflow are as follows:£m
Profit after tax

337.2

2022
(restated)
285.3

Change in net insurance contract liabilities
Net change in trade receivables and liabilities
Change in loans and advances to customers
Non-cash income statement items
Taxation expense
Operating cashflow, before movements in investments

309.5(42.3)(73.6)
61.1
105.6
697.5

248.6
(21.2)(280.6)
71.1
75.9
379.1

2023

The Group continues to generate significant amounts of cash and its capital-efficient business model enables
the distribution of the majority of post-tax profits as dividends. Total cash and investments at 31 December
2023 was £4,214.5 million (31 December 2022: £3,705.8 million), the increase reflecting market value gains
noted above, an increase in assets at the Group level following the refinancing of the Group’s subordinate
debt during 2023, and growth in premiums written.
The net increase in cash and investments in the period is £508.7 million (2022: decrease of £407.1 million).
Taxation
The tax charge for the period is £105.6 million (2022: £75.9 million), which equates to 23.8% (2022: 21.0%) of
profit before tax. The increase in the UK rate of corporation tax to 25% (from 19%) from 1 April 2023 is asignificant driver of the increase. In addition, in late 2023 the Group settled an amount related to a historic
Italian tax matter. This is not expected to result in a material increase in the tax charge going forward. Seenote 10 to the financial statements for further details.
Co-insurance and reinsurance
Admiral makes significant use of proportional risk sharing agreements, where insurers outside the Group
underwrite a majority of the risk generated, either through co-insurance or quota share reinsurance
contracts. These arrangements include profit commission terms which allow Admiral to retain a significant
portion of the profit generated.

34

Although the primary focus and disclosure is in relation to the UK Motor insurance book, similar longer-termarrangements are in place in the Group’s international insurance operations and the UK Household and Van
businesses.
UK Motor Insurance
Munich Re and its subsidiary entity, Great Lakes, currently underwrites 40% of the UK Motor business. From2022, 20% of this total is on a co-insurance basis (via Great Lakes) and will extend to 2029. The remaining
20% is on a quota share reinsurance basis and these arrangements now extend to 2026.
The Group also has other quota share reinsurance arrangements confirmed to at least 2024, covering 38% of
the business written.
The nature of the co-insurance proportion underwritten by Munich Re (via Great Lakes) in the UK is such that
20% of all Motor premium and claims accrue directly to Great Lakes and are not reflected in the Group’s
financial statements. Similarly, Great Lakes reimburses the Group for its proportional share of expenses
incurred in acquiring and administering this business.
The quota share reinsurance arrangements result in all Motor premiums, claims and expenses that are ceded
to reinsurers being included in the Group’s financial statements. These agreements operate on a funds
withheld basis and include certain features such as expense caps and an allocation of investment income
earned on the funds held by Admiral on behalf of the reinsurers. These features result in higher profit
commission should the underwriting year reach profitability.
Admiral tends to commute its UK Car Insurance quota share reinsurance contracts 24-36 months after
inception of an underwriting year, assuming there is sufficient confidence in the profitability of the businesscovered by the reinsurance contract.
After an underwriting year is commuted, movements in financial statement loss ratios result in reserve
releases (or strengthening if the loss ratios were to increase) rather than reduced or increased profit
commission.
In 2023, there were no significant commutations, with the majority of quota share reinsurance covering
underwriting year 2020, and all arrangements covering the 2019 and prior underwriting years, having now
been commuted.
UK Household Insurance
The Group’s Household business is supported by long-term proportional reinsurance arrangements covering
70% of the risk, that run to at least 2024. In addition, the Group has non-proportional reinsurance to cover
the risk of catastrophes stemming from weather events.
International Car Insurance
In both 2022 and 2023 Admiral retained 35% (Italy), 30% (France), 30% (Spain) and 40% (USA) of theunderwriting risk in each country respectively.
Excess of loss reinsurance
The Group also purchases excess of loss reinsurance to provide protection against large claims and reviews
this cover annually. The UK motor excess of loss cover remained similar to prior years with cover starting at£10 million.

35

Principal Risks and Uncertainties
The Group’s 2023 Annual Report will contain an analysis of the Principal Risks and Uncertainties identified in
the Group’s Enterprise Risk Management Framework, along with the impacts of those risks and actions taken
to mitigate them.
Disclaimer on forward-looking statements
Certain statements made in this announcement are forward-looking statements. Such statements are basedon current expectations and assumptions and are subject to a number of known and unknown risks anduncertainties that may cause actual events or results to differ materially from any expected future events or
results expressed or implied in these forward-looking statements.
Persons receiving this announcement should not place undue reliance on forward-looking statements. Unlessotherwise required by applicable law, regulation or accounting standard, the Group does not undertake toupdate or revise any forward-looking statements, whether as a result of new information, future
developments or otherwise.

36

Consolidated Income Statement
For the year ended 31 December 2023
Year ended

Note

31 December 2023
£m

Restated1
31 December 2022£m

3,486.1(3,093.2)
392.9(87.1)
305.8

2,956.9(2,737.2)
219.7(38.4)
181.3

Insurance revenue
Insurance service expenses
Insurance service result before reinsurance
Net expense from reinsurance contracts held
Insurance service result55Investment return

6

122.9

64.6

Finance expenses from insurance contracts issued
Finance income from reinsurance contracts held
Net insurance finance expenses

55(94.5)
28.9(65.6)(52.0)
13.6(38.4)Net insurance and investment result

363.1

207.5

Interest income from financial services
Interest expense related to financial services

94.9(26.8)

58.7(12.6)Net interest income from financial services

68.1

46.1

205.7
(250.8)107.8(31.0)

256.4(204.6)
86.7(18.9)

Other income and expenses

31.7

119.6

Operating profit

462.9

373.2

(20.5)
0.4(20.1)(13.5)
1.5(12.0)

442.8(105.6)361.2(75.9)

Profit after tax

337.2

285.3

Profit after tax attributable to:Equity holders of the parent
Non-controlling interests (NCI)

338.0
(0.8)

286.5
(1.2)

337.2

285.3

Other revenue and profit commission
Other operating expenses
Other operating expenses recoverable from co-insurers
Expected credit losses

Finance costs
Finance costs recoverable from co- and reinsurers
Net finance costs
Profit before tax
Taxation expense

5

8
9
9
6

6
6

10

Earnings per share
Basic

12

111.2p

95.4p

Diluted12

110.8p

95.0p

Dividends declared and paid (total)
Dividends declared and paid (per share)

12
12

307.1
103.0p658.3
223.0p12022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

37

Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Year ended
31 December 2023
£m

Restated1
31 December 2022
£m

337.2

285.3

Movements in fair value reserve98.1(255.6)

Deferred tax charge in relation to movement in fair value reserve

(5.7)

13.0

Movements in insurance finance reserve(78.9)

177.8

9.7(22.8)

Note

Profit for the period
Other comprehensive income
Items that are or may be reclassified to profit or loss

Deferred tax in relation to movement in insurance finance reserve
Exchange differences on translation of foreign operations

3.7

(4.3)

(18.1)

25.1

4.5

(7.0)

Other comprehensive income for the period, net of income tax

13.3(73.8)

Total comprehensive income for the period

350.5

211.5

Equity holders of the parent

351.3

212.6

Non-controlling interests

(0.8)

(1.1)

350.5

211.5

Movement in hedging reserve
Deferred tax charge in relation to movement in hedging reserve

Total comprehensive income for the period attributable to:12022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial

statements.

38

Consolidated Statement of Financial Position
As at 31 December 2023
As at
31 December 2023
£m

Restated1
31 December 2022£m

Restated1
1 January 2022
£m

90.1
242.9
46.1
20.4
1,191.9879.4
409.9
3,862.4
353.1

89.8
217.6
28.4
9.1
1,015.4823.9
316.4
3,411.2
297.0

103.2
151.8
20.7
10.2
987.2
556.8
391.5
3,742.6
372.7

7,096.2

6,208.8

6,336.7

0.3
13.1(40.5)
1,018.9

0.3
13.1(50.2)
922.6

0.3
13.1
23.7
1,243.5

991.8

885.8

1,280.6

1.0
992.8

1.2
887.0

1,282.9

4,581.7
1,129.8
305.8
81.2
4.9

4,025.4
939.1
254.9
88.5
13.9

3,926.4
670.9
351.2
105.3
—

Total liabilities

6,103.4

5,321.8

5,053.8

Total equity and total liabilities

7,096.2

6,208.8

6,336.7

Note

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

11
11
10
5
7
6
6
6

Total assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Total equity attributable to equity holders of theparent12
12

Non-controlling interests
Total equity
LIABILITIESInsurance contract liabilities
Subordinated and other financial liabilities
Trade and other payables
Lease liabilities
Corporation tax liabilities

5
6
6, 11
6

2.3

12022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial

statements.

The accompanying notes form part of these financial statements. These financial statements wereapproved by the Board of Directors on 6 March 2024 and were signed on its behalf by:

Geraint Jones
Chief Financial Officer
Admiral Group plc
Company Number: 03849958

39

Consolidated Cashflow Statement
For the year ended 31 December 2023
Year ended

Note

Profit after tax

31 December 2023
£m

Restated1
31 December 2022
£m

337.2

285.3

18.2

18.2

(4.0)

(1.2)

40.5

23.7

Adjustments for non-cash items:-

Depreciation of property, plant and equipment and right-of-use assets
Impairment/ disposal of property, plant and equipment and right-of-use
assets-Amortisation and impairment of intangible assets-

Movement in expected credit loss provision

15.7

11.7

-

Share scheme charges

63.3

57.3

-

Interest expense on funding for loans and advances to customers

26.2

12.6

-

Investment return(119.3)(64.6)-

Finance costs, including unwinding of discounts on lease liabilities

20.5

13.4

-

Taxation expense

11

6
10

105.6

75.9

Change in gross insurance contract liabilities

5

451.3

372.8

Change in reinsurance assets

5(141.8)(124.2)(94.7)

75.1

Change in insurance and other receivables
Change in gross loans and advances to customers

7(73.6)(280.6)

Change in trade and other payables, including tax and social security

11

52.4

(96.3)

697.5

379.1

Purchases of financial instruments(3,538.4)(3,198.0)

Proceeds on disposal/ maturity of financial instruments

3,176.1

3,328.3

Cashflows from operating activities, before movements in investments

Interest and investment income received

76.8

58.7

Cashflows from operating activities, net of movements in investments

412.0

568.1

Taxation payments(133.0)(91.2)Net cashflow from operating activities

279.0

476.9

(75.9)(98.6)—(2.4)(75.9)(101.0)

Proceeds on issue of loan backed securities

44.9

267.8

Proceeds from other financial liabilities

136.2

—

Finance costs paid, including interest expense paid on funding for loans(35.1)(25.3)

Repayment of lease liabilities(10.7)(9.2)

Cashflows from investing activities:
Purchases of property, equipment and software
Investments in associates
Net cash used in investing activities
Cashflows from financing activities:

Equity dividends paid

12

(307.1)(658.3)(171.8)(425.0)Net increase/ (decrease) in cash and cash equivalents

31.3(49.1)Cash and cash equivalents at 1 January

297.0

372.7

Effects of changes in foreign exchange rates

24.8(26.6)

353.1

297.0

Net cash used in financing activities

Cash and cash equivalents at end of period

612022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial

statements.

40

Consolidated Statement of Changes in Equity
For the year ended 31 December 2023

Note

At 1 January 2022 previously
reported
Impact of initial application of IFRS
171

Attributable to the owners of the Company
Insurance
Foreign
Hedgingfinanceexchangereserve
reserve
reserve1
£m
£m
£m

Share
Capital£mpremium£m

Fair value
reserve
£m

0.3

13.1

36.7

3.0

4.3

—
3.0

0.2

(20.5)(105.3)(125.6)—(125.6)

4.5(20.5)

1,243.5

1,280.6

2.3

1,282.9

Share—

Retained profit
and loss1£m

Total1£m

Non-controllinginterests£m

Total equity1£m

1,348.8

1,406.2

2.3

1,408.5———

At 1 January 2022 restated1

0.3

13.1

36.7

Profit/(loss) for the period1

—

—

—

—

—

—

286.5

286.5

(1.2)

285.3

Other comprehensive income1——(242.6)

18.1

(4.4)

155.0

—

(73.9)

0.1(73.8)

Total comprehensive income for the period1——(242.6)

18.1

(4.4)

155.0

286.5

212.6

(1.1)

211.5

—

—

—

—

—

—

(658.3)(658.3)—(658.3)

Share scheme credit
Deferred tax credit on share scheme
credit

—

—

—

—

—

—

57.3

57.3

—

57.3

—

—

—

—

—

—

(6.4)

(6.4)

—

(6.4)

Total transaction with equity holders

—

—

—

—

—

—

(607.4)(607.4)—(607.4)As at 31 December 2022

0.3

13.1

(205.9)

21.1

0.1

134.5

922.6

885.8

1.2

887.0

Transactions with equity holders
12

Dividends

1

12022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

41

Consolidated Statement of Changes in Equity (continued)
Attributable to the owners of the Company
Insurance
Foreign
Hedgingfinanceexchangereserve
reserve
reserve1
£m
£m
£m

Share
Capital£m

Share premium
account£m

Fair value
reserve £m

At 1 January 2023

0.3

13.1

(205.9)Profit/(loss) for the period

—

—

—

—

Other comprehensive income

—

—

92.4

(13.6)

Total comprehensive income for the period

—

—

92.4

(13.6)

Note

21.1

Retained profit
and loss 1£mTotal1£m

Non-controllinginterests£m

Total equity1
£m

134.5

922.6

885.8

1.2

887.0

—

—

338.0

338.0

(0.8)

337.2

3.7

(69.2)

—

13.3

—

13.3

3.7

(69.2)

338.0

351.3

(0.8)

350.5

0.1

Transactions with equity holders
Dividends

12

—

—

—

—

—

—

(307.1)(307.1)—(307.1)

Share scheme credit
Deferred tax credit on share scheme
creditTransfer to loss on disposal of assets
held for sale

—

—

—

—

—

—

63.3

63.3

—

63.3

—

—

—

—

—

—

2.1

2.1

—

2.1

—

—

—

—

(3.6)

—

—

(3.6)

0.6

(3.0)

Total transactions with equity holders

—

—

—

—

(3.6)

—

(241.7)(245.3)0.6(244.7)As at 31 December 2023

0.3

13.1

(113.5)

7.5

0.2

65.3

1,018.9

991.8

1.0

992.8

12022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

42

Notes to the consolidated financial statements
General information
Admiral Group plc is a public limited company incorporated in England and Wales. Its registeredoffice is at Tŷ Admiral, David Street, Cardiff, CF10 2EH and its shares are listed on the London Stock
Exchange.
The consolidated financial statements have been prepared and approved by the Directors inaccordance with United Kingdom adopted international accounting standards in conformity with therequirements of the Companies Act 2006.
The financial information included in this preliminary announcement has been prepared inaccordance with the recognition and measurement criteria of International Financial ReportingStandards (“IFRS”) as adopted by the UK. The financial information set out in this preliminary results
announcement does not constitute the statutory accounts for the year ended 31 December 2023.
The financial information is derived from the statutory accounts, which comply with IFRS, within theGroup’s Annual Report & Accounts 2023. These accounts were signed on 6 March 2024 and are
expected to be published in March 2024 and delivered to the Registrar of Companies following theAnnual General Meeting to be held on 25 April 2024. The independent Auditor’s report on the Groupaccounts for the year ended 31 December 2022 was signed on 7 March 2023, is unqualified, does not
draw attention to any matters by way of emphasis and does not include a statement under S498(2)or (3) of the Companies Act 2006. This audit opinion excludes disclosures surrounding capital
adequacy calculated under the Solvency II regime as these are outside of the audit scope.
1. Basis of preparation
The consolidated financial statements have been prepared on a going concern basis. In considering
this requirements, the directors have taken into account the following:••

The Group’s profit projections, including:o Changes in premium rates and projected policy volumes across the Group’s
insurance businesseso The impacts of the continued elevated inflationary environment on the cost of
settling claims across all of the Group’s insurance businesseso The return of motor claims frequency towards pre-pandemic levels
o Projected trends in other revenue generated by the Group’s insurance businessfrom fees and the sale of ancillary productso Projected contributions to profit from businesses other than the UK Car insurance
businesso Expected trends in unemployment in the context of credit risks and the growth of
the Group’s consumer lending businesso The More Than acquisition due to complete in the first half of 2024
o Assessment of wider market risk and changes in investment performance given thechanging interest rates toward the end of 2023.
The Group’s solvency position, which has been closely monitored through periods ofmarket volatility. The Group continues to maintain a strong solvency position above
43

•
•

•
•

target levels
The adequacy of the Group’s liquidity position after considering all the factors notedabove
The results of business plan scenarios and stress tests on the projected profitability,
solvency and liquidity positions including the impact of severe downside scenarios thatassume severe adverse economic, credit and trading stresses
The regulatory environment, focusing on regulatory guidance issued by the FCA and the
PRA in the UK and regular communications between management and regulators
A review of the Company’s principal risks and uncertainties and the assessment ofemerging risks including climate related risks.

Following consideration of all of the above, the Directors have reasonable expectation that theGroup has adequate resources to continue in operation for the foreseeable future, a period of notless than 12 months from the date of this report, and that it is therefore appropriate to adopt thegoing concern basis in preparing the consolidated financial statements.
The accounting policies set out in the notes to the financial statements have, unless otherwise
stated, been applied consistently to all periods presented in these Group financial statements. The
financial statements are prepared on the historical cost basis, except for the revaluation of financial
assets classified as fair value through profit or loss or as fair value through other comprehensive
income.
The Group and Company financial statements are presented in pounds sterling, rounded to thenearest £0.1 million.
Adoption of new and revised standards
The Group has adopted the following IFRSs and interpretations during the year, which have been
issued and endorsed:
•
•
•
•
•

IFRS 17 Insurance Contracts (effective 1 January 2023)
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates (effective 1 January 2023)
Amendments to IAS 1 Presentation of Financial Statements and Practice Statement 2:
Disclosures of Accounting policies (effective 1 January 2023)
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arisingfrom a Single Transaction (effective 1 January 2023).
Amendments to IAS 12 Income Taxes: International tax reform - Pillar two model rules(effective 1 January 2023).

The application of the amendments listed above has not had a material impact on the Group’s
results, financial position and cashflows. Further information on the impact of the transition to IFRS
17 is provided below.

44

IFRS 17 adoption
IFRS 17, the new insurance contracts standard, replaces IFRS 4 Insurance Contracts, from 1 January2023.
As a result, the opening balance sheet (1 January 2022) and prior year comparatives (FY 2022) havebeen restated under IFRS 17, applying a fully retrospective approach (i.e. as though IFRS 17 hadalways been in place).
The new accounting policies and choices adopted in the implementation of IFRS 17 are disclosed in
the full in Group’s 2023 Annual Report.
The following section provides further information regarding the key factors driving the differencesin the 2022 results under IFRS 4 and restated results under IFRS 17.

45

Summary of Impact of Transition on FY 2022 restated result
31 December 2022£m

IFRS 17IFRS 4

ChangeAnalysis of profit
UK Insurance
International Insurance
International Insurance – European Motor
International Insurance – US Motor
International Insurance – Other
Admiral Money
Other
Group profit before tax

509.7(56.2)(16.5)(36.4)(3.3)
2.1(94.4)
361.2

615.9(53.8)(1.6)(48.9)(3.3)
2.1(95.2)
469.0(106.2)(2.4)(14.9)
12.5——
0.8(107.8)The 2022 profit before tax on an IFRS 17 basis is lower than that reported under IFRS 4. The
following table sets out the key differences for the UK and international insurance profits reported
under IFRS 17 compared to IFRS 4:£m
IFRS 4 reported profit
Timing of reserve releases
Discounting
Timing of Quota share reinsurance recoveries
Other
IFRS 17 reported profit before tax

UK
615.9
(93.3)
15.4(41.2)
12.9
509.7

International(53.8)
(9.9)
9.5
(2.9)
0.9
(56.2)The difference between IFRS 4 and IFRS 17 reported profit primarily arises as a result of differencesin the reserve strength or risk adjustment position over the course of 2022 under each standard.
Under IFRS 4, Admiral moved down to the 95th percentile over the course of 2022. Under IFRS 17,
Admiral moved down to the 95th percentile at the transition date of 1 January 2022, and remained atthat percentile during 2022. This results in lower reserve releases under IFRS 17 in 2022, andtherefore lower profit.
The discounting impact shown above is the impact of the discounting of the gross, net of XoL claims
cost and finance expenses recognised in the period. In UK Insurance, whilst there is a favourable
impact of discounting of the claims incurred of circa £52 million at YE 2022, this is offset by theunwind of discounting of prior years, reducing the overall discounting benefit to £15 million whencompared to IFRS 4 claims costs. It should be noted that whilst the higher discount curves seen in
2022 result in lower claims reserves, the Group’s accounting policy decision to take the impact ofchanges in yield curve on outstanding claims reserves to other comprehensive income means that
this is not a material driver of IFRS 17 profit in 2022.
In addition, the majority of the discounting benefit on gross claims net of excess of loss reinsurance
is offset by the significant adverse movement on quota share recoveries. This is significant given
that, due to quota share contracts having been largely commuted on earlier underwriting years,

46

there is no significant offsetting finance income (representing the unwind of discounting within thequota share result).
Other movements include a number of largely offsetting differences in the timing of recognition of
acquisition expenses, quota share reinsurance profit commission recoveries, and movements in the
onerous loss component.
Acquisition of More Than home and pet personal lines from RSA
During December 2023 the Group signed an agreement to acquire the UK direct home and pet
personal lines insurance operations of RSA Insurance Group Limited (“RSA”). The acquisition is
expected to complete during the first half of 2024. The consideration payable at completion is £82.5
million, with a further potential payment of £32.5 million depending on the number of policies
successfully migrated to the Group. The acquisition will not include liabilities relating to existing
policies, which will remain with RSA. There is no impact on the results reported in these financial
statements as a result of the transaction.
2. Critical accounting judgements and estimates
In applying the Group’s accounting policies as described in the notes to the financial statements, theDirectors are required to make judgements (other than those involving estimations) that have asignificant impact on the amounts recognised and to make estimates and assumptions about thecarrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that areconsidered to be relevant, including where appropriate, weather-related factors. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognised in the period in which the estimate is revised if the revisionaffects only that period, or in the period of the revision and future periods if the revision affects bothcurrent and future periods.
Critical accounting judgements and estimates that are not impacted by the adoption of IFRS 17 will
be set out in full in the Group’s 2023 Annual Report. The following section sets out the key
judgements and estimates impacted as a result of the adoption of IFRS 17.
2a.

Critical accounting judgements in the application of IFRS 17

Premium allocation approach (‘PAA’)The Group applies the PAA to all of its insurance and reinsurance contracts.
The coverage period of insurance contracts is typically one year or less, including insurance contract
services arising from all premiums within the contract boundary. The Group does not consider the
existing products with more than 12 months coverage to be material. The Group’s insurance
contracts are therefore automatically eligible for the PAA.
However, the Group’s reinsurance contracts are not automatically eligible for the PAA given that thecoverage period is greater than one year. The Group has modelled the expected cashflows andreasonably possible future scenarios for its reinsurance contracts, and as a result expects that the47

measurement of the asset for remaining coverage for the group containing those contracts under
the PAA does not differ materially from the measurement that would be produced applying thegeneral model. Its reinsurance contracts are therefore eligible for the PAA.
The modelling of the cashflows associated with the Group’s reinsurance contracts, and reasonably
possible future scenarios, is a key area of judgement that impacts the PAA eligibility assessment andthe resulting measurement of and presentation of reinsurance contracts in these financial
statements.
Classification of the Group’s contracts with reinsurers as reinsurance contracts
A contract is required to transfer significant insurance risk in order to be classified as such.
Management reviews all terms and conditions of each such insurance and reinsurance contract inorder to be able to make this judgement. In particular, all reinsurance contracts (both excess of loss
and quota share contracts) held by the Group have been assessed and it has been concluded that allcontracts transfer significant insurance risk and have therefore been classified and accounted for as
reinsurance contracts within these financial statements.
Unit of account: combination of insurance contracts and separation of distinct components
The lowest unit of account in IFRS 17 is the contract and there is a presumption that a contract withthe legal form of a single contract would generally be considered a single contract in substance.
However, there might be certain facts and circumstances where legal form does not reflect thesubstance of the arrangement and separation of the contract is required, or alternatively
circumstances when contracts should be combined, such as when a set of insurance contracts withthe same or a related counterparty may achieve, or be designed to achieve, an overall commercial
effect.
Overriding the legal contract to reflect substance is not a policy choice; it is a significant judgement
requiring careful consideration of all relevant facts and circumstances. The following considerations,as set out by the IFRS 17 Transition Resource Group, are deemed relevant in assessing whether thecontracts should be separated, or alternatively, combined:•••

whether there is interdependency between the different risks covered
whether components lapse together, andwhether components can be priced and sold separately.

In addition, any cashflows related to promises to transfer distinct goods or services, other thaninsurance contract services, that are within the host insurance contract are separated andrecognised by applying IFRS 15. In determining whether there are such distinct components, thefollowing is considered:•••

whether the policyholder can benefit from the good or service on its own or together
with other resources available to the policyholder
whether the cashflows and risks associated with the good or services are highlyinterrelated with the cashflows and risks associated with the insurance components
in the contractwhether the Group provides a significant service in integrating the good or service
48

with the insurance components.
After separating any such distinct components, IFRS 17 is applied to all remaining components of the(host) insurance contract.
The Group has determined that, in applying these requirements to its insurance contracts:•••

The individual insurance policies contained in a ’multi-cover policy’ are treated as
separate contracts, given that the components can be priced and sold separately,
there is little interdependency between the risks covered, and the components canlapse separately
The cashflows associated with administration fees (for changes to the underlying
insurance policy), and instalment income (being the additional fees payable by apolicyholder associated with paying for an insurance contract over 12 months,
rather than in one up-front payment), are non-distinct given that the policyholder
cannot benefit from these services separately and the services are highlyinterrelated with the core insurance policy. These cashflows are therefore treatedas insurance revenue under IFRS 17. However, for the component of the insurance
policy that is underwritten outside the Group by a third party insurer, the Group is
performing an agency service on behalf of the third party insurer, and therefore
this component is treated as a separate component of revenue and accounted forunder IFRS 15
The cashflows associated with ancillary or ’add on’ products (which are sold within
the same set of contracts as the core product), are separated from the coreproduct in cases where the policyholder can benefit from the product on its own,
and where the cashflows are not highly interrelated with the insurancecomponents in the contract or the Group does not provide a significant service in
integrating the products.

In addition, the Group’s quota share reinsurance contracts contain profit commission arrangements.
Under these arrangements, there is a minimum guaranteed amount that the Group, as thepolicyholder, will always receive – either in the form of profit commission, or as claims, or anothercontractual payment irrespective of the insured event happening. The minimum guaranteedamounts have been assessed to be highly interrelated with the insurance component of thereinsurance contacts and are, therefore, non-distinct investment components which are notaccounted for separately. Given that the receipt and payment of these non-distinct investment
components do not relate to the provision of insurance services, the amounts are excluded from thenet reinsurance expenses in the Group’s income statement (i.e. both ceded reinsurance premiums
and ceded recoveries are presented net of the minimum guaranteed amount that the Group will
always receive).
Presentation of reinsurance ‘funds withheld’ contracts
The Group has a number of quota share reinsurance contracts that have funds withheld features,
whereby the quota share proportion of ceded premiums and related recoveries are retained by theGroup, and settled on a net basis at commutation. The only initial cashflows during the coverage
period are therefore the payment of any reinsurer margin.
49

Under IFRS 17, the reinsurance assets related to these funds withheld contracts are presented on acashflow basis i.e. the full proportional share of ceded premiums and recoveries is not presented ineither the Income Statement or the Statement of Financial Position.
2b.

Key sources of estimation uncertainty in the application of IFRS 17

Methods used to measure the risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation that is required for bearing theuncertainty about the amount and timing of cashflows that arises from non-financial risk as theinsurance contract is fulfilled. Because the risk adjustment represents compensation for uncertainty,
estimates are made on the degree of diversification benefits and expected favourable andunfavourable outcomes in a way that reflects the Group’s degree of risk aversion. The Groupestimates an adjustment for non-financial risk separately from all other estimates.
Applying a confidence level technique (value at risk (“VaR”)), the Group estimates the probability
distribution of the present value of the future cashflows from insurance contracts at each reporting
date and calculates the risk adjustment for non-financial risk as the excess of the value at risk at thetarget confidence level over the expected present value of the future cashflows.
The Group’s risk adjustment is set in a range between the 85th and 95th percentile, on a net of excess
of loss reinsurance basis. The level and estimate of risk adjustment required at reporting date ismade in a way that reflect the Group’s degree of risk aversion, taking into account both internal
factors (such as data quality and trends; diversification across portfolios) and external factors (suchas inflation and potential changes in Ogden rate) that are relevant at that point in time.
To determine the risk adjustments for non-financial risk for reinsurance contracts, the Group applies
these techniques both gross and net of excess of loss reinsurance and derives the amount of risk
being transferred to the reinsurer as the difference between the two results. The net of excess ofloss risk adjustment is allocated to quota share reinsurance contracts on a proportional basis.
The risk adjustment is calculated at the issuing entity level. Diversification benefit is included acrossportfolios within the entity, to reflect the diversification in contracts sold across entities.
The risk adjustment is then allocated down to each portfolio of contracts within the entity using a
spread VaR methodology to inform the allocation, to ensure coherence of the gross and excess ofloss reinsurance results for risk adjustment across the portfolios within an entity. Allocations of therisk adjustment to each underwriting year (annual cohort) of contracts within a portfolio isperformed manually, based on a systematic approach using management judgement. This typicallyinvolves allocating a higher proportion of the risk adjustment to the more recent underwriting years
that are less developed and therefore more uncertain, compared to the proportion of risk
adjustment allocated to older, more developed years.
Where a risk adjustment is required for the liability for remaining coverage due to facts andcircumstances indicating that contracts are onerous, this is derived using the risk adjustment for theearned portion of the reserves, adjusted for the unearned claims reserves to reflect the difference in
exposure/size of reserves and difference in drivers of risk in the reserves.

50

3. Insurance and financial risk
3a.

Insurance risk sensitivity analysis

The following sensitivity analysis shows the impact on profit for reasonably possible movements in
key assumptions with all other assumptions held constant. The correlation of assumptions will have asignificant effect in determining the ultimate impacts, but to demonstrate the impact due to changes
in each assumption, assumptions have been changed on an individual basis. It should be noted thatmovements in these assumptions are non-linear.
The sensitivities are shown for UK motor only, being the line of business where such sensitivities
could have a material impact at a Group level. The sensitivities are shown on a gross and net of
quota share reinsurance basis to illustrate the impacts on shareholder profit and equity before andafter risk mitigation from quota share reinsurance. The sensitivities (both gross and net) include theimpacts of movements in co-insurance profit commission, given that underwriting year loss ratios
including risk adjustment, are a direct input to the calculation of profit commission. Refer to note 8
to these financial statements for the accounting policy for co-insurance profit commission.
Odgen discount rate
The sensitivities reflect the impact on profit before tax and equity in 2023 for changes to the Ogden
discount rate from the current rate of minus 0.25%, with all other assumptions (including theabsolute value of risk adjustment) remaining unchanged.

£mOgden discount rate increase by 125 bps to +1.00%
Ogden discount rate increase by 75 bps to +0.50%
Ogden discount rate increase by 25 bps to 0.00%
Ogden discount rate decrease by 75 bps to -1.00%

Impact on
profit before
tax gross ofreinsurance
133.9
82.8
29.2
(104.4)

Impact on
profit before
tax net ofreinsurance
95.3
57.4
20.0
(70.2)

Impact on
equity grossofreinsurance
110.6
68.3
24.0
(86.3)

2023
Impact on
equity net
ofreinsurance
77.0
46.3
16.1
(56.6)The sensitivities do not reflect the full ultimate impacts of changes in the Ogden rate as some of the
impact will flow into future financial periods.
In addition, should the Ogden discount rate change in future periods, the impacts on profit before
tax and equity are likely to be larger than those set out above, as a result of including the impacts onclaims arising in relation to premium written and earned beyond 31 December 2023.
Risk adjustment
The sensitivities reflect the impact on profit before tax in 2023 and equity as at the end of 2023 forchanges in the selection of the UK motor risk adjustment confidence level at 31 December 2023,
with all other assumptions remaining unchanged.

51

£m

Impact on
profit before
tax gross ofreinsurance(54.4)
45.6
108.8

Risk adjustment increase to 95th percentile
Risk adjustment decrease to 90th percentile
Risk adjustment decrease to 85th percentile

Impact on
profit before
tax net ofreinsurance(25.6)
24.1
57.6

Impact on
equity grossofreinsurance(45.6)
38.3
91.2

2023
Impact on
equity net
ofreinsurance(20.3)
19.3
46.0

Undiscounted loss ratios, including risk adjustment
The sensitivities reflect the impact on profit before tax in 2023 and equity as at the end of 2023, of achange in the booked loss ratios for individual underwriting years (UWY) as at 31 December 2023, with allother assumptions remaining unchanged.
UWY 2020
impact on:

UWY 2021
impact on:

UWY 2022
impact on:

2023
UWY 2023
impact on:

PBT

EquityPBT

EquityPBT

EquityPBT

Increase of 1%: gross of reinsurance(19.8)(15.2)(13.9)(11.1)(14.5)(12.6)

(9.6)

(8.4)

Increase of 3%: gross of reinsurance(59.3)(45.7)(41.7)(33.4)(43.4)(37.7)(28.7)(25.3)

Increase of 5%: gross of reinsurance(98.9)(76.1)(69.5)(55.6)(72.3)(62.9)(47.8)(42.2)

Decrease of 1%: gross of reinsurance

19.8

15.2

13.9

11.1

14.5

12.6

9.6

8.4

Decrease of 3%: gross of reinsurance

59.3

45.7

41.7

33.4

43.4

37.7

28.7

25.3

Decrease of 5%: gross of reinsurance

98.9

76.1

69.5

55.6

72.3

62.9

47.8

42.2

Increase of 1%: net of reinsurance(19.8)(15.2)

(6.4)

(5.0)

(4.4)

(3.6)

(3.5)

(2.8)

Increase of 3%: net of reinsurance(59.3)(45.7)(19.1)(15.1)(13.1)(10.8)(10.4)(8.5)

Increase of 5%: net of reinsurance(98.9)(76.1)(29.0)(22.8)(21.8)(18.0)(17.3)(14.2)

Decrease of 1%: net of reinsurance

19.8

15.2

7.0

5.5

4.4

3.6

3.4

2.8

Decrease of 3%: net of reinsurance

59.3

45.7

27.3

21.7

13.1

10.8

10.4

8.5

Decrease of 5%: net of reinsurance

98.9

76.1

49.0

39.0

24.1

20.0

19.6

16.3

£m

Equity*2 ‘Booked’ loss ratios are undiscounted underwriting year loss ratios, including risk adjustment.

52

3b.

Financial risk: Interest rate sensitivity analysis

The impact on profit and loss (before tax) and equity arising from the impact of 100 basis point and200 basis point increases and decreases in interest rates on insurance contract liabilities andreinsurance contract assets, is as follows:
31 December 2023
£m

Increase of 100 basis points

Impact on profit
before tax grossof reinsurance
22.2

Decrease of 100 basis points(24.3)

Impact on profit
Impact on
before tax net of equity gross ofreinsurance
reinsurance
15.4
60.1
(17.0)

Impact on
equity net ofreinsurance
49.7(68.4)(57.4)

Increase of 200 basis points

42.7

29.5

113.9

93.8

Decrease of 200 basis points(51.2)(36.2)(148.5)(125.9)The impact on profit before tax of a 100 basis and 200 basis point move in relation to investments
and cash is not significant, at £15.2 million and £30.4 million respectively. The impact on equity ismore significant, at £81.7 million and £163.4 million respectively, as a result of the gains and losseson the majority of the financial investment portfolio being reflected in Other Comprehensive
Income.
Sensitivities for the 2022 comparative period are not significantly different to those provided above.

4. Operating segments
The Group has four reportable segments, as described below. These segments represent the
principal split of business that is regularly reported to the Group’s Board of Directors, which isconsidered to be the Group’s chief operating decision maker in line with IFRS 8 Operating Segments.
UK Insurance
The segment consists of the underwriting of Motor, Household, Pet and Travel insurance and otherproducts that supplement these insurance policies within the UK. It also includes the generation ofrevenue from additional products and fees from underwriting insurance in the UK. The Directors
consider the results of these activities to be reportable as one segment as the activities carried out ingenerating the revenue are not independent of each other and are performed as one business. This
mirrors the approach taken in management reporting.
International Insurance
The segment consists of the underwriting of car and home insurance and the generation of revenue
from additional products and fees from underwriting car insurance outside of the UK. It specificallycovers the Group operations Admiral Seguros in Spain, ConTe in Italy, L’olivier Assurance in Franceand Elephant Auto in the US. None of these operations are reportable on an individual basis, basedon the threshold requirements in IFRS 8.

53

Admiral Money
The segment relates to the Admiral Money business launched in 2017, which provides unsecured
personal loans and car finance products in the UK, primarily through the comparison channel, credit
scoring applications and direct channels.
Other
The ‘Other’ segment is designed to be comprised of all other operating segments that are notseparately reported to the Group’s Board of Directors and do not meet the threshold requirements
for individual reporting. It includes the results of Admiral Pioneer and compare.com prior to its
disposal on 27 March 2023.
Taxes are not allocated across the segments and, as with the corporate activities, are included in thereconciliation to the Consolidated Income Statement and Consolidated Statement of Financial
Position.
An analysis of the Group’s revenue and results for the year ended 31 December 2023, by reportablesegment, is shown below. The accounting policies of the reportable segments are materially consistent
with those presented in the notes to the financial statements for the Group.
Year ended 31 December 2023
UK Insurance£mInternational
Insurance£mAdmiralMoney£m

Turnover*1

3,776.0

894.9

48.5

Insurance revenue

2,596.8

842.6

92.1
—

46.7

—

3,486.1

Insurance revenue net of XoL

2,517.3

811.8

—

44.4

—

Insurance expenses(559.6)(249.4)—(27.9)—

3,373.5(836.9)(1,560.2)(18.4)
4.3
383.4
55.2
—
157.9

(565.2)(22.1)
0.6(24.3)
4.3
—
2.0

—

—

(2,158.5)

—
—
—
—
66.4
(56.2)(33.1)
0.1—(16.5)
0.3
0.2(12.4)

—
—
—
(3.2)
1.5
—

(40.4)
4.9
342.6
56.6
68.1
91.3

596.5

(18.0)

10.2(28.4)

(1.7)

558.6

Insurance claims net of XoL
Quota share reinsurance result
Net movement in onerous loss component
Underwriting result
Net investment income *2
Net interest income from financial services
Net other revenue and operating expenses
Segment profit/(loss) before tax*4

Other central revenue and expenses, including share scheme charges
Investment and interest income
Finance costs
Consolidated profit before tax
Taxation expense
Consolidated profit after tax

Other
£m

Eliminations*3
£m

Total
£m

—

4,811.5(101.8)
4.6(18.6)
442.8(105.6)337.2*4

Revenue and results for the corresponding reportable segments for the year ended 31 December
2022 are shown below.

54

Year ended 31 December 2022
UK Insurance£mInternational
Insurance£mAdmiralMoney£m

Turnover*1

2,784.3

795.9

Insurance revenue

2,174.2

Insurance revenue net of XoL

2,115.7

Other£m

Eliminations*3
£m

Total
£m

41.7
32.7

(0.3)
—

3,680.6

750.0

59.0
—

732.0

—

31.3

—

(254.6)—(24.8)—

2,879.0(755.1)(1,466.6)
104.5
5.1
283.0
18.6
—
208.1

(547.1)13.9(1.0)(56.8)
1.1
—
(0.5)

—

—

(2,031.2)

—
—
—
—
44.6
(42.5)(17.5)(1.0)—(12.0)
0.1
—
(5.6)

—
—
—
(2.2)
1.5
—

117.4
4.1
214.2
17.6
46.1
159.5

509.7

(56.2)

2.1(17.5)(0.7)

Insurance expenses(475.7)

Insurance claims net of XoL
Quota share reinsurance result
Net movement in onerous loss component
Underwriting result
Net investment income *2
Net interest income from financial services
Net other revenue and operating expenses
Segment profit/(loss) before tax*4

2,956.9

437.4

Other central revenue and expenses, including share scheme charges*4
Investment and interest income
Finance costs
Consolidated profit before tax
Taxation expense
Consolidated profit after tax(74.9)
10.1(11.4)
361.2(75.9)
285.3*1 Turnover is an Alternative Performance Measure presented before intra-group eliminations. Refer to the glossary and note 13 for further information.
*2 Net Investment income is reported net of impairment of financial assets, in line with management reporting.
*3 Eliminations are in respect of the intra-group trading between the Group’s comparison and UK and International insurance entities and intra-groupinterest charges related to the UK Insurance and Admiral Money segment.
*4 Segment results are presented net of gross share scheme charges, and any quota share reinsurance recoveries; these net share scheme charges
are presented within ‘Other central revenue and expenses, including share scheme charges’ in line with internal management reporting.

5.

Insurance Service result

5a.

Accounting policies

The full accounting policies will be provided in the Group’s 2023 Annual Report. The information
below reflects the Group’s key accounting policy choices under IFRS 17, and application thereof.
Accounting policy choices
Area

IFRS 17 options

Adopted approachPremium allocation
approach (‘PAA’)eligibility

Subject to specified criteria, the PAA
can be adopted as a simplified
approach to the IFRS 17 generalmodel.

Coverage period for the Group’s
insurance contracts assumed is one
year or less and so qualifies
automatically for PAA.
Reinsurance contracts (both XoL andquota share) include contracts witha coverage period greater than one
year. However, there is no material
difference in the measurement of
the asset for remaining coverage
between PAA and the general55

model, therefore these qualify for
PAA.
Insurance acquisition
cashflows for
insurance contracts
issuedWhere the coverage period of allcontracts within a group is not longer
than one year, insurance acquisition
cashflows can either be expensed as
incurred, or allocated, using asystematic and rational method, togroups of insurance contracts(including future groups containing
insurance contracts that are expected
to arise from renewals) and thenamortised over the coverage periodof the related group. For groups
containing contracts longer than one
year, insurance acquisition cashflows
must be allocated to related groups of
insurance contracts and amortisedover the coverage period of therelated group.

The Group’s insurance contracts are
all one year or less. The Group has
therefore taken the option to
expense acquisition costs as
incurred.

Liability for Remaining
Coverage (‘LRC’),adjusted for financial
risk and time value ofmoney

Where there is no significant
financing component in relation to
the LRC, or where the time between
providing each part of the services
and the related premium due date is
no more than a year, an entity is not
required to make an adjustment for
accretion of interest on the LRC.

There is no allowance made foraccretion of interest on the LRC
given that the premiums arereceived within one year of thecoverage period.

Liability for Incurred
Claims (‘LIC’) adjusted
for time value ofmoney

For PAA groups, where claims ordirectly attributable insurance
expenses are expected to be paid
within a year of the date that theclaim is incurred, it is not required toadjust these amounts for the timevalue of money.

For some claims, for example within
the travel product line in the UK,
and other immaterial product lines
across the Group, the incurredclaims are expected to be paid out
in less than one year.
Similarly, the majority of directly
attributable insurance expenses are
expected to be settled within one
year. For these claims andexpenses, no adjustment is made forthe time value of money.
In addition, given the impact of
discounting outstanding claims in
the Group’s US insurance operation
is immaterial, no discounting has
been applied.
For all other business, the LIC is
adjusted for the time value ofmoney.

56

Insurance financeincome and expense

There is an option to disaggregatepart of the movement in the LIC
resulting from changes in discountrates, and present this in Other
Comprehensive Income (‘OCI’).

The impact on LIC of changes in
discount rates will be captured
within OCI, in line with theaccounting for assets backing theinsurance claims liabilities.

Discount rates
A bottom-up approach has been applied in the determination of discount rates. Under thisapproach, the discount rate is determined as the risk-free yield adjusted for differences in liquidity
characteristics between the financial assets used to derive the risk-free yield and the relevant
liability cashflows (known as an illiquidity premium).
The following weighted average rates, based on the yield curves derived using the above
methodology, were used to discount the liability for incurred claims at the end of the current andprior periods:
31 December 2023
UK Insurance
International (European motor)

5b.

1 year
5.4%
4.0%

3 years
4.3%
3.1%

5 years
4.0%
3.0%

31 December 2022

10 years
3.9%
3.0%

1 year
5.1%
3.8%

3 years
5.0%
3.9%

5 years
4.7%
3.8%

10 years
4.4%
3.7%

Insurance revenue

Insurance revenue for the corresponding reportable segments for the period ended 31 December
2023 are shown below.

Insurance revenue related movement in liability forremaining coverage

UK Motor£m

UK Non-motor£mInt. Insurance
£m

Other
£m

31 December 2023
Total Group£m

2,250.2

346.6

842.6

46.7

3,486.1

Insurance revenue for the corresponding reportable segments for the period ended 31 December
2022 are shown below.

Insurance revenue related movement in liability
for remaining coverage

UK Motor£m

UK Non-motor£mInt. Insurance£m1,909.7

264.5

750.0

31 December 2022 (restated)
Other
Total Group
£m
£m

32.7

2,956.9

The Group’s share of its insurance business was underwritten by Admiral Insurance (Gibraltar) Limited,
Admiral Insurance Company Limited, Admiral Europe Compañia Seguros (‘AECS’) and ElephantInsurance Company. The majority of contracts are short term in duration, lasting for between 6 and 12
months.

57

5c.

Insurance service expenses

Insurance service expenses for the corresponding reportable segments for the period ended 31
December 2023 are shown below.

Incurred claims
Claims incurred in the period
Changes to liabilities for incurred claims
Total incurred claims
Movement in onerous contracts
Directly attributable expenses
Administration expenses
Acquisition expenses
Insurance expenses
Share scheme expenses
Total insurance expenses and share scheme
expenses
Total Insurance service expenses

UK Motor£m

UK Non-motor£mInt. Insurance
£m

Other
£m

31 December 2023
Total Group£m

1,755.5(406.9)1,348.6(18.6)

255.0
(9.1)
245.9
(2.4)

618.2
(21.3)
596.9
(2.4)

36.4
(3.3)
33.1
—

2,665.1(440.6)2,224.5(23.4)

377.8
73.4
451.2
43.2

73.5
34.8
108.3
2.4

184.0
65.4
249.4
8.9

19.0
8.9
27.9
0.8

654.3
182.5
836.8
55.3

494.4

110.7

258.3

28.7

892.1

1,824.4

354.2

852.8

61.8

3,093.2

Insurance service expenses for the corresponding reportable segments for the period ended 31
December 2022 are shown below.

Incurred claims
Claims incurred in the period
Changes to liabilities for incurred claims
Total incurred claims
Movement in onerous contracts
Directly attributable expenses
Administration expenses
Acquisition expenses
Insurance expenses
Share scheme expenses
Total insurance expenses and share scheme
expenses
Total Insurance service expenses

31 December 2022 (restated)
Other
Total Group£m£m

UK Motor£m

UK Non-motor£mInt. Insurance£m

1,620.4(437.2)
1,183.2(19.1)

214.8(16.9)
197.9
0.4

516.0
37.2
553.2
(3.9)

21.1
(3.6)
17.5
—

2,372.3(420.5)
1,951.8(22.6)

327.7
61.9
389.6
39.4

54.6
31.5
86.1
4.2

182.5
72.1
254.6
9.4

16.0
8.7
24.7
—

580.8
174.2
755.0
53.0

429.0

90.3

264.0

24.7

808.0

1,593.1

288.6

813.3

42.2

2,737.2

58

5d. Net expenses from reinsurance contracts held
Net expenses from reinsurance contracts held for the corresponding reportable segments for theperiod ended 31 December 2023 are shown below.
UK Motor UK Non-motor£m£m

Allocation of reinsurance premiums
Amounts recoverable from reinsurers for incurred insurance
service expenses
Incurred claims
Changes to liabilities for incurred claims
Net expense from reinsurance contracts excluding movement inonerous loss component
Other reinsurance recoveries including movement in loss recovery
component
Net expenses/(income) from reinsurance contracts held

31 December 2023
Total
Other
Group
£m
£m

Int.
Insurance
£m

93.6

49.5

190.0

2.2

335.3

(173.8)135.1(52.0)(1.4)(270.3)
95.9

—
(0.1)

(496.1)
229.5

54.9

(3.9)

15.6

2.1

68.7

14.5

2.2

1.7

—

18.4

69.4

(1.7)

17.3

2.1

87.1

Net expenses from reinsurance contracts held for the corresponding reportable segments for theperiod ended 31 December 2022 are shown below.

Allocation of reinsurance premiums
Amounts recoverable from reinsurers for incurred insurance
service expenses
Incurred claims
Changes to liabilities for incurred claims
Net expense from reinsurance contracts excluding movement inonerous loss component
Other reinsurance recoveries including movement in loss recovery
component

31 December 2022 (restated)
Other
Total Group£m£m

UK Motor£m

UK Non-Motor£mInt. Insurance
£m

69.8

44.4

161.3

1.4

276.9

(182.8)136.7(43.5)
0.8(232.6)
64.2

0.2
—

(458.7)
201.7

23.7

1.7

(7.1)

1.6

19.9

13.9

(0.3)

4.9

—

18.5

37.6

1.4

(2.2)

1.6

38.4

Net expenses/(income) from reinsurance contracts held

5e. Finance (expenses)/income from insurance contracts held and reinsurance contracts issued

31 December 2023£m

31 December 2022£m

Insurance finance expenses from insurance contracts issued(94.5)(52.0)

Finance expenses from insurance contracts issued(94.5)(52.0)

Insurance finance income from reinsurance contracts held

28.9

13.6

Finance income from reinsurance contracts issued

28.9

13.6

Net finance expense from insurance / reinsurance contracts issued(65.6)(38.4)(Losses)/gains due to changes in discount rates – insurance contracts(128.1)

274.0

Gains/ (losses) due to changes in discount rates – reinsurance contracts

49.2(96.2)

Total gains before tax recognised in other comprehensive income(78.9)

177.8

Amounts recognised through the income statement

Amounts recognised in other comprehensive income

59

5f. Insurance Liabilities and Reinsurance assets(i) Analysis of recognised amounts
2023

2022

Assets£m

Liabilities
£m

Net
£m

Assets£m

Liabilities
£m

Net
£m

UK Motor—

3,315.7

3,315.7—

2,953.3

2,953.3

UK Non-motor

—

353.7

353.7

—

267.7

267.7

International Motor

—

862.5

862.5

—

776.7

776.7

Other
Total insurance contracts issued

—
—

49.8
4,581.7

49.8
4,581.7——

27.7
4,025.4

27.7
4,025.4

UK Motor

519.9

—

519.9

457.5

—

457.5

UK Non-Motor

191.6

—

191.6

126.5

—

126.5

International Motor

481.8

—

481.8

432.2

—

432.2

—

(1.4)

(1.4)

—

(0.8)

(0.8)

1,193.3(1.4)

1,191.9

1,016.2(0.8)

1,015.4

UK Motor—

2,795.8

2,795.8—

2,495.8

2,495.8

UK other

—

162.1

162.1

—

141.2

141.2

International Motor

—

380.7

380.7

—

344.5

344.5

Other

—

51.2

51.2

—

28.5

28.5

Total insurance contracts issued—

3,389.8

3,389.8—

3,010.0

3,010.0

Insurance contracts issued

Reinsurance contracts held

Other
Total reinsurance contracts heldNet60

(ii) Roll-forward of net asset or liability for insurance contracts issued
UK Motor
The following tables reconcile the opening and closing balances of the LRC and LIC for UK Motor.
2023£ million
Opening assets
Opening liabilities
Net opening balance
Insurance revenue
Insurance service expenses
Incurred claims and insurance
service expenses
Changes to liabilities for incurredclaims
Losses and reversals of losses on
onerous contracts
Insurance service result
Insurance finance income/(expense)
recognised in profit or loss
Insurance finance income/(expense)
recognised in OCI
Total changes in comprehensive
incomeOther changes
Cashflows
Premiums received
Claims and other insurance service
expenses paid
Other movements
Total cashflows
Net closing balance
Closing assets
Closing liabilities

Liability for remaining coverage
Excludingloss
component

Losscomponent—(534.1)(534.1)
2,250.2

—
(8.1)
(8.1)
—

—

Liability for incurred claims

Total

Total

Present valueof future
cashflows

Risk adj. fornonfinancial risk

Total

Total

—
(542.2)(542.2)2,250.2—(1,984.5)(1,984.5)——(426.6)(426.6)——(2,411.1)(2,411.1)——(2,953.3)(2,953.3)
2,250.2——(2,105.1)(144.8)(2,249.9)(2,249.9)

—

—

—

140.1

266.8

406.9

406.9

—
2,250.2

18.6
18.6

18.6
2,268.8—(1,965.0)

—
122.0

—
(1,843.0)

18.6
425.8

—

(4.1)

(4.1)

(59.0)(12.3)(71.3)(75.4)

—

(9.4)

(9.4)

(60.5)(27.0)(87.5)(96.9)

2,250.2—

5.1—

2,255.3—(2,084.5)
—

82.7
—

(2,001.8)
—

253.5
—

(2,482.1)—(2,482.1)———(2,482.1)——(2,482.1)(766.0)—(766.0)

—
—
—
(3.0)
—
(3.0)

—
—
(2,482.1)(769.0)—(769.0)1,866.2—
1,866.2(2,202.8)—(2,202.8)———(343.9)—(343.9)1,866.2—
1,866.2(2,546.7)—(2,546.7)

1,866.2—(615.9)(3,315.7)—(3,315.7)

61

2022

£ million
Opening assets
Opening liabilities
Net opening balance
Insurance revenue
Insurance service expenses
Incurred claims and insurance service
expenses
Changes to liabilities for incurredclaims
Losses and reversals of losses on
onerous contracts
Insurance service result
Insurance finance income/(expense)
recognised in profit or loss
Insurance finance income/(expense)
recognised in OCI
Total changes in comprehensive
incomeOther changes
Cashflows
Premiums received
Claims and other insurance service
expenses paid
Other movements
Total cashflows
Net closing balance
Closing assets
Closing liabilities

Liability for remaining coverage

Liability for incurred claims

Total

Excludingloss
component

Losscomponent

Total

Present
value offuturecashflows

Total

Total

—
(473.1)(473.1)
1,909.7—(28.8)(28.8)——(501.9)(501.9)1,909.7—(1,993.7)(1,993.7)——(507.8)(507.8)——(2,501.5)(2,501.5)——(3,003.4)(3,003.4)
1,909.7———(1,836.9)(212.5)(2,049.4)(2,049.4)

—

—

—

175.6

261.6

437.2

437.2

—
1,909.7

19.1
19.1

19.1
1,928.8—(1,661.3)

—
49.1

—
(1,612.2)

19.1
316.6

—

(1.8)

(1.8)

(36.5)(8.4)(44.9)(46.7)

—

3.4

3.4

191.9

40.5

232.4

235.8

1,909.7—

20.7—

1,930.4—(1,505.9)
(1.7)

81.2
—

(1,424.7)
(1.7)

505.7
(1.7)

(2,000.8)—(2,000.8)———(2,000.8)

—
30.1

—
—

—
30.1

1,516.8———

1,516.8—

1,516.8
30.1(1,970.7)(534.1)—(534.1)

—
(8.1)
—
(8.1)

(1,970.7)(542.2)—(542.2)

1,516.8(1,984.5)—(1,984.5)—(426.6)—(426.6)

1,516.8(2,411.1)—(2,411.1)(453.9)(2,953.3)—(2,953.3)

Risk adj. fornon-financial
risk

62

(iii) Roll-forward of net asset or liability for reinsurance contracts held
UK Motor
The following tables reconcile the opening and closing balances of the ARC and AIC for UK Motor.
2023£ million
Opening assets
Opening liabilities
Net opening balance
Allocation of reinsurance premiums
Amounts recoverable from reinsurers
for incurred claims
Incurred claims
Changes to liabilities for incurred claims
Changes in the loss recovery component
Net income/ (expense) from reinsurance
contracts held
Reinsurance finance income/(expense)
Recognised in profit or loss
Reinsurance finance income/(expense)
Recognised in OCI
Total changes in comprehensive income
Cashflows
Premiums paid
Claims recoveries
Recoveries as a result of commutations
Total cashflows
Net closing balance
Closing assets
Closing liabilities

Asset for remaining coverage

Asset for incurred claims

Excluding loss
component

Lossrecovery
component

Total

Present
value offuturecashflows

Total

Total

20.2
—
20.2
(93.6)

6.3
—
6.3
—

26.5
—
26.5
(93.6)

255.4
—
255.4
—

175.6
—
175.6
—

431.0
—
431.0
—

457.5
—
457.5
(93.6)—————(14.5)——(14.5)

96.7(43.1)—

77.1(92.0)—

173.8(135.1)—173.8(135.1)(14.5)(93.6)(14.5)(108.1)

53.6(14.9)

38.7(69.4)

—

3.2

3.2

9.4

7.5

16.9

20.1

—
(93.6)

7.3
(4.0)

7.3
(97.6)

12.5
75.5

15.4
8.0

27.9
83.5

35.2
(14.1)

94.2
—
—
94.2
20.8
20.8
—

—
—
—
—
2.3
2.3
—

94.2
—
—
94.2
23.1
23.1
—

—
(2.2)
(15.5)(17.7)
313.2
313.2
—

—
—
—
—
183.6
183.6
—

—
(2.2)
(15.5)(17.7)
496.8
496.8
—

94.2
(2.2)
(15.5)
76.5
519.9
519.9
—

Risk adj. fornon-financial
risk

63

2022

Asset for remaining coverage£ million
Opening assets
Opening liabilities
Net opening balance
Allocation of reinsurance premiums
Amounts recoverable from reinsurers
for incurred claims
Incurred claims
Changes to liabilities for incurred claims
Changes in the loss recovery component
Net income/ (expense) from reinsurance
contracts held
Reinsurance finance income/(expense)
recognised in profit or loss
Reinsurance finance income/(expense)
recognised in OCI
Total changes in comprehensive income
Other changes
Cashflows
Premiums paid
Amounts received
Total cashflows
Net closing balance
Closing assets
Closing liabilities(iv)

Excluding loss
component

Lossrecovery
component

24.7
—
24.7
(69.8)

21.7
—
21.7
—

—
—
—

Asset for incurred claims

Total

Present valueof future
cashflows

Risk adj. fornonfinancial risk

Total

Total

46.4
—
46.4
(69.8)

250.7
—
250.7
—

203.1
—
203.1
—

453.8
—
453.8
—

500.2
—
500.2
(69.8)——(13.9)——(13.9)

91.9(36.7)—

90.9(100.0)—182.8(136.7)—182.8(136.7)(13.9)(69.8)(13.9)(83.7)

55.2

(9.1)

46.1

(37.6)

—

1.3

1.3

5.1

3.9

9.0

10.3

—
(69.8)—(2.8)(15.4)—(2.8)(85.2)—(44.8)
15.5
1.8(22.3)(27.5)—(67.1)(12.0)
1.8(69.9)(97.2)
1.8

65.3
—
65.3
20.2
20.2
—

—
—
—
6.3
6.3
—

65.3
—
65.3
26.5
26.5
—

—
(12.6)(12.6)
255.4
255.4
—

—
—
—
175.6
175.6
—

—
(12.6)(12.6)
431.0
431.0
—

65.3
(12.6)
52.7
457.5
457.5
—

Claims development

The tables below illustrate how estimates of cumulative claims for UK Motor have developed overtime on a gross and net of reinsurance basis, for each underwriting year, and reconciles the
cumulative claims to the amount included in the Statement of Financial Position.

64

Gross claims development
Financial year ended 31 December 2023
Underwriting year

UK Motor (core)
At end of year one
At end of year two
At end of year three
At end of year four
At end of year fiveAt end of year six
At end of year seven
At end of year eightAt end of year nine
Ten years later
Gross best estimates of
undiscounted claims
Cumulative gross claims
paid
Gross undiscounted
best estimate liabilities
Risk adjustment(undiscounted)
Effect of discounting

2013& prior
£m

2014
£m

2015
£m

2016
£m

2017
£m

2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

2023
£m

Total
£m

382
675
659
689
643
635
619
604
593
590

394
701
707
680
636
619
606
594
585

436
829
788
727
713
690
656
652

552
1,144
994
947
912
890
865

686
1,175
1,109
1,064
1,008
1,000

701
1,067
1,010
996
981

552
985
954
921

688
1,326
1,294

845
1,584

973

3,225

590

585

652

865

1,000

981

921

1,294

1,584

973

12,670(3,075)

(576)

(560)

(616)

(747)

(893)

(770)

(662)

(826)

(971)

(395)

(10,091)

150

14

25

36

118

107

211

259

468

613

578

2,579
411
(537)

Gross claims liabilities
Ancillary claims andexpense liabilities

2,453
94

UK Motor Gross
liabilities for incurredclaims2,547

65

Claims development, net of XoL reinsurance
Financial year ended 31 December 2023
Underwriting year

UK Motor (core)
At end of year one
At end of year two
At end of year three
At end of year four
At end of year fiveAt end of year six
At end of year seven
At end of year eightAt end of year nine
Ten years later
Net of XoL best
estimates of
undiscounted claims
Cumulative claims
paid
Net of XoL
undiscounted best
estimate liabilities
Risk adjustment(undiscounted)
Effect of discounting
Net of XoL claims
liabilities
Ancillary claims
liabilities andexpenses
UK Motor Net of XoL
liabilities for incurredclaims2013 &
prior
£m

2014
£m

2015
£m

2016
£m

2017
£m

2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

2023
£m

Total
£m

373
659
644
659
623
619
606
597
589
589

378
682
667
637
607
599
586
579
577

427
783
743
692
677
663
640
635

510
1,053
917
883
860
840
820

646
1,123
1,053
1,024
974
978

675
1,033
986
969
950

520
949
927
892

661
1,292
1,257

825
1,550

951

3,190

589

577

635

820

978

950

892

1,257

1,550

951

12,389(3,075)

(576)

(560)

(616)

(747)

(893)

(770)

(662)

(826)

(971)

(395)

(10,091)

115

13

17

19

73

85

180

230

431

579

556

2,298
331
(420)
2,209

94

2,303

66

Claims development, net of reinsurance
Financial year ended 31 December 2023
Underwriting year

2013
&
prior
£m

UK Motor (core)
At end of year one
At end of year two
At end of year three
At end of year four
At end of year fiveAt end of year six
At end of year seven
At end of year eightAt end of year nine
Ten years later
Net best estimates of
undiscounted claims
Cumulative net
claims paid
Net undiscounted
best estimate
liabilities
Risk adjustment(undiscounted)
Effect of discounting
Net claims liabilities

2014
£m

2015
£m

2016
£m

2017
£m

2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

2023
£m

Total
£m

373
659
644
659
623
619
606
597
589
589

378
682
667
637
607
599
586
579
577

427
783
743
692
677
663
640
635

493
1,016
886
853
830
811
793

625
1,086
1,018
990
957
944

626
1,033
986
969
950

520
949
927
892

657
1,259
1,239

762
1,442

939

3,190

589

577

635

793

944

950

892

1,239

1,442

939

12,190(3,076)

(576)

(560)

(616)

(719)

(864)

(770)

(662)

(826)

(971)

(395)

(10,035)

114

13

17

19

74

80

180

230

413

471

544

2,155
172
(365)
1,962

Ancillary claims
liabilities and expenses

88

UK Motor Net
liabilities for incurredclaims2,050(i)

UK Motor Loss ratios and Changes to liabilities for incurred claims

The table below shows the development of UK Motor Insurance loss ratios for the past threefinancial periods, presented on an underwriting year basis, both using undiscounted amounts(i.e. cashflows) and discounted amounts.
31 December
UK Motor Insurance loss ratio development–- undiscounted, gross net of excess of loss
reinsurance

2021

2022

2023

Underwriting year
2018
2019
2020
2021
2022
2023

73%
73%
68%
95%
—
—

68%
71%
65%
91%
104%
—

65%
67%
58%
86%
96%
94%

*Booked undiscounted loss ratios presented from the transition date of IFRS 17 (1 January 2022) onwards

67

31 December
UK Motor Insurance loss ratio development – discounted*, gross net of excess of loss
reinsurance

2021

2022

2023

Underwriting year
2018
2019
2020
2021
2022
2023

71%
71%
67%
92%
—
—

67%
69%
63%
86%
97%
—

64%
65%
57%
81%
88%
86%

* Loss ratios using discounted locked-in curves, excluding finance expenses are presented from the transition date of IFRS 17 (1 January2022) onwards

The following table analyses the impact of movements in changes to liabilities from incurred claims
by underwriting year on a gross and net of excess of loss reinsurance basis for UK Motor.
31 December 2023£m

31 December 2022
(restated)£m2018 & prior

91.5

262.4

2019

61.4

34.2

2020
2021

84.4
56.1

2022

98.2
76.4
79.4

2023

—

—

406.9

437.2

2018 & prior

80.6

187.2

2019

65.0

29.0

2020

97.7

62.8

2021
2022

80.1
69.4

48.2
—

Gross
Underwriting year

Total UK motor gross changes to liabilities for incurred claims
Net—

Underwriting year2023
Total UK motor net of excess of loss changes to liabilities for incurred claims

—

—

392.8

327.2

68

6.

Investment income and finance costs

6a. Investment return
31 December
2023£m

31 December
2022£m

At EIR

Other

Total

At EIR

Other

Total

On assets classified as FVTPL
On assets classified as FVOCI*1*3
On assets classified as amortised costs*1

—
77.0
4.1

43.3
(3.6)
—

43.3
73.4
4.1

—
50.3
2.0

8.4
2.3
—

8.4
52.6
2.0

Net unrealised losses
Unrealised (loss) / gain on forward contracts
Share of associate profit/ loss
Interest receivable on cash and cash equivalents*1
Total investment and interest income *2

—
—
—
81.1

(0.2)
(1.3)
3.6
41.8

(0.2)
(1.3)
3.6
122.9

—
—
—
52.3

0.5
(0.1)
1.2
12.3

0.5
(0.1)
1.2
64.6

Investment return*1 Interest received during the year was £76.8 million (2022: £58.7 million).
*2 Total investment return excludes £3.2 million of intra-group interest (2022: £2.2 million).
*3 Realised losses on sales of debt securities classified as FVOCI are £0.9 million (2022: £2.2 million gain).

6b. Finance costs
31 December
2023£m

31 December
2022£mInterest payable on subordinated loan notes and other credit facilities*1*2
Interest payable on lease liabilities
Interest recoverable from co and re-insurers

18.5
2.0
(0.4)

11.5
2.0
(1.5)

Total finance costs

20.1

12.0

*1 Interest paid during the year was £20.5 million (2022: £13.4 million).
*2 See note 7e for details of credit facilities.

Finance costs represent interest payable on the £305.1 million (2022: £200.0 million) subordinatednotes and other financial liabilities.
Interest payable on lease liabilities represents the unwinding of the discount on lease liabilities
under IFRS 16 and does not result in a cash payment.
6c. Expected credit losses
31 December
2023£m

31 December
2022£m

Expected credit (gains) on financial investments
Expected credit losses on Loans and advances to customers*1

(2.5)
33.5

(1.8)
20.7

Total expense for expected credit losses

31.0

18.9

Note

*1 Includes £15.0 million (2022: £7.2 million) of write-offs, with total movement in the expected credit loss provision being £33.5 million(2022: £20.7 million).

69

6d. Financial assets and liabilities
The Group’s financial assets and liabilities can be analysed as follows:

31 December
2023£m

31 December
2022(restated)£m

Money market funds

587.5

706.5

Other funds*1

301.3

188.8

Derivative financial instruments

17.6

33.0

Equity Investments (designated FVTPL)

12.4

6.4

Financial investments measured at FVTPL

918.8

934.7

Financial investments classified as FVOCICorporate debt securities
Government debt securities
Private debt securities

2,040.6
519.6
242.7

1,701.2
479.8
166.6

Equity investments (designated FVOCI)

2,802.9
23.0

2,347.6
25.1

2,825.9

2,372.7

116.7

101.4

1.0

2.4

3,862.4

3,411.2

Other financial assets (measured at amortised cost)
Insurance receivables
Trade and other receivables

272.7
75.0

187.6
87.6

Insurance and other receivables
Loans and advances to customers (note 7)
Cash and cash equivalents

347.7
879.4
353.1

275.2
823.9
297.0

5,442.6

4,807.3

315.2
759.6
55.0
—

204.4
714.7
20.0
—

Subordinated and other financial liabilities
Trade and other payables
Lease liabilities

1,129.8
305.8
81.2

939.1
254.9
88.5

Total financial liabilities

1,516.8

1,282.5

Financial assets measured at amortised cost
Deposits with credit institutions
Investment in Associates
Total financial investments

Total financial assets
Financial liabilities
Subordinated notes
Loan backed securities
Other borrowings
Derivative financial instruments*1 Other funds include fixed income securities recognised as fair value through profit and loss.

70

The table below shows how the financial assets held at fair value have been measured using the fairvalue hierarchy:
31 December 2023

31 December 2022

FVTPL
£m

FVOCI
£m

FVTPL
£m

FVOCI
£m

888.8
17.6
12.4

2,560.1
—
265.8

900.2
28.1
6.4*1

2,180.9
—
191.8

Total
918.8
2,825.9*1 Gains through the Income Statement are recognised within Investment return. See note 6b for further
information.

934.7

2,372.7

Level one (quoted prices in active markets)
Level two (use of observable inputs)
Level three (use of significant unobservable inputs)

Level three investments consist of debt securities and equity securities.
Debt securities are comprised primarily of investments in debt funds which are valued at the
proportion of the Group’s holding of the Net Asset Value (NAV) reported by the investment vehicle.
These include funds that invest in corporate direct lending, residential and commercial mortgages,
and other private debt. In addition, there is a small allocation of privately placed bonds which do nottrade on active markets, these are valued using discounted cash-flow models designed toappropriately reflect the credit and illiquidity of these instruments; these valuations are performedby the external fund managers. The key unobservable input across private debt securities is thediscount rate which is based on the credit performance of the assets. A deterioration of the credit
performance or expected future performance will result in higher discount rates and lower values.
Equity securities are primarily comprised of investments in Private Equity and Infrastructure Equity
funds, which are valued at the proportion of the Group’s holding of the NAV reported by theinvestment vehicle. These are based on several unobservable inputs including market multiples andcashflow forecasts.
There were no significant inter-relationships between unobservable inputs that materially affect fairvalues.
The table below presents the movement in the period relating to financial instruments valued using
a level three valuation:
31 December 2023

Level Three
Investments
Balance as at 1 January 2023
Gains / (losses) recognised in IS
Gains / (losses) recognised in OCI
Purchases
Disposals

Equity Securities
£m
31.6
(0.1)
(1.0)
6.1
(1.1)

Debt Securities
£m
166.6
10.0
0.8
89.6
(24.3)

Total
£m
198.2
9.9
(0.2)
95.7
(25.4)

Balance as at 31 December 2023

35.5

242.7

278.2

71

31 December 2022

Level Three
Investments
Balance as at 1 January 2022
Gains / (losses) recognised in IS
Gains / (losses) recognised in OCI
Purchases
Disposals
Translation differences

Equity Securities
£m
21.5
1.8
1.1
9.4
(2.5)
0.3

Debt Securities
£m
125.5
3.9
(9.6)
74.4
(27.6)
—

Total
£m
147.0
5.7
(8.5)
83.8
(30.1)
0.3

Balance as at 31 December 2022

31.6

166.6

198.2

7.

Loans and Advances to Customers

31 December
2023£m

31 December
2022£m

Loans and advances to customers – gross carrying amount
Loans and advances to customers – provision

956.8(81.7)

887.4(63.7)

Total loans and advances to customers – Admiral Money

875.1

823.7

Total loans and advances to customers – Other

4.3

0.2

879.4

823.9

31 December
2023£m

31 December
2022£m

Unsecured personal loans

937.7

855.8

Finance leases

19.1

31.6

Other

4.4

0.2

961.2

887.6

Total loans and advances to customers

Loans and advances to customers are comprised of the following:

Total loans and advances to customers, gross

Forward-looking information
Under IFRS 9 the provision must reflect an unbiased and probability-weighted amount that isdetermined by evaluating a range of possible outcomes. The means by which the Group hasdetermined this is to run scenario analysis.
Management judgment has been used to define the weighting and severity of the different scenarios
based on available data.
The key economic driver of credit losses from the scenarios is the likelihood of a customer entering
hardship through unemployment. Unemployment forecasts include a risk grade split of PD based on
the correlation between grade-level default rates observed relative to the change in unemployment
rates in the previous downturn, adjusted for the unemployment forecast expected in the current
economic environment.
The scenario weighting assumptions used are detailed below, along with the unemployment rate
assumed in each scenario at 31 December 2023.
72

31 December 2023
Scenario peak
Unemployment rate

31 December
2023
Weighting

31 December 2022
Scenario peak
Unemployment rate

31 December
2022
Weighting

4.7%
3.5%
6.0%
8.0%

50%
10%
30%
10%

4.8%
3.5%
6.0%
7.9%

40%
10%
40%
10%

Base
UpturnDownturn
Severe

The economic scenarios and forecasts have been updated in conjunction with a third party
economics provider. The probability weightings reflect the view that there is a probability of 90%
attached to recessionary outcomes.
Sensitivities to key areas of estimation uncertainty
The key areas of estimation uncertainty identified, as per note 3 to the financial statements, are in
the PD and the forward-looking scenarios.
31 December
2023
WeightingBase
UpturnDownturn
Severe

50%
10%
30%
10%

31 December 31 December 31 December
2023
2022
2022
Sensitivity
WeightingSensitivity
£m
£m

(1.1)
(5.2)
2.5
8.2

40%
10%
40%
10%

(1.3)
(6.9)
1.4
5.7

The sensitivities in the above tables show the variance to ECL that would be expected if the given
scenario unfolded rather than the weighted position the provision is based on. At 31 December 2023
the implied weighted peak unemployment rate is 5.2%: the table shows that in a downturn scenario
with a 6.0% peak unemployment rate the provision would increase by £2.5 million, whilst the upturnwould reduce the provision by £5.2 million, base case reduce by £1.1 million and severe increase theprovision by £8.2 million.
Stage 1 assets represent 81% of the total loan assets; 0.1% increase in the stage 1 PD, i.e. from 2.2%
to 2.3% would result in a £0.6 million increase in ECL.
Post Model Adjustments (‘PMA’s)
As at 31 December 2023, the expected credit loss allowance included PMAs totalling £9.2 million(2022: £11.3 million).
Post Model Adjustments
Model performance
Cost of Living
Economic scenarios

31 December
2023£m

31 December
2022
£m

2.0
6.5
0.7

3.9
6.5
0.9

9.2

11.3

PMAs are calculated using management judgement and analysis. The key categories of PMAs are as
follows:73

Model performance
The model has been calibrated on historical data that may not fully reflect the risk of losses in the
recent and ongoing, highly volatile macro-economic period. In addition, interest rate rises in 2023
have created the potential for performance uncertainty. For this reason a Model Performance PMA
has been made. It effectively recalibrates the modelled probability of default of the loans to reflect
recent monitored performance. A refresh of the PD model during 2023 has reduced the PMA incomparison to the previous year end.
Cost of Living
This PMA captures the risk of customers falling into a negative affordability position, whereby
customers are no longer able to meet their credit commitments due to higher expenditure driven byhigher prices and increased mortgage payments, when their standard variable or fixed term rate
comes to an end. A PMA is held to acknowledge this, using both external and internal data.
Economic scenarios
An uncertainty factor determined by management judgment has been added to reflect the recent
volatility in unemployment forecasts. This factor has been reduced as variability between successive
forecasts has fallen.
Credit grade information
Credit grade is the internal credit banding given to a customer at origination and is based on external
credit rating information. The credit grading at 31 December 2023 and comparative period is asfollows:

Credit Grade*1
HigherMediumLower
Credit impaired

31 December 2023

31 December 2022

Stage 112- month ECL£mStage 2Lifetime ECL£mStage 3
Lifetime ECL
£m

Total
£m

Total
£m

566.0

83.3

—

649.3

600.2

155.8
53.6
—

30.8
11.8
—

—
—

186.6
65.4

200.0
53.2

55.5

55.5

34.0

Gross carrying amount

775.4

125.9

55.5

956.8

887.4

Expected credit loss allowance(12.8)(39.2)—(81.1)(63.1)(0.5)(29.1)
(0.1)

(0.6)

(0.6)

762.1

96.7

16.3

875.1

823.7

4.3

—

—

4.3

0.2

Other loss allowance*2
Carrying amount – Admiral Money
Carrying amount – Other

Carrying amount
766.4
96.7
16.3
879.4
823.9
*1 Credit grade is the internal credit banding given to a customer at origination. This is based on external credit rating
information.
*2 Other loss allowance covers losses due to a reduction in current or future vehicle value or costs associated with recovery
and sale of vehicles and those as a result of changes in the performance of the EIR asset.

74

Other revenue and co-insurer profit commission

8.

31 December 2023
UK Insurance£mInternational
Insurance£mAdmiral Money
£m

Other
£m

Total
£m

Major products/service line
Fee and commission revenue

107.2

—

0.1

—

107.3

Revenue from law firm

18.3

18.3

—

—
—

—

Comparison income*1

1.6

1.6

Total other revenue

125.5

—
—
—

0.1

1.6

127.2

Profit commission from co-insurers

76.5

2.0

—

—

78.5

Total other revenue and co-insurer profit
commission

202.0

2.0

0.1

1.6

205.7

Timing of revenue recognition
Point in time

160.4

2.0

0.1

1.6

164.1

Over time

20.1
21.5

—
—

—
—

20.1

Revenue outside the scope of IFRS 15

—
—

202.0

2.0

0.1

1.6

205.7

21.5

31 December 2022 (restated)
UK Insurance£mInternational
Insurance£mAdmiral Money
£m

Other
£m

Total
£m

0.3

0.2

104.8

—
—

—

15.8

8.3

8.3

0.3

8.5

128.9

—

—

127.5

Major products/service line
Law firm revenue

15.8

Comparison income—

Total other revenue

120.1

Profit commission from co-insurers

127.5

—
—
—
—
—

Total other revenue and co-insurer
profit commission

247.6

—

0.3

8.5

256.4

209.0

0.3

8.5

217.8

—
—

—
—

17.8

0.3

8.5

256.4

Fee and commission revenue

104.3

Timing of revenue recognition
Over time

17.8

Revenue outside the scope of IFRS 15

20.8

—
—
—

247.6

—

Point in time

20.8

*1 Comparison revenue excludes £nil million (31 December 2022: £0.3 million) of income from other Group companies.

Profit commission
The cumulative profit commission recognised is calculated in aggregate across the contract, in linewith contract terms, based on a number of detailed inputs for each individual underwriting year, themost material of which are as follows:••

Premiums, defined as gross premiums ceded including any instalment income, lessreinsurance premium (for excess of loss reinsurance).
Insurance expenses incurred.
75

•

Claims costs incurred.
o The Group uses the expected value method for the initial calculation of profit
commission revenue, based on known premiums and expenses, and the best estimateof claims costs.
o The variable revenue estimated using the expected value method above is constrained
through the inclusion of the risk adjustment within the claims cost element of thecalculation, with the profit commission recognised aligned to the IFRS 17 booked loss
ratios, discounted at locked-in rates, and inclusive of finance expense. The inclusionof the risk adjustment constrains the cumulative profit commission revenue
recognised to a level where there is a high probability of no significant reversal.

The key methods, inputs and assumptions used to estimate the variable consideration of profit
commission are therefore in line with those used for the calculation of claims liabilities, as set out innote 3 to the financial statements, with further detail also included in note 5. There are no further
critical accounting estimates or judgements in relation to the recognition of profit commission.
31 December 2023£m

31 December 2022
(restated)£m2019 & prior
2020

48.8
27.7

105.9
24.5

2021

—
(2.9)

2023

—
—
—

Total UK motor profit commission

76.5

127.5

Underwriting year

2022

9.

—

Directly attributable and other expenses

31 December 2023
Directly attributable
expenses£m

Other operating
expenses£m

Total expenses£mAdministration and acquisition expenses
Expenses relating to additional products and fees
Share scheme expenses
Loan expenses (excluding movement on ECL provision)
Movement in expected credit loss provision
Other*1

836.8
—
55.3
—
—
—

100.8
41.4
28.5
23.0
31.0
57.1

937.6
41.4
83.8
23.0
31.0
57.1

Total

892.1

281.8

1,173.976

31 December 2022 (restated)
Directly attributable
expenses£m

Other operating
expenses£m

Total expenses£mAdministration and acquisition expenses
Expenses relating to additional products and fees
Share scheme expenses
Loan expenses (excluding movement on ECL provision)
Movement in expected credit loss provision
Other*1

755.1
—
53.0
—
—
—

83.8
38.5
26.3
22.2
18.9
33.8

838.9
38.5
79.3
22.2
18.9
33.8

Total

808.1

223.5

1,031.6

Other includes centralised costs (2023: £34.5 million, 2022: £15.0 million) , business development costs (2023: £15.3
million, 2022: £8.8 million) and other costs (2023: £7.3 million, 2022: £10.0 million).
*1

10.

Taxation
31 December 2023£m

31 December 2022
(restated)£m

Corporation tax on profits for the year

91.6

107.6

Under/(over) provision relating to prior periods

21.3

(0.8)

Current tax charge

112.9

106.8

Current period deferred taxation movement

0.7(31.6)(Over)/Under provision relating to prior periods

(8.0)

0.7

Total tax charge per Consolidated Income Statement

105.6

75.9

31 December 2023£m

31 December 2022
(restated)£m

Profit before tax
Corporation tax thereon at effective UK corporation tax rate of 23.5% (2022:
19.0%)

442.8

361.2

104.1

68.6

Expenses and provisions not deductible for tax purposes
Non-taxable income

3.0(13.4)

2.2(6.0)

Impact of change in UK tax rate on deferred tax balances

(0.4)

(5.6)

Adjustments relating to prior periods
Impact of different overseas tax rates

13.5
(8.9)

(0.2)
3.6

Unrecognised deferred tax

7.7

13.3

105.6

75.9

Current tax

Deferred tax

Factors affecting the total tax charge are:Total tax charge for the period as above

The UK corporation tax rate for 2023 is 23.5% (2022: 19.0%). An increase to the main rate ofcorporation tax in the UK from 19% to 25% was announced in the 2021 Budget and has come into
effect from 1 April 2023.
Adjustments relating to prior periods are higher than previous periods, with £11.7 million of theabove total impact of £13.5 million due to the Group deciding to settle a historic Italian tax
matter, relating mainly to cross border matters. Further costs of £6.8 million relating to this77

inspection, such as interest and penalties, are included in Other Group costs within the income
statement. These costs are expected to be non-recurring.
11.

Other Assets and Other Liabilities

11a.

Intangible assets
Goodwill£m

Customer
contracts andrelationships£mSoftware –Internallygenerated£m

Software – Other
£m

Total
£m

At 1 January 2022
Additions
Amortisation charge
Foreign exchange movement

62.3
—
—
—

—
—
—
—

64.4
83.4
(18.3)
6.9

25.0
5.2
(5.4)
(5.9)

151.7
88.6
(23.7)
1.0

At 31 December 2022
Additions
Amortisation charge
Disposals
Impairment
Transfers
Foreign exchange movement & other

62.3
—
—
—
—
—
—

—
7.9
—
—
—
—
—

136.4
51.1
(34.8)
(0.1)
(0.2)
—
(0.4)

18.9
7.7
(5.5)
—
—
—
(0.4)

217.6
66.7
(40.3)
(0.1)
(0.2)
—
(0.8)

At 31 December 2023

62.3

7.9

152.0

20.7

242.9

11b.

Trade and other payables
31 December 2023£m

31 December 2022
(restated)£m

Trade payables
Other tax and social security
Amounts owed to co-insurers
Other payables
Accruals and deferred income

42.3
11.9
156.9
42.5
52.2

22.7
14.9
115.8
38.2
63.3

Total trade and other payables

305.8

254.9

Analysis of accruals and deferred income
Accruals
Deferred income

28.3
23.9

41.0
22.3

Total accruals and deferred income as above

52.2

63.3

11c.

Contingent liabilities

The Group’s legal entities operate in numerous tax jurisdictions and on a regular basis are subject
to review and enquiry by the relevant tax authority.
One of the Group’s previously owned subsidiaries was subject to a Spanish Tax Audit whichconcluded with the Tax Authority denying the application of the VAT exemption relating toinsurance intermediary services. The Company has appealed this decision via the Spanish Courts
and is confident in defending its position which is, in its view, in line with the EU Directive and isalso consistent with the way similar supplies are treated throughout Europe. Whilst the Company

78

is no longer part of the Admiral Group, the contingent liability which the Company is exposed tohas been indemnified by the Admiral Group up to a cap of £22 million.
No material provisions have been made in these financial statements in relation to the mattersnoted above.
The Group is, from time to time, subject to threatened or actual litigation and/or legal and/or
regulatory disputes, investigations or similar actions both in the UK and overseas. All potentiallymaterial matters are assessed, with the assistance of external advisers if appropriate, and in cases
where it is concluded that it is more likely than not that a payment will be made, a provision isestablished to reflect the best estimate of the liability. In some cases it will not be possible to forma view, for example if the facts are unclear or because further time is needed to properly assess
the merits of the case or form a reliable estimate of its financial effect. In these circumstances,
specific disclosure of a contingent liability and an estimate of its financial effect will be madewhere material, unless it is not practicable to do so.
The Directors do not consider that the final outcome of any such current case will have a material
adverse effect on the Group’s financial position, operations or cashflows, and as such, no material
provisions are currently held in relation to such matters.
A number of the Group’s contractual arrangements with reinsurers include features that, in certain
scenarios, allow for reinsurers to recover losses incurred to date. The overall impact of such
scenarios would not lead to an overall net economic outflow from the Group.

12.

Dividends, Earnings and Share Capital

12a. Dividends
Dividends were proposed, approved and paid as follows:
31 December
2023£m

31 December
2022£m

Proposed March 2022 (118.0 pence per share, approved April 2022 and paid June 2022)
Declared August 2022 (105.0 pence per share, paid October 2022)
Proposed March 2023 (52.0 pence per share, approved April 2023 and paid June 2023)
Declared August 2023 (51.0 pence per share, paid October 2023)

—
—
154.9
152.2

348.1
310.2
—
—

Total dividends

307.1

658.3

The dividends proposed in March (approved in April) represent the final dividends paid in respect ofthe 2021 and 2022 financial years. The dividends declared in August are interim distributions in
respect of 2022 and 2023.
A 2023 final dividend of 52.0 pence per share (approximately £156 million) has been proposed. Referto the financial narrative for further detail.

79

12b. Earnings per share

Profit for the financial year after taxation attributable to equity shareholders
Weighted average number of shares – basic
Unadjusted earnings per share – basic
Weighted average number of shares – diluted
Unadjusted earnings per share – diluted

31 December
2023£m

31 December
2022
£m

338.0

286.5

303,989,170

300,207,330

111.2p95.4p305,052,941

301,543,390

110.8p

95.0p

The difference between the basic and diluted number of shares at the end of 2023 (being 1,063,771;
2022: 1,336,060) relates to awards committed, but not yet issued under the Group’s share schemes.
Refer to note 9 for further detail.
12c. Share capital
31 December 31 December
2023
2022
£m
£m

Authorised
500,000,000 ordinary shares of 0.1 pence

0.5

0.5

Issued, called up and fully paid
306,304,676 ordinary shares of 0.1 pence
302,837,726 ordinary shares of 0.1 pence

0.3
—

—
0.3

0.3

0.3

12d. Related party transactions
The Board considers that only the Executive and Non-Executive Directors of Admiral Group plc are
key management personnel.
Further detail on the remuneration and shareholdings of key management personnel will be set out
in the Directors’ Remuneration Report in the Group’s 2023 Annual Report.

80

13.
Reconciliation of turnover to reported insurance premium and other revenue as per
the financial statements
The following table reconciles turnover, a significant Key Performance Indicators (KPIs) andnon-GAAP measure presented within the Strategic Report, to insurance revenue, as presented
in note 4 to the financial statements.

Insurance premium revenue
Movement in unearned premium
Premiums written after co-insurance
Co-insurer share of written premiums
Total premiums written
Other insurance revenue
Other revenue
Interest income
Turnover as per note 4b of financial statements
Intra-group income elimination*1

Consolidated
Financial
Statement
Note
5b

5b
8

31 December 2023
£m
3,283.3
528.3
3,811.6
577.8

31 December 2022
(restated)£m
2,782.1
142.7
2,924.8393.4

4,389.4
202.8
127.2

3,318.2
174.8
128.9

92.1

58.7

4,811.5

3,680.6
0.3—

Total turnover

4,811.5
3,680.9*1 Total insurance revenue of £3,486.1 million (2022: £2,956.9 million), comprised of insurance premium revenue of£3,283.3 million (2022: £2,782.1 million) and Other insurance revenue of £202.8 million (2022: £174.8 million).
*2 Intra-group income elimination relates to comparison income earned by compare.com from other Group entities.

81

APPENDIX 1 TO THE GROUP FINANCIAL STATEMENTS (unaudited)
1a: Reconciliation of reported loss and expense ratios: Group
31 December 2023£m
Insurance premium revenue
Administration fees, instalment income
and non-separable ancillary commission
Insurance revenue (A)Insurance expenses (B)Claims incurred (C)Claims releases (D)Quota share reinsurance result1
Onerous loss component movement2

Consolidated
Financial
Statement
Note Core productAncillary
incomeTotal grossTotal, net of XoL
reinsurance

3152.3131.0

3,283.3

3,170.6

—

202.8

202.8

202.8

5b/5d

3,152.3

333.8

3,486.1

3,373.4

5c(795.2)(2,624.6)
440.6(41.6)(40.5)(836.8)(2,665.1)
440.6(836.8)(2,605.8)
447.3(40.4)
4.9

5c/5d
5c/5d

—

Underwriting result (E)342.6

Net share scheme costs3(36.8)

Insurance service result

305.8

Reported loss ratio ((C+D)/A)

63.9%

Reported expense ratio (B/A)

24.8%

Insurance service margin (E/A)

10.2%
31 December 2022 (restated)£m

Insurance premium revenue
Administration fees, instalment income
and non-separable ancillary commission
Insurance revenue (A)Insurance expenses (B)Claims incurred (C)Claims releases (D)Quota share reinsurance result1
Onerous loss component movement2
Underwriting result (E)Net share scheme costs3
Insurance service result
Reported loss ratio ((C+D)/A)
Reported expense ratio (B/A)
Insurance service margin

Consolidated
Financial
Statement
Note Core product

2,646.5

—
5b/5d
5c
5c/5d
5c/5d

2,646.5(710.4)(2,339.3)
420.5

Ancillary
income
135.6
174.8
310.4
(44.6)(33.0)—

Total gross
2,782.1
174.8
2,956.9(755.0)(2,372.3)
420.5

Total, net of XoL
reinsurance
2,704.0
174.8
2,878.8(755.0)(2,341.0)
309.8
117.4
4.1
214.1
(32.8)
181.3
70.6%
26.2%
7.4%

1 Quota share reinsurance result excludes quota share reinsurers’ share of share scheme costs and movement in onerous loss-recovery component
2 Onerous loss component movement is shown net of all reinsurance
3 Net share scheme costs of £36.8 million (2022: £32.8 million), being gross costs of £55.3 million (2022: £53.0 million, see note 5c) less reinsurers’ shareof share scheme costs of £18.5 million (2022: £20.2 million) are excluded from the underwriting result.

82

1b.

Reconciliation of reported loss and expense ratios: UK Motor£m

Total premiums written
Gross premiums written
Insurance premium revenue
Instalment income
Administration fees nonseparable ancillary commission
Insurance revenue (A)Insurance expenses (B)Claims incurred (C)Claims releases (D)Current period loss ratio (C/A)
Claims releases (D/A)
Reported loss ratio ((C+D)/A)
Reported expense ratio (B/A)£mTotal premiums written
Gross premiums written
Insurance premium revenue
Instalment income
Administration fees and nonseparable ancillary commission
Insurance revenue (A)Insurance expenses (B)Claims incurred (C)Claims releases (D)Current period loss ratio (C/A)
Claims releases (D/A)
Reported loss ratio ((C+D)/A)
Reported expense ratio (B/A)

Consolidated
Financial
Statement
Note

Core
product
3,004.3
2,453.9
2,007.6

—

5b/5d
5c
5c/5d
5c/5d

Consolidated
Financial
Statement
Note

5b/5d
5c
5c/5d
5c/5d

2,007.6(416.8)(1,719.9)
406.9

Core
product
2,157.7
1,772.8
1,682.4-

1,682.4(354.4)(1,592.2)
437.2

Ancillary
income1
113.9
113.9
107.8
99.0

Total
gross
3,118.2
2,567.8
2,115.4
99.0

35.8
35.8
242.6 2,250.2(34.4) (451.2)(35.6) (1,755.5)—
406.9

Ancillary
income1
113.6
113.6
113.3
75.3

Total
gross
2,271.3
1,886.4
1,795.7
75.3

38.7
38.7
227.3 1,909.7(35.2) (389.6)(28.2) (1,620.4)
437.2

31 December 2023
Core product,
net of XoL
Total, net of
XoL reinsurance
3,016.8
2,903.0
2,485.0
2,371.1
2,053.8
1,946.0
99.0—
35.8
2,188.6(451.2)(1,729.0)
392.8
79.0%
(17.9%)
61.1%
20.6%

—
1,946.0(416.8)(1,693.4)
392.8
87.0%
(20.2%)
66.8%
21.4%

31 December 2022 (restated)Core product,
net of XoL
Total, net of
XoL reinsurance
2,213.5
2,099.9
1,838.9
1,725.3
1,751.1
1,637.8
75.3
38.7
1,865.1(389.6)(1,596.0)
327.2
85.5%
(17.5%)
68.0%
20.9%

1,637.8(354.4)(1,567.8)
327.2
95.7%
(20.0%)
75.7%
21.6%

1Ancillary income combined with other net income is presented as part of UK motor insurance other revenue in reporting “Other revenue pervehicle”. Total other revenue was £247.3 million (2022: £236.8 million).

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Glossary
Alternative Performance Measures
Throughout this report, the Group uses a number of Alternative Performance Measures (APMs);
measures that are not required or commonly reported under International Financial ReportingStandards, the Generally Accepted Accounting Principles (GAAP) under which the Group prepares its
financial statements.
These APMs are used by the Group, alongside GAAP measures, for both internal performance analysis
and to help shareholders and other users of the Annual Report and financial statements to better
understand the Group’s performance in the period in comparison to previous periods and the Group’s
competitors.
The table below defines and explains the primary APMs used in this report. Financial APMs are usuallyderived from financial statement items and are calculated using consistent accounting policies to those
applied in the financial statements, unless otherwise stated. Non-financial KPIs incorporate informationthat cannot be derived from the financial statements but provide further insight into the performanceand financial position of the Group.
APMs may not necessarily be defined in a consistent manner to similar APMs used by the Group’s
competitors. They should be considered as a supplement rather than a substitute for GAAP measures.

TurnoverTurnover is defined as total premiums written (as below), Other insurance revenue, Other revenue andinterest income from Admiral Money. It is reconciled to financial statement line items in note 13 to thefinancial statements.
This measure has been presented by the Group in every Annual Report since it became a listed Group
in 2004. It reflects the total value of the revenue generated by the Group and analysis of this measureover time provides a clear indication of the size and growth of the Group.
The measure was developed as a result of the Group’s business model. The UK Car insurance businesshas historically shared a significant proportion of the risks with Munich Re, a third party reinsuranceGroup, through a co-insurance arrangement, with the arrangement subsequently being replicated insome of the Group’s international insurance operations. Premiums and claims accruing to the external
co-insurer are not reflected in the Group’s income statement and therefore presentation of this metricenables users of the Annual Report to see the scale of the Group’s insurance operations in a way notpossible from taking the income statement in isolation.

Total Premiums
WrittenTotal premiums written are the total forecast premiums, net of forecast cancellations written in theunderwriting year within the Group, including co-insurance. It is reconciled to financial statement line
items in note 13 to the financial statements.
This measure has been presented by the Group in every Annual Report since it became a listed Group
in 2004. It reflects the total premiums written by the Group’s insurance intermediaries and analysis of
this measure over time provides a clear indication of the growth in premiums, irrespective of how coinsurance agreements have changed over time.
The reasons for presenting this measure are consistent with that for the Turnover APM noted above.

Earnings per share

Earnings per share represents the profit after tax attributable to equity shareholders, divided by theweighted average number of basic shares.

84Underwriting result(profit or loss)

For each insurance business an underwriting result is presented. This shows the insurance segment
result before tax excluding investment income, finance expenses, co-insurer profit commission andother net income. It excludes both gross share scheme costs and any assumed quota share reinsurance
recoveries on those share scheme costs.

Loss Ratio

Loss ratios are reported as follows:
Reported loss ratios are expressed as a percentage, of claims incurred, on a gross basis net of XoL
reinsurance, divided by insurance revenue net of XoL reinsurance premiums ceded.
The reported loss ratios use the total claims, and earned premium and related income (instalment
income, administration fees and ancillary income where it is highly correlated to the core product). It is
understood that this is consistent with the approach taken by peers, and it is considered to reflect thetrue profitability of products sold.
Core product loss ratios use the total claims and earned premiums for the core product only. Thismeasure is more consistent with that used previously, and are reflective of the performance of the coreproduct in a line of business.
The calculations and compositions of the loss ratios are presented within Appendix 1a and Appendix 1b
to these financial statements.

Expense Ratio

Expense ratios are reported as follows:
Reported expense ratios are expressed as a percentage, of expenses incurred, on a gross basis
excluding share scheme costs, divided by insurance revenue net of XoL reinsurance premiums ceded.
The reported expense ratios use the total expenses (excluding share scheme costs), and earned
premium and related income (instalment income, administration fees and ancillary income where it ishighly correlated to the core product). It is understood that this is consistent with the approach taken
by peers, and it is considered to reflect the true profitability of products sold.
Core product expense ratios use the total expenses (excluding share scheme costs) and earned
premiums for the core product only. This measure is more consistent with that used previously, andare reflective of the performance of the core product in a line of business.
Written expense ratios are calculated using total expenses (excluding share scheme costs) and written
premiums, net of cancellation provision, for the core product only.
The calculations of the reported expense ratios are presented within Appendix 1a and Appendix 1b to
the financial statements.

Combined Ratio

Combined ratios are the sum of the loss and expense ratios as defined above. Explanation of thesefigures is noted above and reconciliation of the calculations are provided in Appendix 1a and Appendix
1b.

Insurance service
marginThis is the reported insurance segment underwriting result, divided by insurance revenue net of excess
of loss premiums ceded.

Quota share result

The total result (ceded premiums minus ceded recoveries) from contractual quota share arrangements,
excluding the quota share reinsurer’s share of share scheme expenses finance expenses and onerous
loss component.

Segment result

The profit or loss before tax reported for individual business segments, which exclude net sharescheme costs and other central expenses.

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Return on Equity

Return on equity is calculated as profit after tax for the period attributable to equity holders of theGroup divided by the average total equity attributable to equity holders of the Group in the year. Thisaverage is determined by dividing the opening and closing positions for the year by two. It excludes theimpact of discontinued operations.

Group Customers

Group customer numbers reflect the total number of cars, vans, households and pets on cover at theend of the year, across the Group, and the total number of travel insurance and Admiral Money
customers.
This measure has been presented by the Group in every Annual Report since it became a listed Group
in 2004. It reflects the size of the Group’s customer base and analysis of this measure over time
provides a clear indication of the growth. It is also a useful indicator of the growing significance to theGroup of the different lines of business and geographic regions.
The measure has been restated from 2022 onwards to exclude Veygo policies, given the significant
fluctuations that can arise at a point in time as a result of the short-term nature of the product.

Effective Tax Rate

Effective tax rate is defined as the approximate tax rate derived from dividing the Group’s profit before
tax by the tax charge going through the income statement. It is a measure historically presented by theGroup and enables users to see how the tax cost incurred by the Group compares over time and tocurrent corporation tax rates.

Additional Terminology
There are many other terms used in this report that are specific to the Group or the markets in which it operates.
These are defined as follows:
Accident year

The year in which an accident occurs. Claims incurred may be presented on an accident year basis oran underwriting year basis, the latter sees the claims attach to the year in which the insurance policy
incepted.

Actuarial best estimate The probability-weighted average of all future claims and cost scenarios calculated using historical
data, actuarial methods and judgement.
ASHE‘Annual Survey of Hours and Earnings’ – a statistical index that is typically used for calculating the
inflation of annual payment amounts under Periodic Payment Order (PPO) claims settlements.

Claims reserves

A monetary amount set aside for the future payment of incurred claims that have not yet been
settled, thus representing a balance sheet liability.

Co-insurance

An arrangement in which two or more insurance companies agree to underwrite insurance businesson a specified portfolio in specified proportions. Each co-insurer is directly liable to the policyholder
for their proportional share.

Commutation

An agreement between a ceding insurer and the reinsurer that provides for the valuation, payment,
and complete discharge of all obligations between the parties under a particular reinsurance contract.
The Group typically commutes UK motor insurance quota share contracts after 24-36 months fromthe start of an underwriting year where it makes economic sense to do so. Although an individual
underwriting year may be profitable, the margin held in the financial statement claims reserves may
mean that an accounting loss on commutation must be recognised at the point of commutation of thereinsurance contracts. This loss on commutation unwinds in future periods as the financial statement
loss ratios develop to ultimate.

86

Insurance market cycle The tendency for the insurance market to swing between highs and lows of profitability over time,with the potential to influence premium rates (also known as the “underwriting cycle”).
Claims net of XoL
reinsurance

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

Excess of Loss (‘XoL’)reinsurance

Contractual arrangements whereby the Group transfers part or all of the insurance risk accepted toanother insurer on an excess of loss (‘XoL’) basis (full reinsurance for claims over an agreed value).

Insurance premium
revenue net of XoL

The element of premium, less XoL reinsurance premium, earned in the period.

Insurance revenue

Gross earned premium (excluding any co-insurer share) plus Other insurance revenue.

Net promotor score

NPS is currently measured based on a subset of customer responding to a single question: On a scaleof 0-10 (10 being the best score), how likely would you recommend our Company to a friend, family orcolleague through phone, online or email. Answers are then placed in 3 groups; Detractors: scores
ranging from 0 to 6; Passives/neutrals: scores ranging from 7 to 8; Promoters: scores ranging from 9 to
10 and the final NPS score is : % of promoters - % of detractors

Ogden discount rate

The discount rate used in calculation of personal injury claims settlements in the UK.

Other insurance
revenue

Revenue that is considered non-separable from the core insurance product sold and therefore under
IFRS 17 is reported as insurance revenue. For the Group, this is typically the instalment income,administration fees and any other non-separable income related to the Group’s retained share of theunderwritten products.

Periodic Payment
Order (PPO)

A compensation award as part of a claims settlement that involves making a series of annual
payments to a claimant over their remaining life to cover the costs of the care they will require.

Premium

A series of payments are made by the policyholder, typically monthly or annually, for part of or all of
the duration of the contract. Written premium refers to the total amount the policyholder has
contracted for, whereas earned premium refers to the recognition of this premium over the life of thecontract.

Profit commission

A clause found in some reinsurance and co-insurance agreements that provides for profit sharing.
Co-insurer profit commission is presented separately on the income statement whilst reinsurer profit
commissions are presented within the reinsurance result, as a part of any recovery for incurred claims.

Regulatory Solvency
Capital Requirement(‘SCR’)The Group’s Regulatory Solvency Capital Requirement (SCR) is an amount of capital that it should holdin addition to its liabilities in order to provide a cushion against unexpected events. In line with therulebook of the Group’s regulator, the PRA, the Group’s SCR is calculated using the Solvency IIStandard Formula, and includes a fixed capital add-on to reflect limitations in the Standard Formulawith respect to Admiral’s risk profile (predominately in respect of co-and reinsurance profit
commission arrangements and risks relating to Periodic Payment Orders (PPOs). The Group’s current
fixed capital add-on of £24 million was approved by the PRA during 2023.
The Group is required to maintain eligible Own Funds ( Solvency II capital) equal to at least 100% of
the Group SCR. Both eligible Own Funds and the Group SCR are reported to the PRA on a quarterly
basis and reported publicly on an annual basis in the Group’s Solvency and Financial Condition Report.
Admiral separately calculates a ‘dynamic’ capital add-on and has used this this to report a solvency
capital requirement and solvency ratio at the date of this report. A reconciliation between theregulatory solvency ratio and that calculated on a dynamic basis is included in note 3 to the Groupfinancial statements.

87

Reinsurance

Contractual arrangements whereby the Group transfers part or all of the insurance risk accepted toanother insurer. This can be on a quota share basis (a percentage share of premiums, claims andexpenses) or an excess of loss (‘XoL’) basis (full reinsurance for claims over an agreed value).

Scaled Agile

Scaled Agile is a framework that uses a set of organisational and workflow patterns for implementing
agile practices at an enterprise scale. Scaled agile at Admiral represents the ability to drive agile at theteam level whilst applying the same sustainable principles of the group.

Securitisation

A process by which a group of assets, usually loans, is aggregated into a pool, which is used to backthe issuance of new securities. A Company transfer assets to a special purpose entity (SPE) whichthen issues securities backed by the assets.

Solvency ratio

A ratio of an entity’s Solvency II capital (referred to as Own Funds) to Solvency Capital Requirement.
Unless otherwise stated, Group solvency ratios include a reduction to Own Funds for a foreseeable
dividend (i.e. dividends relating to the relevant financial period that will be paid after the balance
sheet date)Special Purpose Entity An entity that is created to accomplish a narrow and well-defined objective. There are specific(SPE)
restrictions or limited around ongoing activities. The Group uses an SPE set up under a securitisation
programme.
Ultimate loss ratio

A projected actuarial best estimate loss ratio for a particular accident year or underwriting year.

Underwriting year

The year in which an insurance policy was incepted.

Underwriting year
basis

Also referred to as the written basis. Claims incurred are allocated to the calendar year in which thepolicy was underwritten. Underwriting year basis results are calculated on the whole account(including co-insurance and reinsurance shares) and include all premiums, claims, expenses incurredand other revenue (for example instalment income and commission income relating to the sale ofproducts that are ancillary to the main insurance policy) relating to policies incepting in the relevant
underwriting year.

Written/Earned basis An insurance policy can be written in one calendar year but earned over a subsequent calendar year.

88