Adding value.
Delivering
difference.
Admiral Group plc
Annual Report and Accounts 2022

2022 Financial and Strategic Highlights

Financial Highlights
EPS1,2,3 (pence)Groups profit before tax1,2,3

124.3p£469.0m£469.0m

2022

2022

£769.0m*

2021£608.0m

2020

124.3p212.2p2021

170.7p2020*£713m including restructure costs

ROE1,2,3

Net revenue135%£1.49bn
35%

2022

56%

2021

52%

2020

£1.49bn2022£3.68bn2021£1.55bn2021£3.51bn2020£3.51bn

9.28m

2022

8.36m

2021

2021

7.66m

2020

Sustainability Highlights
Gender split across the Group(Female)50%(2021: 51% female, 49% male)Emissions (tonnes C02 per employee)

tonnes(2021: 0.5 tonnes)
Net Promoter Score (NPS) Group average
across our operations4>50(2021: >50)

Solvency ratio3 (post dividend)

180%112.0p2022

50%£1.31bn

Dividend per share (pence)

9.28m
2020

£3.68bn

2022

2020

Customers3 (million)

0.3

Turnover1,3(Male)

2022

112.0p187.0p156.5p

180%

2021

195%

2020

187%

1 Group profit before tax, Earnings per share, Group turnover,Group net revenue and Return on equity are presented ona continuing operations basis
2 Group profit before tax, Earnings per share and Returnon equity exclude the impact of one-off restructure costs
in 2021 totalling £55.5 million
3 Alternative Performance Measures, see page 306
4 Relational NPS, methodology updated in 2022

1

Contents
Company Overview
About usOur Business Model
What we do
The drivers of our success
Creating value for our stakeholders

Strategic Report

See page 77

For our customers...
See page 74

Governance at a glance
Introduction to Governance
Board of Directors
Governance Report
Nomination and Governance Committee
Audit Committee Report
Group Risk Committee Report
Remuneration Committee Report
Remuneration at a Glance
Directors’ Remuneration Policy
Annual Report on Remuneration
Directors’ Report

Financial Statements

For ourcommunities...
See page 87

For ourshareholders...
See page 85

215 Independent Auditor’s Report
226 Consolidated Income Statement227	Consolidated Statement ofComprehensive Income
228 Consolidated Statement of Financial Position
229 Consolidated Cash Flow Statement
230 Consolidated Statement of Change in Equity
231 Notes to the Financial Statements
293 Parent company financial statements
296	Notes to the Parent Company
Financial Statements
304 Consolidated Financial Summary (unaudited)
Additional Information
306 Glossary

Admiral Group plc Annual Report and Accounts 2022

Additional Information

For our people...

126
128
130
136
158
171
178
183
186
187
196
210

Financial Statements

Corporate GovernanceCorporate GovernanceOur purpose as a business, and thereason we exist, is to ‘Help more
people to look after their future.
Always striving for better, together’.
It defines who we are, and the waythat we do things.

16 Chair’s Statement
20 Chief Executive Officer’s statement24	Q&A with Milena, Geraint, Cristina
and Costantino
28 Our Strategy
38 Our Sustainability Approach
40 Key Performance Indicators
41 2022 Awards
42 Group Chief Financial Officer’s review
48 UK Insurance review
56 International Insurance review
61 Admiral Money review
63 Other Group Items
64	Group Capital Structure andFinancial Position
68	Creating Sustainable Value for
our Stakeholders
95	Streamline Energy and Carbon Reporting97	Task Force on Climate-related
Financial Disclosures
112 Section 172 Statement
113 Non-financial information statement
114 Principal Risks and Uncertainties
122 Viability Statement

Strategic Report

4
6
8
9
12

Company Overview

Adding value.
Delivering
difference.

2Company Overview

Company
Overview
Contents
4
6
8
9
12

About usOur Business Model
What we do
The drivers of our success
Creating value for our stakeholders

Our purpose-led approach
Help more people to lookafter their future. Always
striving for better, together.
We focus on doing the right thing. Our purpose defines thereason why we exist, and the way that we do things. We try to
be there to help and to provide reassurance, support and relief
when our customers need it most. We price our products fairly
and competitively to provide good financial value and makesure customers can access the right kind of services. We help
protect individuals’ cars and homes to protect people’s futures– all whilst providing an environment where our colleagues
can grow, and strive to do better every day.

4th
Best company towork for in 2022

Admiral Group plc Annual Report and Accounts 2022

3

Company Overview

Helping protect UK homesfrom water damage

Strategic Report

Admiral has partnered with Ondo and their LeakBot services
this year to help our UK Household customers avoid costly
water leaks. LeakBot is a smart water leak detector thatmonitors an entire home’s plumbing and requires noprofessional installation. The device uses its technology tomeasure the flow of water and alerts the customer via theirsmart phone or tablet about any non-routine water loss.

Corporate Governance

We are currently offering LeakBot to 20,000 Platinum
Household customers on a trial basis. Selected customers
will receive a LeakBot device at no cost as well as one
free LeakBot engineer visit if a leak is detected.

In response to some of the devastating global weather
events in 2022, we launched a new Global Emergency Fundto provide help to those affected.

We also saw the devastating impacts of Hurricane Fiona acrossAtlantic Canada. Thousands of our colleagues, their families
and communities were left without power due to fallentrees and downed powerlines. We donated $150,000 to the
Canadian Red Cross Hurricane Fiona Appeal, Feed Nova Scotia
and a number of other employee-nominated charities to give
relief to those affected.

Helping our people growWe launched a new leadership and skills development
hub in 2022 to help give employees the right guidance,
support, and skills development opportunities.
The hub provides access to a range of development courses
and programmes from both our internal development
teams and external sources. Courses and content within
the hub are updated regularly and if an employee feels
confident with the skills they have developed at theircurrent level they can access resources within the following
level. The hub was built on a framework which aims to makedevelopment and career progression planning easier for all.
Colleagues currently have access to over 17,000 courses,
as well as access to the LinkedIn Learning platform.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

In Pakistan, where flooding impacted over 30 million people,
we donated £50,000 to the British Red Cross to aid theirPakistan Flood appeal. This donation is expected to help
3,500 people by providing them with warm clothing aheadof the winter months.

Financial Statements

Helping drive positive impact incommunities across the globe

4Company Overview

About usAdmiral Group plc is a global financial
services company offering motor,
household, travel and pet insurance,
as well as personal lending products.
Our business segments

UK Motor
Insurance

Admiral Group plc is
headquartered in Cardiff,South Wales, and is proud
to be Wales’ only FTSE
100 company. We havea strong internationalpresence, with offices incountries including France,
Italy, Spain, US, Canada,
Gibraltar and India.
5 Alternative Performance Measures– refer to the end of the report for
definition and explanation

Admiral is one of thelargest car and van
insurers in the UK.
Customers (million)

4.94m(2021: 4.97 million)
Turnover5 (billion)£2.49bn(2021: £2.52 billion)
Net insurance premium
revenue (million)£471.0m(2021: £496.5 million)

UK Household
Insurance

Admiral has a
growing household
insurance business.
Customers (million)

1.58m(2021: 1.32million)
Turnover5 (billion)£255.4m(2021: £218.8 million)
Net insurance premium
revenue (million)£55.6m(2021: £49.1 million)

Admiral Group plc Annual Report and Accounts 2022

5Company Overview

Customers worldwide>11,000 9.28m

Turnover worldwide5:£3.68bn

Strategic Report

People employed globally

Corporate Governance

Admiral has motor
insurance businessesin Spain, Italy, France,
and the US and a small
household insurance
business in France.
Customers (million)

2.04m

Turnover5 (million)£795.9m(2021: £690.3 million)
Net insurance premium
revenue (million)£241.8m(2021: £221 million)

Loans

Admiral offers unsecured
personal loans and car
finance products.
Customers (million)

143,213(2021: 111,900)
Total Income (million)£44.9m(2021: £28.9 million)
Gross Balances (million)£0.89bn(2021: £0.61 billion)

Admiral Group plc Annual Report and Accounts 2022

Additional Information(2021: 1.81 million)

Financial Statements

International
Insurance

6Company Overview

Our Business Model
A strong, purpose-led businessmodel that adds value anddelivers difference.
1. Our purpose

Our purpose
Help more people
to look after
their future.
Always striving for
better, together.

2. Leveraging
on what we doRead more on  
page 8UK Insurance
Admiral is one of the largest motor
insurers in the UK. In addition, we are
rapidly growing our household, travel,and pet insurance businesses.

International Insurance
Admiral has established motor insurance
businesses in Spain, Italy, France and theUS, as well as a small Household businessin France.

Loans and other products
Admiral offers unsecured personal loans
and car finance products, as well ascomparison services in the US.

22%
International
Insurance

3%
Loans and
Other
Total Turnover 6£3.68bn
75% UK Insurance
6 Alternative Performance Measure see page 306

Admiral Group plc Annual Report and Accounts 2022

7

Company Overview
Strategic Report

Uniquecompany culture

Operational
excellence

Efficient capital
employment• Simple andclear communication• Communication• Good value
financial products• Good risk
management• Responsible sales
and transparent
claims processes• Recognition and reward • Risk selection anddata analytics• Fun• Efficient
claims management• Satisfied customers• Equality• Strong
shareholder returns

Track recordof long-term
profitable growth• Prudent reserving
philosophy• Test-and-learn approach• Responsible andsustainable operations• Financial discipline

Accelerating
towards
Admiral 2.0

Diversification

Evolutionof Motor

Aim: Strengthen our corecompetencies and increase
speed of delivery to best serve
our customers.

Aim: Increase customer engagement
and business resilience.

Aim: Evolve our propositions
for changes in mobility.

• Scale up promising products• Understand changes in mobility• Strengthen customer proposition• Evolve our proposition• Leverage core strengths• Develop competencies for the future• Innovate in product design• Innovate in product design• Digital First• Scaled Agile• Customer-Centric Innovation• Smart Working• Data and advanced analytics

Read more on  
page 74

5. In order to create value for our stakeholders

Customers

PeopleAdmiral Group plc Annual Report and Accounts 2022

Partners &Suppliers

Shareholders

Communities

Environment

Additional Information

Read more on  
page 28

4. In line with our strategic priorities

Financial Statements

Excellentcustomer service

Corporate Governance

Read more on  
page 93. Achieved through our drivers to success8Company Overview

Our Business Model
What we do
Risk sharing
A key feature of our business model and success isthe use of extensive reinsurance and co-insurance
partnerships. These are proportional risk-sharing
agreements, where insurers outside of the Group
underwrite the majority of the risk generated,either through co-insurance or quota sharereinsurance contracts. These arrangements include
profit commission terms which allow Admiral toretain a significant portion of the profit generated.

Investing premiums

Insurance underwriting

Read more about
our Co-insurance
and reinsurance
on page 66

Read more about
our Investing on
page 65

Admiral Group’s primary business is to sell car, van,home, travel, and pet insurance in the UK, Europe(Spain, France, Italy), and the US. The majority of
our customers buy our products through the pricecomparison channel, with a smaller proportion ofcustomers buying directly from us, as well as thebroker and agency channels. In addition to our core
insurance products, we generate other revenue
from the sale of ancillary add-ons and from fees
generated over the life cycle of a policy.
The Group’s core market is the UK, where we estimate
we have 17% share of the private car insurance market
and a 7% share of the private home insurance market7.
Outside of the UK, we leverage the knowledge, skills,
and resources from our established UK business topromote expansion overseas and grow both ourinternational businesses and new ventures outsideof insurance underwriting.

Admiral’s profitability is primarily generated by theGroup’s underwriting activities but we also generate
investment income by investing the premiums wecollect. The majority of our profits are paid out in
dividends, with a proportion held back to pay forour claims and future investment opportunities,
linked to the capital requirements for the business.
Our investment strategy is focused on capitalpreservation and low volatility of returns. Admiral has
an asset liability matching strategy to control interest
rate, inflation, and currency risk. We hold a prudent
level of liquidity and have a high-quality credit profile.

Unsecured personal lending, car finance,and other products
Outside of our insurance businesses, we sell a rangeof unsecured personal loans and car finance products
through the price comparison channel and via theAdmiral website. Our core lending business operates
in the UK (under the Admiral Money brand) and isfunded through a combination of internal and externalfinancing. Other businesses include a small pricecomparison business in the US and a recently createdentity (operating under the Admiral Pioneer brand)
designed to test new products and identify futuresources of earnings.

7 Based on 2022 data from the Associationof British Insurers (ABI)

Admiral Group plc Annual Report and Accounts 2022

92022 Highlights

We aim to create simple insurance products which areeasily understood and accessible to all. We promote
an inclusive experience and make sure customers
can reach us at any point, whether that be digitally,or over the phone. We also acknowledge that individual
customers may have different needs when it comesto being informed about our products. Our Vulnerable
Customer Policy allows for an appropriate system
to be implemented identify vulnerable customers andensures sufficient controls are in place so that thesecustomers receive appropriate support.

• >50 Group average NPS score across our operations8• Voted Best Big Insurance Company in the UK
Insurance Choice Awards• Number 1 Ranked Italian insurer on Trustpilot

Household insurance teams
support customers impacted
by extreme weather
This year, a number of extreme weather events devastatedcommunities across the world. At the start of 2022, we saw
catastrophic storms and flooding hit areas of the UK. We took
a proactive approach to protecting our customers during
this time. Before the storms made landfall, our Household
insurance team contacted all customers who held policies
in areas of risk. We explained the risks of possible flooding
and asked if any help was required. Throughout the period,
we continued to monitor flood warnings and added
customers to our contact list if their risk exposure wereto increase.
During storms Dudley, Eunice and Franklin, we made sure thatenough support was in place for what we knew would be an
influx of customers contacting us. This included enlisting help
from employees across the business, including our offices in
Delhi, to manage the increased number of calls. We madecalling to make a claim easy with online banners andincreased the number of employees on phones and webchat
to assist with questions from customers.

8 Relational NPS, methodology updated
in 2022Admiral Group plc Annual Report and Accounts 2022

Similarly, in Gironde, southern France, we saw wildfires cause
damage across the region. Our French Household businessquickly contacted customers affected by these fires andmade sure they were given quick access to alternative
accommodation in cases where they were displaced.

Additional Information

Simple and clear communication

Excellent Customer Service

Financial Statements

2022 has been a difficult year for the industry and for
Admiral. However, whilst we continue to experience
difficult economic conditions, our focus on providing
good customer service remains unchanged.

We regularly measure customer satisfaction acrossseveral key benchmarks to stay close to customers’
developing needs and better understand areas
where our service fails to meet expectations. We use
the globally recognised Net Promoter Score® (NPS)
as the key metric for measuring customer loyalty
through customers’ willingness to recommend AdmiralGroup’s brands. Obtaining regular customer feedback
is core to the way we do business as it allows us tounderstand what we are doing well but also enables
us to identify the priority areas for improvement.

Corporate Governance

Satisfied customers

Strategic Report

Our drivers of success are what
we believe makes us different
from our peers. They help us
maximise the value we create
for our stakeholders and standout as a go-to financial services
provider for our customers.

We comply with all relevant regulatory requirements
and actively review our practices to ensure we operate
in line with relevant policies. When selling insurance
products, we provide customers with key characteristic
information about our products, covering the most
crucial features and limitations. This makes surecustomers can make informed decisions and can buy
the right products for their needs. This extends toour claims practices where we work hard to deliver
fair outcomes in a timely manner. We provide clear
guidance on the full claims process and make surecustomers can easily reach us to resolve any issues.

Company Overview

Our Business Model
The drivers of
our successResponsible sales and transparent
claims processes

10Company Overview

Our Business Model
The drivers of
our successcontinued

Equality
We view all of our people as being equally importantto the business regardless of their position, gender,or background. We strive to promote a sense offairness in everything we do and to provide anenvironment where everyone has the opportunity
to succeed. In particular, we have multiple Diversity
and Inclusion working groups made up of employees
across the business. These working groups exist
to give a voice to all our colleagues and empower
them to play an active role in shaping our employee
propositions and policies.

Recognition and Reward
Admiral’s share ownership scheme is a core foundationof our culture and plays an important role in employee
recognition and reward. We believe that a company
works best if people feel like they own a part of theircompany, and so through the scheme, all employeesthat have been with the company for more than a year
become shareholders in Admiral.

Unique company culture
Read more in
Our Customers
on page 74

Fun

Over time, we’ve come to believe strongly thatcreating a great place for our people to work goesa long way towards building long-term commercial
success. We believe that Admiral’s culture and thefour pillars of our culture, are the foundation for why
our people enjoy coming into work every day andwhy Admiral is celebrated as a great place to work.

If people like what they do, they do it better. This mantra
has been at the core of Admiral’s culture since day one.
We encourage our colleagues to spend time together
and get to know each other. We dedicate resources
to our own Ministry of Fun (MOF). The MOF helps toorganise various events for people to participate in
and gives them something fun to look forward to.

Communication

2022 Highlights

We encourage a culture of open and transparent
communication at all levels of the business. We ask
colleagues to give us their suggestions on how we can
improve, tell us how they are feeling, and the ways inwhich we can help. Our Group CEO, Milena Mondini,
operates an open-door policy and regularly engages
with colleagues through the ‘Ask Milena’ initiative.
This philosophy extends to our senior managers anddirectors who also engage regularly with our colleagues
to keep them informed on what is happening in thebusiness and answer their questions.

• 86% of colleagues believe Admiral is a great place
to work9• 88% of colleagues feel that management isapproachable and easy to talk to10
• 96% of people feel that people are treated fairly
regardless of their race11

Top 10 returns!
Top 10 is Admiral’s annual departmental competition tocrown the best 10 departments across the organisation.
Each year departments are tasked with creating a video
or in-person show and answer a set of questions surrounding
a core theme.
In 2022 the theme was based on our purpose ‘Help more
people look after their future. Always striving for better together’.
In particular, departments had to answer the following:“How does your department represent and demonstrate
Admiral Group’s purpose statement?”. This year teams
were encouraged to be as creative as possible, and we hadsubmissions that went above and beyond and included
themes such as The Grinch, I’m a Celebrity Get Me Out ofHere, and Jurassic Park.

9 Great Place to Work Survey result
10 Great Place to Work Survey result
11 Great Place to Work Survey result

The results ceremony was back in-person for the first timesince 2019, giving a great opportunity for colleagues to getback together and celebrate.

Admiral Group plc Annual Report and Accounts 2022

11

Risk selection and data analytics

Efficient claims management
Our efficient claims management is backed by a cultureof continuous improvement, proactive engagement,
decades of experience in claims handling, and greatcustomer service.
Admiral is focused on bottom line profitability
and building sustainable businesses in the longterm. This focus guides decisions made across ouroperations. Our cost-conscious approach is strongly
embedded across the organisation given our
employees are also shareholders and this translates
to a competitive expense ratio.

Admiral shares a large proportion of risk withco- and reinsurance partners. These partnerships
are underpinned by a long track-record of strong
underwriting results. Sharing risk allows us to holdless capital due to bearing less risk, giving a superior
return on capital for our shareholders whilst ensuring
protection for losses.

Admiral has a strong culture of innovation and organic
growth. All our businesses have been built from theground up. We identify and understand opportunities;
take measured steps to test our understanding of
the challenges and effectiveness of our solutions;and learn from these experiences.

Prudent approach and reserving philosophy
Our track record of success is in part due to ourrobust reserving approach, where we hold prudent
reserves which we release over time as we gain more
information on the development of claims or defaults
across our insurance and loans businesses respectively.
In addition, we continuously improve and build on our
key competitive advantages including cost efficiency,
risk selection, data analytics, digital capabilities andclaims management effectiveness.

Responsible and sustainable operations
Central to our approach towards long-term value
creation is our continued dedication to drive positive
outcomes for all our stakeholders. We appreciatethat our stakeholders’ needs evolve over time, and we
consciously adapt to remain a responsible, sustainablebusiness for the long-term.

2022 Highlights• 50% Average combined ratio over the past
five years12• 47% of customers are now from non-UK
Motor businesses• 180% Solvency Ratio

12 Weighted average

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Efficient Capital Employment
Risk management

Track record of long-term, profitable growth
Test-and-learn approach

Financial Statements

Financial discipline

We are committed to returning excess capital toshareholders. We believe that with limited cash,
management remains focused on the most important
aspects of the business. We don’t starve our business,but neither do we provide them the luxury ofexcess capital.

Corporate GovernanceOur unique approach to risk selection is built uponlarge amounts of claims experience, underwriting
skill, and increasingly, on insights from big data
and analytics. We take a data-driven approach ineverything we do, and it is the foundation behind
our business decision-making.

Strong shareholder returns

Strategic Report

We take great pride in providing good value financial
products and services that meet customer needs.
Through our existing products we actively work
to maximise the value of our core businesses andwith new products, seek to lay the foundations for
future growth.

We include an assessment of the projected solvencyof the business as part of the capital plan and
Own Risk and Solvency Assessment. This includes
consideration of principal risks facing the Group,
as well as consideration of emerging risks such as
climate change.

Company Overview

Operational Excellence
Good value financial products12Company Overview

Our Business Model
Creating value forour stakeholders
We are dedicated to building
strong and sustainablebusinesses that are focusedon achieving positive outcomesfor all our stakeholders.

Our Customers

Our People

Our Business:
Partners and Suppliers

Customers are at the heartof our business. As a customercentric organisation, we seek
to create products thatprovide more people with theopportunity to access goodfinancial services products.
The needs of our customers
shape the products we deliver,and the ways in which we do so.

We believe that people who
like what they do, do it better.
This attitude enables our testand-learn culture, operational
excellence, happier andmore productive employees,
and ultimately better
outcomes for our customers
and stakeholders.

Our partners and suppliers
are integral to us achieving ourstrategic goals. They comprisea mix of financial partners,
reinsurance partners,
IT hosting, distribution andclaims services partners.
We work hard to foster
strong relationships tomitigate risks across ourbusinesses and to deliveron our strategic ambitions.

Value created in 2022

Value created in 2022

Value created in 2022

• We launched a new claims systemfor our UK Motor customers• We strengthened our reward
package for colleagues• We added our MultiCar proposition
to price comparison platforms• We upgraded our learning anddevelopment platform• Admiral Pioneer invested in
Wagonex, a subscription-based
platform for car manufacturers• We supported UK and FrenchHousehold customers impacted
by floods• We launched a new health andwellbeing strategy focused on
mental health• We continued to provide fair
and affordable products acrossthe Group• We improved the Group’s
recruitment onboarding platform• We launched Admiral Pet in the UK• We formed new strategic
partnerships with industry-leading
suppliers across the UK• We partnered with Ondo’s LeakBot
services to protect customers fromwater leaks• Members of the Group Board
engaged with employees via the
Employee Consultation Group

Admiral Group plc Annual Report and Accounts 2022

13

Company Overview
Strategic Report

Our Society:
Environment

Shareholder engagement
is key to helping investors
understand Admiral’s strategy
and investment case. It allows
us to explain our decisions andrationale, whilst providing
opportunities for shareholders
to give their feedback.

A culture of giving and asense of responsibility forthe community is sharedacross the whole Group.
Our employees play a keyrole in how we engage withour communities, and wework collectively to drive
long-term change both insideand outside the Group.

Admiral is mindful that it
is increasingly important
to demonstrate responsible
business behaviour withregards to the environment,
not just because our
stakeholders demand it,
but also because it is theright thing to do.

Value created in 2022

Value created in 2022

Value created in 2022

• Management actively engaged
with existing shareholders andpotential investors• We launched a new Community
Strategy focused on getting more
people into sustainable work

• We launched a climate positive
employee engagement programme• We organised a shareholder
and analyst education session
to help them navigate theintroduction of the new IFRS17
accounting standard• We introduced a new Global
Emergency Fund to support
communities across the globe• The Group Chair and Senior
Independent Director held
corporate governance meetings
with key shareholders• We supported over 200
organisations via our long-standing
community match fund
• We worked with several charities
to provide employees with accessto volunteer initiatives

Admiral Group plc Annual Report and Accounts 2022

• We funded the planting andmonitoring of over 30,000 trees
in Kenya• We partnered with Carbon
Intelligence to support us in our
net zero ambitions• We installed electric vehicle
charging points in our offices• We fully offset our carbon emissions
via the purchase of Gold Standard
carbon credits

Additional Information

Our Society:
Communities

Financial Statements

Our Business:
Shareholders

Corporate Governance

Read more about how we engage with andcreate value for stakeholders, on page 68

14Strategic Report

Strategic
ReportContents
16
Chair’s Statement
20
Chief Executive Statement24	Q&A with Milena, Geraint, Cristina
and Costantino
28
Our Strategy
38
Our Sustainability Approach40
Key Performance Indicators
41
2022 Awards
42
Group Chief Financial Officers Review
48
UK Insurance review
56
International Insurance review
61
Admiral Money review
63
Other Group Items
64
Group capital structure and financial position
68	Creating Sustainable Value for
our Stakeholders
95
Streamline Energy and Carbon Reporting97	Task Force on Climate-related
Financial Disclosures
112 Section 172 statement
113 Non-financial information statement
114 Principal Risks and Uncertainties
122 Viability Statement

Adding value.
Delivering
difference.
For our customers

It’s the little things that add up
We recently had a customer, Mr Doyle, who called to renew
his van insurance. During the call, he chatted to Leeanne,
our Customer Loyalty agent, about his love of dogs andwhat he’d like to use the van for.
Connect to Customer is a goodwill initiative that enables
Customer Loyalty colleagues to send gifts or cards,
after interactions with customers. Thanks to Leeanne’s
thoughtful suggestion, they sent a parcel of dog treats
and toys to our customer Mr Doyle, who quickly took to
LinkedIn to sing her praises.
“Mr Doyle explained he’d lost his family dog Jessie and that
he calls his van ‘the Jessie van’. He went on to say that if heever won the lottery, his dream would be to have a rescue
centre where he would employ people to cuddle the dogs
and give them the love they deserve. That made the hairon my arms stand up, I knew I had to do a little something.
That’s when I decided to email our Connect to Customer
team with a message asking to send Mr Doyle blankets,treats and some toys for the animals he would rescue.
He was so passionate about helping less fortunate dogs,
he was very genuine and a lovely man to speak with.”

Admiral Group plc Annual Report and Accounts 2022

15

Company Overview
Strategic Report
Corporate Governance
Financial Statements
Additional Information

Admiral Money sponsors
Fintech Wales programme
The Foundry, FinTech Wales’ 12-week intensive accelerator
programme, provides world-class mentorship and support
to help incubate, accelerate, and scale start-up organisations
within the Welsh ecosystem and beyond.
In 2022, Admiral Money was a proud co-sponsor to‘season 2’ of the Foundry programme which focussed
on successfully validating, fundraising and scaling a new
venture. Admiral Money also worked separately with severalof the start-ups involved, and a number of the unsuccessful
applicants, to identify areas of potential collaborationand support.

Admiral Group plc Annual Report and Accounts 2022

16

Strategic Report

Chair’s Statement“We continue tobelieve that if people
like what they do,they do it better.”
Adding value.
Delivering
difference.

Annette Court
Group Chair

Admiral Group plc Annual Report and Accounts 2022

17

As a result, Admiral has reported lower Group profitof £469 million with turnover of £3.68 billion. This isdriven by UK Motor insurance profitability. Admiral has
led the market in taking strong pricing action tocombat claims cost inflation and continues to focus
on long-term value creation.

Admiral is a special business with a distinctive culture.
Our purpose – To help more people to look after their
future. Always striving for better together – underpins
everything we do and ensures that we strive to do theright thing in consideration of all our stakeholders.
I am immensely proud to have been part of Admiral’s
success story. It has been a hugely enjoyable andrewarding experience.
During my time on the Board I have experienced thetransition of CEOs from Henry to David, and then to
Milena – all have strong entrepreneurial leadershipskills, passion for the Admiral culture, and a focus
on building on our competitive advantages whilst
evolving the strategy within the emerging landscape.
I’m often asked what has been key to Admiral’s success
and, essentially, I believe it’s a lot of small things thathave never changed and make a big difference:• Delivering for our customers – Admiral remains
focused on ‘the customer, the customer,
the customer’ and during my time on the Board,customer numbers have grown from 3.6 million
in 2012 to 9.3 million in 2022 – a testament toour customer-centric approach• Admiral’s relentless focus on the fundamentals ofrisk selection, pricing discipline, claims effectivenessand expense efficiency underpinned by a healthy
obsession with data and analysis and a lowrisk approach

Admiral Group plc Annual Report and Accounts 2022

Although elements remain constant, Admiral continues
to grow and evolve, with a key pillar of the strategy
being diversification. We are making great progress inmost operations, and have now built, amongst others:• A significant UK household business
which is growing strongly and now serves
1.6 million customers• Admiral Money, our UK loans business has achieveda small profit in its fifth year and is taking a suitably
prudent approach to increasing its book• Sizeable and growing businesses in Europe• Admiral Pioneer, a business that builds on our
traditional test-and-learn approach to focus ondiversification through new business areas• A business in the US, which is a challenging market,
and for which we are considering options
Almost half of our customers are now from non-UK
Motor insurance business.

Dividend
Our proposed final dividend of 52.0 pence per sharebrings dividends for the year to 112.0 pence per share,a full-year pay-out of 90% against a backdrop of aftertax profits (from continuing operations) 36% lower
than last year. The final dividend of 52.0 pence pershare comprises a normal dividend of 37.5 pence pershare and a special dividend of 14.5 pence per share.
The Group has delivered a Total Shareholder Return(TSR) of 259% over the last 10 years (as illustrated in
the chart on page 206).

13 Employees participate in the Approved Share Incentive Plan (SIP) after
completing a minimum of 12 months’ service

Additional Information

Looking backEvolution

Financial Statements

Despite the challenging backdrop, our customer
numbers are up 11% to 9.28 million and our solvency
remains strong at 180%. The UK Motor insurance
marketplace is cyclical and we believe we are now
close to the bottom of this cycle. Admiral has a proventrack record of quickly adapting to navigate thecycle and remains focused on continuously evolving
its existing competences while creating sustainablebusinesses for the future.

• Admiral’s culture – this drives all of the above.
We believe that ‘people who like what they do,
do it better’. We are always looking for new ways to
add value and have consistently been recognised
as a great place to work for over 11,000 colleagues.
A key foundation stone of Admiral that has been
continuously reinforced as the company has grownis that everyone matters regardless of their role.
This is demonstrated by the fact that all colleagues
receive shares13 in the company every year

Corporate GovernanceThis year has, once again, been challenging for thesector due to the macro-economic environment.
The Ukrainian-Russian war impacted energy costs,
high inflation led to higher claims costs and, in the UK,
the market adjusted to the FCA’s pricing reforms.

• Admiral’s commitment to doing the right thing andstrong conviction and ethical foundation means it’s
perhaps unsurprising that we were the only insurer
in the UK to issue a £110 million Stay-At-Home
refund for UK customers during the Covid pandemic
and we established a £6 million Covid Fund tosupport impacted communities

Strategic Report

As previously announced, I will step down as Chair at
the AGM in April 2023 having served 11 years on the
Board, with six of those as Chair. I leave with a mix ofpride and deep fondness for this very special company
which I believe remains one of the FTSE 100’s best
kept secrets.

• Admiral’s agility, innovation and culture ofcontinuous improvement through a test-and-learn
approach has ensured that it creates products andservices that truly meet customers’ evolving needs.
After all, it was Admiral that launched the firstcar insurance comparison site, the first 10-monthpolicy, and accelerated the adoption of multicar
and multicoverCompany Overview

I am honoured to be leading the Boardof Admiral as the Group enters its 30thyear – happy birthday Admiral!

18

Strategic Report

Chair’s Statement
continued
PeopleThe Board in 2022

Once again Admiral was recognised as a Great Place
to Work in 2022, including being awarded 19th best
workplace in Europe and fourth best workplace in the
UK. We also received an award for being in the Best
Companies list for 20 consecutive years and received
awards for diversity and wellbeing. These accolades
help to position us as a destination employer whichis crucial in the current competitive market for talent.

The Board recognises the need for a strong corporate
governance framework and supporting processes
across the Group and believes that good governance,with the tone set from the top, is a key factor indelivering sustainable business performance andcreating value for all the Group’s stakeholders.

Having our people as shareholders remains a
distinctive element of Admiral’s incentive schemes.
These are designed to ensure that decisions support
long-term value growth, that the right behaviours are
rewarded and that our people’s interests are alignedwith those of shareholders. We believe that, over the
long-term, share price appreciation depends ondelivering great outcomes for our customers.
(Further details can be found in the Remuneration
Committee report on page 183).

Customers
Admiral’s purpose is to help people to look after their
future and the business has really lived by its purpose
during the year, ensuring that Admiral has been there
for its customers when they need us most.

The Board has been able to resume meeting in person
this year as well as visits to colleagues overseas.
I have visited our overseas locations along with one
or more fellow non-executive directors (NEDs) and
we also attended Employee Consultation Group(ECG) meetings. These allowed us to keep contact
with our people and directly hear their views andthe challenges they face. The Admiral culture stillshines through.
Jean Park stepped down in January 2023 after having
served nine years on the Board and chairing the Group
Risk Committee. She has also been a member ofthe Remuneration and Nomination and GovernanceCommittees and acted as the Senior Independent
Director. We will miss her unstinting support and wise
counsel. I would like to thank her on behalf of thewhole Board for her huge contribution.

Read morein ourGovernancereport on
page 136

The UK business has invested in technology that
reduces the time it takes to settle motor claims –hopefully removing a pain-point during what canbe a stressful time for customers.
In response to the cost-of-living crisis, our teams havelooked at ways to help and support insurance andloans customers who are financially vulnerable.
2022 saw extreme weather from flash floods to forest
fires and a freeze event. Admiral colleagues choseto take a proactive approach, identifying customers
in the impacted areas and contacting them tounderstand how we could support them. These arejust a few examples of the little things that thebusiness does that can make a big difference forcustomers, and that make me proud to be a partof Admiral.

“Once again Admiral
was recognised
as a Great Place
to Work in 2022.”
Annette Court
Group Chair

Admiral Group plc Annual Report and Accounts 2022

19

Company Overview• Continue to build on the remarkably special
Admiral culture and in so doing putting our people,
customers and wider impact on the community at
the heart of what we do

I am delighted that Mike Rogers will take on the roleof the new Chair of Admiral. He has a great trackrecord and significant experience which will benefit
Admiral in its next exciting phase of evolution –and demonstrates a great understanding of theGroup’s culture.

• Continue our long-term trajectory of growth,
profitability and innovation• Invest in the development and growth of our people• Ensure excellent governance and thehighest standards• Focus on all aspects of ESG

I am confident that the current Board and new Chair
are well-equipped with the skills and knowledge tocontinue to build and strengthen Admiral and build asustainable business in the long-term while retaining
Admiral’s distinctive culture.

Our role in Society – doing the right thing

7 March 2023

A goodbye and thank you
from Annette Court
I have thoroughly enjoyed every
year I have been part of Admiral.
I am grateful to our shareholders
for their support as I stayed on
as Chair to ensure a successfultransition to Milena as Group CEO.
I would like to thank Admiral’s customers for
putting their trust in us and our colleagues fortheir dedication in ensuring that we are there
for customers when they need us most.
I wish Mike, Milena and the whole leadershipteam every success for the future and I will becheering Admiral on from the side lines.
I feel privileged to have been part of this special
company. Thank you for your support.

AnnetteAdmiral Group plc Annual Report and Accounts 2022

Additional Information

As previously announced, the Group’s ambition is
to be net zero by 2040 and to be net zero across
our operations for scope 1 and 2 emissions by 2030.
The business verifies its carbon emissions for ourcurrent operations using a third party and these were
subsequently offset to become carbon neutral. We will
apply for approval of our Science Based Targets in
2023. Our aim is to be an economically strong andresponsible business over the long-term, guided bya clear purpose, to make a positive and significant
impact not just on our customers and our people,
but on the economy and society.

Annette Court
Group Chair

Financial Statements

Admiral takes its role in society very seriously and hasan active approach to Corporate Responsibility which
focuses on all our stakeholders and the wider impact
we have (more information in the Sustainability Reporton the Admiral website). We are proud to be Wales’
only FTSE 100 headquartered company. We employ
over 8,000 people in South Wales and our people play
an active part in the communities in which we operate.
We carefully consider our impact on the communityand environment, including factors such as the green
credentials of our buildings, raising funds for multiple
charities, and the impact of climate change acrossthe business.

Corporate Governance

New Chair

Strategic Report

Our focus areas for the Board remain to:20Strategic Report

Chief Executive Officer’s Statement

MilenaMondinide Focatiis
Chief Executive
Officer“It’s the little things
we do every da ythat combine to
add value for all
our stakeholders.“
Adding value.
Delivering
difference.

Admiral Group plc Annual Report and Accounts 2022

21

Corporate Governance
Additional Information

This discipline resulted, for our insurance businessin the UK, in delivering a profit of £616 million,
above 2019 pre-pandemic levels and it will put us
on a strong footing for when the cycle turns.
14 Group profit – 2022: £469 million; 2021: £769 million, excluding restructure
costs, 2019: £505.1 million
15 Elephant loss – 2022: £48.9 million loss; 2021: £13.0 million

Our Strategy
for 2023

Accelerate evolution
towards Admiral 2.0
Our priority is to accelerate
the evolution of our businesstowards Admiral 2.0, anorganisation that builds
and uses historical strengths
but is even more agile.
Whilst we continue to put
the customer first, we aim
to focus on our technology
and data to do so.

See page 28

Admiral Group plc Annual Report and Accounts 2022

Financial Statements

The cyclical nature of insurance is not new. We werequicker than most to react to the changing market
conditions and implemented price increases aheadof others in response to higher inflation. Although thepremium increases impacted our rate of growth in
the short term, we continued prioritising sustainablegrowth over chasing unprofitable volumes.

Despite the headwinds, we were definitely not
blown off course in 2022. To the contrary, we madesubstantial progress against our long-term objectives
and continued to deliver on new initiatives that will
help us to emerge from this period stronger thanever before. We’re developing new capabilities,
especially in data and technology, to enhance ourcustomer experience. For example, we launched a
new claims management system which will reduce
settlement time for many UK motor customers andhave established a Data Academy to accelerate our
evolution into an even more digital-first and data
driven organisation.

Strategic Report

We’ve not been immune to the changes in external
conditions including the implementation of the
FCA’s pricing reforms, increased claims frequency
post Covid, supply chain challenges, adverse weather
and high levels of inflation which had a very big
impact on our business, particularly on the cost ofclaims. At times, over the last 12 months, it has felt
similar to sailing in the middle of a storm: knowing
the desired destination but with the challenge ofrecognising when to steer into the winds that try toblow us off course – whilst never losing focus on where
we’re going.

The international markets were also under pressure
with very low market average premiums in Italy
and Spain. The US experienced more adverse
market conditions than others. Although Elephantquickly put in place aggressive remedies, such as
premium increases in excess of 25% in 2022 and adrastic reduction in advertising spend, the businessregistered a disappointingly high loss of £49 million15.
Elephant remains an efficient operation with a strong
team delivering great service to its customers –who voted it one of the Best insurance companies
in US among over 3,300 brands. We are continuing
to assess the options for Elephant to reach its fullpotential in such a huge market.

Company Overview

2022 was another year of navigatingstormy waters and, once again,
we’ve adapted well and shown
ourselves to be disciplined and agile
as we increased our customer baseby 11% to 9.28 million while deliveringprofits of £469 million.14

Product diversification
Our Group-wide approach
is focused on increasing
business resilience andadapting to the evolving
needs and expectationsof our customers.
See page 31

The evolutionof Motor
The way that people
move around is changing
and Admiral’s third pillar
focuses on evolving
our proposition tomeet those demands.
Admiral stays close to
emerging trends andcontinues to apply
its test and learn
philosophy to further
develop competencies.

See page 34

22Strategic Report

Chief Executive Officer’s Statement
continued
Groups profit before tax1,2,3£469.0m
2022£469.0m£769.0m*

2021£608.0m

2020*£713m including restructure costs

In the UK specifically we are experiencing strong
customer growth in the Household, Loans and Travelbusinesses that increased their turnover by 31% to£350 million combined in 2022. We now also counttwo million customers across our international
businesses, up by 13%.

EPS1,2,3 (pence)

124.3p
2022
2021
2020

We believe that our diversification strategy is key toincreasing our resilience over the long-term, as well as
to improving the engagement and experience for ourcustomers, and by leveraging our strengths, we will
deliver more value to our shareholders. Over the
past year, Admiral Money, our UK Loans business,delivered its first profit in its fifth year, we launched
Pet insurance and we developed new partnerships
and distribution channels in international insurance.

124.3p212.2p170.7p1 Group profit before tax, Earnings per share, Group turnover,Group net revenue and Return on equity are presented ona continuing operations basis
2 Group profit before tax, Earnings per share and Returnon equity exclude the impact of one-off restructure costs
in 2021 totalling £55.5 million
3 Alternative Performance Measures – see page 306

We are aware that this has been a challenging year
also for our customers and our people and looking
after them is our core purpose. We continue to do
our best to support customers and we have a teamdedicated to supporting those more financiallyvulnerable ones. For our colleagues, we’ve responded
by reviewing and making permanent adjustments tocolleagues’ salaries as needed and providing a rangeof additional benefits and support.
We always talk about the team, the team, the teambecause our ability to deliver is due to our all-hands-on
deck approach. We now have over 11,000 colleagues
whose dedication and hard work make this all possible
and I’m always so proud to see the team’s efforts
recognised externally. This year we’ve received a rangeof awards across all our businesses and geographies.
We continue to rank as one of the Best Multinational
Workplaces for the 20th consecutive year by theGreat Place to Work Institute and were named a
Diversity Leader by the Financial Times.
Having a positive impact on our wider society is also
central to our ethos. We are progressing well with
our net zero goal and reduced our scope 1 and 2
emissions16 by 32% year on year. We refocussed a largepart of our effort to sustain the communities in which
we operate on the theme of “employability” whichaligns closely with our purpose to “help more people
to look after their future”. We feel lucky to be part of
the Admiral family that is such a great place to work,
and we would like to contribute to make the world agood place to work for more people.

16 Location based emissions

Admiral Group plc Annual Report and Accounts 2022

23

Company Overview

7 March 2023

Admiral Group plc Annual Report and Accounts 2022

Milena Mondini de Focatiis
Chief Executive Officer

Additional Information

Milena Mondini de Focatiis
Group Chief Executive Officer

Financial Statements

Finally, I would really like to thank all my colleagues
across the Group for their hard work over the lastyear. I look forward to working together in 2023 –and crucially celebrating Admiral’s 30th birthday.
This is a great opportunity for us to reflect on theamazing journey the Group has been on over thelast three decades and the strong foundations welaid out for the next 30 years of growth.

“I would like tothank all m ycolleagues acrossthe Group for their
hard work over the
past year.”

Corporate GovernanceI look forward to working with Mike Rogers over the
coming years as incoming Chair and I’m confident hisbreadth of experience in financial services and beyond
will add great value to Admiral.

Strategic Report

Speaking about the Admiral family, I am very sad
to say goodbye to Annette Court who has been
our Board Chair since 2017. I’ll always be personallygrateful to Annette for the invaluable help in thetransition between David and myself, and for her wise
counsel and warm support at every step of my Admiraljourney. And, on behalf of all my colleagues, I would liketo thank Annette for her considerable contribution to
the Board, her strong commitment to Admiral and its
people, and the guidance and support she has always
generously offered to the wider management teamover the last 11 years, while embedding the Admiralculture at her very heart. I wish Annette all the bestfor her future.

24

Strategic Report

Q&A with Milena, Geraint,
Cristina and Costantino“It’s a volatile
market, but we’re
well-positioned
to succeed.”
Adding value.
Delivering
difference.

Q: Milena, how would you describe the market
environment in 2022?
A: This year has seen its share of challenges bothfor Admiral and the industry. We started the yearwith Omicron and soon after learned of the eventsin Ukraine. Globally, macroeconomic conditions
worsened and we experienced some of the highest
inflation in decades. In Motor, we’d already seen higher
costs of replacing cars and repairs due to lockdowns,
but now saw increased pressure from higher energy
and labour costs.
Low claims frequency, a prominent feature of themarket in 2020 and 2021, slowly moved upwards
as economies reopened – though still remaining
below pre-pandemic levels. As we exit 2022 andmove into 2023, there are some early positive signs.
Some elements of inflation look to be normalisingsuch as used car prices, and are hopeful that supply
chain pressures will ease in 2023 – but there arealso elements offsetting this, so significant levelsof uncertainty remain.

Q: Cristina, building on Milena’s comments,
what have been the key challenges the UK
personal lines market faced this year?
A: 2022 was marked by both significant regulatorychange, namely the General Insurance Pricing
Practices reform, and heightened inflationary pressure.
With regards to the pricing reform, the market shift
we saw in early 2022, when it first came into force,
was in line with our expectations. New business prices
increased at the beginning of the year and retention
also increased across the market as fewer people wereincentivised to shop around.
On inflation, the macroeconomic conditions are really
what are driving the conversation and I think most of
our peers would agree that we’ve never spent so muchtime talking about claims inflation! Here the story
in 2022 continued to be around accidental damage,driven largely by used car price inflation, and theimpact of higher energy costs and supply chain
disruption. For Household insurance, macro challenges
also led to higher inflation in the market, which werethen compounded by severe weather conditions
causing storms, subsidence and freezes.

MilenaMondini deFocatiis
Chief Executive
Officer

Admiral Group plc Annual Report and Accounts 2022

25

Company Overview
Strategic Report
Corporate Governance

Geraint JonesGroup Chief
Financial Officer

A: I’m at risk of sounding like a broken record
here, but the fact is that the inflationary pressure
experienced by the UK was to a large degree also
seen in Europe and the US – albeit a bit lagged insome markets with larger impacts in the second
half of the year. Claims frequency is still tracking
below pre Covid levels in Europe despite economies
reopening. The European markets have also
experienced strong competition over the last few
years, with particular premium pressure in Italy andSpain and hence lower average premiums despite
claims costs increasing.

A: Looking at the last few years, there have clearly
been much shorter cycles than in the past. This was
initially driven by the impact of Ogden, but more
recently due to the Covid pandemic, followed by
the macroeconomic uncertainty and high inflation
mentioned earlier. Whilst it is difficult to predict
how the cycle will look in the future, cyclicality willcontinue to be impacted by inflation and existing
macroeconomic uncertainty. Admiral has a longstanding track record of managing the cycle well.
Our approach has continued to be that of focus anddiscipline, which means at times we will prioritise
profitability over growth. This sometimes requires
short term trade-offs, and we have this done more
recently within the context of high claims inflation.
However, these decisions are always made in thecontext of continuing to focus on building sustainable
and profitable businesses in the long-term. We arestrengthening our core businesses but also looking
at a multitude of diversification opportunities forthe future.

This trend of persistent claims inflation waseven more prominent in the US where it led todisappointing loss performance for Elephant andthe market as a whole – with claims costs impacted
by various factors including high labour costs,
increases in repair times and higher credit hire
costs. So, in a nutshell, we saw challenging market
conditions overall. That said, we’ve increased rates
by double digits in all of these markets. And we’vetaken the opportunity to build on the fundamentalsof the business. In Europe, we continued to invest
in growth towards achieving scale which we thinkis the right decision for the long-term sustainability
and profitability of these businesses. On the contrary,in the US we slowed growth in the second half given
the challenging market conditions and took strong
action including strong base rate increases, narrowing
our footprint to focus on higher performing segments
and focusing on a customer base of higher lifetime
value. So, we’re keeping focused on the fundamentals
and taking action where needed, to continue to build
sustainable businesses.
Admiral Group plc Annual Report and Accounts 2022

Read morein ourGovernancereport on
page 136

Additional Information

Q: Milena, looking at cyclicality in theindustry – how do you think about it
and what’s changed in recent years?

Financial Statements

Q: Turning to our international markets,
Costantino, what did the picture look like in
2022 for the European and US operations?

26

Strategic Report

Q&A with Milena, Geraint,
Cristina and Costantino
continued

Q: Geraint, what is your current dividend
policy, and do you foresee any changes
in the policy or pay-out ratio?
A: There’s been no change in our approach to setting
dividends. Our formal dividend policy is to pay 65%
of post-tax profit as a normal dividend and then pay
a special dividend on top, comprising capital we don’t
need to retain for solvency requirements and buffers.
Cristina
NestaresCEO,UK Insurance

Q: Cristina, how has the household book
performed and how have the difficult
weather conditions that you mentioned
above impacted the book?

Read more on
page 54

A: Weather events are a feature of household
insurance, with severe events generally occurring
every few years. 2022 was one of those years.
The winter in 2022 saw some weather leading tohigher storm and freeze claims, together with awonderfully warm summer which unfortunately
also led to elevated subsidence costs. This severe
weather, combined with inflationary pressures,
negatively impacted the household result by £32m,
leading to a loss of £6 million.
Although a challenging year, the household bookgrew by almost 20% and we continue to enhance
our pricing and data analytics and to drive claims
efficiencies which showed through in further
improvements in our attritional loss ratios. We alsocelebrated the business’ 10-year anniversary –Happy birthday to the Household Team! Whilst
still a relatively young book we have a strong andexperienced management team who’ve successfullygrown our household proposition to deliver great
service to 1.6m customers. I am excited to see what
the next 10 years has in store for Household!

Our average pay-out ratio over the past few years
is around 90% and changes in dividend period on
period tend to be broadly in line with changes in posttax profit. As we see things today, we don’t expect
changes in the level of pay-out moving forward.
The solvency ratio is the main constraint and we’re
comfortable with the post-dividend ratio of 180%.

Q: Milena, are you comfortable with theway that hybrid ways of working areembedded across the business – and within
this new environment how do you maintain
Admiral’s culture?
A: Hybrid working has changed the way we work,
but it doesn’t change the foundations of our culture.
Admiral continues to be all about ‘the team, the team,the team’. We continue to encourage people to work
together and challenge them – whether in an officeor online – to drive better outcomes for the business.
It has also been rewarding to see that our engagementscores have remained at or above pre-pandemic
levels and our Great Place to Work rankings continue
to be industry leading. We were ranked in the Top
20 best places to work in Europe and 4th in the UK.
These awards are a testament to a strong culture
that’s deeply embedded within the organisation.

Admiral Group plc Annual Report and Accounts 2022

27

Company Overview

A: 2022 was a difficult year for Elephant, with verystrong claims inflation leading to a disappointing
result for the business. The team continued to focus
on strengthening fundamentals – we increased baserates by double digits, slowed growth, narrowed ourfootprint and strengthened risk selection and pricing.
In addition, we strongly reduced our cost basethrough cutting acquisition and advertising costs,
and continued to shift the business towards more
efficient distribution channels. We’re continuing
to look for ways to improve and we are considering
options for the future of the business.

A: As Milena highlighted, 2022 was definitely
a challenging year. However, all in all, the Group
produced a pretty pleasing set of results.
We unsurprisingly see a reasonable drop in Group
profit when we compare against 2021 and 2020,
though it’s important to remember that both those
years benefited from exceptional circumstances
given the impact of the pandemic on claims costs
and profitability. In 2022, we experienced the unwindof the positive covid related impacts, higher claims
inflation and bad weather.

A: We have a long-standing approach at Admiralof making sure we have a positive impact on ourcommunities. 2022 was no different. To support
communities impacted by storms and floods we set
up a new Global Emergency Fund. The fund is focusedon making donations that target those in need quickly.
In 2022, we supported the Welsh Refugee Council
to help refugees secure employment in the country,
we supported the British Red Cross relief efforts inPakistan and donated to communities impacted by
Hurricane Fiona in Canada.
Under our new Together for Better Community
Strategy we’ve also begun working withorganisations like Generation. These organisations
strive to transform the education system into
an employment system. We are looking topilot programmes in India and Italy, supporting
participants get sustainable jobs across thetechnology, services, and healthcare sectors.
Our selected partnerships will see us help more
people to achieve their full potential and securefulfilling and sustainable employment regardlessof background or location, from helping womenin tech, talented young people, adults withadditional learning needs and those furthest
away from the labour market.

Admiral Group plc Annual Report and Accounts 2022

Costantino
MorettiCEO,International
Insurance

Additional Information

Q: Milena, 2022 has been a difficult year notjust for businesses but for many communities
around the world, can you share more about
what Admiral’s done to help?

We expect that 2022 was the worse point of thecycle and that 2023 should improve following actions,
including significant price increases. Early signsin Europe are positive and we project improving
loss ratios as well as continued growth. In the US,
we’ve taken some pretty drastic actions to improvethe bottom line, whilst businesses such as Admiral
Money and Pioneer continue to grow and develop.
Admiral Money in particular is showing pleasing
progress, reporting its first (of many!) profit in 2022
despite the difficult backdrop.

Financial Statements

Although a challenging year, I’d like to thank thestrong and committed team at Elephant who havebeen working very hard to serve our customers withina challenging period. Elephant was recognised forthis in 2022 by making the Forbes list of America’s
Best Insurance Companies. This award is voted forby customers and only 35 carriers were selected outof a list of over 3,000. Amazing to see!

Read more on
page 46

Corporate Governance

Q: Geraint, given the difficult conditionsin 2022 – how has the Group performed
and what can we expect going forward?

Strategic Report

Q: Costantino, Elephant in the US experienced
a challenging year, can you provide an updateon the performance and outlook?

28

Strategic Report

Our Strategy
1. Accelerating
towards Admiral 2.0
Scaled Agile• Following the successful implementation of Scaled
Agile in ConTe last year, our Spanish operation
followed suit in 2022. Teams across both businesses
worked together to embed Scaled Agile principles
in Seguros and to build on the learnings from ConTein the previous year. This teamwork has allowed asmooth agile transition within the business, whichhelps with delivering projects to the market quickly

Customer Centric Innovation

Overview
Our aim is to accelerate the evolution of ourcore businesses toward what we call Admiral
2.0, an organisation that leverages on Admiral’s
historical strengths whilst being even more agile
and technology focused. This includes embracing
smarter ways of working and attracting new talent.
But, above all else, it is a company that continues
to put the customer first and that leverages ondata and advanced analytics to constantly improvetheir experience.

• Great customer service is a core strength ofour business. We are continuously seeking
improvements on the digitalisation of customer
journeys and app adoption• We’ve added a new Claims Total Loss Process inside
MyAccount, enabling customers to manage total
vehicle loss claims online• We’ve enabled customers to adjust their policy
tiers and ancillaries online during any point of theirpolicy period• We’ve added single sign on with our app andMyAccount, reducing the time it takes customers
to sign into their portal

Core Competencies:

Smart Working• Digital First• We have fully adopted hybrid working across ouroperations – new town hall spaces have been
built to host department and team engagement
events which keep colleagues up to date on
department-wide news and celebrate team andindividual successes• Scaled Agile• Customer-Centric Innovation• Smart Working• Data and advanced analytics

Progress in 2022
Digital first• We’ve continued to simplify our technology estate,removing legacy systems and improving our overall
operational resilience• We’ve integrated a new claims management systemin our UK Motor function – building a more efficientand convenient system for our customers. As a resultof these changes we are already seeing greater digital
adoption through increased rate of use• We’ve enhanced our rating capability byimplementing new machine learning techniques overthe past few years. These models have improved ourrisk predictions as well as fraud detection capabilities.
Similar approaches are being adopted in other partsof the business, ensuring our customers continue toreceive fair and competitive prices• Internationally our US brand Elephant has
strengthened their digital claims journey to increase
the speed of claims resolution. Over two-thirds of
new claims now start on the Elephant app

Data and advanced analytics• Initial steps to deploying Admiral’s UK Next
Generation Architecture have been taken. This isa set of foundational technologies that allows
Admiral to bring an improved customer experienceand broader product offerings to our customers.
This will help support faster deployment of new
products and services, an enhanced web and mobile
platform to improve customer self-service, and theability to provide a single view of the customer toboth agents and our partners

Relevant Principal Risks and Uncertainties
A

B

C

D

E

F

G

H

I

J

K

Read more on
page 114

Admiral Group plc Annual Report and Accounts 2022

29

Company Overview

Admiral 2.0 case study:
Programme NEO

Strategic Report

We’re excited to announce that our new
claims management system, Guidewire ClaimCentre (GWCC), has gone live across our UK
Motor function. This is a great achievement
and a testament to the commitment
from our Programme Neo team.

Lorna Connelly
Head of UK Motor Claims

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Claims employees have been receiving training on the
new system and are already enjoying its benefits. We havereceived lots of positive feedback already on how quick,efficient, and simple the system is. Likewise, feedback
from customers has been just as positive. Customers haveshared how simple the digital flow is and how clear it is tonavigate in addition to the ease with which their claim canbe managed fully online, meaning they don’t have to call in,giving them more flexibility and time.

“I am so excited to get to this position!
It is the culmination of so much hard work
across the Programme and the department,
and the feedback from our employees
who have been through training has been
unbelievable. Thank you and well done toeveryone involved. Going live is just thestart, roll out will take some time and welook forward to all the future improvementsfor our customers, employees and resultsthat this launch will inspire.”

Financial Statements

We first went live with the system in Household Claimsin August 2021, allowing us to learn and improve on asmaller subset of our overall UK claims. We then took
those learnings on board when launching with our muchlarger product, UK Motor insurance. We went live with
the Motor system in August 2022.

Corporate GovernanceHaving used our previous claims system for 20 years, ournew claims system will transform the way our claims aremanaged. The Guidewire Claim Centre is more efficient,
it offers better data insight, and it will enrich our customer
experience. Customers now have a truly digital experience,
giving them more choice and flexibility on how theyinteract with us. GWCC will also improve our communication
with both customers and suppliers and give us greater
ability for further integration in the future.

30

Strategic Report

Our Strategy
1. Accelerating towards Admiral 2.0
continued

Data Academies
This summer we launched a new Data
Academy in the UK to provide first class data
training for our colleagues.
To that end, over 700 employees across UK insurance,
Pioneer, Admiral Money and Admiral Law have been brought
together in a single Data Community. They can accessmonthly newsletters, lunch and learns, training sessions
and development programmes. We are also collaboratingwith the EU Analytics Academy to support and develop ourdata professionals and share our learnings across the Group.
In September 2022, we partnered with Women in Data toshow our investment in increasing diversity across dataroles as well.
Since the launch of the Data Academy, over 300 people haveattended an event or training session and there have beenover 1,000 newsletter reads. At the heart of the Admiral 2.0
strategy is data, and the Data Academy is also rolling out
an ambitious ‘Data Skills’ training pathway to the businessto increase their data confidence and skills and help people
make better data driven decisions.

Digital improvements in Italy
Digitalisation, agility, quality and security are
the pillars of ConTe’s customer-centric approach.
Digitalisation, agility, quality and security are the pillarsof ConTe’s customer-centric approach. Striving to put ourcustomers at the centre of what we do, in 2022 ConTe madeseveral improvements. For digital users, ConTe accelerated thedigitalisation journey, with now over half of our customers’transactions being performed online. We continued theiradoption of Scaled Agile, with the focus on executing moreand constantly delivering value to the customers.
During 2022, we made good strides towards claims
digitalisation. Customers can now self-report a claim
autonomously through their personalised area on the website.
In addition to this they can use the app to upload pictures ofthe damage and state their preference of how they would liketo repair the vehicle. Streamlining this process has resulted
in great customer feedback, with a 4.8/5 rating on web app
usability, and significantly increasing the use of digital channels.
Admiral Group plc Annual Report and Accounts 2022

31

Company Overview

2. Diversification

Strategic Report

Progress in 2022
Scale up promising products• We’ve brought in additional expertise in Household
and strengthened our supplier network. We’ve also
leveraged our new claims management system toimprove customer pricing

Strengthen Customer Proposition

Our approach to product diversification is tomake focussed, staged investments on a selectnumber of new product opportunities across thefinancial services sector, whilst strengthening andcomplementing existing customer propositions.

• We launched our MultiCar proposition on pricecomparison, helping expand the reach of ourpopular customer insuranceCore Competencies:• Leverage core strengths• Since 2017, Admiral has built a prime loan book andbecome a meaningful participant in the UK personal
lending market. To date, we’ve issued over 250,000
loans to customers and disbursed over £2 billion
in lending• Innovate in product design

Innovate in product design• Scale up promising products• Strengthen customer proposition• We now offer a new product to customers in the
UK – Pet insurance. The product is available tocustomers online and via price comparison websites• Toolbox by Admiral launched a commercial
insurance MVP in 2021 by offering flexible, easy‑tobuy tool insurance direct to UK tradespeople.
In 2022, Toolbox extended its product range toinclude other core business insurances (e.g. public& employers liability) and began to test possible
future routes to scale

Leverage Core Strengths• We’ve partnered with Ondo insurance and their
Leakbot device. Leakbot is a smart water-leakdetector which alerts customers to leaks in theirhome and helps prevent damage• We launched an online journey for our Landlord
insurance proposition, allowing customers topurchase Landlord policies directly from our website

Relevant Principal Risks and Uncertainties
A

B

C

D

Read more on
page 114

Admiral Group plc Annual Report and Accounts 2022

E

F

G

H

J

K

Additional Information

Diversification is a key element for Admiral to build
a sustainable business for the future. Our approachhas been to take the skills and learnings from ourcurrent business and find ways to leverage themin building successful future businesses. In the past
10 years, we’ve launched several products including
household insurance, travel insurance, pet insurance
and a personal lending business. Our diversified
business model means that customers can engage
with us across a number of products, and we can
support a large variety of their needs.

Financial Statements

Overview• Post-pandemic, the travel market has strongly
bounced back. We’ve grown our operations to
support higher demand and continue to meetcustomer needs

Corporate Governance• Within the UK, we have seen sustained growth inHousehold and Travel, and good progress on our
new Pet proposition

32

Strategic Report

Our Strategy
2. Diversification
continued“I am super excited to have reached thismilestone, this is the culmination of so much
hard work from so man y people across thebusiness! I truly believe we have built afantastic range of products and services
that will deliver great value for our customers
and continue to build on the foundations ofwhat has made Admiral a leader across ourflagship products. The business has achieved
solid growth following launch and plan onbuilding on the strong start throughout 2023”.
Pritpal Powar
Head of Pet

Launch of Pet in the UK
We launched Admiral Pet in 2022 to offer a
new and exciting product for our customers.
This is a new market for Admiral and a good stepping-stone for
our Group diversification strategy. To celebrate this milestone,
we partnered with Warner Brothers and the 2022 ‘DC Leagueof Super Pets’ film, which saw some lucky colleagues attend
a special screening at the Warner Brother’s headquarters
in London!
• Admiral Pet has lots of additional features above the basic
Pet insurance product, including:– ‘Pawsquad’, an online service that enables customers to
speak to a qualified, UK-registered vet 24/7 for advice
and treatment options free of charge– Innovative and customer centric digital journeys acrosssales and claims– Multi-Pet, insurance cover that allows customers to insure
all their pets on one policy and make savings of up to 15%
Admiral Group plc Annual Report and Accounts 2022

33

In addition, since the launch of our new claims system lastyear, our Household colleagues have been rolling out new
software from our partner CoreLogic. This software helps
to enhance how our panel of suppliers can integrate withour claims system.

Bouncing back from Covid and pandemic
restrictions, this year the Travel department
sold over 800,000 policies! The department
has tripled in size over the year, with a creationof a brand-new team in Delhi who ensure ourcustomers can contact us more conveniently.
Over 2022, we have improved our customer portal andlaunched a new, shorter online journey (Instaquote) for ourcustomers. Digital improvements have also happened within
our claims process, whereby we now offer an electronic
notification of loss journey. This has helped increase thelevels of customer self-service, and gives a faster and more
efficient process for our customers.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Travel turns 5

Financial Statements

Finally, the Household Insurance team continue towork on improving and growing our product offering.
Landlord insurance now has an online journey,
meaning our customers can purchase a landlord
policy directly from our website.

Corporate Governance

The Household team are continuously seeking improvements
in our pricing, claims management, and the service ourcustomers receive. Some of our key achievements over theyears include an expanded digital offering, new productlaunches within the household line, simple quote journeys
with Instaquote, and strengthened supplier partnerships.

Strategic Report

Our Household product and team turned
10 years old in 2022. Household has been an
Admiral success story from the start and was
our first diversification product beyond Motor.
We now have over 1.5 million customers andstrong plans in place to accelerate that growthin the coming years.

Company Overview

Household celebrate 10 years

34

Strategic Report

Our Strategy
continued
3. Evolutionof Motor

Evolve our proposition• We improved our electric vehicle cover to now
include an out of charge feature provided by the AA.
If customers run out of charge whilst on cover withus, the AA will recover them to the nearest charge
point or any other destination of their choice

Overview

Develop competencies for the future

Admiral’s third strategic pillar is built on evolving our
proposition for changes in mobility. The way people
move around is changing. Different views exist
on future mobility trends and where the greatest
future impact will be. To stay close to these trends,
we are harnessing our test and learn philosophy,
looking at emerging propositions, and developing corecompetencies that will be relevant for the future.

• We collaborated on an autonomous simulation
project funded by the government under its
innovation funding scheme. The simulation tested
automated driving systems in a virtual environment
and across multiple different scenarios

Core Competencies:• Understand changes in mobility• Evolve our proposition• Develop competencies for the future• Innovate in product design

Progress in 2022
Understand changes in mobility• Our designated mobility team continued to test
and learn how changes in mobility will impact
our products and how we can adapt to changing
customer needs• These projects help us build our knowledgeof autonomous systems, their risks, and the typesof tools we can use to understand those risks. It also
helps us build our network in the space and build
connections with relevant organisations

Innovate in product design• We launched LittleBox Pod, a new telematics
product that works alongside the Admiral app
to record where, when and how the customer
drives. Each journey is shown to the customer
in the app and they receive instant individual,
personalised feedback• Our Veygo app has had a re-brand, improving
the customer experience and making it easierfor customers to get what they want quicker• We have invested in Wagonex, the UK’s leading
mobility subscription platform provider to better
understand changes in mobility

Relevant Principal Risks and Uncertainties
B

C

D

E

F

G

J

K

Read more on
page 114

Admiral Group plc Annual Report and Accounts 2022

35

Company Overview
Strategic Report
Corporate Governance
Financial Statements

As part of our strategy to be the leading insurerin analytics and data, LittleBox Pod is a newtelematics product that we’re offering to ourcustomers. Launched in November, it is thethird device added to the LittleBox product line
alongside the hard install and the Plug & Drive.
The Pod is a small discreet device that the customer selfinstalls to the inside of their windscreen via a peel and stickback. The device itself is only 2 inches x 2 inches in size andis battery powered with a 4+ year lifespan or 4,000 hours ofdriving. Customers download and register with the Admiral
App, which then links wirelessly with Bluetooth to help collectand use the Pod data. The LittleBox Pod works alongside theAdmiral app to record where, when and how the customer
drives. Each journey is shown to the customer in the app andthey receive individual, personalised trip feedback.
The Pod also uses tracking on phone distractions, harshbraking, acceleration, speed and night-time driving tocalculate our customers driver score. This score is thenuploaded automatically on a weekly basis through theapp, so customers can instantly view their driving habits.
Through this channel, our customers can stay closer thanever to their feedback on how to improve their driving
performance, and ultimately bring their premiums down.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

LittleBox Pod(Telematics product expansion)

36

Strategic Report

Our Strategy
3. Evolution of Motor
continued

Pioneer’s investment in Wagonex
In 2022, Admiral Group’s venture building
business Admiral Pioneer made its firststrategic investment into Wagonex, oneof the UK’s leading mobility subscription
platform provider.
Wagonex, designs, builds, and manages flexible,
all‑inclusive technology automotive subscriptions
which enable vehicle suppliers to offer subscription
options direct to consumers.
This investment supports Admiral Group’s ambition
to diversify and enhance its digital proposition andextend into new mobility trends. It will also provide theGroup, which already offers short-term motor insurance,with insight into the specific insurance needs of vehicles
provided to customers on a subscription basis.

“Our aim is to support long-term
diversification by identifying new markets
and ventures where our existing strengths andknowledge give us a competitive advantage.
We believe that Wagonex’s best-in-classtechnology and strong position in the rapidly
expanding car subscription market makes it
a perfect fit for our first strategic investment.
We look forward to working closely with Tobyand the team as they continue to expand
Wagonex in the UK and beyond.”
Emma Huntington
CEO, Admiral Pioneer
Admiral Group plc Annual Report and Accounts 2022

37

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Veygo’s new app, has developed the tech further toimprove the customer experience and make it easierfor customers to get what they want much quicker,
significantly reducing the number of screens andquestions they must answer before being shown aprice. This has made the speed of getting cover a lot
quicker for our customers. In addition, all of Veygo’s
propositions are now on the app, making it easier forcustomers to get the exact product they are after.
The app is designed specifically with young people
in mind and making sure we can provide the correct
product in the correct ways to our customers.

Financial Statements

Tap.Vey.Go is the new campaign to tell customers
about the new and improved Veygo app, making suretemporary and learner insurance is available for ourcustomers on the go. It is another example of how we’rebringing our business strategy to life, ensuring excellent
customer service, increasing customer retention,and excelling in tech. We’ve also made it possible forcustomers to purchase monthly rolling subscription
policies through the website with zero cancellation
fees on expiry. It demonstrates Veygo’s commitment
to meet customer’s developing needs of on
demand cover.

Corporate GovernanceVeygo product marked 5 years of trading in October
2022. The brand offers flexible, short term car insurance
for customers looking for learner driver insurance or
temporary insurance. The product is key to our growth
in motor evolution and diversification. With 3 million
policies already purchased by its happy customers,
we can’t wait to see what else is to come for ourcolleagues in Veygo. Although it is only 5 years old,the speed in which technology evolves in our fastdeveloping world, meant, in order to meet and exceed
our customer’s needs, it was time to further develop
the app and its capabilities.

Strategic Report

Since its launch in 2017, Veygo’s journeyhas gone from strength to strength.
With the vision to anticipate future trends
in the short-term insurance marketplace,keeping up to date within the digital spaceis essential.

Company Overview

Tap. Vey. Go –Veygo’s new and improved app

Strategic Report

Our Sustainability Approach

We have a purpose-led sustainability approach which provides an agreed uponframework to focus investments and drive strong sustainable performance.
At the core of our approach is Admiral’s purpose to help more people look after
their future. Always striving for better, together. Our sustainability approachbuilds on our purpose and purpose framework and targets four key areas –Customers, People, Society, and Business.

PeopleHighlights in 2022

19th

Best Multinational
Workplace in Europe

3rdGreat Place To
Work for womenin the UK

Gre
at
pla
c

38

86%
of colleagues
believe Admiral is agreat place to work19

i
ive
Posit

Society(Community andEnvironment)

rk
o
ow
t
e

Help more
people tolook after
their future.

m

ct
on
soc
iety

pa

Highlights in 2022

Over
3,300

recorded volunteer
hours by employees

32% >£400k
reduction inscope 1 and 2
carbon emissions

donated via our Global Emergency Fund

Admiral Group plc Annual Report and Accounts 2022

39

Company Overview

Our performance this year is describedon page 40

Strategic Report

Read more about our sustainability
approach on page 68

Striving
for better
together.
Admiral Group plc
Sustainability Report 2022

Highlights in 2022

>50

Voted

Group average NPS
across all countries17

Best Big Insurance
Company in the
UK Insurance
Choice Awards>85%
UK Motor customers likely
to renew after a claim18

lb

us
ine
ss

Business

fu
s
es
c
c
Su

Highlights in 2022

+259% AA
Total Shareholder Return20

17 Relational NPS, methodology updated in 2022
18 UK Motor customers , monthly score averaged over the year
19 Great Place To Work (GPTW) survey result

Admiral Group plc Annual Report and Accounts 2022

MSCI ESG rating

20 Total Shareholder Return (TSR) for Admiral Group plc shares
over the ten-year period to 31 December 2022
21 Weighted average

50%
average Return on
Equity last 5 years21

Additional Information

ces
rien
pe
ex
er

Alwaysstriving
for better,
together.

Financial Statements

Grea
t cu
sto
m

Customer

Corporate Governance

Download the PDF of the Sustainability
Report at admiralgroup.co.uk

40

Strategic Report

Key Performance Indicators

In order to implement, develop and measure
the Group’s strategic performance,
we monitor several financial and non-financial
key performance indicators (‘KPIs’).

Financial measures
Group Profit

GrowthInternational GrowthGroup share of profit before tax

Group customer numbers

International customers

-39%

+11%

+13%

Diversification

Shareholder Returns

Capital Position

UK Household customers

EPS

Solvency ratio

+18%

-41%

180%

Customer satisfaction

Customer service

Digital strides

Customers likely to renew after a claim

Net Promoter score

Customer engagement

>85%

>50

>50%

Great place to work

Positive impact on society

Net Zero by 2040

GPTW rankings

Number of hours donated by employees

Carbon emissions reductions

4th+3,30032%(2021: +26%)(2021: +9%)(2021: +14%)(2021: +13%)(2021: +24%)(2021: 195%)

Non-financial measures

22(2021: >90%)23(2021: >50%)>50% MTAs23 done online

24(2021: -8%)

22 Monthly score averaged over the year
23 Mid Term Adjustments (UK operations)
24 Reduction in scope 1 & 2 emissions

Admiral Group plc Annual Report and Accounts 2022

41

Company Overview

2022 Awards

Best Car and Home
Insurance provider,
Insurance Choice Awards

Listed on Forbes’ list of
American Best Insurance
Companies, US
Best Big Companies
to Work For in the UK

2nd

Best Big Insurance company,
Insurance Choice Awards

Best Big Company forTeam of the Year (IT Digital),
Fintech Awards Wales

Wellbeing
Great Place
to Work UK

Best Multinational
Workplace in Europe

4thBest Workplacefor Women

3rd

Listed in Top 75 Social
Mobility Employer Index, UK
Élection du Service
Client de l’Année (ESCDA)
Award, France

19th

Atlantic Canada’s Top
Employers and Nova Scotia’s
Top Employers, Canada

Great Place toWork Italy

Richmond Times Dispatch
Top Workplaces, US

4th
Great Place to WorkUK Best Workplaces

India’s Best Workplacesin IT and IT-BPM

Great Place toWork France

7thGreat Place toWork Canada

4thGreat Place toWork Spain

2nd
Admiral Group plc Annual Report and Accounts 2022

Silver Award, Workplace
Wellbeing Wales awards
Best Workplace for
Wellbeing UK, 4thBest Place to Work in Data,
DataIQ Awards
Best Car Finance Providerof the Year, Moneyfacts
Armed Forces Employer
Recognition Scheme
Gold Award

Additional Information

Great Place toWork International

Financial Statements

Recognised by the Fundación
Diversidadas as beinga Diverse and Inclusive
Workplace, Spain

Corporate GovernanceBest Companies

Strategic Report

Other Awards

42

Strategic Report

Group Chief Financial Officer’s Review

Geraint JonesGroup Chief
Financial
Officer“The Group delivered asolid set of results in
2022 within the context ofmacroeconomic uncertainty
and the highest level ofinflation in decades.“Adding value.
Delivering
difference.

Admiral Group plc Annual Report and Accounts 2022

43

Company Overview

Looking first at the UK Insurance result,
we unsurprisingly see a big fall against 2021 but asmall increase v 2019. Maybe it goes without saying,
but the reduction from 2021 is very predominantly
motor insurance related and is mainly due to the
combination of a) the unwind of the positive covid
related impacts and b) the higher inflation in 2022.
Those effects led to higher current year claims andlower profit commission.

Comparing back to 2019, UK profit and turnover
were modestly higher in 2022, though the increasein customer numbers is much higher at nearer 30%.
There are various offsetting movements that resultin the higher profit, including the worse weather in
2022, but also stronger back year reserve movements
and associated profit commission in 2022 comparedto more positive current year claims in 2019.

£m

2022

2021

2019

Change v 2021

Change v 2019

UK Insurance
Europe Insurance
US Insurance
Admiral Money
Admiral Pioneer
Share scheme cost
Other costs
Continuing operations
pre-tax profit
Restructure cost
Continuing operations profit
after restructure cost

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

894
1
(13)
(6)
(10)
(63)
(34)

598
9
(10)
(8)
–
(49)
(35)

(278)
(6)
(36)
+8
(6)
+11
+7

+18
(14)
(39)
+10
(16)
(3)
+8

469
–

769
(56)

505
–

(300)
+56

(36)
–

469

713

505

(244)

(36)

Admiral Group plc Annual Report and Accounts 2022

Additional Information

We noted when reporting our half year resultsin August 2022 that 2019 is a better comparison
to the 2022 figures, rather than the exceptional
2020 and 2021 years which were distorted by thehuge positive impact of the pandemic on claims
costs and profitability. My review of the results
therefore looks also at 2019, the last pre-pandemic
full year:

The UK Household result was also impacted bymuch higher than usual severe weather-related claims(seen across the market), significantly moving theresult from a profit of £21 million to a loss of £6 million.
If we adjust both years to take out the impact ofsevere weather and subsidence claims, profit would
have been broadly flat at around £25 million.

Financial Statements

This had a number of impacts around the Group,
but most important was probably the notable
increase in average claims costs, especially todamage claims. We back ourselves to manage
insurance cycles effectively – quickly identifying
and responding to trends – and we increased prices
significantly during the year, especially in the UK and
US, to counteract the inflation. In the UK particularly,
our rates appear to have moved materially morethan competitors (until the last quarter maybe),
and hence we stopped growing in UK motor in H2.
Loss ratios were adversely impacted despite therate increases.

Corporate Governance2022 was undeniably a challenging year, though with one
or two exceptions, the Group result was pretty pleasing.
There are lots of moving parts in the comparisons ofcourse (which are discussed in detail in the strategic
review), but there are a few stand-out observations:

Strategic Report

With the impact of the pandemic
fading, spiking inflation acrossour markets was the big story for
Admiral in 2022.

44

Strategic Report

Group Chief Financial Officer’s Review
continued
In UK motor, at the end of 2022 we have reduced thesize of the margin in the booked reserves (though it
wasn’t a significant driver of profit), in part becausesome of what we hold that margin for has manifested
in the best estimate reserves (in terms of higher
inflation). Our philosophy regarding reserving remains
sacrosanct and the closing margin position remains
very cautious – around a 95th percentile position –which is aligned with the top end of the accounting
policy range we expect to adopt under IFRS17 from
2023. If there are no big shocks in claims development
moving forward, we expect significant reserve releases
to feature as an important part of profit.

Investments and investment income

Moving now to Europe, where despite the higher
claims inflation and continued strong growth (+15% in
customer numbers, over €600m turnover), the result
was only modestly lower at a loss of £5 million vsa profit of £1 million in 2021 (£9m profit in 2019).
The combined EU motor result was only very slightly
negative (higher loss ratios, investing in expanding
distribution in Spain were notable drivers), and wecontinued to invest in expanding the product line
(particularly Household in France and Pet in Italy).
Given the backdrop, I think it’s a decent result forwhat continues to become a more material part of
the Group.

Notwithstanding the above, the portfolio is subject tovaluation changes from spreads and rate movements(the latter is well matched to changes in the values ofclaims liabilities). Movements in unrealised losses in 2022
were £256m, though values recovered notably in the lastmonths of the year and into early 2023. As rates moved
up in the year and maturing assets and cash inflows were
invested, the level of return increased (average returnin 2022 of 1.6% vs 1.1% in 2021). If rates remain higher
than their long-term lows for the foreseeable futurethen we will earn higher investment income (for context,
each additional 100bps of return = ~£35m in additional
investment income).

A disappointing change in 2022 though was the
Elephant result in the US, which was a bit under£40 million worse than both comparative years.
The US auto insurance market experienced severe
increases in the cost of claims during the year,
and despite substantial rate increases, Elephant’s loss
ratio was adversely impacted (85% in 2022 v 73% and
82% in 2021 and 2019 respectively). The H2 result wasworse than H1, as the rate increases take their time
to impact the results and claims costs continued toinflate. Many or even most of Elephant’s competitors
appear to have fared much worse. As my colleagues
have noted, we’re assessing the best way forward for
Elephant, and in the meantime the focus of the teamis on materially improving the combined ratio andsignificantly reducing the loss.

IFRS17

And finally, returning back to the UK – Admiral
Money delivered its first full year profit – small at theminute admittedly but given the economic situation,it’s a fine result the team should be very proud of,and we believe it’s the first of many, hopefully growing,
positive results. We remain prudently provided for
expected credit losses. We continue also to invest
in growing new businesses under the Admiral Pioneer
umbrella – notably Veygo (flexible short term car
insurance) and Toolbox by Admiral (business insurance
for tradespeople) both of which are making very
nice progress. Hopefully exciting times ahead for
those businesses.

Another feature of 2022 was volatility in financial markets,particularly in terms of higher interest rates (three year
UK gilt up from 0.7% to 3.6%) and wider spreads on
corporate bonds (UK investment grade spreads up~80bps). Admiral’s investment strategy (unchanged for awhile) is reasonably cautious and is focussed on matchingasset and liability duration (average life of the assets
and claims liabilities is around three years), currency andto some extent inflation. The portfolio is of high credit
quality, and we hold very prudent levels of liquid assets.
There are appropriate ESG targets in place and we’ve
committed to a net zero portfolio by 2040 at the latest.

Big change is coming from 2023 with the new IFRS17
insurance accounting standard finally coming into effect.
Our team has worked extremely hard to get us ready forthe new standard which will introduce big differences inaccounting and presentation.
We held a market briefing in November 2022 on the key
impacts for Admiral (slides and webcast on our corporatewebsite are worth a look) and to reiterate those key
messages are:• No change on Admiral’s strategy or the ultimate
profitability of our businesses• No change on dividend policy or expectations• Admiral will use the simplified approach, though there
may be some impacts on timing of profit recognition• We will continue to be very prudent in claims reserving
It’ll be interesting to see if the adoption of the standard
leads to improved transparency and comparability.
I’d like to close by very sincerely thanking the IFRS17
project team for their work over the past few years –nice work team!
Geraint JonesGroup Chief Financial Officer
7 March 2023

Admiral Group plc Annual Report and Accounts 2022

45

Company Overview

2019% change vs.
2021% change vs.
2019

Group Turnover (£bn)*1*2*3
Underwriting result including investment
income*1*2
Profit commission
Net other revenue and expenses*1
Operating profit
Group profit before tax *3Group profit before tax, including
restructure cost

3.68

3.51

3.30

+5%

+12%

143.3
170.9
166.7
480.9
469.0

347.0
304.5
129.4
780.9
769.0

238.0
114.9
164.7
517.6
505.1

–59%
–44%
+29%
–38%
–39%

–40%
+49%
+1%
–7%
–7%

469.0

713.5

505.1

–34%

–7%

615.9
(53.8)(1.6)(48.9)(3.3)
2.1(95.2)
469.0

894.0(11.6)
4.8(13.0)(3.4)(5.5)(107.9)
769.0

597.9
(0.9)
9.0
(9.6)
(0.3)
(8.4)
(83.5)
505.1

–31%
nm
nm
nm
nm
nm
–12%
–39%

+3%
nm
nm
nm
nm
nm
+14%
–7%

Key metrics:
Group loss ratio*1*4Group expense ratio*1*4Group combined ratio*1*4
Customer numbers (million)

72.0%
29.7%
101.7%
9.28

58.5%
26.7%
85.2%
8.36

64.9%
23.7%
88.6%
6.98

+14pts+3pts+17pts
+11%

+7pts
+6pts
+13pts+33%

Earnings per share*3
Dividends per share*5
Special dividends from sale of Penguin Portals
Return on Equity*1*3
Solvency Ratio*1

124.3p112.0p
45.0p
35%
180%

212.2p187.0p
92.0p
56%
195%

143.7p140.0p
–
52%
190%

–41%
–40%
–
–21pts–15pts–14%–20%––17pts–10ptsAnalysis of profit:
UK Insurance
International Insurance
International Insurance – European Motor
International Insurance – US Motor
International Insurance – Other
Admiral Money
Other
Group profit before tax*3*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Underwriting profit including investment income includes prior period claims reserve releases on business originally reinsured but subsequently commuted.
Excluding these releases, the 2022 underwriting result is a loss of £45.6 million (2021: profit of £157.8 million, 2019: profit of £116.3 million)*3 Group Turnover, Group Profit before tax, Earnings per share, Return on equity presented on a continuing operations basis. 2021 Group profit before tax,
Earnings per share and Return on equity exclude the impact of the £55.5 million UK Insurance restructure cost
*4 See note 14 for a reconciliation of Turnover and reported loss and expense ratios to the financial statements. Ratios exclude the impact of the UK Insurance
restructure cost in 2021
*5 The 2019 dividend of 140.0 pence per share includes the deferred special element of the 2019 final dividend of 20.7 pence per share that was paid alongside
the interim 2020 dividend

Admiral Group plc Annual Report and Accounts 2022

Additional Information

2021

Financial Statements

2022

Corporate Governance£m

Strategic Report

2022 Group Overview

46

Strategic Report

2022 Group Overview

Group highlights
The Group delivered a solid set of results in 2022
within the context of macroeconomic uncertainty andthe highest level of inflation in decades. In response,
the business increased prices and rates where applicable,
but the impact of these changes will take time toearn through in the underlying result. This is within acontext of two outlier years of elevated Group profits
in 2020 and 2021, as a result of Covid and other factors.
Hence, comparisons include both the 2021 year impacted
by Covid, but also the 2019 pre-Covid year.
Highlights of the Group’s results for 2022 are as follows:• Businesses across the Group grew strongly in 2022with turnover up 5% and customer numbers up 11%
year-on-year:– The UK Motor business grew in the first half ofthe year primarily driven by growth in renewals
customers, although this growth reversed in thesecond half as Admiral maintained pricing discipline,
increasing prices ahead of the market. Overall Motorcustomers and turnover were both down 1%
compared to 2021
– UK Household continued to grow customer
numbers strongly (+20%), which alongside a notable
contribution from UK Travel led to overall UK Insurance
customer growth of 8%– Outside the UK, International Insurance customers
increased by 14%, and turnover by 15%• Group profit before tax for the year was £469 million,
39% lower than the exceptional result for 2021 and 7%
lower than 2019:– UK Motor insurance profit was £623 million – lower
than 2021 (£872 million, excluding restructure cost),
as a result of both an increase in claims frequencies
post the low levels during the pandemic and theimpact of claims inflation, but £31 million higher
than 2019 (£592 million)– UK Household was impacted by a number ofsevere weather events in 2022 resulting in a lossof £6 million (2021: £21 million profit), with thesevere weather profit impact of £32 million(2021: £4 million)– International Insurance business combined result was£42 million lower than 2021:– This was primarily driven by elevated market-wideclaims inflation in the US, with a £49 million loss,£36 million worse than 2021 (loss of £13 million)– Admiral Money reported its first profit of £2 million(2021: £6 million loss); within the context ofmacroeconomic uncertainty the business continued
a prudent approach to growth, maintaining
favourable default experience and tightening
lending criteria– Other Group items decreased to £95 million(2021: £108 million), impacted by lower sharescheme costs and higher investment income at theparent company level, partially offset by a larger
investment in Admiral Pioneer

Economic uncertainty, Covid-19, and the costof living crisis
Macro-economic uncertainty and high levels of inflation
impacted the market and the Group’s performancein 2022.
In Motor insurance, elevated used car prices continued
to drive inflation, which together with higher repair
costs, longer repair timescales and higher projections of
future wage inflation, contributed to significantly higher
claims inflation across the countries in which Admiraloperates. Admiral took a disciplined approach to preserve
underwriting margin, increasing prices in all businesses,
which impacted growth. The impacts of these pricechanges are expected to continue to flow through into
2023. In Household insurance, severe weather events
had a large impact on results in both the UK and Europe.
Admiral continues to take a long-term approach to thebusiness, maintaining pricing discipline and a prudent
approach to reserving for insurance claims.
Within the context of an uncertain macroeconomic
outlook and increasing interest rates, Admiral Money
took a prudent approach to growth and risk selection,tightening underwriting criteria and raising prices.
Provisions for credit losses remain appropriately prudent,
though no significant increase in the level of arrears anddefaults has been seen to date.
Admiral remained committed to supporting customers,
people and communities during a challenging 2022.
This included a continued focus on customer service.
From an employee perspective, Admiral continued toadapt and embrace hybrid working for employees andsupported colleagues as part of the cost of living crisis
through increased salaries and other support measures.
From a community perspective, the business renewed
the community fund strategy to focus on supporting
employability, investing in new projects and created more
opportunities for colleagues to get involved.

– The EU Motor result was also lower with a small
loss of £2 million compared to a profit of £5 million
in 2021; also impacted by claims inflation,
continued competitive market conditions in Italy
and Spain placing pressure on premiums andinvestment in channel diversification

Admiral Group plc Annual Report and Accounts 2022

47

Financial Statements

The Group’s return on equity was 35% in 2022,
21 percentage points lower than 2021 and 17 points
lower than 2019. This is the result of a significant
growth in the average equity since 2019, supporting
the Group’s larger businesses, together with lower
earnings in 2022 as noted above.

Dividends• 37.5 pence per share normal dividend; plus
• A special dividend of 14.5 pence per share
The 2022 final dividend reflects a pay-out ratio of 91%
of earnings per share for the second half. 52.0 pence
per share is 28% lower than the final 2021 dividend of
72.0 pence per share (excluding the 46.0 pence special
dividend from the sale of Penguin Portals businesses)with the movement being broadly in line with the
reduction in post-tax profits.
Following the two payments of 46.0 pence per sharealongside interim and final dividends in 2021, a further
special dividend of 45.0 pence per share was paidwith the 2022 interim dividend, reflecting the final
payment of the phased return to shareholders of
the proceeds from the sale of the Penguin Portals
comparison businesses which completed in 2021.
The total amount returned to shareholders fromthe three payments was just over £400 million.

The total 2022 financial year dividend, including
the third special dividend from the Penguin Portals
disposal, is 157.0 pence per share, approximately£465 million. Excluding the Penguin Portals special
dividend, the total 2022 financial year dividend is112.0 pence per share, reflecting a pay-out ratio of
90% (2021 and 2019 comparatives 88% and 94%).
The final dividend payment will be paid on 2 June 2023,
the ex-dividend date is 4 May 2023 and the record
date is 5 May 2023.
The Group’s results are presented in the following
sections as:• 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 – including Admiral Pioneer (New ventures)• Group Capital Structure and Financial Position

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The Group’s dividend policy is to pay 65% of posttax profits as a normal dividend and to pay a further
special dividend comprising earnings not required tobe held in the Group for solvency capital requirements
including appropriate headroom above the regulatory
minimum in line with internal risk appetite.
The Board has proposed a final dividend of 52.0 pence
per share (approximately £155 million), split as follows:

Corporate Governance

Return on equity

Geraint JonesGroup Chief Financial Officer

Strategic Report

Earnings per share (EPS) for 2022, is 124.3 pence(2021: 212.2 pence). The relative reduction compared
to 2021 is in line with the fall in pre-tax profit noted
above. 2022 EPS is 14% below the 2019 comparative,a larger reduction than the change in pre-tax profit
due to a higher effective tax rate in 2022 compared to2019 (in turn primarily related to the much higher loss
in the US during 2022, against which no deferred tax
is recognised).

Company Overview

Earnings per share“Admiral continues
to take a long term
approach to the business,maintaining pricing
discipline and a prudent
approach to reserving for
insurance claims.”

48

Strategic Report

UK Insurance

Cristina Nestares
CEO, UK Insurance

Read more
about ouroutlook in
Our Q&A on
pages 24–27“Admiral’s differenceis it’s unique culture.
It’s one of thefundamental
cornerstones to our
success over thelast 29 years.”

It’s been another interesting year and
one that’s brought some new challenges
to contend with. We have navigated
our way through by remaining focused,
keeping our customers central in ourdecision making and continuing to findways to make a difference, but we’vealso faced some unique circumstanceswith not only industry but economywide impacts.

We successfully implemented the new FCA pricing
reform at the start of 2022, with the market adjustingin line with our expectations. Shortly after, the UK
experienced the largest spike in inflation in 40 years
following the start of the war in Ukraine and alongside
this, a severe supply and demand post-pandemic
shortage significantly impacted claims inflation for
insurers. Global supply chain shortages of car spareparts, subsequent delays to car repairs, limited
availability of new cars and labour shortages have
all led to higher damage repair and second-handcar costs, with inflation at double digits. The impactof these conditions has been felt industry-wide anddespite Admiral’s scale advantages providing some
protection against these challenges, inevitably,higher claims costs and our prudent reserving
philosophy have led to a higher 2022 loss ratio
compared to recent years.

Admiral Group plc Annual Report and Accounts 2022

49

Company Overview
Additional Information

Admiral Group plc Annual Report and Accounts 2022

Read more
about OurAwards on
page 41

Financial Statements

It was great to see our Household insurance
business proudly celebrate its tenth year in 2022
and our book grew by 20%, ending the year with
1.6 million policies (growing from 1.3 million in 2021).
Notwithstanding this pleasing growth, the Householdbusiness was not immune to the inflationary pressuresalready referenced and also had to contend withseveral weather events during the year includingstorm Eunice, a long dry summer leading to anincrease in subsidence claims and freezing conditionsin the winter months – all of which have affectedcurrent year financial results.

2022 has certainly been one of the most significant
and challenging years the insurance industry has
navigated in recent decades but I’m incredibly proudthat throughout, we have not lost sight of whatmakes us Admiral. Remaining consistent with our corevalues, leveraging our strengths in pricing and claims,
continuing to invest in new capabilities for the longterm success of the business and looking after ourpeople will all be remembered as stand out positives
for the year. A big thanks to our team for their support,
commitment, and hard work!

Corporate Governance

Despite the challenging trading environment,
we remain committed to improving the customer
experience and have continued to invest in new
capabilities enabling customers to access more
services via digital channels. We’ve also advanced
our multi-product proposition and improved businessresilience by improving the structure of our repair
network. In support of our UK diversification strategy,
we have continued to invest in our home pricing
and data analytics capabilities, improved customer
journeys to make it easier to access Admiral’s multiproduct offering and the discounts this affords
customers, and we launched a new Pet insurance
proposition. In Motor, our tiered product range
offers customers more choice and we’ve grown
our electric vehicle proposition by more than 60%
as well as investing further in pricing and data andanalytics capabilities.

Sustaining competitive advantage by fostering astrong culture, focusing on core values, and caring
for our people is a consistent and important threadthroughout our history. And in 2022, as the costof-living crisis began to materialise, in addition
to colleagues’ annual pay reviews, we gave two
permanent salary increases to our more juniorcolleagues and provided winter weather payments
to help them with their energy bills, making a positive
difference for a large proportion of our colleague
population. In celebration of the strength of ourculture and people engagement, we also received
some external recognition and we’re delighted that
our UK business was named the second Best Big
Company to Work For in the UK and received a special
award as Best Big Company for Wellbeing at theBest Companies Awards 2022. We remain committed
to being there for our colleagues, just as they arecommitted to being there for our customers when
they need us most.

Strategic Report

At Admiral we’ve responded to inflationary pressuresby maintaining pricing discipline, increasing prices
in Motor insurance by more than 20% by the end of
the year. Our decision to accelerate rate increases
earlier than the market led to a reduction incompetitiveness and a contraction in our new businessmarket share. However, this is consistent with ourposition on growth; only growing when conditions
are supportive. We strongly believe this is the rightapproach for the long-term sustainability of thebusiness. Although customer loyalty and strong
retention has helped to sustain the size of our motor
book, we ended the year with our customer basebroadly flat year-on-year.

50

Strategic Report

UK Insurance
continued
UK Insurance financial performance£m

Turnover*1
Total premiums written
Net insurance premium revenue
Underwriting profit including investment income*1
Profit commission and other income
UK Insurance profit before tax
Restructure cost
UK Insurance profit before tax, including restructure cost

2022

2021

2020

2019

2,784.3
2,489.7
628.8
247.1
368.8
615.9
–
615.9

2,751.7
2,453.2
612.6
394.9
499.1
894.0
(54.0)
840.0

2,672.0
2,373.3
539.7
346.5
351.8
698.3
–
698.3

2,635.0
2,321.7
533.2
257.4
340.5
597.9
–
597.9

*1 Alternative Performance Measures – refer to note 14 at the end of this report for definition and explanation

Split of UK Insurance profit before tax
£m

Motor
HouseholdTravel & Pet
UK Insurance profit before tax

2022

2021

2020

2019

622.6
(6.3)
(0.4)
615.9

871.7
21.3
1.0
894.0

683.6
15.4
(0.7)
698.3

592.0
7.5
(1.6)
597.9

Key performance indicators
Vehicles insured at year end*1
Households insured at year end*1
Travel & Pet policies insured at year end*1
Total UK Insurance customers*1

2022

2021

2020

2019

4.94m
1.58m
0.44m
6.96m

4.97m
1.32m
0.15m
6.44m

4.75m
1.16m
0.07m
5.98m

4.37m
1.01m
0.09m
5.47m

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

Key highlights for the UK insurance business for 2022:• Closing UK Insurance customers of just under 7 million, 8% higher than the end of 2021 and 27% higher thanthe end of 2019, with significant contributions from UK Household and Travel and the UK Motor book slightly
lower during 2022
• Strong UK Motor profit of £623 million, down from the elevated profit of £872 million in 2021, but higher thanthe 2019 pre- pandemic profit of £592 million• A loss of £6.3 million for UK Household primarily driven by weather events; excluding the severe weather
impact of £31.6 million, profit was £25.3 million

Admiral Group plc Annual Report and Accounts 2022

51

Company Overview

£m

2021

2020

2019

2,522.5
2,244.3
496.5
40.8(86.1)(95.6)
355.6
290.6
646.2
225.5
871.7
(49.6)
822.1

2,473.8
2,193.0
451.4
50.8(97.1)(77.2)
327.9
124.7
452.6
231.0
683.6
–
683.6

2,455.3
2,158.5
452.6
30.4(164.7)(74.7)
243.6
112.2
355.8
236.2
592.0
–
592.0

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Investment income includes £2.2 million of intra-group interest (2021: £2.7 million; 2020: £2.9 million; 2019: £2.8 million)*3 Underwriting profit excludes contribution from underwritten ancillaries (included in net other revenue)*4 Net other revenue includes instalment income and contribution from underwritten ancillaries and is analysed later in the report

Key performance indicators
£m

2022

2021

2020

2019

71.5%
21.8%
93.3%
20.1%
97.8%
£124.0m£189.1m£313.1m
£58
4.94m

53.0%
19.7%
72.7%
19.9%
78.8%
£128.1m£189.2m£317.3m
£59
4.97m

49.2%
19.8%
69.0%
18.8%
72.3%
£104.3m£137.3m£241.6m
£61
4.75m

60.7%
19.1%
79.8%
18.5%
87.6%
£121.7m£121.7m£243.4m£66
4.37m*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Motor loss ratio adjusted to exclude impact of reserve releases on commuted reinsurance contracts. Reconciliation in note 13b*3 Motor expense ratio is calculated by including claims handling expenses that are reported within claims costs in the income statement. The impact of reinsurer
caps is excluded. Reconciliation in note 13c*4 Original net share shows reserve releases on the proportion of the portfolio that Admiral wrote on a net basis at the start of the underwriting year in question*5 Commuted reinsurance shows releases, net of loss on commutation, on the proportion of the account that was originally ceded under quota share reinsurance
contracts but has since been commuted and hence reported in underwriting profit rather than profit commission

UK Motor profit decreased by 29% to £622.6 million (2021: £871.7 million) with the reported combined ratio
increasing to 93.3% (2021: 72.7%), reflecting a higher current year loss ratio (excluding prior year releases) as aresult of higher claims inflation as well as an increase in claims frequency compared to the low levels during the
pandemic. Profit commission was lower than 2021, also due to the lower current year profitability. Both 2020
and 2021 are considered exceptional periods, delivering much lower loss ratios than in previous years as a resultof Covid-related factors.
Market prices increased in the first half of the year in response to the FCA reforms; Admiral remained well positioned
and saw an increase in retention. From a claims perspective, claims frequency gradually increased over the courseof the year although still remains lower than pre-pandemic levels. Global inflation and factors such as a supply
constraints for new cars leading to significant inflation in used car values and hence total loss claims, and car parts,
resulted in much higher claims inflation from Q2 onwards which continued through the remainder of the year.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Reported Motor loss ratio*1,*2
Reported Motor expense ratio*1,*3
Reported Motor combined ratio*1
Written basis Motor expense ratio*1
Reported loss ratio before releases*1
Claims reserve releases – original net share*1,*4
Claims reserve releases – commuted reinsurance*1,*5
Total claims reserve releases*1
Other Revenue per vehicle*1
Vehicles insured at year end*1

Financial Statements

2022

2,493.0
2,217.9471.0
35.0(159.8)(126.1)
220.1
170.2
390.3
232.3
622.6
–
622.6

Corporate GovernanceTurnover*1
Total premiums written*1
Net insurance premium revenue
Investment income*2
Net insurance claims
Net insurance expenses
Underwriting profit including investment income*3
Profit commission
Underwriting profit and profit commission
Net other revenue*4
UK Motor Insurance profit before tax
Restructure cost
UK Motor insurance profit including restructure cost

Strategic Report

UK Motor Insurance financial review

52Strategic Report

UK Insurance
continued
Admiral increased rates ahead of the market, by over 20% during the year in response to the elevated claims
inflation, maintaining pricing discipline and prioritising underwriting profitability over growth. This impacted
Admiral’s pricing competitiveness compared to the market and hence impacted the growth of the book,which resulted in a lower number of vehicles insured at the end of the year, compared with the start(2022: 4.94 million; 2021: 4.97 million). Turnover was relatively flat at £2.49 billion (2021: £2.52 billion), as a resultof lower average premiums in the Car insurance business. This reflected the lower growth of the book as well as
the effects of the FCA reform, and a competitive market environment, in particular as the profile of the book
moved towards lower risk, renewals customers.
The results were impacted by a number of factors:

Underwriting Profit and Profit Commission• Net insurance premium revenue decreased by 5% to £471.0 million (2021: £496.5 million), reflecting lower
growth in new business and a lower average premium impacted by the FCA reform which resulted in a shift inmix towards the renewals book (generally lower average premiums), and a lag in the earning of rate increases
made in the second, third and fourth quarters of the year.
• Investment income was lower at £35.0 million (2021: £40.8 million), with higher underlying investment income
being offset by a reduction in income arising from cash held by Admiral relating to the portion of the portfoliothat is ceded through quota share reinsurance (£20.0 million reduction; 2021: £1.6 million reduction). Refer tothe Investment Income section later in the report.
• There are a number of trends impacting UK motor claims in 2022 which resulted in the increase in reported
loss ratio (53.0% in 2021 to 71.5% in 2022):
Reported Motor Loss Ratio

Reported loss ratio
before releases

2021
Change in current period loss ratio
Change in claims reserve releases – original net share2022

Impact of claims
reserve releases –original net share

78.8%+19.0%
97.8%

Reported Loss
Ratio

–25.8%–0.5%–26.3%

53.0%+19.0%–0.5%
71.5%• The current period loss ratio increased by 19.0% which is the result of:– Higher than usual levels of claims inflation, particularly in relation to damage claims (further detailfollows below)– Continuing return towards pre-pandemic road usage over the last 12 months (although still below historiclevels) and therefore an increase in claims frequency compared to 2021
– Slightly lower average premium in the period following a shift in portfolio mix towards renewals business• Prior period releases were relatively flat when compared with 2021 at around 26%:
– Admiral continues to see favourable development in best estimate reserves, particularly for large bodily
injury claims which are initially projected cautiously– This benefit is partially offset by an allowance in the best estimate for the potential effects of excess
inflation on bodily injury claims– The margin held above best estimate reserves remains significant and prudent – it is estimated to sit
around the 95th percentile confidence level, a reduction from the end of 2021 (contributing to the priorperiod reserve release) and consistent with the top end of the percentile range the Group expects to set
for reserving under IFRS 17

Admiral Group plc Annual Report and Accounts 2022

53

Company Overview

The impact of inflation on third party and own damage claims is observed reasonably quickly, with the elevatedlevels due to market-wide factors such as high second-hand car values (impacting total loss claims), parts supply
chain issues and underlying challenges in supply of labour leading to higher repair costs.

In addition to the inflationary environment, there continues to be a high level of uncertainty within motor
claims across the market arising from (and not limited to), the continued adjustment of claims frequency post
Covid, the impact of the whiplash reforms on smaller bodily injury claims and the future path of the Ogden
discount rate.

Financial Statements

The longer-term impacts of the current inflation spike on bodily injury claims is highly uncertain. Admiral has
not observed material changes in inflation for bodily injury claims settled in 2022, when compared to 2021.
However, given the longer-tailed nature of these claims, a conservative allowance has been made in the best
estimate reserve is held to reflect the potential impacts of higher than historic levels of future wage inflation
on certain elements of bodily injury claims reserves.

Corporate Governance

Admiral’s actuarial reserving team calculates best estimate claims reserves for UK motor claims reserves,using standard actuarial techniques applied to paid and incurred claims data, overlayed with assumptions andjudgements where it is considered that the data does not fully reflect potential future trends and developments.
The best estimate claims reserves are validated through comparison with projections performed by anindependent, external actuarial firm. Projections showed an increase in average ultimate claims cost in the firsthalf of 2022 compared to 2021 of around 11%, and this remained similar for the second half of the year as claims
inflation persisted.

Strategic Report

Claims Inflation and Reserving

As a result of this uncertainty, Admiral continues to hold a significant and prudent margin above best
estimate reserves.

£m

2021
Change in commuted releases
Change in profit commission
2022

Reserve releases– commuted
reinsurance Profit commission

189.2
–0.1
189.1

290.6
–120.4
170.2

Total

479.8
–0.1
–120.4359.3• Releases on reserves originally reinsured but since commuted were flat at £189.1 million (2021: £189.2 million),a higher level than seen in years prior to 2021. Underwriting years 2018 – 2020 made a significant contribution,
consistent with the releases on the original net share, reflecting the larger than usual movements in loss ratios
for those underwriting years in H1• Profit commission was significantly lower at £170.2 million (2021: £290.6 million). This is the result of thehigher current period loss ratio, meaning that no profit commission is recognised on the 2021 or 2022
underwriting years, compared to the unusually high £150 million recognised on the 2020 underwriting year
in 2021. Further information on the Group’s co-insurance and reinsurance arrangements is provided later inthis report• The reported earned expense ratio was higher at 21.8% in 2022 (2021: 19.7%) with the written basis ratio
at around 20%. The higher earned basis ratio primarily results from the lower average premiums noted above.
As a result of movements in the underlying earned expense ratio, net insurance expenses also included ahigher proportion of costs incurred as a result of quota share reinsurance expense caps (£32.6 million vs£10.1 million in 2021) relating to the 2021 and 2022 underwriting years. The caps will result in an increased
level of profit commission on these underwriting years in the future should they be profitable on an
ultimate basis

Admiral Group plc Annual Report and Accounts 2022

Additional Information• Reserve releases from commuted reinsurance and profit commission were notably lower in 2022 than in 2021,
with a combined total of £359.3 million (2021: £479.8 million), as follows:

54

Strategic Report

UK Insurance
continued
Other Revenue and Instalment Income
UK Motor Insurance Other Revenue – analysis of contribution:£mContribution from additional products & fees, including thoseunderwritten by Admiral*1
Instalment income
Other revenue
Internal costs*2
Net other revenue
Other revenue per vehicle*3
Other revenue per vehicle net of internal costs

2022

2021

2020

2019

207.4
91.3
298.7
(66.4)
232.3
£58
£48

200.8
100.2
301.0
(75.5)
225.5
£59
£47

203.4
100.9
304.3
(73.3)
231.0
£61
£50

217.6
83.9
301.5
(65.3)
236.2
£66
£56

*1 Additional products underwritten by Admiral included in underwriting profit in income statement but re-allocated to Other Revenue for purpose of KPIs
*2 Internal costs reflect an allocation of insurance expenses incurred in generating other revenue*3 Other revenue (before internal costs) divided by average active vehicles, rolling 12-month basis

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 to net other revenue continue to be:• Profit earned from Motor policy upgrade products underwritten by Admiral, including breakdown, car hire andpersonal 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
Overall contribution (other revenue net of costs plus instalment income) was broadly consistent at £232.3 million(2021: £225.5 million).
Other revenue per vehicle was £58 (gross of costs; 2021: £59), with Net Other Revenue (after deducting costs)
per vehicle at £48 (2021: £47), both largely consistent with 2021.

UK Household Insurance financial performance£m

Turnover*1
Total premiums written*1
Net insurance premium revenue
Underwriting (loss)/profit *2
Profit commission and other income
UK Household insurance (loss)/profit
Restructure cost
UK Household insurance (loss)/profit including
restructure cost

2022

2021

2020

2019

255.4
235.9
55.6
(13.2)
6.9
(6.3)
–

218.8
198.5
49.1
3.9
17.4
21.3
(4.4)

193.8
175.9
43.2
2.5
12.9
15.4
–

171.3
154.9
37.2
0.7
6.8
7.5
–

(6.3)

16.9

15.4

7.5

*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Underwriting profit/(loss) excluding contribution from underwritten ancillaries

Admiral Group plc Annual Report and Accounts 2022

55

Company Overview

2022

2021

2020

2019

91.2%
33.5%
124.7%
32.0%
31.6
1.58m

63.3%
30.3%
93.6%
2.2%
3.8
1.32m

64.8%
29.4%
94.2%
5.3%
4.8%
1.16m

69.1%
28.9%
98.0%
–
–
1.01m

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

The household book continued to grow in 2022, with the number of households increasing by 20% to 1.58 million(2021: 1.32 million) and turnover increasing by 17% to £255.4 million (2021: £218.8 million). The continued levelof growth, within a competitive market environment, was in part driven by continued growth in the multicoverproposition as well as in the price comparison channel.

The reported loss ratio for the period was impacted by severe weather and subsidence events and as a result
was higher at 91.2% (2021:63.3%). The weather events included storms during the first half of the year andsubsidence and freeze events in the second half, with the freeze event contributing roughly half of the 32pt
impact. Excluding the impact of the severe weather events, the reported loss ratio was 59.2% (2021: 61.1%).
Releases from prior year loss ratios reduced the reported loss ratio by 1.9pts (2021: 3.7pts).

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The combined ratio of 124.7% (2021: 93.6%) resulted in a net underwriting loss of £13.2 million(2021: £3.9 million profit), in part offset by profit commission and other income of £6.9 million(2021: £17.4 million), lower than the prior year as a result of the impact of weather events on profit commission.
This resulted in a £6.3 million loss (2021: £21.3 million profit, excluding restructure cost). Excluding the impactof the weather events, the Household result was a profit of £25.3 million (2021: £25.1 million). The expense ratio
was also slightly higher at 33.5% (2021: 30.3%) as a result of investment in technology, including a new claims
management system.

Financial Statements

Average market premiums were lower in the first half of the year as a result of the FCA reforms, and retention
increased for Admiral and the market. Admiral increased rates, particularly in the second half of the year in
response to higher claims inflation.

Corporate Governance

Reported Household loss ratio*1
Reported Household expense ratio*1
Reported Household combined ratio*1
Impact of severe weather and subsidence (loss ratio)*1
Impact of severe weather and subsidence (£m)*1
Households insured at year end*1

Strategic Report

Key performance indicators

56

Strategic Report

International Insurance“We are proud of ourperformance and lookforward to an evenstronger 2023 as wework towards our
strateg y of building
sustainable, scaled,
and profitable businesses
in the long-term.”

Costantino Moretti
CEO, International Insurance

International Insurance
In 2022 we continued to strengthen the businessfundamentals and preserve scale while we weathered
the storm of turbulent market conditions. In eachof our businesses, inflation caused by the tail-windeffects of the pandemic and the Ukrainian-Russianwar, increased costs of repair and replacement,
driving claims severity up throughout the year.
We’re proud that we continued to grow despite newvehicle shopping declining across Europe in 2022,
thanks in large part to continued investment inchannel and product diversification by each businessto sustain value creation for our shareholders.
In Admiral Seguros and Conte, intermediary sales
grew to represent 30% and 12% of new business sales
respectively, while in L’olivier efforts in improving directacquisition contributed to customer growth of 10%.
Loss ratio results in Europe are mainly a productof higher claims severity inflation in each country.
As costs continued to rise throughout the year,
declining or stagnant premiums, especially in Italy,
exacerbated loss ratios. This increase in market loss
ratios was partially counterbalanced by our prudent
approach that led us to increase prices ahead of themarket. This was in addition to investments in growth
and technology in each of our European businesses.
These elements led to a combined result that isclose to breakeven for European Motor insurancewith a small loss of £1.6 million. We are confident
that the investments we’ve made in Europe indiversification, digitisation and infrastructure have
set us on the right footing for profitable growth whenmarket conditions improve and more scale is gained,
particularly in France and Spain.
In the US, we saw the same severity inflation trend
in 2022 as we did in Europe, but to an even greater
extent with, for example, repair costs up a 21% since202025. The Elephant team has taken several actions
to curb adverse loss ratio outcomes and protect thebottom line, including drastic base-rate increases,
reducing exposure to any unprofitable footprint andwithdrawal from the direct to consumer (expensive)channel. However, these actions are not immediate
fixes, and thus we see a disappointing result in the
US. We are committed to improving results in the
US in the short term, and anticipate the actions
taken in 2022 will help alleviate loss ratio pressure,
to significantly improve the bottom line result in thenear future.
We are proud of the businesses we’ve built
internationally, and the quality of products andservice that we offer customers in those markets,with several industry awards being won by ourbusinesses. While 2022 was a challenging year,
we believe we’ve set our businesses on the rightfooting to deliver long-term value to the Group by
establishing a diversified set of channels and products,
digitising the customer experience to meet themwhere and when they need it, and modernising our
tech-stack to enable efficient scaling.
25 Data source: CCC; for 2022 data only available YoY up to Q3 2022

Admiral Group plc Annual Report and Accounts 2022

57

Company Overview

Antonio Bagetta
CEO,
ConTe

Strategic Report

PascalGonzalvez
CEO,
L’olivierCorporate Governance

Italy

Over the last three years, the L’olivier portfolio has
increased by 85%, making us one of the fastest
growing motor insurers in the French market. In thesame period, we also diversified our products anddeployed an ambitious digitalisation strategy.

In 2022 ConTe managed to deliver earned profit
for the ninth year in a row. We ended the year with
973,000 happy customers, resulting in double-digit
growth (+14%).

Our continuous progress in digitisation translated
into faster and better service for our customers
and increased efficiency. In addition to operational
excellence, this led us to win, for the second year in arow, the award for “best customer service of the year”
in the non-life insurance category26 and we maintained
a level of Net Promoter Score (NPS)27 far higher thanmarket average for insurance.
Despite the challenging market environment,
L’olivier’s team has been delivering continuous
improvement and quality to its customers,
which proves its ability to navigate unstablegrounds and keep creating value.

Sustainable growth is our main objective: in thesecond half of the year we raised our prices materiallyto protect 2022 profitability and to prepare a robust
baseline for 2023. As a result, we grew, we kept
the loss ratio under control and we limited averagepremium reduction.
Market average premium is still under pressure dueto the lower number of new car registrations andlower claims frequency (when compared to pre-Covid).
In this context, we built on the Admiral DNA of acost-conscious culture – we limited investments inmarketing but were still able to maintain top brandawareness as a result of new TV advertisements anda partnership with the Italian National football team.
We also continued to improve our digital offering forcustomers which has resulted in improved internal
efficiencies, together with an improved customer
experience where 50% of customers choose tocomplete transactions online. We are the one of themost appreciated brands among direct insurancecompanies – voted best on Google and Trustpilot.
Overall, we kept a strong culture of focus and cost
control in 2022 but we continued to invest materiallyin our long-term strategic objectives: data andanalytics, as well as channel diversification. All of thishas been possible thanks to our people. We are proud
to have achieved the 4th place in the Great Place toWork Italy ranking, thanks to our innovative, flexible
hybrid model and wellbeing initiatives.

26 Awarded by ESCDA (Elu Service Client De l’Année) https://escda.fr/
27 Based on analysis by L’observatoire des Parcours Clients by PMP
and Skeepers

Admiral Group plc Annual Report and Accounts 2022

Additional Information

L’olivier managed to achieve these results in oneof the toughest market environments in decades,with car sales dropping to a record low, while highinflation suddenly reappeared. Add to that a coupleof historical hailstorms, and you get yourself onevery challenging year, to which L’olivier responded
by taking a protective approach toward margins,
leading to a slightly slower pace of growth.

Financial Statements

France58

Strategic Report

International Insurance
continued
Sarah Harris
CEO,
Admiral Seguros

AlbertoSchiavonCEO,
Elephant

Spain

US

In the context of global uncertainty, the Admiral
Seguros team remained focused on a few key things– we continued growing much faster than the market,
we signed the first Admiral Group bancassurance
agreement with ING in Spain, and we continued
to invest in business transformation. We were alsoproud to be named #2 Best Place to Work in Spainfor our size.

Persistently high claims inflation was the main theme for
the US Auto Insurance Industry during 2022 and greatly
impacted Elephant’s short term strategic priorities.
As a response to these market challenges, Elephant took
decisive action including substantial base rate increases(+25% in multiple phases), significant reductions inadvertising spend and slowing growth to protect thebottom line. We are confident these changes are sufficient
to offset the severity trend we’ve seen: Elephant’s relative
base rate increases surpassed many key competitors inthe second half of the year, and the loss ratio gap with themarket continues to trend positively.

In 2022 our customer base grew 18% in a slow-growthmarket driven by our multi-channel strategy andby better retention and conversion in main sales
channels. Growth was achieved whilst we increased
prices in reaction to higher inflation. In June we signed
a long-term distribution agreement with ING for
auto insurance after a competitive tender process in
Spain. The partnership is a recognition of our excellent
customer experience and capabilities.
As part of the Admiral 2.0 strategy, we continued
to invest in business transformation. We adopted
Scaled Agile and started a refresh of key parts of ourtechnology stack that will be key for our future.
In the meantime, we worked to embed our core loss
ratio capabilities into newer channels and continued
to innovate in digital processes to provide a better
customer experience.
Our 2022 actions have required investment whichhave impacted the short-term results for the business,but we are confident we’ve made the right choices forlong-term value-creation. In 2023 we will continue ourpath towards sustainable scale in our motor business.
We strive to do this whilst improving efficiency,
building competitive advantage across all channels,
and fostering a culture that thrives in the hybrid world
and is customer obsessed. We are proud of what wehave achieved so far and excited about what 2023 hasin store.

As Elephant saw the impacts of claims frequency
normalising to near pre-pandemic levels, the businessexperienced a record high increase in overall repair costs
impacting claims severity, increasing 8% versus themarket increase of around 11%28. As we wait for the rateactions to earn through, the 2022 overall loss to Admiralwas £48.9 million29.
Elephant’s actions to slow growth as we weather the market
cycle resulted in a 1% reduction in policies in-force since thefirst half of the year. To further achieve the scale needed
and control the high cost of acquisition, we have focused
our acquisition efforts towards higher retaining customers
and expanded distribution towards independent agencies.
Vehicles-per-policy increased from 1.5 to 1.8, helping tomaximize the yield on our marketing spend.
As we move into 2023, we will continue to protect thebottom line and optimise customer lifetime value andexpect to see our actions become more visible in ourearned results.
While 2022 was a challenging year, Elephant wasrecognised on the Forbes list of America’s Best Insurance
Companies 2023. Elephant was one of only 35 carriers outof 3,300 evaluated to make the list, providing confidence
that the investments we’ve made in serving ourcustomers over the years haven’t gone unnoticed. This iscertainly a solid recognition from our customers that our
staff delivers great service at every stage of the policy.
I remain incredibly grateful for their tremendously hard
work, resilience, and positive attitude.
28 Data source: CCC; YoY to Q3 2022
29 Elephant loss – 2022: £48.9 million; 2021: £13.0 million

Admiral Group plc Annual Report and Accounts 2022

59

Company Overview

£m

2021

2020

2019

690.3
623.8
221.0
0.5
(170.8)(91.7)(41.0)
29.4(11.6)

648.8
584.0
204.2
–
(139.3)(78.8)(13.9)
22.7
8.8

623.6
562.6
168.6
1.5
(137.2)(53.0)(20.1)
19.2
(0.9)

80.9%
44.5%
125.4%
110.1%
2.04m

73.7%
44.8%
118.5%
106.3%
1.81m

64.3%
43.9%
108.2%
97.9%
1.60m

76.8%
37.6%
114.4%
103.7%
1.42m

Key performance indicators
Reported Loss ratio*2
Expense ratio*2
Combined ratio*3
Combined ratio, net of Other Revenue*4
Vehicles insured at period end

International Motor Insurance – Geographical analysis
2022

Vehicles insured at period end (m)Turnover*1 (£m)

Spain

Italy

France

US

Total

0.43
104.6

0.97
227.9

0.40
194.9

0.24
268.5

2.04
795.9

2021

Spain

Italy

France

US

Total

Vehicles insured at period end (m)Turnover*1 (£m)

0.37
88.5

0.85
212.7

0.36
175.7

0.23
213.4

1.81
690.3

2022

2021

2020

2019

(1.6)
(48.9)(3.3)(53.8)

4.8(13.0)(3.4)(11.6)

15.3
(4.8)
(1.7)
8.8

9.0
(9.6)
(0.3)
(0.9)

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

Split of International Insurance result£mEuropean Motor
US Motor
Other
International Insurance result

Admiral Group plc Annual Report and Accounts 2022

Additional Information*1 Alternative Performance Measures – refer to the end of this report for definition and explanation*2 Loss ratios and expense ratios have been adjusted to remove the impact of reinsurer caps so the underlying performance of the business is transparent*3 Combined ratio is calculated on Admiral’s net share of premiums and excludes other revenue. It excludes the impact of reinsurer caps. Including the impact ofreinsurer caps the reported combined ratio would be 2022: 139%; 2021: 119%; 2020: 107%; 2019: 113%
*4 Combined ratio, net of other revenue is calculated on Admiral’s net share of premiums and includes Other Revenue. Including the impact of reinsurer caps thereported combined ratio, net of other revenue would be 2022: 123%; 2021: 107%; 2020: 96%; 2019: 102%

Financial Statements

2022

795.9
720.5
241.8
2.3
(220.3)(115.1)(91.3)
37.5(53.8)

Corporate GovernanceTurnover*1
Total premiums written*1
Net insurance premium revenue
Investment income
Net insurance claims
Net insurance expenses
Underwriting result including investment income*1
Net other revenue
International Insurance result

Strategic Report

International Insurance financial performance

60

Strategic Report

International Insurance
continued
Admiral has several insurance businesses outside
the UK: Spain (Admiral Seguros), Italy (ConTe),
France (L’olivier) and the US (Elephant Auto).
The key features of the International Insurance
results are:• Positive growth trajectory continued in 2022 withincompetitive markets, with customer numbers
increasing by 13% to 2.04 million (2021: 1.81 million)
and combined turnover rising by 15% to£795.9 million (2021: £690.3 million)• An aggregate loss of £53.8 million(2021: £11.6 million loss), consisting of a loss in theEuropean Motor insurance businesses of £1.6 million(2021: £4.8 million profit) and a deterioration
in Elephant Auto’s result (increased loss from
£13.0 million to £48.9 million year-on-year)• A higher combined ratio (net of other revenue)of 110.1% (2021: 106.3%), primarily the result ofa higher reported loss ratio across the Europeanand US motor businesses driven by higher claims
inflation across all markets as well as premium
pressure in the Spanish and Italian markets• An investment of £3.3 million (2021: £3.4 million) for
new product development primarily related to the
new French home insurance business and several
product tests in Italy

European Motor Insurance
Admiral’s European insurance operations in Spain,
Italy, and France insured 1.80 million vehicles at
31 December 2022, 14% more than the previous year
(31 December 2021: 1.58 million). Turnover increasedby 10% to £522.9 million (2021: £474.6 million).
The combined European Motor result reflected a net
loss of £1.6 million (2021: £4.8 million), with profitability
in Italy offset by more challenging outcomes because ofcompetitive market pressures in France and Spain.
The European combined ratio net of other revenue(excluding the impact of reinsurer caps) increased to104% from 99%, primarily driven by lower averagepremiums and higher claims inflation. In addition,these businesses continued to focus on improving
core fundamentals, whilst investing in the futureof the business through expansion into newdiversification opportunities and distribution channels,
particularly the intermediary channel and partnership
opportunities, to enhance future growth prospects.

ConTe in Italy saw a profitable year with improved
customer retention despite a highly competitivemarket resulting in continued premium pressure.
Vehicles insured increased by 14% to 0.97 million(31 December 2021: 0.85 million), with the business
continuing to invest in growth through innovationand distribution expansion.
Admiral Seguros (Spain) saw continued growth,with an 18% increase in customer numbers to over
0.43 million (2021: 0.37 million). This was largely
driven by growth in the broker channel and improved
retention, although overall results were impacted
by strong inflation in the market. The business also
invested in strengthening existing distribution
channels, exploring growth through new partnerships,
and progressing in its agile transformation.
L’olivier Assurance (France) continued to grow strongly
in 2022 and remains one of the fastest growing Motor
insurers in the French market. The customer baseincreased by 11% to 0.40 million (2021: 0.36 million).
L’olivier targeted growth via the direct channel
and maintained high customer satisfaction
through continuous digital service and efficiency
improvements. The result was negatively impacted
by high inflation and several hail events in H1 that
had an estimated £2 million impact.

US Motor Insurance
In the US, Admiral underwrites motor insurance ineight states through its Elephant Auto business.
Elephant insured 0.24m vehicles at the end of 2022,
4% higher than 2021 (2021: 0.23m) and Turnoverincreased to £268.5 million (2021: £213.4 million).
The business reported a higher loss of £48.9 million(2021: £13.0 million loss) largely due to a surge
in claims severity inflation across the US market.
To mitigate the impact of higher inflation,
Elephant raised base rates materially, by more than
30%, and prioritised higher customer lifetime value
over new sales growth. In particular, the compositionof the book shifted towards higher quality, multivehicle policies. Targeted expansion in the agency andpartnership channels also provided mechanisms bywhich the business can continue to scale efficiently.
Changes in reinsurance agreements from the 2022
underwriting year (primarily driven by capitalefficiency considerations) resulted in a further increasein the Admiral net share of losses compared to 2021.

Admiral Group plc Annual Report and Accounts 2022

61

Strategic Report

Scott Cargill
CEO,
Admiral Money

Admiral Money plays an increasingly important role inthe consumer lending market. Since launching in 2017
we are proud to have provided more than 250,000
customers with over two billion pounds of loans.
Our personal loans and car finance book now stands
at £0.89 billion, our second consecutive year of
45%+ growth and our cost income ratio continues
to improve, falling to 49.7% in 2022 (2021: 82%) .
We anticipate this will continue to fall as we approachscale. We retain a firm focus on prime lending andare seeing increasing proof that UK customers
are showing a preference for our guaranteed rate
proposition, valuing the certainty and transparency it
offers. Our 2022 NPS score of 71 and Trust Pilot scoreof 4.6 is further evidence our exceptional customer
propositions and service commitment is setting us
apart in the consumer lending market.
UK inflation and the subsequent cost of living pressure
it creates has been front of mind since 2021. We madeearly decisive moves to increase the hurdles in ouraffordability models to ensure that after assessing ourcustomers, we are lending responsibly, and they cansustain the loan through any reasonable stress. To datecustomer payment performance remains positive withlow arrears and defaults in line with expectations.
Admiral Group plc Annual Report and Accounts 2022

Progress in building our capabilities in 2022 has beenstrong. The continued adoption of open banking
has improved our decision making and onboarding
journey. Enhancing our self-service functionality
now results in 80% of customer transactions being
processed digitally and new machine learningmodels are used to support decision making acrossthe business.
We also continued to make pleasing progress on
integrating more closely with the UK insurance
business to offer loans to these customers, with over
50% of our new customer flows from either current
or recent Admiral Insurance customers. In addition,
we were again winners of the Moneyfacts Consumer
Awards best car finance provider of the year award.
Looking to 2023, we enter with strong momentum.
We expect to benefit from our strong position ina growing market as we see a continued shift tocomparison and credit score marketplaces. I expect
to see continued growth in our loan balances
towards the £950 million to £1.1 billion range during2023, assuming current economic conditions.
Combined with a tightly controlled cost base,
we should see further improved economics in the
coming years.
I am optimistic for 2023 and confident in the team’s
ability to execute on our business plan. Admiral built
successful businesses by doing the common things
uncommonly well and Admiral Money enters 2023 ingood shape to achieve the same success in UK lending.
I’d like to finish by thanking our customers and all of
my colleagues and wish everyone the best for 2023.

Additional Information

2022 has been a difficult and complex year for manybusinesses in the UK, however it has been a very
positive and pleasing year for Admiral Money. We havecontinued our philosophy of safe, efficient growthand despite all the external economic challenges wedelivered our first full year profit.

Financial Statements

Our first full year profit of £2.1 million for 2022 is an
important milestone for the business. We’ve achieved
this whilst continuing to retain appropriate prudence
in our credit loss provision with coverage of 7.2% on
the book which includes post model adjustments of£11.3 million.

Corporate Governance“We enter 2023 withstrong momentum:
we expect to benefit
from our strong
position in a
growing market.”Company Overview

Admiral Money

62

Strategic Report

Admiral Money
continued
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
transparency and certainty.
Admiral Money recorded a pre-tax profit of £2.1 million
in 2022 (improved from £5.5 million loss in 2021),
the first full year profit in the history of the business.
Gross loan balances grew strongly, up 46%
to £0.89 billion (2021: £0.61 billion), with a£63.7 million (2021: £50.2 million) credit loss provision,leading to a net loans balance of £823.7 million(2021: £556.8 million). This increase in portfolio led toa 60% increase in net interest income to £44.6 million(2021: £27.8 million).
Admiral Money continued to carefully manage
affordability and credit criteria for new lending in
2022 to reflect the higher interest rate and elevatedinflation environment. At the same time interest
rates on new loans were increased to reflect the risingcost of our funding. These measures will help ensuresustainable financial performance into the future.

The credit loss charge increased to £20.6 million(2021: £10.7 million), driven by the significant
increase in the portfolio during the year.
Overall, an appropriately prudent approach has beentaken to calculating the credit loss provision, including
post model adjustments for cost of living, mortgage
increases and forecast uncertainty, reflecting the levelof uncertainty in the current economic environment.
For further information, refer to note 7 in thefinancial statements.
Admiral Money is funded through a combination ofinternal and external funding sources. The externalfunding is secured against certain loans via transferof the rights to the cash-flows to two special purpose
entities (“SPEs”). During H1 2022 one of the SPEs
was extended, providing funding with improved
terms for the next three years. The securitisationand subsequent issue of notes via SPEs does not resultin a significant transfer of risk from the Group.

Admiral Money Financial Performance£m

Net income
Interest expense*1
Net interest income
Other income
Total income
Movement in expected credit loss provision and write-off
of Loans
Expenses
Admiral Money profit/(loss) before tax

2022

2021

2020

2019

58.7
(14.1)
44.6
0.3
44.9

36.6
(8.8)
27.8
1.1
28.9

36.8
(10.1)
26.7
2.1
28.8

30.8
(9.1)
21.7
1.9
23.6

(20.6)(22.2)
2.1(10.7)(23.7)(5.5)(25.8)(16.8)(13.8)(14.3)(17.7)(8.4)*1 Includes £1.5 million intra-group interest expense (2021: £2.7 million; 2020: £2.9 million; 2019: £2.8 million)

Admiral Group plc Annual Report and Accounts 2022

63

Company Overview

Other Group Items

£m

2022

2021

2020

2019

(51.7)(16.3)(12.1)(15.6)(10.9)
11.4(95.2)(63.3)(19.8)(11.4)(10.2)(7.2)
4.0(107.9)(50.9)(22.9)(12.1)
(0.8)
(3.3)
4.9
(85.1)(49.0)(20.0)(11.3)–(9.3)
6.1(83.5)*1 Share scheme charges exclude restructuring costs of £1.5 million, recognised in 2021
*2 Includes £0.7 million intra-group interest expense (2021: £nil; 2020: £nil; 2019: £nil)

Finance charges of £12.1 million (2021: £11.4 million)
primarily represent interest on the £200 million
subordinated notes issued in July 2014.

Admiral Group plc Annual Report and Accounts 2022

Other business development costs reported ahigher loss of £10.9 million (2021: £7.2 million),
which included an improved loss from Compare.comof £2.8 million (2021: loss of £3.5 million) offset byincreased investments in new ventures.
Other interest and investment income increasedto £11.4 million in 2022 (2021: £4.0 million), as a resultof higher government bond yields and a £4.7 million
gain arising from the sale of government bonds inthe period (2021: nil).

Additional Information

Other central overheads were lower at £16.3 million(2021: £19.8 million), and include the cost of a numberof major Group projects such as preparation forthe significant new insurance accounting standard,
IFRS 17 and the development of the internal model.

Admiral Pioneer, launched in 2020 to focus on new
product diversification opportunities, made a lossof £15.6 million in 2022 (2021: £10.2 million).
The business continued to invest in growing the
Veygo short term car insurance business, as wellas investing in new products such as tool insurance
in the UK (Toolbox by Admiral).

Financial Statements

Share scheme charges relate to the Group’s two
employee share schemes (refer to note 9 to thefinancial statements). Charges decreased by£11.6 million (excluding discontinued operations)in 2022, to £51.7 million. This was more in line withprevious years when excluding the elevated level in
2021 which was linked to a higher share price andhigher bonus pay-outs due to higher dividends.

Corporate Governance

Share scheme charges, excluding restructure costs
Other central overheads
Finance charges*1
Admiral Pioneer
Other business development costs
Other interest and investment return
Other Group items

Strategic Report

Other Group items financial review

64Strategic Report

Group Capital Structure and Financial Position

The Group continues to manage its capital to ensure that all entities are able to continue as going concerns andthat regulated entities comfortably meet regulatory capital requirements. Surplus capital within subsidiaries is
paid up to the Group holding company in the form of dividends.
The Group’s regulatory capital is based on the Solvency II Standard Formula, with a capital add-on to reflect
recognised limitations in the Standard Formula with respect to Admiral’s business, predominantly in respect of
profit commission arrangements in co- and reinsurance agreements.
The Group continues to develop its partial internal model to form the basis of future capital requirements.
As previously noted, the expected timescale for formal application has been extended as a result of a decisionby the Board to review certain aspects of the model. In the interim period before submission, the current capital
add-on basis will continue to be used to calculate the regulatory capital requirement.
The estimated and unaudited regulatory Solvency II position for the Group at the date of this report is as follows:

Group capital position (estimated and unaudited)Group

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

2022
£bn

2021
£bn

2020
£bn

1.20
0.66
0.54
180%

1.36
0.70
0.66
195%

1.47
0.79
0.68
187%

*1 2021 own funds included a deduction for the third tranche of the Penguin Portals dividend that was paid alongside the 2022 interim dividend in October 2022
*2 Solvency capital requirement includes updated capital add-on which is subject to regulatory approval*3 Solvency ratio calculated on a volatility adjusted basis

The Group’s solvency ratio remains strong at 180%. The solvency ratio reduced by 15 percentage points since
the end of 2021, primarily due to a reduction in Own Funds of approximately £160 million as a result of lower
generation of economic capital. Widening credit spreads impacted the Own Funds during the first half of theyear, with the impact partially reversing during the second half.
The Solvency Capital Requirement includes an updated capital add-on which remains subject to regulatory
approval. The solvency ratio based on the previously approved capital add-on, that is calculated at the balance
sheet date rather than the date of this report, and will be submitted to the regulator within the Q4 Quantitative
Reporting Template (QRT) is as follows:
Regulatory solvency ratio (estimated and unaudited)

Solvency ratio as reported above
Change in valuation date
Other (including impact of updated, unapproved capital add-on)
Solvency ratio (QRT basis)

2022

2021

2020

180%
(11%)
(19%)
150%

195%
(5%)
(9%)
181%

187%
(5%)
24%
206%

The Group’s capital includes £200 million ten year dated subordinated bonds. The rate of interest is fixed at 5.5%
and the bonds mature in July 2024. The bonds qualify as tier two capital under the Solvency II regulatory regime.

Solvency ratio sensitivities (estimated and unaudited)
Estimated sensitivities to the current Group solvency ratio are presented in the table below. These sensitivities
cover the two most material risk types, insurance risk and market risk, and within these risks cover the mostsignificant elements of the risk profile. Aside from the catastrophe events, estimated sensitivities have not beencalibrated to individual return periods.
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
Currency – 25% adverse movement in euro and US dollar vs sterling
ASHE – long-term inflation assumption up 0.5%
Loans – severe peak unemployment scenario*1

2022

2021

2020

-11%
-1%
-4%
-2%
+2%
-9%
-3%
-3%
-1%

-9%
-1%
-3%
+5%
-5%
-9%
-3%
-5%
-1%

-10%
-1%
-2%
+7%
-7%
-6%
-3%
-3%
-1%

*1 Refer to note 7 to the financial statements for further information on the ‘severe’ scenario

Admiral Group plc Annual Report and Accounts 2022

65

Company Overview

Taxation

Investments and cash
Investment strategy

In line with our investment approach, the aim is to reduce the Environmental, Social, and Governance (ESG)
related risks in our portfolio whilst continuing to achieve sustainable long-term returns. In 2022, the portfolio
weighted average ESG score had an MSCI A rating.

Investment income
£m

2022

2021

2020

64.6
(20.0)
1.8
46.4

46.9
(1.6)
(2.6)
42.7

47.8
12.9
(7.8)
52.9

Net investment income for 2022 was £46.4 million (2021: £42.7 million). Investment income in 2022 wasadversely impacted by investment income adjustments related to UK motor quota share reinsurance
arrangements of £20.0 million (2021: £1.6 million). Provisions for expected credit losses developed favourably,leading to a £1.8 million release of provisions (2021: £2.6 million adverse impact).
The investment return on the Group’s investment portfolio (excluding unrealised gains and losses, the releaseof the investment income accruals held in relation to reinsurance contracts and the movement in provision for
expected credit losses) was £64.6 million in H1 2022 (compared to £46.9 million in 2021). The annualised rateof return was higher at 1.6% (2021: 1.1%), mainly as a result of higher reinvestment yields as interest rates rosethroughout the year.
The increase in yields and widening of credit spreads in 2022 resulted in a reduction in the market value of theportfolio of £255.6 million (2021: £50.1 million reduction). That movement is reflected in the statement of othercomprehensive income.
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 2022
was £3,705.8 million (31 December 2021: £4,115.3 million), the lower balance at the end of the current period
reflecting the market value reduction noted above as well as the payment of the final tranche of the Penguin
Portals disposal proceeds to shareholders.

Cash and investments analysis£mFixed income and debt securities
Money market funds and other fair value instruments
Cash deposits
CashTotal*1

2022

2021

2020

2,372.7
934.7
101.4
297.0
3,705.8

2,594.3
1,063.0
85.3
372.7
4,115.3

2,101.3
1,339.3
65.4
351.7
3,857.7*1 Total Cash and Investments include £198.2 million (2021: £147.0 million; 2020: £74.8 million) of Level 3 investments. Refer to note 6e in the financial statements
for further information

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Investment return
Movement on accruals held for insurer funds withheld
Movement in provision for expected credit losses
Total

Financial Statements

Admiral Group’s investment strategy focuses on capital preservation and low volatility of returns. The businessfollows an asset liability matching strategy to control interest rate, inflation and currency risk. A prudent level ofliquidity is held and the investment portfolio has a high-quality credit profile. In 2022, the focus remained on asset
liability matching, and flows were invested into high quality assets to take advantage of rising risk-free rates,whilst being cautious on the credit outlook. The Group holds a range of government bonds, corporate bonds,
alternative and private credit assets, alongside liquid holdings in cash and money market funds.

Corporate Governance

The tax charge reported in the consolidated income statement is £97.2 million (2021: £130.2 million), equating to
20.7% of pre-tax profit (2021: 18.2%). The increase in the effective tax charge is primarily the result of the higher
loss in the US insurance business for which no deferred tax asset is recognised.

Strategic Report

The change in interest rate sensitivity reflects both the Group’s continued focus on asset liability matching
and the change in impact of interest rate movements on the solvency capital requirement in higher
yield environments.

66

Strategic Report

Group Capital Structure and Financial Position
continued
Cash flow£m

Operating cash flow, before movements in investments
Transfers to financial investments
Operating cash flow
Tax payments
Investing cash flows (capital expenditure)
Financing cash flows
Loans funding through special purpose entity
Net contributions from non-controlling interests
Foreign currency translation impact
Net proceeds from sale of Comparison entities
Cash included in the disposal of Comparison entities
Net cash movement
Unrealised (losses)/gains on investments
Movement in accrued interest
Net increase in cash and financial investments

2022

2021

2020

367.3
189.0
556.3
(91.2)(101.0)(692.8)267.8–(14.8)––(75.7)(255.6)113.2(407.1)637.8(266.5)371.3(126.7)(69.2)(750.7)
185.9
–
(5.3)
457.0
(41.3)
21.0(47.3)
17.4
257.6

959.8
(176.0)783.8(175.0)(43.1)(454.3)(46.2)
2.4
2.4
–
–
70.0
40.7
54.8
341.5

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

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

2022

2021

2020

371.8
39.6
68.2
(280.6)
71.1
97.2
367.3

996.7
40.8
(65.3)(205.2)(261.7)
132.5
637.8

527.8
94.8
65.3
77.3
84.8
109.8
959.8

The net decrease in cash and investments in the year is £407.1 million (2021: £257.6 million increase).
The main drivers include the unrealised losses on investments as a result of interest rate and credit spread
movements as noted above, and dividend payments to shareholders (including the two final tranches of thePenguin Portals special dividend).

Co-insurance and reinsurance
Admiral makes significant use of proportional risk sharing agreements, where insurers outside the Group
underwrite a majority of the risk generated, either through co-insurance or quota share reinsurance contracts.
These arrangements include profit commission terms which allow Admiral to retain a significant portion of
the profit generated.
Although the primary focus and disclosure is in relation to the UK Motor insurance book, similar longer-termarrangements are in place in the Group’s international insurance operations and the UK Household andVan businesses.

UK Motor Insurance
Munich Re and its subsidiary entity, Great Lakes, currently underwrites 40% of the UK Motor business.
From 2022, 20% of this total is on a co-insurance basis (via Great Lakes) and will extend to 2029. The remaining
20% is on a quota share reinsurance basis and these arrangements now extend to 2026.
The Group also has other quota share reinsurance arrangements confirmed to at least 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 for the 2022 year accrue directly to Great Lakes and are not reflectedin the Group’s financial statements. Similarly, Great Lakes reimburses the Group for its proportional share of
expenses incurred in acquiring and administering this business.

Admiral Group plc Annual Report and Accounts 2022

67

Company Overview

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.
During the first half of 2022, just over half of the quota share reinsurance covering the 2020 underwriting
year was commuted. The majority of quota share reinsurance covering 2019 and prior underwriting years wascommuted prior to the start of this half year period.

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 therisk of catastrophes stemming from weather events.

Financial Statements

Refer to note 5d(v) of the financial statements for further analysis of reserve releases on business originallyreinsured but subsequently commuted.

Corporate Governance

Admiral tends to commute its UK Car Insurance quota share reinsurance contracts 36 months after inceptionof an underwriting year, assuming there is sufficient confidence in the profitability of the business covered by
the reinsurance contract.

Strategic Report

The quota share reinsurance arrangements result in all Motor premiums, claims and expenses that are ceded toreinsurers being included in the Group’s financial statements. These quota share agreements operate on a funds
withheld basis and include certain features such as expense caps and an allocation of investment income earnedon the funds held by Admiral on behalf of the reinsurers. These features result in higher profit commission should
the underwriting year reach profitability.

International Car Insurance

Excess of loss reinsurance
The Group also purchases excess of loss reinsurance to provide protection against large claims and reviews
this cover annually. The excess of loss cover remained similar to prior years with cover starting at £10 million.
Rates increased within the context of increasing market rates as a result of higher inflation. The household
insurance book excess of loss reinsurance also saw an increase in rates, for the same relative level of cover.

Profit commission
Admiral is potentially able to earn material amounts of profit commission revenue from co- andreinsurance partners, depending on the profitability of the insurance business underwritten by the partner.
Revenue is recognised in the income statement in line with the financial statement loss ratios on Admiral’s
retained underwriting.
Note 5c to the financial statements analyses profit commission income by business, type of contract and by
underwriting year.

Principal Risks and Uncertainties
The Group’s 2022 Annual Report will contain an analysis of the Principal Risks and Uncertainties identified by
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.
Unless otherwise 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.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

In both 2021 and 2022 Admiral retained 35% (Italy), 30% (France) and 30% (Spain) of the underwriting risk
in each country respectively. In the USA, 40% (2021: 45%) of the risk was retained within the Group.

68

Strategic ReportCreating Sustainable Value for our Stakeholders

Our purpose is embedded into the purpose framework

Admiral’s purpose frameworktranslates our purpose into action
and shows how we plan on living by
our purpose statement – including
what that statement means to not
only our people but our company,
our business, and our society.
Our sustainability approach builds on
our purpose framework and targets
four key areas – Customers, People,
Business, and Society – with defined
ambitions for each of these:

Our purpose• People: Be one of the best places to work in
the world• Customer: Provide great customer experiences• Business: Build successful businesses with
operational resilience

Great customer
experiences

A great place
to work

Provide greatcustomer experiences

Be one of the best places
to work in the world

Positive impact
on society

Successful
business

Make a difference through apositive impact on society

Build successful businesses
with operational resilience• Society: Make a difference through a positive
impact on society

Materiality assessment
In order to capture and address the ESG issues thatmatter most to our business and stakeholders we
ran a materiality assessment in 2021. The outcomeof the materiality assessment currently drives
our sustainability approach as well as other key
business initiatives and decisions. We acknowledge
that these rankings will likely change over time
and we will look to conduct further materiality
assessments in the future.
For further detail on
the methodology
behind our materiality
assessment please
see Admiral’s 2022
Sustainability Report

You can read morein our Section 172
statement (starting on
page 112) to see howthese priorities feed
into our strategy andreinforce our purpose

Our results revealed the following priorities:
Focus Area

Stakeholder

Risk governance and business resilience
Talent Acquisition & Development
Great Service
Educational Opportunities
Long-term shareholder value
Product Quality
Eco-friendly products
Impact of operations on climate change
Employability and social mobility
Diversity & Inclusion

Business
PeopleCustomerSocietyBusiness
CustomerBusiness/Society
SocietySociety
PeopleOur impact
Read more on page 114
Read more on page 77
Read more on page 74
Read more on page 87
Read more on page 85
Read more on page 74
Read more on page 91
Read more on page 87
Read more on page 87
Read more on page 80

Admiral Group plc Annual Report and Accounts 2022

69

Company Overview

MonitorManage

Focus

Strong ethicalpartnerships

Homelessness
and housing
External efforts
to fight climatechangeFinancial inclusion

Employability andsocial mobility
Innovation
Educational
opportunities

Peopleengagement*
Diversityand Inclusion*

Governance andbusiness resilience

Great service

Long-termshareholder
value

Talent acquisitionand development*

Eco-friendly
products

Smart, green
and safe mobility

Additional Information

Executive
Remuneration
Sports, artsand culture

Admiral impact

Stakeholder key
People*CustomerSociety (Community and Environment)

Business* Actively monitored and maintained as part of our culture“The outcome of themateriality assessment
currently drives oursustainability approach
as well as other key
business initiatives
and decisions.”
Admiral Group plc Annual Report and Accounts 2022

Financial Statements

Importance of stakeholders

Investingresponsibly

People, healthand wellbeing*

Product
quality

Corporate GovernanceFair andaffordable
price

Impact of operations
on climate change

Community
Health andWellbeing

Strategic Report

Materiality matrix
Aggregated across all survey responses, workshops, management discussions and SWG feedback

70

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Admiral’s alignment with the United Nations’ Sustainable Development Goals
The Sustainable Development Goals (SDGs) are a set of 17 global goals developed by the United Nations, which define global priorities
and aspirations for 2030. The goals aim to address major societal and environmental concerns. The most relevant goals where we believe
Admiral contributes are listed for each of our stakeholders below.

Customers

Goal 8:Decent Work and Economic GrowthTarget (8.2): Achieve higher levels of economic productivity
through diversification, technological upgrading
and innovation.
Target (8.3): Promote development-oriented policies
that support productive activities, decent job creation,
entrepreneurship, creativity and innovation, and encourage
growth of micro-, small- and medium-sized enterprises,
including through access to financial services.

Admiral’s contribution• Transfer core strengths from UK Motor business
into new ventures, such as Admiral Moneyand Pioneer• Leverage historical data and experience to test andlearn in new markets and develop products which
support economic development• Provide insurance cover to both fully electric andhybrid vehicles• Telematics offering both incentivises and supports
safer driving practices for our customers

Goal 11:
Sustainable Cities and Communities
Target (11.2): Provide access to safe, affordable,
accessible, and sustainable transport systems for all.

PeopleGoal 3:
Good Health and Wellbeing
Target (3.4): Promote mental health and wellbeing.

Admiral’s contribution• Ranked Best Big Company for Wellbeing in the UK
in recognition of our employee support initiatives• Long standing graduate trainee programme

Goal 4:
Quality Education
Target (4.4): Increase the number of youths and adults who
have relevant skills, including technical and vocational skills,
for employment, decent jobs, and entrepreneurship.

• Fully gender balanced Group Board30• Launched an international mentoring programme,
Get Discovered, to develop and empower highpotential women across the organisation

Goal 5:
Gender Equality
Target (5.5): Ensure women’s full and effective participationand equal opportunities for leadership at all levels ofdecision making in political, economic, and public life.

30 As of 31 December 2022

Admiral Group plc Annual Report and Accounts 2022

71

Company Overview
Strategic Report

Goal 8:Decent Work and Economic Growth

Goal 10:
Reduced Inequalities
Target (10.2): Empower and promote the social, economic,
and political inclusion of all, irrespective of age, sex, disability,
race, ethnicity, origin, religion or economic or other status.

Target (13.3): Improve education, awareness-raising andhuman and institutional capacity on climate change
mitigation, adaptation, impact reduction and early warning.

• Established partnerships with Generation to help
people obtain access to life-changing careers.
• Committed to net zero emissions by 2040 and
cutting emissions in half by 2030
• Launched climate positive employee engagement
programme to educate and enable colleagues tosupport our net zero commitments• Celebrated Black History Month to reflect on
the diverse histories of people of African and
Caribbean descentBusiness

Goal 12:
Responsible Consumption and Production
Target (12.6): Encourage companies, especially large
and transnational companies, to adopt sustainable
practices and integrate sustainability information into
their reporting cycle.

Admiral’s contribution• Actively engaged with ESG rating providers andintegrated feedback into our sustainability disclosure• Reporting against the Sustainability AccountingStandards Board (SASB) standards• Aligned disclosure with all recommendations
under the Task Force on Climate-Related Financial
Disclosure (TCFD) framework• Received external verification of carbon emissions
data and aiming to set Science-Based Targets

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Goal 13:
Climate Action• Our Community Strategy ‘Together for Better’is – committed to transforming futures in our
local communities

Financial Statements

Target (8.6): Substantially reduce the proportion of youth
not in employment, education or training.

Admiral’s contribution

Corporate GovernanceSociety72

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Sustainability GovernanceGroup Board: The Admiral Group Board is responsible
for promoting the long-term sustainable success of
the Group and is its principal decision-making forum.
It is the principal governing body for sustainabilityrelated issues and takes ownership of sustainability
and climate-related topics and associated stakeholder
engagement. The Board approves our Environment,
Social and Governance (ESG) ambitions which can havea material impact on Admiral. Milena Mondini, Group
CEO, is the appointed Sustainability representative on
the Group Board.

To see the Group
Governance
Structure,
and all Board
Committees
please turn topage 126

Board Committees: The Board has delegatedauthority to several permanent Committees that deal
with sustainability related matters where relevant
and matters in accordance with written Terms ofReference. The principal Committees of the Board– Audit, Remuneration, Group Risk and Nomination
and Governance play an important role in the Group’s
sustainability related decision-making processes.
For example, the Group Risk committee oversees
the management of climate-related risk and ensuresappropriate oversight is in place.

Sustainability Working Group: A Sustainability
Working Group was established in 2020 to help
identify, monitor and facilitate the implementationof sustainability ambitions across Group operations.
The working group supports the Group Board
and Admiral’s executive leadership team toensure adequate oversight is in place aroundsustainability-related decision-making. This includes
monitoring the latest market developments around
ESG, supporting subsidiary entities with theirsustainability commitments, and sharing best practice
ESG management.
In 2021, sustainability champions were appointed
from across the business to own the ESG ambitions
disclosed in this report. Each champion reports
progress against these ambitions directly to the
Sustainability Working Group.
Climate Change Steering Group: Given the impact ofclimate change and the increased focus the area hasreceived in recent years, a subcommittee dedicatedto climate change was created in 2021. The Climate
Change Steering group reports directly to the
Sustainability Working Group.
Forums & Ministries: Several internal forums andMinistries exist across the business to uphold thepillars of our culture and monitor areas related
to sustainability such as employee diversity,
happiness and wellbeing. For example, the Diversity
and Inclusion forum consists of six working groups
and drives Diversity and Inclusion initiatives acrossthe Group. Several ministries such as the ministry of
fun and the ministry of health organise regular events
to keep colleagues happy and engaged.

Admiral Group plc Annual Report and Accounts 2022

73

Company Overview
Strategic Report

2022 ESG rating

DISCLOSURE I NSIGHT ACTION• 2022: AA• 2022: D• 2021: A• 2021: C

Sustainalytics
Sustainalytics ESG Risk Rating32

ISS ESGISS ESG performance• 2022: 21.0

• 2022: C-• 2021: 22.3

• 2021: C-• 21st percentile subindustry ranking (2021: 8th)

• 4th Industry decile rank (2021: 4th)33

Dow Jones
Dow Jones Sustainability Index

Tortoise
Tortoise Responsibility100 index• 2022: 48/10034• 2022: 63rd out of 100• 2021: 37/100• 2021: 21st out of 100

Financial Statements

CDP
CDP Climate Score31

Corporate Governance

MSCI
MSCI ESG rating assessment31

Admiral Group plc Annual Report and Accounts 2022

Additional Information

31 The use by Admiral Group of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names
herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Admiral Group by MSCI. MSCI services and data re the property of MSCI
or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI
31 Members of the Sustainability Working Group are reviewing the drivers behind our lower CDP score in 2022 and putting in place a plan of action to improve
performance going forwards
32 Copyright ©2022 Sustainalytics. All rights reserved. This report contains information developed by Sustainalytics (www.sustainalytics.com). Such informationand data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do notconstitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable fora particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers
33 A decile rank of 1 indicates high relative performance versus a decile rank of 10 which indicates poor relative performance
34 Improved result (a higher mark indicates stronger performance against the Dow Jones Sustainability Index scoring requirements)

74

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Our Customers

How we engage to confirm what matters
to our customers
There are opportunities for us to communicate
and engage with our customers, and vice versa,
throughout the different points in the customer life
cycle. Some of these mechanisms include:• Discussions with our; customer service teams,
new business and renewals teams, our claims teams,
and our complaints teams• Online customer portals• Live chats with agents• Social media• Admiral App messages• Customer feedback (comment forms, surveys, SMS)
• Customer focus groups• Perception studies

Why they matter to us strategically, and how
they influence the operation of the business
Customers are at the heart of our business,and everything that we do. As a customer-centricorganisation, we seek to provide more people with theopportunity to access good financial services products.
The needs of our customers shape the products wedeliver, and their feedback and expectations feed into
the design of our channels and platforms.
In 2022, we assessed our customer-centric strategy
and operational culture to ensure that the business
was well aligned with best practice recommendations.
Our assessment provides confidence that we haveeffective practices and monitoring in place to support
excellent customer service, as well as significant
resources dedicated to training customer facing
employees across the business.

What matters to our customers, andencourages them to maintain a relationshipwith Admiral
Considering several influences, including the latest
regulatory guidance, we believe that key factors thatare important to our customers include:• Great service• Fair, affordable pricing• Good quality products• Accessible products and channels• A resilient business

Frequently reviewing the engagement mechanisms
across our customer experiences, particularly
throughout digital journeys, allows us to understandwhat is most important to our customers and helps us
to continually refine and improve our service.

Board oversight, training, and escalation
The Board continues to receive updates fromManagement on the treatment of existing customers
and the various processes that are designed to ensure
fair outcomes throughout the customer journey.
Customer satisfaction levels and employee feedback
is fed into Board discussions which ultimately shapes
strategic decision making, including plans related
to digital investment and future diversification.
The Board also receives annual feedback on the
Conduct Risk framework through the Group
Risk Committee.
During 2022, the Board also spent significant timereviewing several actions that were implemented
in 2021 in response to the FCA’s pricing remedies,including but not limited to;• Ensuring that renewing home and motor insurance
consumers are quoted prices that are no more thanthey would be quoted as a new customer throughthe same channel• Make it simpler for customers to stop automatic
renewals if they wish to do so• Ensuring that we deliver fair value on all
insurance products• Updating and enhancing the model used toestimate the savings arising from the whiplash
reforms, introduced by the UK government on
May 31, 2021

Admiral Group plc Annual Report and Accounts 2022

75

Company Overview• Approval of the Consumer Duty
Implementation plan

What value do we create for our customers?
In 2022, Admiral delivered numerous changes
impacting customers for the better. Some examplesof the value delivered to our customers include:• Improved Claims System for UK Motor
Customers (NEO)+ Read more on page 29+ Read more on page 76• We supported UK and French Household customers
impacted by floods+ Read more on page 9• We launched a new loans product, ConTe Prestiti,
in Italy in Q3+ Read more on page 150• We launched Admiral Pet+ Read more on page 32

Increased focus on Net Promoter Score (NPS)
We commit to providing excellent and efficientcustomer service, and to improving our offerings withcustomer feedback. We use NPS to measure and drive
performance across the Group.
Although NPS was already a key metric for Admiral,the opportunity was taken during 2022 to increasemeasurement of NPS, whilst aligning businessleaders and delivering company-wide training on theimportance of recording and tracking scores.

Whilst the Board and Management were confident
that the existing Admiral culture was well aligned tosupport this objective, in 2022 the Board asked thebusiness to develop a series of high-level principles
for employees to anchor their day-to-day actions to,when dealing with customers.
Careful consideration was given to ensure that an
appropriate ‘tone from the top’ was agreed upon,
both at Admiral Group Board and EUI Board.36
The Executive management team and the Board
continued to observe progress of strategy inanticipation of implementation throughout the year.
Admiral also continues to explore opportunities toprovide customers with additional, innovative products.
In 2022, our international businesses continued to grow,and launched additional products to help more people
look after their future.

How we monitor the impact of our actions
and the strength of our relationshipThe following metrics are some of the main tools
we use to assess the impact of our actions and thestrength of our relationship with our customers:• Net Promotor Scores (NPS) scores• Customer satisfaction scores• Complaint rates• Feedback and insight relating to products andservices from all customer-facing teams• Policy acquisition and renewal rates

Continued delivery of fair and affordably
priced products• Activity levels on the MyAccount Portal

During 2022, Admiral has continued to offer fair andaffordable pricing, and we continued to evolve ourunderstanding of customers’ needs to aid productdesign (e.g., Admiral Essentials, and flexible short-termcover provided by Veygo).

• Ombudsman feedback

35 A subsidiary NED of EUI Limited, the entity considered as‘The Firm’ by the FCA Regulatory Authority

36 EUI Limited is a fully owned subsidiary of Admiral Group Plc. EUI Limited isan insurance intermediary with employees across the UK, India, and Canada

Admiral Group plc Annual Report and Accounts 2022

• Call volumes, and call answer rates• Social media

Further
information is
located on pages
28 to 30 of theStrategic Report

Additional Information• We added our Multicar proposition to
PCW platforms

Financial Statements

The Board also received updates on (i) the progress
to deliver the technology and digital strategies,
which have a direct impact on the improvements
made to customer journeys, and (ii) information
security and cyber risk, including crisis management,
both from a customer and reputational
impact perspective.

Ahead of 2022, Admiral recognised that theimplementation of the FCA’s pricing remedies would
affect general insurance customers on a market-widebasis, and subsequently anticipated the changes
required before the regulation came into force in
Q1. As the year developed, the Board also started
to prepare for the FCA ‘Consumer Duty’ (‘The Duty’)regulation, and to plan for further enhancements tobusiness practices. As part of the process, the Board
recognised the need to embed a customer-centricculture at all levels, to support adapting processes
and procedures ‘to do the right thing.’

Corporate Governance• Appointment of an Independent Director as
Consumer Duty Champion during Q335

What are the risks and opportunities that
could affect the relationship and, therefore,
Admiral’s success?

Strategic Report• Preparing and enhancing operations in anticipationof the new Consumer Principle from the FCA,
that requires firms to act to deliver good outcomesfor all retail customers

76

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Our sustainability ambition:
We strive to provide greatcustomer experiences

Simple and clear communication
We aim to create simple insurance products which
are easily understood and accessible to all. In 2022,
we continued to strengthen our digital services.
For example, we’ve rolled out a new self-installtelematics device that customers can link to their
Admiral app. Through it, customers can easily accessfeedback on their driving behaviour and see how they
can improve. This encourages safer driving on ourroads which benefits everyone, and for customers it
improves the customer experience and helps bring
their premiums down.

Responsible sales
We comply with all relevant regulatory requirements
and actively review our practices to ensure allprocesses and systems operate in line with relevant
policies. Notable in 2022 was the introduction of theGeneral Insurance Pricing Practices (GIPP) in the UK.
The new pricing rules require that renewing Motor andHome insurance buyers are quoted prices that do not
exceed what they would have paid as a new customer.
Admiral regularly communicated with the FCA and the

ABI throughout the consultation and implementation
period and successfully transitioned its pricing
practices at the start of the year.
Additionally, new Consumer Duty regulation was
finalised in 2022 and will come into force in July 2023.
To prepare, Admiral has put in place the necessary
framework to continue to ensure we deliver valued
products and services for customers in terms ofpricing, transparency, and support. We are confident
that we create value for customers through the
products and services we sell. We also consistently
review our activities through a Consumer Dutylens and will continue to enhance our monitoring,
governance, and management information (MI)requirements in 2023.

Satisfied customers
We regularly measure customer satisfaction acrossseveral key benchmarks, allowing us to stay close tocustomers’ needs and understand areas where ourservice fails to meet expectations. With emphasison creating a more seamless experience, customers
that speak to us via webchat can now experiencean effortless secure card payment method with theuse of Semafone. The new tool opens a channel
for customers to transact and engage with us,
improving the customer journey. The use of Semafone
also supports those in our vulnerable customer basewho may struggle to give card payment information
over the phone; having this function on Webchat
allows customers to ask for support instantly.

Fair and transparent claims outcomes

Launch of MultiCaron price comparison
We made our MultiCar product proposition
available via the price comparison channel
for the first time this year. We believe this isan exciting opportunity to grow our popular
MultiCover offering as it allows us to givecustomers a MultiCover price much earlier intheir shopping journey. Admiral is the first of
any insurance company to offer this in the UK.

As an insurer, we are committed to providing
appropriate claims practices that deliver fair andjust outcomes for customers in a timely manner.
Over the last three years, significant work has been
put in to develop our new claims system: Guidewire
Claims Centre (GWCC). The new system provides
more transparent and efficient customer experience;
it offers better data insight and gives customers
more choice and flexibility on how they interact
with Admiral. GWCC was originally introduced into
our Household Claims function in 2021 and thensuccessfully rolled out to Motor Claims in 2022.

The idea to launch MultiCover online came from one of ourinternal innovate competitions where colleagues acrossthe business pitch ideas to senior management and makea proposal on how it could work for our customers. The idea
was so successful it was picked up by a project team andsubsequently put into practice. We are currently triallingMultiCar on Confused.com and will continue to monitor
progress into 2023. This will give us the chance to understandour customer needs and behaviours and if successful we will
look to test on other price comparison sites and with otherproducts – watch this space!
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77

Company Overview

Our people are encouraged to engage across multiple
channels, virtually and face-to-face. We also engage via:
• 1:1s with managers• Blogs• Chat Logs
• Colleague surveys• Employee Consultation Group (ECG) meetings• Feedback schemes such as ‘Ask Milena’ and‘Have your say’

Corporate Governance• Polls

Strategic Report

Our People

How we engage to confirm what matters
to our people• Participation in the Great Place to Work survey• Grievances• Whistleblowing channels

Why our people matter to us strategicallyand how they influence the operation of
the business

What matters to our people, and encourages
them to maintain a relationship with Admiral
Our people want a friendly, fun, and productive
workplace where they are engaged, and where theirviews are valued and considered. Hybrid working andhealth and wellbeing continue to be key priorities forall businesses around the Group.
We consider the priorities of our people to be:• Talent acquisition and development, with fair andequal opportunities available to all• Reward and recognition, including long-term
shareholder value (inc. the employee share scheme)• Health and wellbeing, both physically and mentally• The opportunity to build and maintain a work life
balance whilst remining engaged and included by
the business• Flexible and remote working, and freedom toprovide inputs into working hours and placesof work+ See more on page 81

Board oversight, training, and escalation
The Board receives updates on Diversity and Inclusion,
people, and culture which all reflect the permanent
move to a hybrid working model. The Board also
receives updates relating to ECG meetings in the UK
and international businesses, Group health and safety
and whistleblowing.
The Group CEO and CFO host our Staff General Meeting(SGM) (which allows for questions to be raised to themas representatives of the Board), and host numerous
forums with our people. Our employee AGM took place
in hybrid form during 2022, and feedback suggested
that it was a useful format for management to share
information with employees, in a fun and engaging way.
Additionally, our Non-Executive Directors attend
ECG meetings on a rotational basis and report backto Board. In 2022, the Board Chair and other NonExecutive Directors made virtual and in-person
visits to different business departments andoverseas locations.

What value do we create for our people?
• We improved our reward package for employees
and responded to the cost-of living crisis+ Read more on page 148• We launched new Admiral training programmes toensure and encourage our people to engage with
our purpose+ Read more on page 79• We upgraded our learning and development
scheme, launched a new programme,
Get Discovered, and made LinkedIn Learningavailable to all colleagues+ Read more on page 81, 165

Admiral Group plc Annual Report and Accounts 2022

Additional Information

We believe that people who like what they do, do it
better. We strive to do better every day because welike what we do, and we want to help more people tolook after their future. This attitude enables our testand-learn culture, supports operational excellence,
fosters happier and more productive employees,
and ultimately shapes better outcomes for ourcustomers and other stakeholders.

• Friendly Forums

Financial Statements• Exit interviews

78

Strategic ReportCreating Sustainable Value for our Stakeholders
continued• We extended our health initiatives (men andwomen’s health) and we upgraded our paternity
and maternity policies+ Read more on page 81• We continued to encourage our teams to host teambuilding events, supported by our Ministry of Fun+ Read more on page 10• We supported Purple Light Up – a global movementthat celebrates and draws attention to theeconomic contribution of the 386 million disabled
employees around the world+ Read more below

Diversity and Inclusion
Further
information on
our Diversity
and Inclusion
activities can befound on pages
80, 158

Further
information on
our awards canbe found on
page 41

Admiral provides a working environment in which
Diversity and Inclusion is embraced, and promotes
a comprehensive Diversity and Inclusion approachacross the Group.
Our Diversity and Inclusion strategy supports ourability to attract, engage, develop, and retain diverse
talent. Employee led working groups include:• Disability – This team promote a safe andhealthy environment for all our team members,
raise awareness, and support inclusion within
the community• Social Mobility – This working group aims to ensurethat regardless of background, everyone can fulfil
their potential and is able to progress their careers
Working groups consist of volunteers across thebusiness from a variety of roles and experience.
There are around 60 members in total. Each working
group meets every 4–8 weeks.
We check that our culture continues to reflect support
for Diversity and Inclusion through several feedback
mechanisms, including:• Feedback from the Employee Consultation Group• Great Place to Work survey results• Pulse survey results• Exit interviews• An engaging and diverse events calendar• Gender Equality – This group is tasked withraising awareness on issues surrounding gender;
and to continue to support staff and promote an
inclusive culture

Examples of initiatives that reinforce our culture are:• Ethnicity and Culture – This group supports
us becoming a more ethnically diverse andinclusive company through awareness, discussion,and improving the work environment• Celebrating Black History Month• Ty Rainbow LGBTQ+ – This team promote a safe
and inclusive environment to support LGBTQ+
staff and customers, as well as providing a social
support network• Participation and awareness of our ‘#IBelong’ series• Sponsoring Pride (Headline Sponsors for 22 years)• Promoting ‘Purple Light Up’ and celebrating the
economic contribution of disabled employees
In 2022, Admiral was placed 26 out of 850 workplacesin Europe as a Diversity Leader, by the Financial Times,
as well as being named 3rd Best Workplace for Womenin the UK by the Great Place to Work.

• Age – This group focus on understanding the needsof our employees including issues and needs ofpeople at work in various age ranges from 16–30,
30–50 and 50+

Purple Light Up
On December the 3rd, Admiral and businesses
around the world celebrated the economic
power of disabled people.
For the event, we wanted to open a conversation arounddisability inclusion in the office and share some of the things
we do. Throughout December, we held multiple office andvirtual events. Colleagues at Admiral both showcased their
lived experiences and shared their perspective, guide dogs
for the blind visited our offices, and guests such as Stuart
Nixon MBE hosted webinars discussing overcoming adversity.
The events were organised by our Disability Forum which was
created to improve awareness, discuss ideas, and implement
adjustments to improve the workplace for those livingwith disabilities.

92%
answered positively
to “I believe AdmiralGroup is a diverse andinclusive employer”

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79

Company Overview

Hybrid working provides both risks and opportunities
in respect of our people. Whilst we may now be able toreach different pools of talent for critical roles, we pay
careful consideration that there could be a risk losingof talent, as geography becomes less of a constraint ina hybrid working world.

• Health and safety incidents• Employee feedback• Pay gaps
• Culture Dashboard metrics, including:– Satisfaction scores from Great Place toWork survey– Diversity targets

The protection of Admiral’s unique culture is critical toensuring that we continue to attract and retain talent.

– Training & development (courses completed)

How we monitor the impact of our actions
and the strength of our relationship– Sickness– Attrition– Recruitment (e.g., applications per vacancy)

Financial Statements

As well as monitoring the impact of our actions andthe strength of our relationships qualitatively throughour engagement mechanisms, we also monitor thefollowing key performance indicators:

To achieve our ambition to be one of the best places
to work in the world, we have set the commitment to
be in the top 25 Great Places To Work (GPTW) rankings
across all of the Group’s respective businesses. In 2022,
we achieved this target in almost all operations where
we are ranked.
2022 Great Place To Work

Ranking

UK
Admiral Canada
ConTe
Admiral Seguros
L’olivierAdmiral Solutions38
Europe

4th
4th
4th
2nd
7th
35th
19th

Two years ago, we took the opportunity to reflect onour ‘why’ – why do we exist as a business and what is
our purpose as an organisation. Following hundredsof hours of listening to employees and conducting
multiple employee workshops, we outlined a newGroup purpose statement. In 2022, we have increased
colleague’s exposure to our purpose through training,and decision-making among stakeholder groups.
Key successes include:• Exposure to purpose for every employee via online
and offline communications campaigns• Annual Top 10 competition centred aroundshowcasing our purpose in the everyday• Development of a purpose-led communities andsustainability approach• The launch of a UK course about our purpose• Shareholder communications about purpose in
our annual and half-year results

80%of employees agreed
that they understandhow their role brings
to life Admiral Group’s
purpose in 202237

Embedding Admiral’s purpose

37 Staff pulse survey result.
38 Performance versus other entities is impacted by themuch larger pool of companies included in India.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Our sustainability ambition:
To be one of the best places to work in the world

Our ambition is to be one of the best places
to work in the world

More information
about how wemonitor andassess culture,and talentmanagement
can be found on
pages 140 to
143 (for culture)and page 166(for talentmanagement)

Corporate Governance• Accolades

Strategic Report

What are the risks and opportunities that
could affect the relationship and, therefore,
Admiral’s success?

80

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
A diverse and inclusive businessWe firmly believe that to create a successful working
environment, companies must embrace Diversity
and Inclusion (D&I) across all levels of the business.
In Admiral, a Diversity and Inclusion Forum, made up
of over 200 employees, is in place to drive all our D&I
initiatives. The forum consists of six working groups
which consider and implement ways we can bettersupport a diverse working environment. To drive theconversation at the highest level, Cristina Nestares,
CEO of UK Insurance is the appointed D&I
executive sponsor.
In 2022, colleagues have had access to monthly
newsletters and all line managers underwent
mandatory D&I training. Our international entities
completed a maturity assessment which consideredmultiple elements of D&I. This helped identify
our strengths but also areas for improvement.
People Services (PS) managers and D&I sponsors
met regularly to share progress, ideas, and express

concerns. New local working groups were introducedin Spain, Italy, and the US, with a focus on making
positive changes in their respective entities too.
Through these initiatives we are seeing a transition in
the business from a position of awareness, into wider
engagement and consolidation.

Disabled employees
Admiral Group’s UK businesses are Disability
Confident Employers. This means they are recognised
as going the extra mile to make sure disabled
people get a fair chance, full and fair consideration
to applications for employment made by thosewith disabilities, having regard to their particular
aptitudes and abilities. Admiral has a Disability Forumto help promote inclusivity in the Group for thosewith a disability. There is also a Workplace Support
Team to provide support for those with physicalDiversity partnerships and signatory commitments
disabilities, neurodiversity and short-term mental
health problems. Training sessions to help better
employees understand those with neurodiversity
are also available. The Admiral Group will support any
employee who is disabled or has a life-threatening
illness and help them to contribute to the Group as
long as their health allows. Managers in the Group are
sensitive to health concerns and special needs and will
not knowingly allow any employee with a disabling or
life-threatening illness to suffer from discrimination
at work. The Group also provides employees withaccess to the Employee Assistance Programme CareFirst confidential helpline which offers advice andsupport on a range of health issues.

£3,600in Admiral shares
received by around 10,000
employees each year92%
answered positively
to “I believe AdmiralGroup is a diverse andinclusive employer”

Admiral Group plc Annual Report and Accounts 2022

81

Company Overview

The Learning & Development (L&D) department is
Admiral’s central training hub and offers support,
learning opportunities and career advice to all
employees. In 2022, the L&D department launched
a new internal Leadership Planning and Skills
Development hub. The hub provides guidance,
support, and skills development opportunities for
employees within Admiral. In it, colleagues can build
their own personal learning plan which they can thentailor to their specific development needs. The hub
links to a range of internal and external development
courses and programmes with additional resourcesin the pipeline to be built. At current we have over
17,000 courses, as well as access to LinkedIn Learning
for all colleagues. In 2022, we’ve also deepened ourunderstanding of where talent pools may or may notexist across our global operations and strengthened
processes to identify potential talent. To that end,
internal communities have been created in targetedbusiness areas to enhance our development networks
and develop Admiral’s employer value proposition.

Recruiting the right people
Our recruitment programs are designed to align withstrategic business needs. In 2022, in line with Admiral
2.0 Group strategy, emphasis was placed on recruitingfor Data and Analytics (D&A) roles. Strategies havebeen put in place to identify where we need todevelop or recruit talent, these strategies take into
account variables such as, attrition, time to hire,
and the demand for skills. Community working groups
were then established to design better ways to attract
and retain D&A talent.
Admiral Group plc Annual Report and Accounts 2022

Our culture is built on an environment where
employees feel that they are part of a wider collective,
and that their contribution plays a vital role in ourcontinued success. The Admiral Employee Consultation
Group, or ECG for short, was implemented in 2019and gives employees a voice at the highest level ofthe organisation. Each department in the businesshas an assigned ECG representative, voted for by theemployees, to listen to employees’ views and sharewith the Board and senior managers where they
believe Admiral is doing well or needs to improve.
In 2022, topics discussed included developments
around Smart Working, health and wellbeing, andfurther conversations on the Group’s remuneration
practices. No topics are considered ‘off-limits’ andemployees are encouraged to share their opinions toensure transparent and fair conversations can occur.

Employee Reward
We recognise the previous few years have beenchallenging for employees mentally, physically, andfinancially. As recognition of the dedication our
employees have showed and to address the challenges
faced due to the cost-of-living crises, we committed togiving employees extra payments in the year. We also
operate our employee share scheme which seesaround 10,000 employees receiving an award worth
up to £3,600 in Admiral shares each year.
A wide range of non-salary benefits covering all
employees are also available. This includes support
for medical appointments, buy-a-book schemes,company support for dependent care throughcooperation with local childcare facilities, a cycle-towork scheme, and a wide variety of leave opportunities
such as: Maternity/Paternity leave, Dependent Careleave, Career break leave, Compassionate leave, andCharity leave.

Additional Information

People Learning and Development

Engaging and communicatingwith our employees

Financial Statements

In 2022, we launched a new mental health andwellbeing strategy to help educate and enable
our colleagues. As part of our strategy, we ran
events such as Women’s and Men’s Health months
focused on driving awareness and understanding ofvarious health issues. We also launched a Wellbeing
Representatives Network which encourages face-toface communication, and gives assistance to those
who may be struggling.

To keep candidates engaged throughout therecruitment process, changes were also made to our
onboarding platform. The platform was updatedwith all the opportunities Admiral offers in termsof benefits, learning and development, health andwellbeing, and our culture. In addition, a hiring
manager portal has been created which provides acentralised place for hiring managers to view theirjob vacancies, see applications, anonymised CVs,and provide feedback to candidates. These changes
are expected to streamline the recruitment process,and in turn improve the overall recruitment journey.

Corporate Governance

At Admiral we have been committed since day one
to providing a work environment where people
feel comfortable to be themselves and receive theright level of support. The Board receives updates
on health and safety throughout the year and the
Employee Consultation Group (ECG) gives employees
a platform to share their views. Within Admiral all
People Services (PS) executives and the Wellbeing &Workplace support team are certified Mental HealthFirst Aiders. We also offer access to mindfulness
courses, healthy eating and living webinars, and guest
speakers talking on a range of topics such as anxiety
and emotional resilience.

Strategic Report

Health and wellness across our operations

82

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Our Business:
Partners andSuppliers

How we engage to confirm what matters
to our partners and suppliers
To ensure strong third-party engagement, there arededicated processes around the Group to govern
end-to-end relationships. Key parties have internal
relationship managers responsible for ongoing
dialogue, for example with co- and reinsurance
partners, and strategic partners.
To monitor and support the governance of
procurement, a software application is used toprovide tender management, contract management,
supplier management and due diligence under asingle platform. This information is reported to theAdmiral Risk Management Committee monthly andhelps inform our engagement with our suppliers.
The Group’s dedicated Regulatory Relationship teams
maintain channels of communication with the FCA
and PRA in the UK, and all our international regulated
intermediaries and insurers.

Why they matter to us strategically and how
they influence the operation of the business

Board oversight, training, and escalation

Our partners and suppliers are considered strategicallyimportant to us either because (i) the supplier is amaterial outsourcer (ii) the supplier or partner is
integral to achieving future strategic goals, (iii) there
are particularly preferential rates or terms in place,or (iv) another factor which makes the relationshiphard to replicate or replace.

• All proportional risk-sharing agreements,
including co-insurance and reinsurance contracts

Our strategic partners and suppliers comprise a mix
of financial partners, reinsurance partners, IT hosting,
distribution and claims management and claims
services partners. Therefore, it is crucial that the Group
fosters these relationships effectively to mitigate theassociated risks in the supply chain.

• Modern slavery risks in the supply chain

What matters to our partners andsuppliers, and encourages them to maintaina relationship with Admiral

The Board receives updates on:• Matters relating to partnerships and opportunities• Relationships with key partners and procurement,
including our payment policies and practices• Regulatory, technological and consumer trends
The Board takes all updates into account when
considering the long-term consequences of its
strategies and business plan. The CFO provides
updates on the activities related to the renewalof the Group’s co-insurance, reinsurance and quota
share contracts, including maintaining the ongoingstrategic relationship with Munich Re.

The matters of most importance to our partners andsuppliers are:
• Strong ethical partnerships and fair treatment• Receiving great service and engagement throughour supplier sourcing, and supplier management• Timely payment practices• Governance of managing risk
• Business resilience

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83

Company Overview

Read more on
pages 6, 32
and 36The selection of suppliers must follow a documented
evaluation process, considering at a minimum thetender submission, the business requirements,
the due diligence carried out, commercial andcontractual terms.

• We launched Pet partnership with veterinarians
across the country+ Read more on page 32• We partnered with an Insurtech to help customers
mitigate leaks in UK Home

+ Read more on page 36

What are the risks and opportunities
that could affect the relationships and,
therefore, Admiral’s success?
Partner and supplier risk refers to the degree of risk
to the business arising from the potential loss of the
supplier or partner, the contract, the criticality ofthe service, the size of the supply market and thecomplexity to move or switch suppliers. At Admiral,each supplier is given a risk score based on thesematters, which is regularly reported to the Risk
Management Committee, as outlined above.
Some risks in respect of partners and suppliers arise
from hosting critical services in the cloud. Whilst the
migration to the cloud has many operational andcommercial advantages, the reliance on cloud hosting
providers such as Microsoft Azure and Google Cloud
Platform means that outages affecting those providers
could have a significant impact on core operations
and present a business interruption risk. The one-tomany nature of cloud services means that Admiral isusually required to sign up to cloud suppliers’ terms

Admiral Group plc Annual Report and Accounts 2022

There were opportunities to improve the way wemanage our partner and supplier relationship risks in
2022. Some of the opportunities included reviewing
our procurement framework applicable to the Group,building additional capabilities to monitor, rate andimprove ESG performance of partners and suppliers,
and enhanced supplier risk controls to meet the FCA’soperational resilience requirements.

How we monitor the impact of our actions
and the strength of our relationship• Successful renewal of risk-sharing agreements
and contracts• Engagement with co-insurance andreinsurance partners• Feedback from strategic suppliers and partners• Compliance and audit activities• Efficiency/savings and decreased risk inprocurement activities• Supplier performance against agreed service levels

Additional Information+ Read more on page 3• Admiral Pioneer funded investment in Wagonex

With the general exception of cloud suppliers,
we also continue to ensure that all suppliers sign up
to our terms and conditions that are reviewed andupdated in line with regulatory standards. For cloud
suppliers who require us to sign up to their terms
and conditions, we require suppliers to include a
set of contractual requirements called the “Cloud
Minimum Standards”.

Financial Statements

Managing relationships with our partners andsuppliers in this way enables us to maintain businessresilience and therefore reduce risk, ensures that there
is a consistent process and that they are treated fairly
and paid promptly.

and conditions that limit liability for potential businesslosses arising from service outages. However, this is anindustry-wide risk and one that is generally mitigatedby: (i) carrying out appropriate due diligence on
suppliers to ensure they have effective resiliency;(ii) not over relying on a single cloud hosting provider;and (iii) maintaining appropriate insurance cover toprotect the group against business interruption causedby third party outages.

Corporate GovernanceAs part of the tender process, each supplier completes
an extensive due diligence questionnaire to ensure
they comply with Group standards. Our procurement
team also manages contract renewal, including
an updated due diligence assessment andcommercial negotiation.

Strategic Report

What value is created by us for them?

84

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Our sustainability ambition:
To build successful businesses with operational resilience

Sustainable procurement practices
Admiral has embedded sustainable business practices
across all the procurement engagements that it
conducts. During any tender process, potential
suppliers are asked to complete a due diligencequestionnaire which includes questions related
to societal and environmental factors such as
financial crime, data protection, modern slavery,
and environmental accreditation. Suppliers are thenassigned a risk score based on these criteria. Risk levels
are managed throughout the supplier process andwhere suppliers have poor credentials, they are
disqualified. That said, we recognise that more can bedone in terms of promoting sustainable procurement
practices. We are currently working towards improving
technology and automation solutions to make theGroup procurement function more efficient. This will
ensure that we can continue to effectively assess our
supply chain and appropriately consider any risingmodern slavery and environmental risks in the future.

Partnership with Pure Storage
Admiral partnered with Pure Storage in 2019,
to improve our on-premise data storage within
our data centres.
In 2022 the project was completed. Pure storage helped
us improve our performance across all our core databases,
almost doubling the speed of our real-time analytics andemergency rate changes made at short notice in response
to such things as inclement weather. Pure technology has
also helped us to reduce the size of our data centre and its
carbon footprint by a factor of four – keeping the businesson track to reach our net zero target by 2040.

We are committed
to achieving our
net zero target by2040

Chris Bevan, Head of Platform Services, had the following
to say – “With Pure Storage, rate change calculations are
98% faster, giving customers the best prices and improving
our chance of listing in the top 10 on aggregation sites”.

Admiral Group plc Annual Report and Accounts 2022

85

Company Overview

The Group engages regularly with shareholders
through frequent and open dialogue. Our Investor
Relations calendar consists of various activities
including but not limited to:• Annual Report• Roadshows (in person where possible, and remotely)• Conferences• Analyst and Investor phone calls/ presentations• 1:1 and group meetings

Corporate Governance• Results announcements and presentations

Strategic Report

Our Business:
Shareholders

How we engage to confirm what matters
to our shareholders• IFRS 17 analyst training session• Annual General Meeting• Staff General Meetings

Why they matter to us strategically and how
they influence the operation of the business

What matters to our shareholders andencourages them to maintain a relationshipwith Admiral
Our stakeholders deem that the key areas ofimportance related to our shareholders include:• The financial performance of the business,
including products and services that are fit for
purpose and provide solid financial returns• Business strategy and viability of long-term success• Our approach to climate change andthe environment• We also recognise the growing importance of ESG
factors in investment decision making

In 2022, we also further improved communication
through enhanced disclosures and engaging withindices to improve index ratings.

Board oversight, training, and escalation
The Board receives regular updates on the activitiesof the Investor Relations team, as well as on meetings
held between Board members and/or management
and investors. The Board also receives investor
feedback (post roadshows/results/conferences) anduses it to shape its approach to corporate governance,
ensuring that any issues or concerns raised areconsidered and addressed. The Board also receives
regular updates on the key elements of ESG.

What value is created by us for them?
• Clarity and insight into operations• Sharing timely updates in line with best practice• Transparency, so that analysts and shareholders
have confidence in the value of the stock/can
price fairly• Assurance of management intentions/strategy• Confidence that external views will be shared/
discussed with the management team
• In 2022, we held an IFRS 17 event to help investors
better understand the impact of the changing
accountancy rules• Across the year, we engaged with third-party
agencies to provide feedback on our sustainability
reporting and made efforts to improve disclosure+ Read more on page 91• Our Chair and Senior Independent Directors held aseries of corporate governance meetings with ourlargest shareholders• In 2022, we ran through a succession plan, to secure
our new Chair
Admiral Group plc Annual Report and Accounts 2022

Additional Information

Shareholder engagement fosters understandingof Admiral’s strategy and investment case. It allows
us to explain the business and strategic decisions
and rationale whilst providing opportunities
for shareholders to comment and challengebusiness priorities.

• Corporate Governance shareholder meetings(with Chair and Senior Independent Directors)

Financial Statements• On-site investor visits

86

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
What are the risks and opportunities that
could affect the relationship and, therefore,
Admiral’s success?

How we monitor the impact of our actions
and the strength of our relationshipOur principal risks and uncertainties section outlines
the risks and opportunities that could impact our
strategic objectives and affect shareholder’s viewsof the business.

• Analyst feedback

No new principal risks and uncertainties wereidentified throughout 2022, and the principal
risks and uncertainties that could impact Admiral’s
relationship with shareholders have remained
stable over the same period.

• Broker feedback• Shareholder feedback• Investor Relations material• Feedback from proxy advisory firms• AGM voting results• ESG indices

To see how welink risks to ourpillars of strategy,please turn topage 114
To see ourprincipal risks
and uncertainties,
please turn topage 114
Our key financial
and non-financial
highlights are on
page 4• Investor meetings• Roadshow feedback• Rating agency reports
Our website contains all Investor Relations materialand AGM Voting Results.

Details of how
we engage with
ESG indices canbe found on
page 73

Our sustainability ambition:
We seek to build successful businesses with operational resilience

Regular shareholder engagement
Admiral’s management team actively engages with
the Group’s shareholders to promote open andtransparent dialogue. Issues discussed generally
relate to the Group’s financial performance, productand service updates, and the long-term strategy of
the Group. These engagements provide current andpotential investors with insights into Admiral’s strategy
and are a means by which we receive feedback.
The Investor Relations Team oversees engagementwith the Group’s shareholders and provides
regular updates to the Group Board. The team alsoorganises meetings between Board members and/or management and investors, including conferences,
one to one management meetings, and annual
Corporate Governance meetings with our Board Chair.
In 2022, there continued to be a mix of meetings heldin person and online with the Group able to continue
its regular shareholder engagement.

Admiral Group plc Annual Report and Accounts 2022

87

Company Overview

We engage in several ways, including:• Colleague volunteering, particularly our‘Impact Hours’ scheme• Charity initiatives• Partnerships with recruitment bodies

Corporate GovernanceOur employees drive our community engagement
as they are involved in nominating and choosing which
initiatives we support. A culture of giving and a senseof responsibility for the community is shared acrossthe whole Group.

Strategic Report

Our Society:
Communities

How we engage to confirm what matters
to our communities• Partnerships with educational bodies• Fundraising• Funding projects through our Community FundWhy they matter to us strategically and how
they influence the operation of the businessAs a large employer across several countries,
we believe it is our responsibility to provide
employment opportunities for those in the local
areas whilst training and developing our people.
We are committed to promoting and recognising
diversity both within Admiral, and in the communities
in which we operate.

What matters to them and encourages themto maintain a relationship with Admiral
The material issues for our communities generally
relate to support and ongoing dialogue, financial andresource-based contributions, and consistency andintegrity relating to our promises.
We recognize the following focus areas as being themost important to our communities:• Employability• Social mobility• Educational opportunities• Financial inclusion• Sports, arts, and culture* Rebranded to ‘Impact Hours’ in 2022

Admiral Group plc Annual Report and Accounts 2022

Board oversight, training, and escalation
The Board receives updates on the key community
initiatives across the Group and provides direction
on how we can continue to make a long-lasting,positive impact. In 2022, the Board also approved our
new Community Outreach programme. Please turn topage 89 to read more.

What value is created by us for them?
• We launched the Global Emergency fund
+ Read more on page 90• We encouraged all of our employees to ‘Give a Day’*
with our long standing volunteering scheme+ Read more on page 89• We sponsored FinTech Wales Foundry
Accelerator programme+ Read more on page 15• We supported over 200 organisations and donatedover £140k in 2022, via our Community Fund
+ Read more on page 88• We developed and streamlined our existing
Community Outreach programme+ Read more on page 150

Additional Information

Giving back to our communities is an integral partof our company culture. Our people play a key rolein how we engage with our communities, and wework collectively to drive long-term change both
inside and outside of the Group.

• Funding projects through our Ministry of
Giving programme

Financial Statements• Sponsorship of various community events

88

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Local support
We recognise that there are organisations that do
great work and are very closely aligned to many of ourGroup sustainability goals. Examples of organisations
that we support locally include bodies that championsocial mobility and employability, support educational
opportunities, promote health and wellbeing, provide
help for the homeless and support sport, and promoteart and culture within various communities. Therefore,
during 2022, we made ‘super donations’ to support
local organisations that work in these areas.

Partnership with Jesus College
In 2022, we entered the second year of our threeyear partnership with the University of Oxford’s Jesus
College on their Welsh access initiative. Our support
enables our Access and Outreach team to develop
new access activities, enhance existing programmes
and reach more academically gifted young people
in the country, who are currently under-represented
at Oxford and other leading universities in the
UK. This work will include outreach partnerships
with several Welsh primary and secondary schools,
careers and interviews advice workshops for secondary
students and bring additional support to the College’s
prestigious Seren Summer School programme and the
University of Oxford’s “Oxford Cymru” consortium.

What are the risks and opportunities that
could affect the relationship and, therefore,
Admiral’s success?
Admiral is known for being a generous partner ofcommunity charity initiatives and engaging withour communities provides us opportunities to giveback and actively contribute to society. Over thelast 12 months, the Community Strategy has beenrevised, and focus areas include impact hours,
which contribute to teambuilding and colleagues
building networks in and outside of the business.
The Community Strategy has evolved into having
a purpose/ goal that aims to help as many people
into jobs as possible. The more focused approach
potentially means that the scope of the community
projects is narrower. Relationship management withexisting charity partners will need to be managed
to reflect our generous/ positive contributions,communicate our streamlined approach and protect
our reputation. You can read more about this on thenext page.

How we monitor the impact of our actions
and the strength of our relationship• Feedback from charities, recruitment, andeducational bodies• Feedback from employees• Community feedback• Dialogue with organisations• Feedback from the Welsh Government• Media Coverage• Social Media

Over
£140k
in 2022, via our
Community
Fund

Admiral Group plc Annual Report and Accounts 2022

89

Company Overview• Community• Colleagues• Careers

Our longstanding Community and Match Fund havealso been incorporated into our wider Community
Strategy. For context, through the Community Fund
scheme colleagues can apply for a grant to helporganisations, community groups and clubs that either
they or their direct family are involved in. In 2022,

Impact Hours
Alongside our work to support people into sustainable
work, we have long-standing initiatives in place suchas Impact Hours (previously Give-A-Day) where our
employees can take the equivalent of two working
days away to volunteer in their local communities.
In 2022, to maximise the effect and use of our Impact
Hours, we have encouraged and helped business areas
to plan bespoke volunteering initiatives. We havealso improved the tracking of volunteer hours andensured each of our selected charitable partners canprovide volunteer opportunities. Since the re-launchof our volunteer programme, we have noticed asignificant increase in teams using their team-building
time to volunteer and make positive change intheir communities.

“I participated in an ‘Impact Hours’
litter pick in Bute Park with m y wholeteam. We had valuable team bonding
in a largely virtual team. Doing charity
work never felt so ‘Admiral’ singing
Tom Jones and reminiscing over past
lives in the contact centre, all while
performing an invaluable service to thecommunity in Cardiff.”
Cellan Lloyd
Group Compliance

Admiral Group plc Annual Report and Accounts 2022

Additional Information

This approach will focus primarily on the employment
market and getting more people into work.
To support our strategy, we are working with local
and global partners to reduce labour skills gaps andhelp disadvantaged groups into more sustainable
employment. One of our most significant partnerships
is with Generation, a non-profit organisation striving totransform the education system into an employment
system. Initially, we will pilot programmes in India and
Italy. Generation Italy will support 80–100 participantsin tech programmes and Generation India will support
550–600 participants in programmes across thetechnology, service & sales, and healthcare sectors.

we supported over 200 organisations, spending £142K,
with the majority of the spend going towards sports
and arts clubs. Additionally, if a colleague has raised
money for a charity or organisation, they can apply formatch funding where the business matches what theyraise. We provided a total of £59K to over 70 charities
and organisations in 2022.

Financial Statements

Admiral has always cared about our impact on thecommunity, and has been involved in many initiatives
to invest in our communities in areas where wethink we can make a difference, but that also aremeaningful to our colleagues. In 2021, we built on
this approach to re-define and add more focus to our
Community Strategy, launching our ‘Together for
Better’ approach – our commitment to transforming
futures in our local community. Grounded by ourGroup Purpose, Together for Better is underpinnedby three strategic pillars:

Corporate Governance

Our Community Strategy

Strategic Report

Our sustainability ambition:
We strive to have a positive impact on society

90Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Global Emergency Fund

Over
£140K

Admiral’s Global Emergency Fund was set up in 2022
and is dedicated to making fast donations to people
and organisations who need it most around the world.
Organisations supported in 2022 include the Welsh
Refugee Council, where our donation has supported
their employability programme and helped a total of
150 refugees secure employment in Wales. We havealso donated to the British Red Cross to aid theirPakistan Flood appeal, helping over 3,500 people byproviding warm clothing during the winter months.
In response to the Hurricane Fiona in Canada, $150,000
was donated to charities helping those affected.
Much of this was led by our employees who worked
tirelessly to support communities across Halifax andother badly affected areas, such as Nova Scotia.

donated via our
Community Fund

A few of our Together for Better partnerships

Over £50K
donated to over
70 charities andorganisations throughour Match FundOver 200
charities supported
through our
Community Fund

Admiral Group plc Annual Report and Accounts 2022

91

Company Overview

Colleague-directed activities include:• Regular updates from the Green Team, an internal
working group set up to look at green initiatives tominimise the impact of climate change• Engagement with colleagues at employee forums
and via CEO updates• Various recycling initiatives across our offices• Quarterly meetings of our Climate Steering Group• Presentations from Group Strategic Risk at CMAD
(Senior Managers Strategy Sessions)

Why it matters to us strategically and how
it influences the operation of the business

Admiral is mindful that it is increasingly important
to demonstrate responsible business behaviour withregards to the environment, not just because all our
stakeholders demand it, but because it is the rightthing to do:• Our people want to know that they work for acompany which is playing its part in tackling theclimate emergency• Our customers want to know that we are not only
looking after their property and possessions, butthat we’re looking after their future• Our shareholders and regulators want to know that
we are a company which is robust to the challenges
and open to the opportunities that tackling theclimate emergency will present• We strive to reduce our environmental impact,
including our carbon footprint, and encourage
responsible behaviour in our people, customers,
and other stakeholders

Admiral Group plc Annual Report and Accounts 2022

Further details on this can be foundon page 97

What value is created by us forthe environment?
• We enhanced our Climate positive employee
engagement programme+ Read more on page 99• We invested in reforestation investments(Stump Up For Trees and Size of Wales)+ Read more on page 94• In 2022, we made progress towards our net
zero targets+ Read more on page 93• During the year, we installed electric vehicle
charging points in our offices+ Read more on page 94• We became fully carbon neutral for the thirdyear running+ Read more on page 95

Additional Information

At Admiral, we care deeply about our employees,
our customers, and the impact we make on the world.

The Board regularly receives updates on climate
and ESG-related topics, as well as our Responsible
Investment Policy, and provides feedback and topics
for consideration. During the year, a briefing session
was also held on the Task Force on Climate-Related
Financial Disclosures (TCFD) for the Audit Committee
and the Group Risk Committee to provide clarity on
the requirements and their respective responsibilities.

Financial Statements

Board oversight, training, and escalation

Corporate Governance• Internal promotion of Green Week and Earth Day

Strategic Report

Our Society:
Environment

How we engage to increase awarenessand to confirm what matters

92

Strategic ReportCreating Sustainable Value for our Stakeholders
continued
We recognise that environmental disclosures are
increasingly requested by investors, shareholders,customers, and other stakeholders. For 2022,
Admiral made disclosures consistent with theTaskforce on Climate related Disclosures (TCFDs)
and against the Streamlined Energy and Carbon
Reporting Framework. (SECR).
Please turn to page 97 to read more about
TCFD, and page 95 for SECR

How we monitor the impact of our actions
To monitor the impact of our actions we report energy
and carbon emissions in line with SECR to make carbon
reporting more transparent and to aid the goal ofachieving a carbon net zero target.
We also align our reporting with the TCFD’s publishedrecommendations concerning governance, risk
management, strategy, metrics, and targets.
Read more on
page 97

What are the risks and opportunities
that could  affect Admiral’s impact
on the environment and, therefore,
Admiral’s success?
The current focus is on climate change, both theimpact of a changing climate on us, as well as our
impact on climate change.
The former is viewed through the lens of transition
risks (risks arising from a transition to a low carbon
economy), physical risks (risks arising from a changing
climate), and liability risks (risks arising from people
or businesses seeking compensation for losses they
may have suffered from climate change), in the short,medium, and long-term.

We are committed
to achieving
net zero in directly
controlled operationalemissions by

2030

More information is included in the ‘strategy’ sectionof the TCFD disclosure on pages 97 to 111

While the current focus is on carbon footprint,
and plans for footprint reduction, in the future,
there is likely to be an increasing focus on biodiversity
and other aspects of environmental degradation/
regeneration.

We are committed
to achieving net
zero greenhousegas emissions by

2040

Admiral Group plc Annual Report and Accounts 2022

93Company Overview

Admiral Group has formally committed to achieving
net zero greenhouse gas emissions by 2040 at thelatest, across all three scopes of emissions, and to
cut these emissions in half by 2030. A commitment
was also made to achieving net zero in operationalemissions by 2030. Alongside this, we are working
hard to help our customers make greener and smarterchoices by becoming a market leading underwriterof electric vehicles and making sure customers canaccess product features which reduce or offset theircarbon emissions.

An employee engagement programme – Climate
Positive – was launched in 2022. The programme aims
to raise awareness of climate change, as well as theGroup’s response, to promote action, and to encourageongoing employee involvement. Climate-related
content was published in local languages across avariety of channels and formats, and a training course
was released that contributes towards continuous
professional development. Employees were also
encouraged to volunteer to become Climate Positive
allies, tasked with raising awareness of climate changewith peers and sharing key messages.

See page 101 for further detail on net zero definition

Progress against our net zero commitments

Sustainable equipment use
Following the transition to hybrid working
and the need for all employees to use laptops
away from the office, much of the equipment
employees used before the pandemic was nolonger needed.
A decommission project was launched across our sevensites in South Wales to remove all unnecessary assets fromour offices. Over the course of this project, 16,853 piecesof equipment consisting of desktops, laptops, and monitors
were re-sold and recycled, saving approximately 83,729 tonnes
worth of equipment from going to landfill. By working withenvironmentally conscious suppliers, we avoided 5,026 tonnesof CO2 and 1,621 tonnes of fossil fuel emissions going into theatmosphere, as well as 10,103 litres of H2O being used.

16,853pieces of equipment
re-sold or recycled

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Our primary efforts in 2022 were dedicated towards
verifying the group’s scope 1–3 carbon emissions.
To date, the measurement and verification of scope
1 and 2 emissions has been completed, and the focus
is now on estimating accurate scope 3 emissions(investments and supply chain), using finance data.
In parallel to verifying scope 1–3 emissions, we havestarted work to establish Science-Based Target(SBT)-aligned pathways; with the plan to submit theseto the SBTi for approval in 2023. To support us on this,a three-year programme of work has been agreed andinitiated with Carbon Intelligence. Once SBTs havebeen set and approved, a credible transition plan canbe devised and implemented. This plan will ensurethat Admiral meets its intermediate 2030 targets
as well as its long-term ambition to be a net-zerobusiness by 2040.

Financial Statements

Employee engagement on climate change

Corporate GovernanceCommitted to Net Zero by 2040

Strategic Report

Our sustainability ambition:
We strive to have a positive impact on society

94Strategic ReportCreating Sustainable Value for our Stakeholders
continued
Responsible Products
Over the past few years, we have developed,
redesigned, and expanded our product proposition
to make sure we adapt to changes in our society
and the environment.
Read more
about thepositive impact
our products
have on society
in the 2022
Sustainability
Report

The number of electric vehicles (EV) on covercontinued to grow strongly in 2022, and is up by over
60% year on year. Times Top for EVs, (a measure of
how competitive our pricing is) is positive, and loss
ratios for electric vehicles are in line with levels
exhibited by petrol and diesel vehicles. In addition,
Kooalys, a small new venture we launched in
France, supports enterprises in their eco-transition
towards green vehicle fleets. Through Kooalys,
we are gaining a better understanding into changes
in mobility and the transition towards commercial
electric vehicle usage. Combined, our approach means
we stay close to developing trends and continue
to test-and-learn new opportunities.

Responsible Investments
Admiral’s investment strategy targets Net Zero39
by 2040 with the aim of achieving real economic
carbon emission reductions.
We have a responsible investment policy which
includes a commitment not to invest in coal andoil sands – in line with the 2015 United Nations
Paris Agreement. To reach our Net Zero targets wewill focus our investments into firms with ScienceBased Targets (SBT) and into financial instruments
which focus on providing climate solutions, suchas green bonds. We use external data from a third-

party (MSCI ESG Research) to support our approach.
This data is integrated into the Group’s wider
investment decision-making process and ensures
an appropriate level of ESG management is in place.
Minimum average ESG scoring requirements are also
used and we actively engage with asset managers
where any risks are identified.

Support for green initiatives
In 2022, we supported climate action initiatives
by purchasing carbon offsets and donating toreforestation projects in both Wales and abroad.
During the year, we offset 3,454 tonnes of carbon
emissions via our partnership with United Purpose,purchasing credits through their gold standard
carbon scheme.
We donated to Stump Up For Trees (SUFT),a community-based charity focused on broadleaf
woodland creation and enhancing the natural
biodiversity and ecology of the environment in
the Brecon Beacons area of south-east Wales.
Our donation will see 1,125 trees planted over the
next 12 years, with the trees estimated to continue
to remove carbon from the environment for up to
100 years. As well as SUFT, we also support the charity
Size of Wales. Our funding helps to protect against
deforestation through planting and monitoring
37,000 trees via the Bore Forest Project in Kenya.
Our support also contributes to the local community.

A
Admiral’s investment
portfolio weighted
average ESG score has
an MSCI A rating

37,000trees planted via
the Bore Forest
Project in Kenya
39 Defined by average carbon intensity across eligible investments. Where eligible includes
all assets outlined in the Net Zero Investment Framework which is endorsed by the UN’s
Race to Zero

Admiral Group plc Annual Report and Accounts 2022

95

Company Overview

This statement has been prepared in accordancewith our regulatory obligation to report greenhousegas (GHG) emissions pursuant to the Companies(Directors’ Report) and Limited Liability Partnerships(Energy and Carbon Report) Regulations 2018 which
implement the government’s policy on Streamlined
Energy and Carbon Reporting (SECR). During thereporting period January 2022 to December 2022,
our measured Scope 1 and 2 emissions (locationbased) totalled 3,429 tCO2e. This comprised:

Strategic Report

FY2021
UK

Total

UK

Rest of
World

Total

1,839
1,768
25
3,607
1,865

196
1,272
1,332
1,467
1,527

2,035
3,039
1,357
5,074
3,392

598
1,549
41
2,147
639

27
1,254
1,320
1,281
1,347

625
2,803
1,361
3,429
1,986

0.5

0.4

0.5

0.3

0.4

0.3

437

619

1,057

315

675

990

Financial Statements

Scope 1
Scope 2 – location-based
Scope 2 – market-based
Total Scope 1 & 2 (Location-Based)
Total Scope 1 & 2 (market-based)
Scope 1 & 2 intensity per FTE(location-based)
Scope 3

FY2022

Rest ofWorld

Corporate GovernanceStreamlined Energy and Carbon Reporting (SECR)

In accordance with SECR calculations, the tCO2e 2021 data shown for Scope 1, 2 and 3 is estimated and unverified. In addition, the 2021 has been restated following areview by Carbon Intelligence due to an update in the reporting methodology. For verified tCO2e data, please refer to TCFD table on page 108.

The impact of COVID has resulted in working fromhome becoming “business as usual”, with the offices
being kept within statutory and regulatory compliancerequirements, has naturally resulted in a reduction ofutility usage and driven a floor space reduction which
has increased the energy/utility savings. The building
management within the UK sites Newport, Cardiff andSwansea is controlled by Building Management Systems(BMS). These UK sites are being actively monitored for
performance optimisation and time schedule efficiency.
The requirement to introduce greater amounts offresh air into the buildings, which is achieved via the
BMS system, has resulted in a marginal increase inutility consumption.

Scope 1 and 2
emissions (locationbased) totalled

3,429 tCO e
2

Our Scope 1 and 2
emissions havedecreased by

32%

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Overall, our Scope 1 and 2 emissions have decreased
by 32% against last year. This was largely due toimproved control in our Building Management
Systems in our largest locations and closure ofsome sites. We purchase 63% of our electricity
from renewable sources, meaning our Scope 1
and 2 market based emissions were 1,986 tCO2e,a decrease of 41% from last year.

96

Strategic Report treamlined Energy and Carbon Reporting (SECR)
S
continued
During this period, we have taken the opportunity
to engage with specialist consultants to review thebuilding operation and explore decarbonisation
measures such as the removal of natural gas in
Cardiff and the sourcing of alternative solutions.
Equipment/plant modernisation is also being planned
for the next financial period/year which includes the
upgrade of the BMS system in Cardiff and replacement
or upgrading of air-condition plant for more
efficient solutions.
We continue to engage our staff in energy efficiency
campaigns and to explore the use of emerging
technology, such as the district heating mains being
introduced in Cardiff. We have also engaged with
consultants to review our options with regards toemerging technologies and fossil fuel alternatives
in all our sites.
Our Scope 3 emissions are comprised of businesstravel, Fuel and Energy-Related Activities notincluded in Scope 1 or Scope 2 (FERA), waste andwater. Our measured Scope 3 emissions totalled
990 tCO2e, a decrease of 6% from last year due
to fewer estimations and closure of some sites.
During the year, our total fuel and electricity
consumption totalled 15,216,000 kWh, of which
71% was consumed in the UK. The split between
fuel and electricity consumption is displayed below.

Methodology
We quantify and report our organisational GHG
emissions in alignment with the World Resources
Institute’s Greenhouse Gas Protocol Corporate
Accounting and Reporting Standard and in alignment
with the Scope 2 Guidance. We consolidate ourorganisational boundary according to the operational
control approach, which includes all our operations
and sites. The GHG sources that constituted ouroperational boundary for the year are:Scope 1:• Natural gas combustion• Diesel Vehicle combustion

Scope 2:
• Purchased electricity – standard• Purchased electricity – renewable

Scope 3:
• FERA• Waste• Water• Business Travel

Where data is missing, values have been estimatedusing extrapolation of available data or data fromthe previous year as a proxy. However, in comparison
to previous years, more raw data was available
and therefore, estimations make up less than 3%of Admiral Group’s total emissions. The Scope 2
Guidance requires that we quantify and report Scope 2
emissions according to two different methodologies(“dual reporting”): (i) the location-based method,using average emissions factors for the country
in which the reported operations take place; and(ii) the market-based method, which uses the actual
emissions factors of the energy procured.

FY2021
Energy consumption (kWh)Electricity
Fuels*1

FY2022

UK

Rest of
World

Total

UK

Rest of
World

Total

8,325,000
5,033,000

4,606,000
530,000

12,931,000
5,562,000

7,297,000
2,904,000

4,982,000
32,00012,279,000
2,937,000*1 Natural gas and transportation fuels (petrol and diesel)

Admiral Group plc Annual Report and Accounts 2022

97

Task Force on Climate-related Financial Disclosures (TCFD)

Company Overview

In 2019, Admiral began to reportin line with the Task Force on
Climate-related Financial Disclosures(TCFD), in order to provide bettertransparency around the ways inwhich climate change will impact
the Group now and in the future.

Strategic Report
Additional Information

Admiral Group has also continued to address thechallenges of climate change in a number of otherways, including completing Carbon Disclosure
Project (CDP) disclosure, producing a Sustainable
Accounting Standards Board report, and continuing

Financial Statements

Recognising Admiral’s part in tackling climatechange, in 2021 the Group made a commitment toreach net zero across all emissions by 2040, and net
zero in operational emissions by 2030. Since then,as discussed in the “metrics and targets” pillar, theGroup has made progress in reducing its emissions.
In 2023 Admiral intends to submit Science-Based
Targets for validation, with the intention of securing
verified targets by the end of 2023, supporting its
overarching commitments.

On the following pages Admiral has madedisclosures consistent with 9 out of 11 of the TCFD’s
recommendations and recommended disclosures.
At present, Admiral has not made disclosuresconsistent with all the TCFD’s recommendations andrecommended disclosures within Strategy (b) as,
given the large uncertainty around the likelihood andseverity of climate-related issues, they do not serve as
an explicit input into the financial planning process,and therefore the impact on financial performanceand financial position has not been explicitly assessed.
Work will be undertaken during 2023 to consider how
Admiral Group can better recognise the potential
impacts in its financial planning and accounting
activities, to ensure consistency with all recommended
disclosures in future climate reporting. Admiral has
also not set or disclosed clear targets consistent withthe cross-industry, climate-related metrics as requiredby the recommended disclosures within Metrics andTargets (c). During 2023, Admiral intends to submit
Science-Based Targets for validation, which will include
further consideration of cross-industry, climate‑related
targets as per Metrics and Targets (c), to ensure
consistency with all recommended disclosures infuture climate reporting. Further discussion andinformation are included in the relevant sections of
the report, and are signposted as such.

Corporate Governance

Since then, the Group has increased its disclosure
to further align reporting with the TCFD’s publishedrecommendations, considering all-sector and sectorspecific guidance, as well as emerging best practice.

its membership of the Institutional Investors Groupon Climate Change.

Compliance with LR 9.8.6R
Admiral Group plc has complied with the requirements of LR 9.8.6R by including climate-related financial disclosures consistent
with the TCFD recommendations and recommended disclosures. Disclosures can be found on the following pages:
Pillar

Disclosure

Governancea. Describe the board’s oversight of climate-related risks and opportunities
b. Describe management’s role in assessing and managing climate-related risks
and opportunities
Strategya. Describe the climate-related risks and opportunities the organization has identified
over the short, medium, and long termb. Describe the impact of climate-related risks and opportunities on the organization’s
businesses, strategy, and financial planningc. Describe the resilience of the organization’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
Risk
a. Describe the organization’s processes for identifying and assessing climate-related risks
management b. Describe the organization’s processes for managing climate-related risks
c. Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organization’s overall risk management
Metrics anda. Disclose the metrics used by the organization to assess climate-related risks andtargets
opportunities in line with its strategy and risk management process
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions
and the related risks
c. Describe the targets used by the organization to manage climate-related risks andopportunities and performance against targets
Further relevant disclosures are signposted within the TCFD disclosure.
Admiral Group plc Annual Report and Accounts 2022

Page
Read more on
page 98-99

Read moreon pages
100–106

Read moreon pages
106–107

Read moreon pages
108–111

98

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
Governance

Board and Board committees
The Admiral Group Board, which is responsible forpromoting the long-term, sustainable success of
the Group, has ultimate oversight of climate changerelated risks and opportunities. It is responsible forunderstanding the Group’s relationship to climatechange – its impact on the environment, as wellas the impact of a changing climate on the Group– and considering this in the context of the Group’s
strategy and risk management (including policies),
in setting the businesses’ performance objectives,and monitoring performance. Climate change risks
and disclosures are reviewed and discussed at Group
Board and at several Group Board committees,
as recurring agenda items, including the Group
Risk Committee (GRC) and Investment Committee.
The Admiral Group Board approves the GroupORSA Report, which includes the consideration ofclimate-related risks and opportunities alongside
examination of the Group’s strategy and businessplans, as well as the forward-looking risk and capitalassessment of the plan and associated stresses.
The Group Board will consider climate-related issues
in relation to major capital expenditures, acquisitions,divestitures, and major plans of action (where theseoccur) by reference to the Group’s strategic ambition,
which is aligned with the risks and opportunities
arising from a changing climate.

Whilst the Group Board maintains ultimate
accountability, the GRC has primary oversight
responsibility for climate change risk, as it hasdelegated authority from the Group Board foroverseeing risk management activities. It advises
the Group Board on Admiral’s principal risks anduncertainties (PR&Us), as well as on emerging risks,and reviews the Group’s management of these risks.
Climate change risks are embedded within the BAU
risk management approach, which is discussed
within the Group Risk Committee section of the
Corporate Governance disclosure (see page 178),
and any developments of note are reported within theConsolidated Risk Report (CRR). In addition, dedicatedagenda items at GRC allow a full update of climaterelated activities to be considered, including progress
towards goals and targets (e.g., by comparing
reductions in operational GHG emissions versus
stated targets). Climate change considerations arealso reported within the annual ORSA Report, whichis reviewed by the GRC prior to Board approval.
During 2022 the Board and GRC each received one
formal update on climate-related work ongoingaround the Group, including progress towards goals
and targets, initiatives aligned to three focus areas(operations and supply chain, investments, andproducts and services), an update on regulatory
developments, as well as information regarding
Climate Positive, discussed in the focus box onpage 99. The Investment Committee had four
updates. The EUI and AECS Boards also received
updates during the year. In addition, Boards andcommittees received multiple additional updates
as part of other presentations (e.g., the Group ORSA
Report, which presented the output of the risk
assessment and scenario analysis) or discussions on
ESG and sustainability topics. In future, entity Boards
and executive management teams will take more
direct responsibility for managing climate-related risks
and exploiting any opportunities.

Management and management committees
Various senior management from across the Group
have different responsibilities relating to climatechange-related issues, and sit on appropriate fora,
such as the Sustainability Working Group (SWG) andthe Climate Steering Group. The reporting which
occurs at each forum allows management to be
informed about and to monitor climate-related issues.
The Group CEO is the appointed sustainability
representative for the Group Board, which includes
climate change risk within its remit. The SWG reports
directly to the Group CEO.
The Group CRO has designated SMCR responsibilities
in relation to climate change and is a member of the
Climate Steering Group.

Admiral Group plc Annual Report and Accounts 2022

99Company Overview

Read more
about Board
leadershipand company
purposeon page 137

Climate Positive
A Group-wide staff engagement programme –Climate Positive – was launched in April 2022.
The initial programme lasted six months and aimed
to raise awareness of climate change, the Group’s
response to the challenge, to promote action,and to encourage ongoing staff involvement.
Content was published in local languages across avariety of channels and formats, and a training course
titled “What is the Climate Emergency?” was released
that contributes towards continuous professional
development. Staff have also been encouraged tovolunteer to become Climate Positive allies, tasked
with raising awareness of climate change withpeers and sharing key messages. In future, Climate
Positive will continue to share news with staff, as wellas provide a way for staff to help Admiral shape its
response to the challenges posed by climate change.

Read more
about theGroup Risk
Committee
on page 178

Additional Information

Keith Davies, Group CRO and SMF accountable forclimate change, and Geraint Jones, Group CFO, sit on
the Climate Steering Group, which is also attended
by representatives from businesses around theGroup, and by representatives from Risk, Facilities,
Investments, Procurement, and Investor Relations.
It meets quarterly and is chaired by the Group
Strategic Risk Lead, a member of the Group Risk team.

Read more
about our
ClimateSteering
Group onpage 72

Climate-related governanceWorking groups

Management meetings

Board Committees

BoardsSustainability
Working Group

Investment
Committee

Group Risk
Committee

Admiral Group
Board

Climate Steering Group

Executive
Committee

Group Audit
Committee

Entity Board(s)Admiral Group plc Annual Report and Accounts 2022

Financial Statements

The SWG was established in 2020, reporting directly
to the Group CEO, and provides updates to the Group
Board. It provides oversight and challenge to the
Climate Steering Group, which was established in
2021 to provide guidance on the overall programmeof climate-related work, and to ensure a joinedup approach across all Group functions andGroup entities.

Read more
about ourSustainability
Working
Group onpage 72

Corporate Governance

The Group CEO, Group CRO, and Group CFO, alongwith the EUI CEO, comprise an executive committee
which is appraised of, and provides guidance on,
climate-related initiatives across the three focus
areas of operations and supply chain, investments,
and products and services, as required.

On a day-to-day basis the Group Risk team is
responsible for the assessment of climate-relatedrisks and opportunities. The output of this work is
included in the CRR, where applicable, the ORSA
Report, and other regular and ad hoc reports
and papers that are shared with the appropriate
committees. Group Risk is responsible for drafting andpresenting climate-related updates to the Boards andcommittees shown in page 178, and it also coordinates
climate-related work across the Group, encompassing
representatives from the three focus areas. It informs
management of climate-related issues via the working
groups and management meetings also shown inpage 178.

Strategic Report

The Group CFO is responsible for investments,
which includes responsible investment and climatechange considerations. The CFO is a member of the
Climate Steering Group.

100

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
reducing its impact on the environment is most clearlyseen through its net zero commitments, while theimpact of a changing climate on the Group is captured
via risk assessment and scenario analysis, which aretaken into account when considering the businessdiversification and motor evolution pillars of theGroup strategy.

Strategy

Climate risk is typically disaggregated into transition,
physical and liability risks. Transition risks arise from amove towards a low carbon economy, while physicalrisks arise from climatic changes. They are inversely
correlated: physical risks can be mitigated by anaggressive shift to a low carbon economy, increasingtransition risk; aiming for a low level of transition risk
will increase physical risk. Liability risks come frompeople or businesses seeking compensation for losses
they may have suffered from the physical or transition
risks outlined above.

Read more
about our
purpose-led
approach on
pages 2 to 5

In 2020 Admiral articulated its purpose as being
to “help more people look after their future.
Always striving for better, together.” As a result,consideration of the company’s impact on theenvironment and on people’s futures is integral toAdmiral’s purpose and, therefore, Admiral has set
ambitious net zero targets.
When considering the impacts from climate change,
Admiral recognises that there are two components(double materiality): its impact on the environment,
most clearly quantified via greenhouse gas emissions,but also via waste production and water usage;
and the impact of a changing climate on the Group,on its revenues, costs, and via other non-financial risks,quantified via scenario analysis. Admiral’s approach to

While there is the possibility that climate change will
introduce new types of risk to the Group, not currently
captured within the risk universe, the working
hypothesis is that it will primarily impact the Group’s
existing PR&Us. The process undertaken to determine
which risks and opportunities could have a material
financial impact on the Group is described in the “riskmanagement” pillar.
Admiral has defined the following time horizons forclimate-related risks and opportunities: short- (0–5years); medium- (5–10 years); and long-term (10+years). This is shown graphically in Figure 1. The shortterm time horizon coincides with the businessplanning horizon, and the medium- and long-termtime horizons coincide with the expected useful lifeof buildings infrastructure (depending on the natureof the infrastructure). While both transition risks andphysical risks are beginning to crystalise, the worst

Figure 1 Time horizons for climate-relatedrisks and opportunities
Medium-term: 5–10 years
Short-term: 0–5 years
Detailed five year financial
projections are produced
as part of the businessplanning process, using
robust assumptions basedon current Group structure
and business mix.

Strategic investments arebeing made now in orderthat they provide a material
contribution to Group
results in the medium-term.
Results are inherently subject
to more uncetainty, as
customer demands, consumer
behaviour, and the external
operating environment are
all subject to change, notleast from the impact fromclimate change.

Long-term: 10+ years
Beyond ten years it ispossible that the Group will
look considerably different
to the way in which it does
today, and will potentiallybe operating within a muchchanged environment. There issignificant uncertainty overlong-term projections.

Admiral Group plc Annual Report and Accounts 2022

101

Company Overview• A moderate/minor impact relates to anon-significant impact on revenue or profit• A significant impact relates to a potential impact
on revenue or profit which far exceeds normalmonth-to-month variance• A major impact relates to a potential impact onrevenue or profit in excess of typical annual variance• A critical/catastrophic impact relates to a potential
impact on revenue or profit generally seen no morethan once in every twenty years, or which could
ultimately jeopardise business survivability

The current energy crisis has confirmed theappropriateness of Admiral’s net zero strategy,
in particular the need to reduce its operational energy
use as far as possible and as quickly as practicable,
and to diversify from fossil fuel sources before
permanent removal is considered for any residual
emissions. Admiral remains committed to using 100%
renewable electricity wherever it is available.

Net zero
Admiral follows the Oxford Principles for
Net Zero Aligned Carbon Offsetting (the“Oxford Principles”) definition of net zero,
whereby net zero means substantiallyreducing emissions and balancing any residual
emissions with removals on an ongoing basis.
The four principles are:
1. Cut emissions, use high quality offsets, andregularly revise offsetting strategy as bestpractice evolves
2. Shift to carbon removal offsetting
3. Shift to long-lived storage
4. Support the development of net zeroaligned offsetting

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Three key climate-related risk drivers which may affect
Admiral are shown in Figure 2. They are a transition
from petrol and diesel vehicles to electric vehicles,
a secular reduction in private vehicle use, and anincreased incidence and severity of weather events.
The impact by timeframe, assuming current action/
mitigation, of each key risk driver is shown against the
PR&Us expected to be primarily affected, where:

Financial Statements

To date, climate considerations have not impacted
the Group’s approach to acquisitions and divestments(other than that any potential M&A activity shouldalign with the Group’s overall strategy, which considers
the impact from climate change) and have had no
impact on access to capital. Climate-related issues
have not impacted Admiral’s investment in R&D.

Admiral is a global financial services company,
operating in the UK, Italy, Spain, France, Gibraltar
and the US, and has offices in Canada and India,
which primarily offers personal insurance lines
and personal loans. The most material businesses,
currently, are the UK insurance businesses. In future,
however, it is expected that the bottom-line
contribution from non-UK and non-insurance linesof business will become more material. The current
priority is to focus on the potential impact of climatechange on the UK insurance lines of business in the
short-term, due to materiality, as can be seen in theapproach to scenario analysis. As Admiral develops its
knowledge and understanding, and builds capabilities
and expertise, more focus will be given to thepotential impacts on non-UK and non-insurance linesof business in the medium- and long-term, including
the quantification of applicable risks.

Read more about
our strategy
on pages 28 to 37

Corporate Governance

Climate-related efforts are aligned to three focus
areas – operations and supply chain, investments,
and products and services – each of which arepotentially exposed to the three components ofclimate change risk. This is because climate-relatedrisks may impact all of Admiral’s business lines,
operations, and investments, and may also impact
reinsurance arrangements. While there are risks fromdelayed action, there are also opportunities fromseriously considering the challenges, including thepotential to accelerate the Group’s transformation,
to build resilience, to drive innovation in core insurance
products, and to gain competitive advantage in newand existing markets. Being a “green” company could
help attract and retain talent.

The potential impact is assessed qualitatively using
SME input and is cross-checked versus the scenario
outputs. At present, given the large uncertainty
around the likelihood and severity of climate-related
issues, they do not serve as a formal input into thefinancial planning process, and the impact on financial
performance and financial position is not formallyassessed. Work will be undertaken during 2023 toconsider how Admiral Group can better recognise
the potential impacts in its financial planning andaccounting activities.

Strategic Reporteffects from changing weather and climatic patterns
may materialise in the medium- and long-term if asmooth transition to a low carbon economy is notachieved. Liability risks are highly uncertain, in scopeand in outcome – the first cases are currently beingbrought against oil, gas and energy companies –therefore timing is less certain.

102

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
Figure 2 Key climate-related risk drivers which may impact Admiral Group

Climaterelated risk

TCFD
category

Transition
from petroland diesel
vehiclesto EVsTransition:
policyand legal,
technology,
market,reputation

PR&Us
primarily
affected

Description

Erosion of• A move away from private vehicles to active and public
competitivetransport or car sharing, thus reducing the overall size ofadvantage
Admiral’s primary market
in UK carinsurance
Reserving• Change to incidence, extent, location, and clustering of bothrisk in UK andchronic (high frequency) and acute (high impact) weatherinternationaland climate-related drivers of insurance claims, potentiallyinsurance
differing by geography (e.g., south-eastern US versus UK
versus Europe), and affecting the UK household LOB, inparticular, due to materiality
Premium• Average annual losses from weather events will likely berisk andhigher under future scenarios with higher carbon emissions,catastrophe
in particular affecting the UK household LOB, due to materiality
risk• Increasing uncertainty about trends in past data and the degreeof confidence that can be placed in projections
Reduced• Increase in the cost and importance of reinsurance protection
availability of • Increased concentration risk, putting pressure on reinsurance
co-insurance/ • Reinsurance structures impacted if more events
reinsurance
hit reinsurance layers• Possible changes to terms and conditions
Failure of• Profitability and/or viability of household, motor, or new
geographic
product underwriting may be compromised
and/orproduct
expansionOperational • Increased risk of office closures and/or damage
risk• Increased levels of health and safety risk during specificweather events• Increased data risk or reduced availability of coresystems (depending on the location of informationrelated infrastructure)• Suppliers may be exposed to similar risks

  

•

•

•
•

Increased
Physical:incidence
acute,and severity chronicof weather
eventsLongterm
10+ years  Erosion ofcompetitive
advantagein UK carinsurance

Transition:
policyand legal,
technology,
market,reputation

Mediumterm
5–10 years

Changing distribution of risk from new technologies(e.g., will EVs be slower and safer, or silent, more dangerous,and prone to battery fires?)
Introduction of new types of risk which have not beenencountered before (e.g., petrol cars do not have battery fires)
Reduction or elimination of some claims-types(e.g., wrong fuel claims)
Unanticipated claims inflation from replacing ‘brown’technology with ‘green’; old ‘brown’ technology may become
more expensive to repair
A move away from petrol and diesel vehicles to alternativefuel vehicles, reducing competitive advantage from pricing
expertise, stressing supply chain (including repairer network)
and increasing LR
New entrants taking market share as petrol and diesel vehicles
are replaced by EVs
EV OEMs offering bundled products and services, changing
customer acquisition channel
Changing distribution of risk from emerging technologies(e.g., will a greater proportion of more vulnerable road users,from e-scooters etc. lead to more BI and CSI claims?)

Reserving risk •in UK andInternational
insurance••

Secularreductionin private
vehicle use

Shortterm
0–5 years

Reserving•risk in UK andinternational
insurance

  
  

  
  
  
  
  

Admiral Group plc Annual Report and Accounts 2022

103

Company Overview

TCFD
category

Customerswitching frompetrol anddiesel vehicles
to EVs and otheralternative fuels

Products and •services: ability
to diversify
business•
activities, shift
in consumer
preferences•

Shortterm
0–5 years

Description

Increased revenue through demand for lower emissions products,
including the potential for new ancillary products and/or value added
services (e.g., EV home charger cover)
Increased competitive advantage from capitalising on early pricing
learnings, enhanced supply chain management (including repairer
network), creating a LR advantage to competitors
Reduction or elimination of some claims-types (e.g., wrong fuel claims)

Mediumterm
5–10 years  

Impact:  Negligible/Minor  Moderate  Major  Transformative

Admiral has taken steps over a number of years
to reduce its environmental impact, including
initiatives related to energy, water, paper, and waste.
Consequently, the verified operational carbon
footprint40 is low, and is offset via the purchaseof Gold Standard carbon credits. In 2021, Admiralworked with an external party, Arup Group, tobaseline its property and facilities infrastructure
in order to understand possible carbon footprint
improvements. The identified strategic initiatives
are generally medium-term commitments, such asmechanical and electrical (M&E) changes to plantand building management systems, which focus on
more considerate use of utilities, water, and waste,
improving controls of the main M&E plant andassociated systems, and end-of-life replacement of
M&E plant and machinery where a significant carbon
reduction can be achieved. The accuracy of data
produced throughout the property portfolio has also
been improved. It should be noted that Admiral’s
purpose-built Tŷ Admiral building complies withBREEAM excellent standards and has photovoltaics/
solar panels fitted which provide energy directly
back into the grid, one example of a climate change
mitigation activity. There are also opportunities based

Admiral’s supply chain partners will also, to a greateror lesser extent, be exposed to the same risks fromclimate change as the Group is. During 2022 Admiral
has enhanced its due diligence question set to allow
it to capture and assess what its supply chain is doing
to support sustainability ambitions. The change tothe questionnaire allows Admiral to dynamically tailor
questions based on a supplier’s response, allowing
Admiral to risk assess the response. If a supplier’s
response demonstrates no policies or procedures,
Admiral issues an environmental assessment to the
supplier to capture further information, and internal
contract owners are expected to develop remediationplans with the supplier, to work towards ahead ofreceipt of the next annual due diligence questionnaire.

Environmental impact of IT hardware
refresh programme
Admiral has undertaken a refresh programme of IT hardware
and, as part of the refresh programme, appointed a supplier
to securely dispose of existing assets with a focus on theenvironmental impact of disposal.
Almost 84 tonnes of equipment were processed, including
over 16,000 desktop displays, and laptop computers. 7% of
the devices were recycled and 93% were reused, representing
an estimated 5,000 tCO2e in avoided emissions and over 10m
litres of water use avoided.

40 For 2020 and 2021 verification was performed by Carbon Intelligence, across scope 1 (emissions arising from the combustion of natural gas), scope 2 (emissions arising frompurchased electricity), and scope 3 (emissions arising from waste generated in operations, business travel, and water supply and treatment) to a standard limited assurance.
For this level of assurance, Carbon Intelligence provides a limited assurance statement asserting that there is no evidence that an emissions report is not materially correct (amateriality threshold of 5% at the gross organisational level has been applied for this exercise). The verification assessment was undertaken against World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition (for scope 1 and 2) and against
World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) (for scope 3)

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Admiral’s operations are exposed to physical andtransition risks. Climate change may increase
the frequency and severity of weather events,
as well as causing longer-term changes in weather
patterns, which could directly impact staff,
offices, infrastructure, and the broader operations.
Admiral may also be exposed to increased capital andoperating expenditures, due to legal or regulatory
requirements designed to reduce greenhouse gas
emissions, or due to increasing climate-related
expectations from shareholders, customers, staff,
or other stakeholders.

around city centre heating proposals and geothermal
technology in some major cities, though these are
medium- to long-term in nature. Tactical opportunities
for carbon footprint reduction have already been
captured, including property downsizing to reflect
office attendance habits in a post-Covid businessenvironment. Further detail on progress towards theambition to be net zero across operational emissions
by 2030 is given in the “metrics and targets” pillar.

Financial Statements

Operations and supply chain

Longterm
10+ years

Corporate Governance

Climate-related
opportunity

Strategic Report

Figure 3 Key climate-related opportunities for Admiral Group104

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
The introduction of supply chain risk controls in
Admiral’s contract management system has allowed
it to better assess the procurement category ofenvironmental risk. The embedding of supply chain
risk controls is ongoing, but it allows for increased
visibility at the early stages of sourcing and ongoing
discussion with the supply chain.

Investments
Climate change may impact the Group’s investment
portfolio via a number of mechanisms. Some of
Admiral’s investments will be exposed to physical risks,
as changing climatic conditions impact businesses,
disrupt supply chains, and cause assets to lose value
prematurely. Other investments will be exposed totransition risks, as the move to a low carbon futurecauses products, services, and entire business models
to become less attractive or, indeed, obsolete.
Some investments may also be exposed to liability
risks. Effects may be company-specific, sectorspecific, or may have an impact on the broader
economy and macro environment, for example via
reduced economic growth, higher unemployment,or changes in inflation. The main consideration iswhether these risks expose Admiral to default or
spread widening over the holding horizon, which on
average is approximately three years. While climatechange poses a risk to the Group’s investments,
the transition to a low carbon economy should alsopresent investment opportunities – Admiral has
already invested in renewable energy infrastructure,green bonds, and other corporate bonds with credible
transition plans.

To mitigate these risks, ESG considerations have been
embedded into the investment approach, and Admiralis following the Institutional Investors Group on
Climate Change (IIGCC) Net Zero Framework to help
guide the decarbonisation of the portfolio. Admiral isalso increasing its investment in climate solutions,with investments in green bonds and renewableenergy infrastructure, and has targets to grow thenumber of counterparties which have a credible plan
to align emissions with a 2°C pathway, for example via
Science-Based Targets. Admiral Group’s four largest
bond mandates, which account for approximately
37% of all investments, have requirements for fundmanagers to reduce the average carbon intensityof the portfolio by 25% by 2025, versus a year-end
2020 baseline, in line with the Group’s overall net zerotarget. This covers nearly all the assets which require
net zero targets under the Science-Based Targets
initiative and the Net Zero Framework from the IIGCC,
the balance largely being invested in cash, money
market funds, and government bonds. In addition,
the mandates exclude coal and tar sands (based on a
10% revenue threshold) and ensure that all energy andmining sectors are either Paris-aligned or are subject
to engagement or stewardship activities. By 2025 theportfolios also aim to have 5% green bonds, 35% of
the portfolio with Paris-aligned commitments, and atemperature score under 3.5°C.

Read more
about seeding,launching, andscaling new
businesses at
Admiral Pioneer
on page 36

Read more about
our environment
on pages 13, 38
and 91 to 94

Carbon removal offsetting
According to the Oxford Principles “most offsets available
today are emission reductions, which are necessary but not
sufficient to achieve net zero in the long run. Carbon removals
scrub carbon directly from the atmosphere.” However,consideration must still be given to how carbon is stored,
and for how long.
Over several years Admiral has pursued steps to reduce
its operational emissions, for example through efficiency
improvements, by purchasing electricity in the UK from
100% renewable sources (since 2015), and by installing solar
panels on the Cardiff office. Since 2019 Admiral has offset
its remaining operational emissions (scope 1, 2 and partial
scope 3) via the purchase of Gold Standard carbon offsets.
Admiral does not consider these purchases to be “emissions
reductions”, rather, following the Oxford Principles, they are
considered “offsets”. In addition, Admiral supports high-quality
forestation projects which provide carbon sequestration, in
Wales and abroad, via charities Stump Up for Trees and Sizeof Wales.
Admiral Group plc Annual Report and Accounts 2022

105

Company Overview

41 NGFS Scenarios Portal, Data & Resources, NGFS

Admiral Group plc Annual Report and Accounts 2022

The scenario modelling results are highly reliant
on a range of assumptions, some of which
are considered very unlikely to materialise.
Management and mitigating actions (e.g., annual
repricing of insurance policies, greater or different
use of reinsurance, changes to asset allocation in
the investment portfolio) are also not considered.
The output of this scenario analysis has been usedin discussions about future strategic direction,
including the relative attractiveness of different
products and markets.

Additional Information

The NGFS “disorderly – delayed transition”
scenario assumes that the implementation ofpolicies needed to drive the transition to net zerois delayed until 2030, and is then more sudden
and disorderly, resulting in material short-term
macroeconomic disruption. Under this scenario,
global warming is limited to an increase of 1.8°C by
2050. This scenario has been applied to Admiral by
exploring the transition risks from climate change
relating to the transition of the UK motor bookfrom petrol/diesel vehicles to EVs, affecting the
profitability of the business. The key assumptions
underlying this scenario are mispricing of EV risks
by 15% and some additional fire and large losses
related to EVs.

The scenarios performed highlight the developing
nature of climate scenario modelling, and give
comfort that the Group’s business model andstrategy should remain resilient to potential
climate-related impacts. The conclusions ofscenario analysis are that climate change presents
a strategic risk to Admiral over the long-term andmay require management and mitigation in the
short- and medium-term. The risks presented
by a transition to a low-carbon economy arepotentially significant in the short-term, assuming
no mitigating activities. However, Admiral’s
strategy focuses on initiatives which should
mitigate this risk, and therefore is it consideredthat Admiral’s activities are aligned to a wellbelow 2°C world. In such as transition scenario,
the strategic focus will be to accelerate the motor
evolution and business diversification pillars of
the Group’s strategy. Physical risks may havethe greatest potential impact on the Group’s
household insurance business in the long-term– in such a hot house world the focus will be on
ensuring robustness of the core business via pricing
discipline and appropriate reserving.

Financial Statements

The two scenarios examined are “disorderly –delayed transition” and “hot house world – current
policies”. Note that these externally designed
scenarios are examined using their relevant andapplicable components for calibration basedon Admiral’s exposure. Their calibration has
been modified and adapted based on Admiral’smateriality, to understand the associatedimplications on assets and on liabilities fromtransition risk (car book) and physical risk (primarily
household book). As with the other ORSA stressand scenario tests, the period modelled is 20222024 – the current focus is on short-term impact,
as inherent uncertainty as well as developing
approaches to assessment mean there is lessconfidence in medium-term and long-term
impacts. As modelling capabilities are further
developed, there will be increasing focus on
medium- and long-term assessments.

The NGFS “hot house world – current policies”
scenario assumes that no action is taken on climatechange so that global temperature levels continue
to increase, reaching in excess of 3°C above preindustrial levels by 2050. This scenario has beeninterpreted as resulting in increased incidents
of extreme weather events, impacting the UK
household, car, and van books. Specifically, it has
been assumed that a UK catastrophe inland flood
event occurs each year. For both scenarios it isassumed that excess of loss reinsurance recoveries
would operate.

Corporate Governance

While qualitative assessments of the impact fromclimate change are useful, it is also important toquantify the impact where possible. Stress andscenario testing is conducted as part of the annual
ORSA process to understand the robustness of theGroup’s business model and strategy to the impact
of various risks. In addition to the standard ORSA
scenarios, two climate change scenarios were
performed this year, scenarios from the Network
for Greening the Financial System (NGFS)41 andEIOPA’s 2022 climate change scenario. This builds
on Admiral’s first exploratory exercise in modellingclimate change scenarios in the 2021 ORSA,
which was based on the BoE’s Climate Biennial
Exploratory Scenario (CBES).

Strategic Report

Scenario testing106

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
Products and services
The effects of climate change will be felt acrossall lines of business, by all products and services,and will play a part in deciding what future business
opportunities to pursue. The effects will requirea response across the value chain, from pricing tounderwriting, and from claims management toproduct design.

Read more about
Electric Vehicle
trends on page 94

The most obvious impact from climate change willbe the physical risk to the household lines of business.
Climate change is causing sea levels to rise and isalso causing more frequent and heavier rainfall,
increasing the risk of flooding. Changes in weather
patterns may also increase the incidence and severityof storm and freeze events, as well as hailstorms andsubsidence. Together these indicate that an increasein the volume and value of household claims is likely.
Physical risks may also cause operational issues: inFebruary three storms – Dudley, Eunice, and Franklin –hit the UK in quick succession, causing a large increasein the number of new claims, however a surge plan
was executed which saw the wider business help withFNOL communications which allowed household
staff to focus on vulnerable customers.

Aligned to the third pillar of the Group’s strategy,“evolution of motor”, Admiral has a strong electricvehicle offering, which will help counteract the
expected long-term decline in the number of petroland diesel vehicles on the road. The offering, which iscontinuously being developed and expanded,is discussed further on page 94. In order to realise theopportunities of the Group’s second strategic pillar –“diversification” – Admiral launched Pioneer to explore
and invest in new ventures and emerging consumer
needs. This will help counteract any long-term moveaway from private vehicle ownership, including
private electric vehicles, to more integrated transport
solutions. Pioneer is discussed further on page 36.
Taken together, these areas of work will help support
Admiral in the transition to a low-carbon economy.

Risk management

Since launching the UK household business in 2012,
Admiral has sought to control its exposure to floodrisk by developing an understanding of the risk at a
granular geographical level, which has been coupledwith a conservative appetite for underwriting suchrisk. By participating in the Flood Re scheme Admiral
can underwrite properties which are outside of its
acceptable flood criteria by ceding the flood risk to
Flood Re, while still offering customers protection
via underwriting all other perils. Risk modelling iscontinually updated and improved, while perilsbased pricing allows for interrogation of specificconcentrations of risks.
Physical risks may also impact the motor insurancebooks, for example via increasing frequency of hail
events, or via increasing severity of US hurricane
seasons affecting the US business.
Admiral is also exposed to transition risk, most clearly
via the motor insurance books. Any move to reduce
aggregate greenhouse gas emissions could see a
concerted move away from traditional models oftransport reliant on private petrol and diesel vehicles,
to a model of integrated and active transport,
reliant on electric and alternatively fuelled vehicles,
both privately owned and shared, and public transport.
Indeed, sales of new petrol and diesel vehicles will
be banned in the UK from 2030. The loans businessmay also be affected in the longer-term as reducing
demand for petrol and diesel vehicles may see residual
values fall, a risk factor to which Admiral is exposed
via PCP loans. There might, however, be an offsetting
increase in demand for loans to fund EV purchases or
to fund “green” home improvements.

Emerging Risks are identified, assessed, and managed
via an internally developed framework, fully integrated
into the ERMF, which evaluates the potential impact
to Admiral via existing PR&Us or via new risks.
This methodology has been extended, utilisingexternal support, to individually assess the potential
impact of climate-related risk drivers – transition,
physical and liability risks – across three distinct
timeframes (0–5 years, 5–10 years, and 10+ years).

Admiral Group plc Annual Report and Accounts 2022

107

Company Overview

Admiral uses industry-standard flood and catastrophe
models to understand its underlying risk and hence
what amount of risk is accepted, what amount of risk
is mitigated, and the reinsurance protection deemed
appropriate for risk transfer. Admiral’s approachto pricing is the key tool for managing/mitigatingclimate-related risks but, given its commercial
sensitivity, the approach is not disclosed.

Read more about
Emerging Risks
on page 121

Given the highly uncertain nature of climate changerisks – the transmission mechanism of the risks,
the magnitude of their impact, the certainty of theirimpact, the effect of their impact, and the timing ofthat impact – they do not sit naturally in standard risk
measurement and management processes. Instead,a hybrid approach, which comprises both qualitativeand quantitative approaches, must be utilised.
Climate change risks, and any resulting opportunities,
are initially evaluated qualitatively. A risk matrix
approach is employed, whereby the potential impactof the risk (scored between minor and catastrophic)
is considered alongside the likelihood of impact(scored between rare and almost certain) in the
short-, medium- and long-term. Where appropriate
a quantitative approach to analysis and evaluation is
also taken, informed by the qualitative assessment:
several scenarios were included as part of thestress and scenario testing section of the Group’s
ORSA submission.
Key risks and opportunities are discussed above in the“strategy” pillar.

Admiral Group plc Annual Report and Accounts 2022

The Regulatory Compliance team, part of Group
Compliance, monitors and reviews publications
and pronouncements from various regulators,
supervisors, and transnational bodies, including but
not limited to the FCA, the PRA, the Bank of England,
and EIOPA. Summaries are distributed to relevant
stakeholders as and when material is published, amonthly round-up is distributed more broadly acrossthe Group, and a representative from the Regulatory
Compliance team is a member of the Climate
Steering Group.

Additional Information

Assessment approach

As described in above, the key risks faced by Admiralare not currently assessed to be severe or critical/
catastrophic. The primary approaches for risk
mitigation are: execution of strategy for mitigationof transition risks; and disciplined pricing, assessmentof impact by peril, and regular assessment of thereserving approach as mitigation for physical risks.
Extensive use of co-insurance and reinsurance is theprimary approach for transfer of physical risks.

Financial Statements

The assessment is performed at the level of transition,
physical and liability risks, however microeconomic
and macroeconomic transmissions channels – thecausal chains linking climate risk drivers to theoperational and financial risks faced (as per the
Bank for International Settlements) – specificallyapplicable to each business line are also considered.
This allows the potential impact from climatechange on all current and potential future lines ofbusiness, on operations and investments, as well as
opportunities, to be identified. Existing and emerging
regulatory requirements related to climate change
are considered.

As the assessment methodology is based on theexisting Emerging Risk assessment methodology,
integration into the ERMF is straightforward.
Therefore, climate change risks and opportunities
are reported to the GRC via the CRR, and annually as
part of the Group’s ORSA Report submission. They arealso reported on to the Group Board, management
committees, and to subsidiary Boards and committees.
This monitoring and reporting ensures that thehighest level of company management is aware of therisks and opportunities, can account for them in futurebusiness planning and strategy setting, and can devise
management actions to mitigate their effects or tocapture any resulting opportunities.

Corporate GovernanceManagement and mitigation

There is no one definitive source for climate changerisks: different geographical regions, different
industries, and different companies will have differing
expectations of the impacts that they will face inthe future. Therefore, Admiral Group’s identificationof the way that climate change risks may impact
the business, and any resulting opportunities,
follows a multi-stage process which attempts toincorporate internal viewpoints and forecasts (e.g.,
from departmental expertise, insight from working
groups, committees, and boards) with those fromexternal sources, both insurance-specific andmore broadly.

Strategic Report

Read more about
Principal Risks
And Uncertainties
on pages 114
to 121

Identification

108

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued
Metrics and targets

to physical risks is not considered to be material or
relevant, given that most of Admiral’s business is basedon short-term (typically annual) agreements, and does
not tie in exposure to the medium- or long-term
effects of climate change.
Note that verification of Admiral’s scope 3 emissions
is near finalised, and then work will begin to set
Science-Based Targets, which will complement theGroup’s overall net zero ambitions, for example byproviding short-term GHG emissions reductions
targets. It is intended to submit Science-Based Targets
for verification in 2023. Climate-related metrics have
not yet been integrated into remuneration policy,
however work to address this is being considered
and is linked to the setting of Science-Based Targets.
Admiral does not make use of an internal carbon price.

Operations

Good progress has been made in 2022 regarding
the collection, verification, and reporting of data,
for example by focusing on own collection of datarather than relying on landlords, automating datacollection where possible, and working closely withfund managers.

Read more
about Our Society– Environment
on page 91

Metrics relevant to operations, investments, andproducts and services are discussed and/or disclosed
in the following sections, however numerical values
which may be considered commercially sensitive
are not included. Metrics for tracking opportunities
are largely the same as metrics for tracking risks as,
for example, the risks and opportunities from a move
to EVs come from the success or failure in capturing
profitable business in this developing market.
Other cross-industry climate-related metrics which
are not disclosed are not considered to be material
and/or relevant. For example, the amount and extent
of business activities vulnerable to transition risks or

Admiral recognises that its operations arecontributing to climate change, and the Grouptake its responsibility for reducing this impact
seriously. Therefore, as discussed above, Admiral has
pursued steps to reduce its operational emissions
and, since the baseline year of 2019, has offset its
remaining scope 1, 2 and partial scope 3 emissions42.
However, Admiral also recognises that offsetting
emissions is not enough, and therefore is working
hard to reduce the absolute level of its operationalemissions: in 2021 the Group’s scope 1, 2 and partial
scope 3 emissions, as verified by Carbon Intelligence,
were 2,434 tCO2e, an improvement of 30% versus
2020 and 47% versus 201943. Scope 1 and 2 emissions
have reduced due to building closures and consideratebuilding use(e.g., reduction in utilities use), though scope 1
emissions increased in 2021 as compared to 2020 due
to increased gas usage, due to colder weather, and two
refrigerant leaks, related to air conditioning systems.
Scope 3 emissions reductions are largely related to adecrease in business travel.

Table 1 Verified45 Group greenhouse gas emissions (ton CO2e)
Scope

Scope 1
Scope 2 (market-based)
Scope 3 (partial)
Total
YoY reduction (scope 1 and 2)
YoY reduction (scope 1, 2 and partial scope 3)

2021

2020

2019

1,149
1,189
96
2,434
–20%
–30%

1,121
1,798
535
3,454
+11%
–24%

1,364
1,26244
1,945
4,572

42 As per Greenhouse Gas Protocol definitions, scope 1 emissions are direct emissions from owned or controlled sources (natural gas, fugitives, companycars), scope 2 emissions are indirect emissions from the generation of purchased energy. Limited scope 3 emissions cover business travel, water, waste,
and distribution losses for purchased electricity. Verification for this limited scope was decided upon as these are the emissions more directly in Admiral’s control
43 Note that 2019 carbon footprint was verified by Carbon Trust.
44 Note that scope 2 emissions increased in 2020 (versus 2019) due to more accurate data capture from non-UK entities. 2019 relied more heavily on estimation
for non-UK entities
45 2021 and 2020 data has been verified by Carbon Intelligence; 2019 data has been verified by Carbon Trust

Admiral Group plc Annual Report and Accounts 2022

109Company Overview

Further operational metrics are discussed in the
Streamlined Energy and Carbon Reporting disclosure,found on pages 95 to 96.

Several challenges should be noted: sourcing
reliable and consistent data; avoiding unintentional
consequences such as high concentration in certain
sectors or investments; and reliably determining
the expected risk and return impact of such a
strategy. However, in order to guide and review
progress towards overall targets, a number of metrics
are tracked, some of which are shown in Table 2.
Investment metrics are calculated by identifying
in-scope non-cash assets and applying MSCI ESG
data on a per security basis. Various metrics aresubsequently calculated at a whole portfolio level.

Table 2 Climate-related investment metrics
MetricWeighted average carbon intensity
Investment in holdings with confirmed SBTs
% Allocated to coal and oil sands
Investment in Green bonds

2022

2021

69 tCO2e/$m sales46
£485m
0%
£100m

71 tCO2e/$m sales47
£422m
0%
£74m

46	55% portfolio coverage. 61 tCO2e/$m sales for benchmark. Note that portfolio coverage has dropped as compared to 2021 (see footnote 47) due to anincreasing allocation to non-covered assets such as government bonds and private debt
47 67% portfolio coverage. 83 tCO2e/$m sales for benchmark

Admiral Group plc Annual Report and Accounts 2022

Additional Information

There is a high level of alignment between AdmiralGroup’s announced targets and the ABI’s climatechange roadmap, published in July 2021: intermediatetargets of a 50% reduction in emissions by 2030
are aligned, both cover all scopes of emissions,however Admiral is targeting net zero by 2040,
ten years ahead of the ABI’s roadmap.

To ensure that these targets are met, Admiral has
developed an investment proposal to align its
corporate bond mandates to the Paris Agreement,
following the Net Zero Investment Framework,
which is a practical blueprint for achieving net zero
emissions by 2050, and which has been endorsed by
the UN’s Race to Zero campaign. The proposal has
several features including reducing emissions throughtime and increasing investment in climate solutions.
There will not be blanket divestment rules, but instead
Admiral’s investment managers are expected to beengaging with companies which could, as last resort,possibly lead to divestment and reinvestment in lesscarbon-intensive names through time.

Read more
about SECR
disclosure
on pages 95–96

Financial Statements

Admiral Group has formally committed to ambitious
net zero targets, committing to achieving net zero
greenhouse gas emissions by 2040 at the latest,
across all three scopes of emissions, and to cut theseemissions in half by 2030. A commitment was also
made to achieving net zero in operational emissions
by 2030.

As a financial services company, the majority ofAdmiral’s emissions are likely to be category 15
emissions (part of scope 3) from the investment
portfolio. Therefore, when the Group set its ambitious
net zero targets, it was imperative to include theseemissions in the emissions reduction targets.
Admiral has therefore committed to achieving a
reduction in investment-related greenhouse gas
emissions of 25% by 2025, and of 50% by 2030,
reaching net zero greenhouse gas emissions by 2040
at the latest – aligned to the overall target.

Corporate Governance

Admiral is a financial services company, and therefore it
has a low operational footprint when compared to its
complete carbon footprint, including the supply chain
and investment portfolio. This is even more likely to be
the case given the efforts made over the past decade
to improve the efficiency of its buildings and to reduce
its energy consumption. This is why, in order to makea meaningful difference in the global effort to tackle
climate change, it is important to include all emissions
in the Group’s net zero ambitions, including all scope
3 emissions.

Investments

Strategic Report

GHG emissions are quantified in alignment with theWorld Resources Institute’s Greenhouse Gas Protocol
Corporate Accounting and Reporting Standard andare discussed further in the SECR section of theannual report on page 95. Unverified emissions data,
including for 2022, as well as a description of themethodology used to estimate metrics if data is
missing, is also included.

110

Strategic Report

Task Force on Climate-related Financial Disclosures (TCFD)
continued

Read more
about Electric
Vehicle trends
on page 94

Products and services

Transition risks

As discussed above, the effects of climatechange may impact all of Admiral’s business lines.
Physical risks, which may be managed via risk selection
and reinsurance protection, might be more prominent
in Admiral’s household businesses. Transition risks may
be felt more keenly in the motor businesses, though the“diversification” pillar of the Group’s strategy is designed
to mitigate this impact, in particular the creation of
Pioneer in 2020 to focus on new business opportunities.

The move away from petrol and diesel vehicles is
the most obvious transition risk faced by the Group,
and is one which presents a strategic challenge tous. Considerable efforts have been made to mitigate
the risk of a transition to electric vehicles (EVs) andalternatively fuelled vehicles (AFVs), both via newand existing businesses, which have invested indeveloping and testing new products and productfeatures to meet developing customer requirements.

Physical risks

The transition to a low carbon economy may see an
erosion of Admiral’s traditional competitive advantages
in pricing and claims handling, as petrol and diesel
cars are replaced with EVs and AFVs. Conversely,
this transition could present an opportunity for Admiral
to build competitive advantages in these areas.
Admiral monitors market-wide metrics, which arereported on monthly in management packs anddiscussed at relevant fora, such as the proportion of
new vehicle registrations which are EVs or AFVs, aswell as internal metrics capturing the attractivenessand competitiveness of the EV proposition, the claims
experience, and the customer experience more broadly(e.g., Times Top, market share, loss ratio – all of which
would be considered commercially sensitive). This isdone to ensure that the Group is developing adequate
capabilities in these new technologies.

Admiral is exposed to both acute and chronic physicalrisks, however in the short- to medium-term the mostimpactful risk is likely to be increasingly severe andfrequent windstorms, floods, and freeze events.
To mitigate and manage these risks Admiral takes aflexible and proactive approach to risk selection andpricing, ensuring that written business is within risk
appetite, and that projected loss ratios and combined
ratios lead to profitability over the cycle.
As a UK insurer, Admiral takes part in the Flood Re
scheme, which is designed to allow insurers to offer
more affordable insurance for homes built before
2009 in areas most at risk of flooding. The volume
and value of policies ceded to Flood Re is monitored
on an ongoing basis.
Admiral also utilises quota share reinsurance
arrangements extensively, including both catastrophe
and aggregate cover for household lines. These are inplace to provide protection against an accumulationof claims associated with a weather catastrophe event.
Admiral tracks a number of climate-related metrics,
such as modelled burn cost per peril and number
and value of weather-event-related claims, in order
to assess its exposure to climate-related risks
however, in the main, these would be considered tobe commercially sensitive. Admiral is able to disclosethe metrics shown in Table 3, as per the Sustainability
Accounting Standards Board standard.

Admiral’s purpose is to “help more people look after
their future. Always striving for better, together.”
By developing products and services which not only
help mitigate the worst effects of climate change,
but also help support a transition to a low carbon
future, Admiral is doing just that.

Admiral Group plc Annual Report and Accounts 2022

111

Company Overview
Strategic Report

Table 3 Physical risk metrics
MetricProbable Maximum Loss (PML)of insured products from weather
related natural catastrophes• Admiral utilises various methods and evaluations to makeunderwriting and reinsurance decisions that manage theGroup’s exposure to catastrophic events. Across the Group’s
insurance book, the main weather-related risks exist in
relation to Admiral’s UK Household book, as well as the US
Motor book

• In relation to Admiral’s UK Car Insurance business, the1-in-200 estimated possible loss as of December 2022 was£90–115 million. Admiral currently has £80 million of coverfrom the motor excess of loss reinsurance and a further£5 million from the property excess of loss reinsurance.
Therefore, after the £12 million deductible, Admiral iscovered up to a £97 million single event

Period Perils

2018
2019
2020
2021
2022

Admiral Group plc Annual Report and Accounts 2022

Freeze, flood, and storm
Flood and storm
Flood and storm
Flood and storm
Freeze, flood, and storm

Paid (£m)

Incurred (£m)

10.4
0
0
5.3
8.0

10.4
0
0
5.0–6.0
20.0–30.0

Additional Information

Total amount of monetarylosses attributable to insurance
pay-outs from (1) modelled natural
catastrophes and (2) non-modellednatural catastrophes, by type of
event and geographic segment(net and gross of reinsurance)• In relation to the US Motor Insurance business, the1-in-200 estimated possible loss as of August 2022 was$17–20 million. The US business has $21.5 million of coverfrom the Motor excess of loss reinsurance. Therefore,
after the $3.5 million deductible, the US business is covered
up to a $25 million single event
Admiral Group does not separately identify losses by modelled
and non-modelled catastrophes. However, the table below
provides some details on the weather-related losses following
natural catastrophes in relation to the UK Household book,which represents the main weather-related risk from acrossthe Group’s operations. The table covers property catastrophe
losses above £5.0m across 2018–2022.

Financial Statements• Admiral’s Household excess of loss reinsurance provides
catastrophe cover with a limit that is considerably higher
than the estimated 1-in-200 loss. As of January 2023,
this was estimated to be £470–510 million from floods andstorms for the UK Household Insurance business. Admiral’s
excess of loss deductible is £50 million, and the 70% quota
share leads to a net event loss of £15 million

Read more
about Our Society– Environment
on page 91

Corporate Governance

Description

112

Strategic Report

Section 172 Statement

The Board of Directors confirms that during the year underreview, it has acted to promote the long- term success of theCompany for the benefit of shareholders, whilst having due
regard to the matters set out in section 172(1)(a) to (f) of theCompanies Act 2006, being:(a)	the likely consequences of any decision in the long-term(b) the interests of the Company’s employees(c)	the need to foster the Company’s business relationships with
suppliers, customers, and others(d)	the impact of the Company’s operations on the community
and the environment(e)	the desirability of the Company maintaining a reputation
for high standards of business conduct.
(f)	the need to act fairly between members of the Company
During 2022, the Board reviewed and reaffirmed that of thesix stakeholder groups, (customers, people, suppliers andpartners, shareholders, community, and the environment),
each continued to be strategically important to the long-term
success of the Group’s operations, the stakeholders maintainunchanged from the group wide stakeholder materiality
exercise as detailed in the 2021 Annual Report. As part ofthe 2022 review, the Board considered the current approachto corporate governance and engagement in relation to
the interests of each of its stakeholders.

In preparation for the review, discussions were held with theinternal relationship owners within Admiral Group, on our key
information feeds, existing engagement methods, feedback
processes and the activities and plans for the year.
A Board agenda planner set out the matters to be considered by
the Board during the year, and this was subsequently reviewed
and updated at each Board meeting in 2022.
Board papers during the year were accompanied by a separate
document outlining which stakeholders could be affectedor impacted by the paper, along with an explanation of how
stakeholder interests had been considered prior to the raisingof the matter at the Board meeting. The accompanying papers
also shared the likely consequence of any Board decision on eachstakeholder group identified, and how the impact on stakeholders
could be monitored.
Examples of how stakeholder engagement and section 172(1)matters have influenced Board discussion and decision making
during the year can be found in the principal/ non-routine/
significant decisions in 2022 on pages 148 to 152.
The below table sets out where key disclosures in respect of eachof the section 172(1) matters can be found:S.172 factor

Relevant disclosure

Page

Consequences of decisions
in the long term

Principal decisions
Board appointments
Board activity during the year
Different stakeholder sections
Principal decisions
Employee stakeholder section including employment
engagement, communication
Employee Consultation Group
Non-Financial Information Statement
Diversity
Hybrid Working
Principal decisions
Stakeholder sections
Consumer Duty
Principal decisions
Stakeholder sections
TCFD disclosures
Sustainability
Principal decisions
AwardsStakeholder sections
CultureGroup Minimum Standards
Diversity & inclusion
Health and Wellness
Conduct risk
Whistleblowing
Chief Executive statement
Principal decisions

148 to 152

In the interests of employees

The need to foster business relationships
with suppliers, customers, and others
The impact of the Company’s operations
on the community and environment

Maintaining a reputation for highstandards of business conduct

Fairness between members

130 to 135
138 – 139
68 – 94
148 to 152
77 to 81
145 – 147
113
78 – 80
28, 78, 93, 129 and 142
148 to 153
68 – 9475, 75, 119
148 to 153
68 to 94
97 to 111
38 – 39
148 to 152
79
68 to 94
10, 70, 77 – 81
178
78, 80, 159 – 160
81
120
144
20 – 23
148 to 152

Admiral Group plc Annual Report and Accounts 2022

113

The below policies can be located here on our website www.admiralgroup.co.uk
Our General Standards of Conduct outline the conduct standards that all colleagues must adhere to regardlessof their role.

Our business
6
28
11
40

Business Model
Strategy
Financial Stability
Key Performance Indicators

Sustainability
38
10
78
87
94

Our Approach to Sustainability
Culture and Values
Employees Diversity and Inclusion
Community Engagement
Responsible Investments

Climate disclosure
97	Task Force on Climate-related
Financial Disclosures
95
Streamlined Energy and Carbon Reporting

Governance
114
136
Admiral Group plc Annual Report and Accounts 2022

Risk
Governance

Additional Information

The non-financial reporting requirements contained
in sections 414CA and 414CB of the Companies Act
2006 are addressed within this section by means ofcross reference, to indicate where they are locatedwithin the strategic narrative and to avoid duplication.

Financial Statements

Our Health and Safety Policy outlines our commitment to ensuring the health and safety of staff and anyone
affected by our business activities, and our commitment to providing a safe environment for those attending
our premises.
Diversity andOur Equality, Diversity and Dignity at Work Policy outlines that Admiral is committed to ensuring that any type
Dignity at Work of discrimination is not accepted. This policy outlines the standards of behaviour that are expected from all
members of employees, to ensure that everyone at Admiral is treated with dignity and respect. This policy
explains that all managers should be alert to potential discrimination and harassment and actively prevent themfrom occurring, communicate this policy to all employees, and be responsive and supportive to anyone who
makes a complaint.
Procurement
Our Group Procurement and Outsourcing Policy confirms that all employees who engage in procurement
andactivity are expected to enhance and protect the standing of the business, maintain the highest standard of
Outsourcing
integrity in all business relationships, promote the eradication of unethical business practices, and ensure fullcompliance with laws and regulations.
Anti-Bribery
Our Anti-Bribery Policy strictly prohibits the solicitation or acceptance of any bribe, to or from any person orcompany, by an individual employee, Board member, agent or other person or body on Admiral’s behalf, in orderto gain any commercial, contractual, or regulatory advantage for Admiral in an unethical way or to gain any
personal advantage for the individual or anyone connected with the individual.
Gifts andOur Gifts and Gratuities Policy recognises that sometimes customers, suppliers or business associates offer
Gratuities
gifts or gratuities to staff and confirms that all such gifts must be made and received openly and fairly.
Whistleblowing Our Whistleblowing Policy encourages and enables employees to raise any concerns they have about serious
malpractice or wrongdoing. The policy is designed to ensure that an employee can raise their concerns without
fear of victimisation, subsequent discrimination, disadvantage, or dismissal. This policy details internal andexternal reporting lines for any employee concerns.
Financial
Our Financial Crime Policy ensures that robust systems and controls are in place to detect, prevent and deter
Crime
financial crime across the Group and ensures we remain compliant with applicable laws and regulations in ouroperational jurisdictions. All areas of financial crime are captured by this policy, including money laundering,market abuse & insider trading, sanctions regime, modern slavery, tax evasion and Bribery & Corruption.
ModernOur Anti-Slavery, Exploitation and Human Trafficking Policy confirms Admiral’s zero tolerance approach to
Slavery
modern slavery, outlines our ongoing commitment to eliminating unethical working practices, and provides
guidance to employees on reporting any problems identified at work or in the community. We release an annual
Modern Slavery Statement in line with the Modern Slavery Act 2015.
Tax
Our Tax Strategy Policy documents our approach to taxation. The policy confirms that the Group’s primaryobjective is to be compliant with all tax legislation requirements in all the territories in which we operate.

Corporate Governance

GeneralStandardsof Conduct
Healthand Safety

Strategic Report

Group policies

Company Overview

Non-Financial Information Statement

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Strategic Report

Principal Risks and Uncertainties

The Board, with support from the Group
Risk Committee and the Group Risk function,
undertakes a regular and robust assessmentof the principal and emerging risks facing
the Group alongside engaging with the
management team on the Group Strategy.
These risks have been summarised as thosewhich would threaten its business model,
future performance, liquidity and solvency.

Identificationof risks

Principal risks (A–K)
Insurance Risk:
A 	Reserving risk in the UK andinternational insurance
B Premium risk and catastrophe risk
C 	Reduced availability of co-insurance
and reinsurance arrangements
D 	Potential diminution of other revenue

Group Risk:
E 	Erosion of competitive advantage
in UK car insuranceF 	Failure of geographic and/or
product expansion
G 	Reliance on UK price comparison
distribution channel

Credit Risk:
H 	Credit risk

Market Risk:
I 	Market risk

Operational Risk:
J 	Legal and regulatory risk
K 	Operational risk

The table overleaf sets out the principal risks which
Admiral has identified through its Enterprise Risk
Management Framework (ERMF). The impact of thoserisks and actions taken to mitigate them are explained
below. This section also includes a description of
Admiral’s approach to identify, manage and govern
emerging risks.
Risk Appetite: The Admiral Group risk strategy contains
strategic risk statements for the relevant risks
which help deliver the Group’s business objectives.
The Group risk appetite is owned and approved by
the Admiral Group Board. The responsibility for theGroup risk appetite is delegated to the Group Risk
Committee which reviews all components prior to
Board approval and monitors the performance of thebusiness against the approved Group risk appetite
through the consolidated risk report.
Unsurprisingly, given external events, the risk
profile of the Group has changed since 2021.
Operational risk has reduced, as the Group
becomes more familiar with operating in
the post-Covid-19 business environment,
however many other PR&U are trending up,
driven by unprecedented levels of inflation,
supply chain challenges, and economic andmarket turmoil. This trend of increasing risk
is anticipated to continue into 2023 due tocontinued uncertainty.
Principal risks and uncertainties reflect themain risks faced by the company in achieving
its strategic objectives. Our strategic
objectives have been listed below with thelinks to our strategy noted against eachprincipal risk and uncertainty (for more
information on the strategy refer to pages
28–37. Alongside these three pillars there
are two supporting strategies covering thecustomer and the Group culture which arecentral to everything the Group does.
1 	Admiral 2.0: Increase speed of delivery
on customer needs, continuing
to upgrade UW capabilities andoperational excellence.
2 	Business Diversification: Increasecustomer engagement and businessresilience, enriching our proposition
beyond motor.
3 	Motor Evolution: Evolve our proposition
for changes in mobility.

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115

Company Overview

A

Reserving risk in the UK and international insurance

1 2

Risk

Mitigating Factors

Admiral is exposed to reserving risk through its
underwriting of motor, household and other insurance
policies. Claims reserves in the Financial Statements may
prove inadequate to cover the ultimate cost of claims
which are by nature uncertain.

The Group continues to reserve conservatively,
setting claims reserves in the Financial Statements well
above actuarial best estimates to create a margin held
to allow for unforeseen adverse development.

ImpactDuring this period, increased uncertainty in forecasting
both the level and duration of the impact of higher
inflation rates on claims reserves may lead to adverse
run‑off and higher claims costs than projected.

Best estimate reserves are estimated both internallyand externally by independent actuaries.
For very large claims Admiral purchases excess of loss
reinsurance, which mitigates a portion of the loss.
Regular reviews of both settled and potential PPO
cases are undertaken by the Claims and Actuarial teams,
with independent actuarial analysis provided as part ofthe external reserving process.
Admiral’s investment strategy is the result of astructured, disciplined and transparent investment
process. Long-dated inflation linked assets are held topartly hedge the risks associated with PPO claims.

B

Premium risk and catastrophe risk
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

The Group is exposed to the risk that inappropriate
premiums are charged for its insurance products
leading to either insufficient premiums to cover claims
cost or uncompetitive rates leading to reduced businessvolumes. This risk is increased during periods of highinflation leading to greater market uncertainty.

There are a number of aspects which contribute to
Admiral’s strong UK underwriting results, including:

The risk of increased claim costs and/or reduced
business volumes could be driven by potential economic ,social, environmental, regulatory or political change suchas the Russia-Ukraine conflict, impacting supply chains or
new entrants to the market.
Admiral is exposed to the risk of higher losses than
anticipated due to the occurrence of manmade
catastrophes or natural weather events, potentially
increased in frequency and severity due to climate change.
Acute physical climate risks include changes in thefrequency of both large catastrophe events and severe
weather events, where trends are difficult to identify,
and which have large claims costs associated with them.

ImpactHigher claims costs, reduced business volumes
and/or higher loss ratios, resulting in reduced profits
or underwriting losses.
A large flood or windstorm, causing extensive property
damage (both motor and household) to a significant
proportion of the portfolio, could lead to a larger than
anticipated total claims cost.

Admiral Group plc Annual Report and Accounts 2022

• Experienced and focused senior management
and teams in key business areas including pricing
and claims management• Highly data-driven and analytical approachto the regular monitoring of claims andunderwriting performance• Capability to identify and resolve underperformance
promptly through changes to key performance
drivers, particularly pricing• Continuous appraisal of and investment in employees,
systems and processes• Monitoring the impact arising from climate changerisks, covering both physical and transitional risks,
as well as other Emerging Risks which may impact
premium or catastrophe drivers
Admiral purchases excess of loss reinsurance, which isdesigned to mitigate the impact of very large individual
or catastrophe event claims.

Additional Information

PPO claims are capital intensive owing to increased
uncertainty of the cost of significant claims over alonger term.

Financial Statements

This is a particular risk for motor insurance liabilities,
where the amount payable for bodily injury claims(particularly large claims) can change significantly during
the lifetime of the claim as a result of external risks suchas changes in Ogden rates (expected in 2024), impacts ofincreased levels of Periodical Payment Orders (PPOs) andclaims inflation.

Corporate GovernancePossible
impact on
our strategic
initiatives

Strategic Report

Insurance Risk

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Strategic Report

Principal Risks and Uncertainties
continued
C

Reduced availability of co-insurance and reinsurance arrangements
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

Admiral uses proportional co-insurance and reinsurance
across its insurance businesses to reduce its own
capital needs (and to increase the return on the capital itdoes hold) and to mitigate the cost and risk of establishing
new operations. There is a risk that support will not be
available or that it will be available at an uneconomical
price in the future if the results and/or future prospects ofeither the UK businesses or (more realistically) one or moreof the less well-established operations are not satisfactory
to the co- and/or reinsurers.

Admiral mitigates the risk to its reinsurance
arrangements by ensuring that it has a diverse rangeof financially secure partners.
Admiral continues to enjoy a long-term relationshipwith a number of different reinsurers, some of which
are amongst the world’s largest.
These long-term arrangements are in placethroughout the UK and International businesses.

Climate change could lead to system-level shifts inconditions in the natural environment. A higher frequency
and severity of extreme weather events, as well as
increased chronic physical risks, could increase the cost ofreinsurance protection for insurers. Climate change could
impact reinsurance structures if more events are hitting
reinsurance layers, potentially leading to changes in terms
and conditions or premiums.

ImpactA potential need to raise additional capital to support
an increased underwriting share. Return on capital might
reduce compared to current levels.

D

Potential diminution of other revenue
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

Admiral earns other revenue from a portfolio of
products and services in addition to the core insurance
products. The level of this revenue could diminish due
to: political, regulatory, legal, social/customer behaviour,
strategic, market or economic changes.

Admiral continuously assesses the value to its customerof the products it offers and makes changes to ensure
the products continue to meet customer needs andoffer good value.

ImpactLower profits from business operations and lower returnon capital.

Admiral seeks to minimise reliance on any single
source by earning revenue from a range of products.
This would mitigate the impact of regulatory ormarket changes, or changes in consumer behaviour,which might affect a particular product orincome stream.
Admiral works closely with its regulatorsand other key industry bodies to understandpotential developments.

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117

Company Overview

E

Erosion of competitive advantage in UK car insurance

1 2 3

Risk

Mitigating Factors

Admiral typically maintains a significant combined
ratio advantage over the UK market. This advantage
and/or the level of underwriting profit (and associatedprofit commission) could be eroded. This risk could
be exacerbated by: unfavourable loss or expense ratio
results, irrational competitor pricing, new technologies
used within the insurance market and/or regulatory
market intervention. It may arise from new or existing
competitors, or outcomes from legal or regulatorychange such as the FCA’s pricing practices.

Admiral’s focus remains on the wide range offactors that contribute to Admiral’s combined ratio
outperformance of the UK Motor market. Some areset out earlier in the Strategic Report, but otherfactors include:

A worse UK car Insurance result and lower return on
capital employed.
A sustained and uncorrected erosion of competitive
advantage could affect the ability of Admiral to maintainits reinsurance arrangements, which might in turn require
Admiral to hold more capital.

and efficient acquisition costs• An experienced and focused management team
• A robust pricing discipline to ensure
prudent behaviour to try and protect ourcompetitive advantage• A strong Admiral brand and customer orientatedculture to attract and retain customers

Failure of geographic and/or product expansion
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

In line with the Group’s diversification strategy,
Admiral continues to develop its other UK insurance
businesses, non-insurance businesses such as Admiral
Money, and its international businesses. Admiral Pioneeris the vehicle for the development and launching of new
products and services, other than those already coveredby existing established Group businesses.

Admiral’s approach to expansion and productdevelopment remains conservative, applying thetest-and-learn philosophy that has proven successful
for previous operations. International insurance
businesses have generally executed cautious launch
strategies and are usually backed by proportional
reinsurance support which provides substantial
mitigation against start-up losses in the early years.

One or more of the operations could fail to becomea sustainable, profitable long-term business.
Product expansion into new areas could lead tounprofitable business, could increase regulatory risk,
and may introduce new risks into the Group.
Growth in developing businesses could exceed the scaleof infrastructure of the operation.

ImpactHigher than planned losses (and potentially closure costs)
and distraction of key management.
A collective failure of these businesses would threaten
Admiral’s objective to diversify its earnings by expanding
into new markets and products, though any single failureof product or geography is likely to be tolerable.
The UK car business, which continues to perform strongly,
is largely unaffected by this risk.

Admiral Group plc Annual Report and Accounts 2022

The Directors are mindful of management
stretch and regularly assess the suitability of theinfrastructure and management structure in place
for Admiral’s new UK and international operations,alongside oversight and challenge from appropriate
boards and committees.
The Group has established a sufficiently large anddiverse portfolio in order to mitigate the risk of failureof individual new operations.

Additional Information

F

quickly to market conditions and developments• A focus on maintaining a low-cost infrastructure

Financial Statements

Impact• A track record of innovation and ability to react

Corporate GovernancePossible
impact on
our strategic
initiatives

Strategic Report

Group Risk

118

Strategic Report

Principal Risks and Uncertainties
continued
G

Reliance on UK comparison distribution channel
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

Admiral is dependent on the four main UK comparison
websites as an important source of new business andgrowth. Growth in this distribution channel could slow,
cease or reverse, or Admiral could lose one or more of
the websites as a source of customers.

Admiral contributes materially to the revenues of all
four major UK comparison businesses, and has a strong
brand presence, and therefore it is not considered
probable that a material source of new business would
be lost.

ImpactAdmiral continues to grow its MultiCover and MultiCar
products which promotes retention. It also has a direct
offering to new and existing customers, with continuing
investment made to improve its online/digital offering.

A potentially material reduction in UK insurance new
business volumes, in particular for UK Motor.
However, a more competitive market might benefit theinsurance businesses through lower acquisition costs.

Credit Risk

H

Credit risk
Possible
impact on
our strategic
initiatives
1 2

Risk

Mitigating Factors

Admiral is primarily exposed to credit risk in the form of:(a) reinsurance counterparty credit risk; or (b) banking
counterparty credit risk or (c) credit risk of investments.
One or more counterparties could suffer significant
losses leading to a credit default, while a downgradeof investments could erode the value.

Admiral only conducts business with reinsurers ofappropriate financial strength. In addition, majorreinsurance contracts are operated on a funds withheld
basis, which substantially reduces credit risk, as Admiral
holds the cash received as collateral.

Admiral Money exposes the Group to credit risk in relation
to customer defaults on its unsecured personal loan andcar finance business.

Impact
The impact of a major credit event could be losses andreduced capital, dependent on its nature and severity.
Admiral would also need to ensure that it continues tohave sufficient liquid assets to meet its claims and otherliabilities as they fell due.
Increased defaults could impact future profitably andlending capabilities.

Admiral continuously monitors the credit quality of ourcounterparties within Board approved limits, adjusting
its credit rules and pricing accordingly.
Credit risk of investments is managed throughdiversification and appointing high-quality third-party
asset managers. Limits on counterparties and certain
credit ratings ensure that credit risk is managed
within risk appetite, and produces a high quality credit
portfolio. The Group invests in a range of liquidity funds
which hold a wide range of short duration, high quality
securities, and in fixed income funds holding primarily
investment grade assets. Cash balances and deposits
are placed only with highly rated counterparties.
Most long-term investments are held in Government
bonds to further mitigate the exposure to credit risk.
Admiral considers counterparty exposure frequently
and in significant detail, and has in place appropriate
triggers and limits to mitigate exposure to individual
investment counterparties.
Admiral Money’s credit risk appetite is set to ensurethat the risk taken is commensurate to the expected
returns whilst also considering customer affordability.
Admiral Money continuously monitors its criteria fornew business and the performance of its portfolio.

Admiral Group plc Annual Report and Accounts 2022

119Company Overview

I

Market risk
Risk

Mitigating Factors

Market risk arises as a result of movement in interest
rates, credit spreads and foreign exchange rates.

1

Market volatility (notably significant changes in risk
free interest rates or material increases in credit spreads)
can adversely impact the value of the Group’s assets.
The Group’s solvency can also be adversely impacted
due to an increased regulatory valuation of claims
liabilities, in particular in relation to longer-dated
potential PPO claims.

The investment strategy focuses on preservation of
the amount invested, low volatility of returns andstrong liquidity. The majority of the portfolio is invested
in high quality fixed income and other debt securities,
and money market funds and other similar funds inorder to achieve these objectives. To note Admiral does
not invest in commercial property.

ImpactThis includes asset/liability matching, considerationof hedging options for these liabilities, including ofcertain risks associated with PPO claims.
Relative to the size of the Group, exposure to nonsterling currency remains relatively small.

Operational Risk
Legal and regulatory risk
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

Legal and regulatory risk may arise where Admiral fails to
fully comply with legal or regulatory requirements and/orchanges in an accurate, timely manner. Examples include
compliance with the FCA’s new Consumer Duty. This risk
may also arise where previous industry and/or Admiralregulatory or legal compliance standards are revisited
with negative consequences, applied retrospectively,
for the industry and/or the Group. As Admiral operates
globally, across business lines and products, it is exposed
to a number of differing legal jurisdictions and regulators.

Ongoing monitoring of the Group’s compliance withcurrent and proposed requirements and interaction
with regulators by Executive Management andthe Board.

Failing to meet increasing expectations from regulators,
legislators, and shareholders around climate change
and the environment could potentially lead to exposure
to legal and regulatory risk. In the longer term, theimpact from not meeting increasing expectations could
be serious.

ImpactExposure to regulatory intervention, censure and/or
enforcement action through fines and other sanctions.

Admiral Group plc Annual Report and Accounts 2022

Assurance is gained through external reviews andbenchmarking exercises ensuring Admiral is compliant
with legal and regulatory requirements.
Strong project governance is a key control in managing
regulatory change.

Additional Information

J

Financial Statements

Continued growth of the Group’s businesses outside
the UK has altered the exposure to net assets andliabilities in currencies other than pounds sterling,increasing the Group’s exposure to Euros and Dollars
in particular.

The Group’s mitigation for interest rate risk resulting
from long duration PPO liabilities includes reinsurance
cover and a continuing focus on investment strategies.

Corporate GovernancePossible
impact on
our strategic
initiatives

Strategic ReportMarket Risk

120

Strategic Report

Principal Risks and Uncertainties
continued
K

Operational risk
Possible
impact on
our strategic
initiatives
1 2 3

Risk

Mitigating Factors

Operational risk arises within all areas of the business.
The principal categories of operational risk for Admiral
are: conduct risk; physical security risk; technology risk;
information security/cyber risk; business continuity
and operational resilience; process risk; change risk;
people risk; data governance risk; and, outsourcing andprocurement risk.

Admiral operates a three lines of defence model,
and internal controls are in place and are monitored
to mitigate risks. The control framework is regularly
reviewed, and the internal audit function has an agreed
cycle of testing of the adequacy and effectiveness ofcontrols. Specific operational risks are mitigated by:

ImpactPotential customer detriment and/or potential regulatorycensure/enforcement and/or reputational damage as aresult of Admiral’s action or inaction.
Admiral being unable to service its customers or making
poor business decisions due to lack of system availability,
data integrity and/or data confidentiality.
The risk of reductions in earnings and/or value,
through financial or reputational loss, from inadequate
or failed internal and outsourced projects, processes
and systems, or from people related, hybrid working or
external events.
Risk to Admiral occurs through the losses that could
materialise if the internal control framework managing
business processes fails.

• Monitoring, managing and reporting on customer
outcomes in order to mitigate customer detriment• Regular Executive Management and Board reviewof the effectiveness of the Group’s IT capability• Continuing investment in Information Security inorder to mitigate Information Security risks, including
evolving Cyber risk. Including the embedding of
improved KRI’s for Cyber/Information Security risks• Staffing a major incident team within IT which
is tasked with maintaining system availability,with business continuity and disaster recovery
plans in place which are regularly tested, alongsidecompletion of an operational resilience work stream• Backing up data to allow for its recovery in the eventof corruption• Employing enhanced project governance andoversight of new systems implementations,with external specialist review and assurance
where required• Attracting, retaining and motivating quality
employees to deliver superior customer service
and to achieve business objectives• Employing targeted recruitment and identifying
potential leaders through internal development,
talent management and retention processes forthe purposes of succession planning• An ongoing commitment to Diversity and Inclusion.
• Monitoring outsourced and offshore activities
through ongoing supplier relationship andperformance management, and with regular due
diligence reviews• Strategic reviews are periodically undertaken toalign procurement and outsourcing arrangementswith our wider business strategy and also in response
to ongoing macroeconomic challenges
Admiral also purchases a range of insurance covers
to mitigate the impact of a number of otheroperational risks.

Admiral Group plc Annual Report and Accounts 2022

121Company Overview

The management of emerging risks is a key elementof Admiral’s strategic risk management, and emerging
risks and opportunities continued to be reviewed
throughout 2022.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Reporting on emerging risks and opportunities
is provided to the GRC and relevant Boards,
is incorporated into the Group ORSA Report, and isdiscussed with the senior management and entity
risk teams.

Financial Statements

Admiral’s Emerging Risk Radar captures an assessmentof potential impact and time to crystallisation for
emerging risks. It categorises each risk into four broadrisk segments: (a) social, political & economic, (b) legal& regulatory, (c) technology and (d) environmental.
Plotting emerging risks in this way can shed light on
the macro trends with common drivers and effects.

Corporate Governance

Admiral Group identifies and monitors emerging
risks, issues which may be potentially significant, but
may not be fully foreseen, assessed or allowed for ininsurance terms and conditions, pricing, reserving or
capital setting, or strategic and business decisions.
By their very nature, emerging risks are many andvaried, with a high degree of uncertainty aroundthe likelihood of occurrence, severity and/or timing.
The broad analysis of a wide range of emerging
risks and opportunities may lead to a change instrategy, management behaviour, ways of working
or risk management and in turn, to a stronger andmore robust business which better delivers on
its commitments to customers, employees, andother stakeholders.

Emerging risks are identified via horizon scanning.
This involves an extensive literature review,
consultations with internal working groups, andinterviews with internal stakeholders, subject matter
experts, and external specialists. Emerging risks areassessed using an internally-developed framework,
which includes qualitative and quantitative analysis
to grade each emerging risk on a scale designed tobe comparable across entities and compatible withmanagement of operationalised risks. Evaluation of
the potential impact to Admiral includes considerationof how the risk may interact with existing Principal
Risks and Uncertainties (PR&Us), as well as any new
risks that could arise. It also covers the precautionary
deployment of management actions andmitigating controls.

Strategic Report

Emerging risks

122

Strategic Report

Viability Statement

In accordance with provision 31 of the 2018 UK
Corporate Governance Code, the Directors haveassessed the prospects of the Company over athree-year period, having referenced the Group’s Own
Risk and Solvency Assessment (ORSA), risk strategy,
risk appetite, principal risks and uncertainties, key risk
drivers, and ongoing risk management activities.
As per provision 31, Admiral considers three years
to be a period of assessment over which it has areasonable degree of confidence. Although the Group
reviews financial projections that extend beyond
the three-year time horizon covering the years up to2027, Admiral considers that there is an inherent risk
and uncertainty in projecting beyond this three-year
period, as the degree of certainty in the impact ofinternal and external developments reduces greatly
due to the nature of Admiral’s primary business(one-year insurance policies). However, these financial
projections contain no information which would cause
different conclusions to be reached over the longterm viability of the Group.
At least annually, the Group produces an ORSA report,
which is the main source of evidence used by the
Board to assess viability. The ORSA report sets out
a detailed consideration of the principal risks anduncertainties facing the Group and considers current
and projected levels of solvency and liquidity over a
12-month to three-year period.
In addition to the three-year period of assessment
supported by the ORSA, the Board utilises otherrelevant reporting, some of which is longer termin nature. Notably these include five-year financial
projections reviewed twice a year, three-year solvency
projections reviewed at least twice a year, and a oneyear financial budget for the forthcoming 12 months
approved on an annual basis.
Quantitative and qualitative assessments ofrisks are performed as part of the ORSA process,assessing these risks over the three-year capitalplanning time horizon. This forward-looking
approach reflects the alignment of the financial
and business planning process and the solvency
assessment, referred to within Admiral as the capitalplan. This makes sure that Admiral is appropriately
capitalised at a fixed point in time as well as overthe future planning time horizon, given Admiral’s
principal risks and uncertainties and a plausible rangeof potential stressed conditions. The capital plan isa key consideration for Group and Subsidiary Boards
in assessing and approving the business strategy,
business / financial plan and key business decisions.

The quantitative assessment considers how theregulatory capital requirements, economic capitalneeds, own funds and solvency position of the Groupare projected to change over the three-year horizon,with a requirement to maintain a solvency ratio above
the approved capital risk appetite buffer throughout
the projection.
The assessment includes a series of sensitivity, stress andscenario tests (S&STs) and reverse stress tests (RSTs) thatare examined and quantified to understand the potential
impact on the Group’s solvency, liquidity and profitability,
as part of the ORSA process. In addition to these Group
tests, there are also entity-specific scenarios, consideredof lower materiality to the Group, that are performedby each subsidiary insurance entity as part of their
ORSA processes.
The results of the stress tests form part of the process
to set the Group’s capital risk appetite, which seeks tohold a buffer on top of the Group’s regulatory capitalrequirement that is sufficient to protect its regulatory
capital position against a range of significant but plausible
potential shocks and stresses.
Key strategic decisions, including the setting of dividend
payments, consider the solvency impact against theBoard-approved capital risk appetite of 130%, which
is a key criterion for the Board in assessing viability.
Refer to the Strategic Report (page 64) for information on
sensitivities to the reported 2022 solvency ratio position.
To assess the robustness of the Group to the impact ofvarious risks, 15 S&STs and two RSTs have been quantified
to understand the potential impact on the Group’s
solvency ratio. In 2022 a range of scenarios have been
performed from the capital planning process along withscenarios related to PRA’s IST 2022 natural catastropheand cyber / operational risk scenarios, and insurance,
market risk and inflation stresses.
The results indicate that for most of the stresses,
Admiral has sufficient capital to withstand the extreme
scenarios. The 130% buffer is breached for two scenarios(extreme inflation and macroeconomic shock) although
the solvency ratios still lie comfortably above the 100%minimum solvency ratio. For these scenarios Admiral also
has several management actions that it could call on
to alleviate capital pressures and improve the solvency
ratio to bring it above the 130% buffer. A third exception
is an extreme RST, combining severe and extreme
insurance (reserve/premium) and market risk scenario
combinations. In the absence of management actions thiswould result in a breach of the 100% minimum solvency
ratio but, as is the intention of the RST, it is considered to
be an extremely remote outcome, being well excess of a
1-in-200-year event.

Admiral Group plc Annual Report and Accounts 2022

123

Company Overview• Premium Risk and Catastrophe Risk: Global
uncertainties, supply chain pressures andincreasing vehicle repair and replacement
costs have all contributed to claims inflation.
Similarly, labour shortages and cost of living
concerns will contribute to wage inflation impacting
large bodily injury claims. In most insurance
markets, motor claims frequency has increased
but is still noticeably below pre pandemic levels.
Admiral continues to manage these challenges
with a disciplined, long-term approach to pricing
and growth, with a focus on building the businessfor the long-term. The business continues tomaintain a prudent reserving approach to claims

Admiral Group plc Annual Report and Accounts 2022

48	Please also see note 6 to the financial statements which sets out the Group’s
objectives, policies and procedures for managing financial assets and liabilities

Additional Information

Changing Economic Outlook: Admiral has reviewed
and continues to monitor the Group’s solvency andliquidity positions in response to market volatility
and wider economic uncertainty, considering factors
such as increases in inflation, the wider impact of
supply chain disruption, surging energy prices and thepressures on individual household finances leading toa “cost of living crisis” in many countries. Some of thecurrent trends in risks most impacted by the changing
economic outlook are highlighted below:• Operational Risk: During 2022, GRC have continued toreview the impacts and level of operational risk as focus
turned to adapting to the “post-Covid-19 businessenvironment”. The labour market remains difficult
with strong competition to attract candidates at alllevels. The trial and introduction of flexible working
conditions, increased staff retention risks in the UK,
the potential erosion of the competitive advantage ofAdmiral’s culture and the return to more “normalised”
driving patterns have all been considered in theirimpact on both operational performance and customer
outcome risks. The GRC received reports of actions
such as a reduction in working hours for UK staff and
an increase in holiday allowance being implemented
to address some of these impacts. Monitoring andreporting is in place on the impact of attraction
and retention levels as well as levels of sickness andabsences, following the improvements made to thestaff benefits package

Financial Statements

While each of Admiral’s principal risks anduncertainties could have potentially impacted theGroup’s performance, during 2022 the following key
risk drivers were seen to be of notable importance:
Covid-19, changing economic outlook, technology,
cyber and operational resilience, geopoliticalinstability, and climate change.

• Reserve Risk: The Group has a prudent approach toreserving, which helps to minimise the impact ofinflation and help build strong, resilient businesses
for the long-term. Provision has been made for the
impact of inflation on unsettled Bodily Injury (BI) claims,
for which cost of care is the primary driver of cost,ensuring that reserves capture excess inflation, for allheads of damage, but particularly for wage inflation
over the average time it takes for BI claims to settle.
This continues to be reviewed, with best-estimatesof these impacts being reflected in the reserves
recognised as at the balance sheet date

Corporate Governance

The Admiral Group Risk Strategy is considered andapproved by the Board. The strategy is directly linked
to the business plan and seeks to ensure that all risks
are managed effectively to allow the Group to meetits strategic aims (pages 28–37). Supporting this is theAdmiral Group Risk Management Policy, which setsout Admiral’s approach to risk management, as wellas the governance of risk management across theGroup. This approach ensures that there is appropriate
oversight of the Group’s risk profile, and that theGroup remains within risk appetite in all its operations.

• Credit Risk: The increase in cost of living may lead to anincreased number of customers being unable to meettheir loan repayments or insurance premiums. The EUI
processes for payment holidays to direct debit payers
was established during the Covid-19 lockdowns andremains in place for financially vulnerable customers.
Within Admiral Money, affordability assessments for
new loans have been adjusted to ensure that customers
are resilient to ongoing inflation. The loans portfolio
has been stress tested and the results indicate a strong
portfolio within risk appetite

Strategic Report

Risk management is an essential part of Admiral’soperations, and successful risk taking is key to
the Group achieving its business objectives.
Risk management is therefore a key consideration
when setting the Group’s strategy, managing
performance, and rewarding success. The current risks
that are faced by the Group are captured in the Risk
Universe, with the most notable risks captured in theGroup’s principal risks and uncertainties (page 114)48.
In addition to these principal risks and uncertainties,
the Group also considers a range of emerging risks
that could impact the Group to varying degrees in
the future, but which are not yet fully understood,
including those related to climate change (page 121).

124

Strategic Report

Viability Statement
continued
Covid-19: Group committees have continued
to monitor the ongoing impact of Covid-19 andchallenge Admiral’s response, including oversight of
the return to the office, in line with all applicable local
and national guidance. Throughout the pandemic
the GRC sought to ensure appropriate action was
taken to manage the impact to Admiral’s principal
risks and uncertainties: prioritising staff health andsafety, maintenance of the strong Admiral culture,
Admiral’s ability to continue to provide high quality
customer service and financial resilience.
• Key actions undertaken by the GRC in this regard
include review and challenge of potential impacts
to Admiral Group’s solvency and liquidity including
financial stress testing and updates on Covid-19
related regulatory interactions
Geopolitical Instability: The Russian invasion of
Ukraine and an escalation of geopolitical tensions led
to a review of potential exposure across the Group’s
PR&Us. From a solvency perspective the impact
has been assessed as immaterial at this time, andmonitoring of geopolitical tensions is ongoing.
• Market Risk: The initial investment spread shock
was of brief duration and there was very limited
indirect exposure across the investment portfolio.
Market risks are reviewed by the investments teamand asset managers to ensure Admiral is adequately
positioned in this rapidly changing environment• Insurance Risk: The risk of reduced availability of
co-insurance/reinsurance arrangements remains
heightened due to tensions between Russia-Ukraine
and an anticipated Ogden change in 2024, however
monitoring is being undertaken to adequately react
to any scenario
Cyber and Operational Resilience: Admiral’s continual
focus on data, technology, and digital has driven
increasing adoption of cloud technologies.
• Increased monitoring of Technology andInformation Security Risks commenced during2022 through additional KRIs and regular standing
reports and updates from the Group Technology
and Information Security Risk Team. Updates oncyber crisis planning were provided to committees
and monitoring will continue on progress andresponse planning activities

Climate change: Admiral remains committed torecognising and understanding the threats andopportunities posed by climate change to the Group,
as well as to mitigate its impact on the environment.
Climate-related risks can impact on all of Admiral’sbusiness lines, operations, investments, and reinsurance
arrangements. Admiral Group recognises that while there
are risks from delayed action, there are also opportunities
from considering the challenges, including the potential
to accelerate the Group’s transformation, to build
resilience, and to gain competitive advantage in newand existing markets.
As part of this work there is an ongoing Group focus on:• Ensuring full compliance with existing and emerging
regulatory and disclosure requirements• Researching climate-change trends and assessing therisks and opportunities arising from climate change• Incorporating climate-related risk drivers intobusiness-as-usual risk management, such as enhancing
Admiral’s climate scenario testing capabilities• Continuing efforts to further reduce the Group’s
carbon footprint
Admiral Group’s strategy linked to climate change isdiscussed in more detail in the Task Force on ClimateRelated Financial Disclosures disclosure (page 97).
Based on the results of this analysis, the Directors havea reasonable expectation that the Group will be able tocontinue in operation and meet its liabilities as they falldue, for the period up to and including December 2025.

Strategic Report Approval
The strategic Report is approved for issue by the Boardof Directors, and signed on behalf of the Board:

Milena Mondini de Focatiis
Group Chief Executive Officer
7th of March 2023

• The cyber security programme in the European
insurance businesses continues to make progressin reducing their information security risk, in linewith the Group’s Cyber Security Framework.
In the UK, an Operational Resilience programme
was completed at the end of March 2022 in linewith regulatory requirements. Work will continue
specifically focussed upon the identified Important
Business Services

Admiral Group plc Annual Report and Accounts 2022

125

Company Overview

Corporate
Governance

Strategic Report

Contents

Additional Information

Admiral Group plc Annual Report and Accounts 2022

Adding value.
Delivering
difference.
For ourcommunities

Financial Statements

Governance at a glance
Introduction to Governance
Board of Directors
Governance Report
Nomination and Governance committee
Audit Committee Report
Group Risk Committee Report
Remuneration Committee Report
Remuneration at a Glance
Directors’ Remuneration Policy
Annual Report on Remuneration
Directors’ Report

Corporate Governance

126
128
130
136
158
171
178
183
186
187
196
210

126

Corporate Governance

Governance at a glance

Total Board Director skills

11 Finance
10 Risk
8 Insurance
11 Executive/Strategic Leadership
5 Marketing/Retail
8 M&A
10 City
8 International
8 Tech/Digital/Data
8 Operations
6 Entrepreneurial
3 Loans
7 Small / Medium Enterprise
11 Remuneration/People
7 ESG/Sustainability
Find further detailon page 130

Executive/Non-Executive Directors

Total Board Independence

Age diversity

2 Executive
9 Non-executive

8 Independent
3 Non-Independent

40s 18.2%
50s 27.2%

60s 45.5%70s 9.1%“This year’s external
evaluation found that thisis a strong Board thatis reflective and supportiveof the Admiral culture.”“Admiral is only one of 5
FTSE100 companies where
each of the board positionsof Chair, SID and CEO
are held by women.”

Annette Court
	Group Chair of the Nomination
and Governance Committee

Annette Court
	Group Chair of the Nomination
and Governance Committee

Admiral Group plc Annual Report and Accounts 2022

127

Annette Court
	Group Chair of the Nomination
and Governance Committee

Financial Statements

10 White British or other White (including
minority white groups)
1 Asian /Asian British
Board gender diversity

Corporate Governance

Board Ethnicity

Strategic Report

8 British
3 Non-British

Company Overview“The Board remains
satisfied that it
has the appropriatebalance of skills,
experience, independence  
and knowledge.”

Board Nationality

Non-Executive Director tenure

3-6 years<3 years>9 years
6-9 years

5 Men
6 Women

JP Rangaswarmi 2y 8m
Evelyn Bourke 1y 8m
Bill Roberts 1y 6m* Jean Park stepped down from the Board in January 2023

Balance of skills,
knowledge andexperience

Annual Board
evaluation and individual
Director appraisals

Board compositionand succession planning

Non-Executive tenure
and independence

Admiral Group plc Annual Report and Accounts 2022

Time commitment
and external
appointments

Board diversity

Additional Information

Annette Court 10y 9m
Jean Park* 8y 11m
Justine Roberts 6y 6m
Andy Crossley 4y 10m
Mike Brierley 4y 3m
Karen Green 4y 0m

128

Corporate GovernanceIntroduction to GovernanceIntroduction from the Chair
Dear Shareholder,

On behalf of the Board, I am pleased to present the Group’s
Governance Report for the financial year ended 31 December
2022. This report sets out our approach to effective corporate
governance and outlines key areas of focus of the board and its
activities undertaken during the year as we continue to drive
long-term value for all our stakeholders.

Backdrop

With the background of a world coming out of a pandemic,
moving to a world of hybrid working with uncertainty andvery high claims inflation alongside a cost-of-living crisis,
Admiral remains focused on building on our strengths: a strong
workplace culture, diversity and inclusion, succession planningand climate change reporting. The Board continues to keep
abreast of the changing corporate governance landscape (suchas the BEIS audit and corporate governance reforms) and iscommitted to ensuring that it provides effective leadershipby ensuing that good governance principles and practices areadhered to across the Group.

“With the backgroundof an uncertain world,
Admiral remains
focused on building
our strengths.”
Annette Court
	Group Chair of the Nomination
and Governance Committee

Board changes and succession planning

In January 2022 the Board approved that Bill Roberts wasappointed as a member of Nomination and GovernanceCommittee. Due to Jean Park’s temporary leave of absence which
was effective from February 2022, upon the recommendationof the Committee, the Board approved that Justine Roberts beappointed as the Interim Senior Independent Director (“SID”)
and Andy Crossley be appointed as the Interim Group Risk
Committee Chair with effect from February 2022 and Karen Green
was appointed as a member of the Risk Committee on 1 June
2022. Justine played an important role in 2022 in leading the
Chair succession process as my extended tenure as Board Chaircomes to an end at the AGM in April 2023. Jean Park retired fromthe Board in January 2023 and, in her place, the Board approved
the appointment of Justine Roberts as permanent SID and as apermanent member of the Remuneration Committee. Refer tothe report of the Nomination and Governance Committee forfurther information.
Further details of the respective selection
processes are set out on pages 159 to 170
Further details on our succession planningis set out on page 128
Further details on our explanations in
respect of non-compliance with Provisions
19 of the Code are on page 136

Admiral Group plc Annual Report and Accounts 2022

129

Company Overview

Stakeholder engagement

The Nomination and Governance Committee and the Board
considered updates on diversity and inclusion during theyear, including revised targets to demonstrate Admiral’scommitment to continue to be a diverse and inclusive employer.
Further information about the Board’s oversight of diversity andinclusion at Admiral is included in the Nomination and Committee
Report on page 158 and pages 78 and 80 of the Strategic Report.
Read more in our Nomination committee
report on page 158

Board effectivenessAt the end of the year, the Board and all of its Committees were
evaluated externally by Bvalco Ltd on their own performance toensure that they continued to operate effectively and to provide
an opportunity to make any improvements in 2023. The outcomeof the review also fed into the Board’s objectives which were set
for 2023. A summary of the outcome of the externally facilitated
Board evaluation including information on the Board’s objectives
are on pages 169–170.
Annette Court
Group Chair
7 March 2023

Admiral Group plc Annual Report and Accounts 2022

Additional Information

During the year, the Board revisited its Stakeholder Map andreaffirmed the key stakeholder groups, as well as the various
mechanisms used to engage and communicate with each.
Consideration was also given to how Admiral stakeholders’ views
were taken into account in decision making in accordance with
the Board’s duties under s.172 of the Companies Act 2006.
Information on how the Directors discharge this duty, as well as
an update on the work of the Employee Consultation Groups(ECGs), is contained within the stakeholder sections on
page 145 of the Governance report.

The Board increased its oversight of environmental, social andgovernance factors in 2022, with climate change, and diversity
and inclusion being areas of increasing focus. Not only did
the Board receive multiple updates on progress to increase
disclosures on ESG matters, but the Audit and Risk Committees
also increased their respective oversight of the Taskforce for
Climate-related Financial Disclosures (TCFD) and SASB disclosures.
The Remuneration Committee also considered proposals during
the year to link ESG metrics to reward. Further information on
TCFD and climate change can be found on page 97.

Financial Statements

For further detail see Our Customers
section pages 74 to 76

ESG

Corporate GovernanceAs reported in our 2020 annual report, the Board approved arevised Group purpose statement in January 2021. The Board iscognisant that it has the ultimate responsibility for ensuring that
Admiral has an appropriate company culture that aligns with theGroup purpose and considers its impact on all of its stakeholders.
Culture continues to be a topic closely monitored by management
and the Board, following the workforce spending an extended
time working from home following the pandemic. The Board
received updates during the year on the proposals to introduce amore permanent hybrid working model across the Group and how
this might impact Admiral’s culture. Further information on theGroup’s purpose and how its culture is monitored and assessed by
the Board is outlined on pages 72 to 78 of the Strategic Report andpages 148 to 152 of this report, respectively.

Strategic Report

Purpose, Culture and the impact of COVID-19

130

Corporate Governance

Board of Directors

Our diverse Board has a breadth ofskills and experience of adding value
and delivering difference.
Board skills matrix

Committee Membership

Finance

Risk

Insurance

Executive/Strategic LeadershipMarketing/Retail

M&A

City

International

Technology/Digital/Data

Operations

Entrepreneurial

Loans

Remuneration/People

ESG/Sustainability

Audit Committee member
Remuneration Committee memberGroup Risk Committee member
Nomination and Governance Committee member
C Committee Chair
Senior Independent Director

Annette Court

C

Current appointments

Contributions and reasons for appointment• Non-Executive Director, Chair of theRemuneration Committee and member of the
Audit and Risk Committee at Sage Group Plc

As Chair, Annette effectively leads theBoard, and is responsible for setting its
agenda and monitoring its effectiveness.
Annette demonstrates significant commitment
to the role and with a background in financial
services and technology, and expertise inmentoring leaders, she contributes both
strategically and practically to all areas of Board
related decision making. Annette is also Chair of
the Nomination and Governance Committee arole she devotes herself to fully and contributes
effectively offering challenge and guidance.

Chair• Chair of WH Smith Plc• Member of Streetgames.org Business
Advisory Board• Business Mentor

Background and experience
CEO of Europe General Insurance for Zurich
Financial Services and a member of the Group
Executive Committee from 2007–2010.
Former CEO of Direct Line Group (formerly
RBS Insurance) and member of the RBSGroup Executive Management Committee.
Previously a member on the Board of the
Association of British Insurers (ABI).

Appointed
Appointed to the Board on 23 March 2012,
appointed to Chair on 26 April 2017 with service
ending 27 April 2023.

Annette was appointed as Board Chair in April
2017, having spent 5 years as a Non-Executive
Director of the Board. Annette reached hernine-year tenure as Non-Executive Director on
the Board in March 2021. Annette will not beseeking re-election at the April AGM and she will
be stepping down from her role as Chair.

SkillsAdmiral Group plc Annual Report and Accounts 2022

131Company Overview

Chief Executive Officer

Contributions and reasons for appointment• Mentor for A-Road, Growth Capital

Milena leads a very strong and experienced
management team and is an effective CEO who
continues to build an even stronger Admiral forthe future.

• Admiral Insurance Company Limited member(an Admiral Group subsidiary)

Background and experience

SkillsFinancial Statements

Milena joined Admiral in 2007 and was appointed
CEO in January 2021. She has been a memberof the leadership team throughout her timeat Admiral, has extensive experience of theGroup’s operations and has attended and actively
contributed at Board meetings as an observer
since 2011. Her previous roles included being
Head of UK and European Insurance and CEOof ConTe.it, Admiral’s Italian insurance business
which she founded in 2008.
Before joining Admiral, Milena worked asa consultant for Bain & Co and Accenture.
She holds an MBA from INSEAD and a degree in
Telecommunication Engineering from Universitá
degli Studi di Napoli Federico II.

Additional Information

Appointed
Appointed to the Board in August 2020 andbecame CEO on 1 January 2021.

Geraint Jones

Chief Financial Officer
Current appointments

Contributions and reasons for appointment• Admiral Financial Services Limited Board
member (an Admiral Group subsidiary)

Geraint has worked for Admiral for approaching
20 years and has been Group CFO for nearly
8 years. He has a deep understanding of theGroup’s businesses and strategy, which, together
with his significant financial and accounting
experience and broad range of skills andcommercial expertise, makes him a valuable
contributor both to the Board and the wider
Group. Geraint is also able to use his financial andaccounting experience to provide insight into theGroup’s financial reporting and risk management
reporting processes.

• Admiral Insurance (Gibraltar) Limited Board
member (an Admiral Group subsidiary)• Admiral Insurance Company Limited Board
member (an Admiral Group subsidiary)• Co-opted member of the Finance and Audit
Committee of the Wales Millennium Centre

Background and experience
Geraint joined Admiral in 2002 and held several
senior finance positions including Head ofFinance, before being promoted to Deputy CFO
in January 2012 and CFO in August 2014. Geraint is
responsible for finance, investments and investor
relations. A Fellow of the Institute of Chartered
Accountants in England and Wales, Geraint spent
the early part of his career as an external auditor
at Ernst & Young and KPMG.

Appointed
Appointed in 2014.

Admiral Group plc Annual Report and Accounts 2022

Corporate Governance

Current appointments

Strategic Report

Milena Mondini de Focatiis

Skills132

Corporate Governance

Board of Directors
continued
Mike Brierley

Non-Executive Director
Current appointments

Contributions and reasons for appointment• Chair of Admiral Financial Services Limited(Admiral Money) (an Admiral Group subsidiary)

Mike brings a depth of knowledge from working
at senior levels across multiple financial services
sectors, jurisdictions and markets. As a resultof his extensive financial and commercial
experience, Mike is able to contribute effectively
as a non-executive director, and in his role
as a member of the Audit and Remuneration
Committees. Through his recent and relevant
financial experience, he is able to effectively
challenge management on the financial
reporting and internal control matters that comebefore the Audit Committee. Mike demonstrates
full commitment to the responsibilities that gowith his Board and Committee roles and offers
appropriate challenge and guidance in respect ofthe matters considered in these forums.

• Non-Executive Director of Alpha Bank
London Limited• Director and Trustee of the Rose Theatre Trust

Background and experience
Mike was CFO of Metro Bank Plc between 2009
and 2018, helping lead the business from start-up
to listing on the FTSE. He spent seven years at
Capital One Europe in various roles including
CFO Europe, CFO UK and Chief Risk Officer
Europe. He has also served as CFO for Royal Trust
Bank, Financial Controller at Industrial Bank ofJapan (London Branch), Director Business Risk
at Barclaycard and was co-founder and Deputy
Managing Director and CFO of Gentra Limited.
Mike is a Fellow of the Institute of Chartered
Accountants in England and Wales.

SkillsAppointed
Appointed in 2018.

Karen GreenC

Non-Executive Director
Current appointments

Appointed• Non-Executive Director, Senior Independent
Director and Chair of the Sustainability
Committee of Phoenix Group Holdings Plc

Appointed in 2018.

• Non-Executive Director and Chair of the Risk
Committee of Asta Managing Agency Ltd• Council Member and Chair of the Investment
Committee Lloyd’s of London• Non-Executive Director and Interim Risk andAudit Committee Chair (effective 1 January2023) of Miller Insurance Services LLP• Advisor role at Cytora Limited

Background and experience
Karen Green is the former CEO of Aspen UK,
comprising the principal UK insurance andreinsurance companies of Aspen Insurance
Holdings (2010 to 2017). Other senior Aspen
positions included Group Head of Strategy,
Corporate Development, Office of the Group CEO
and she was a member of the Group Executive
Committee for 12 years. Prior to that, she held
various corporate finance, M&A and private
equity roles at GE Capital Europe and Stonepoint
Capital having started her career in investmentbanking at Baring Brothers and Schroders.

Contributions and reasons for appointment
Karen has substantial financial services
experience and has a deep understandingof insurance and reinsurance, having servedin senior executive roles in these sectors,
including as CEO of an insurance business.
Karen also has a strong background in strategicplanning and corporate development and therelevant financial and industry expertise to be
Chair of the Audit Committee. She demonstrates
the commitment required to discharge
effectively the responsibilities attached tothis role and to challenge management on theGroup’s financial reporting and risk management
processes in particular.

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133

Company Overview

Non-Executive Director
Interim Senior Independent Director
As CEO of the successful Mumsnet and Gransnet
brands, Justine has strong digital and customer
experience insights that she is able to bring to
the Board decision making process. Justine also
has a strong background in driving change
through digital capabilities and brings a freshand insightful perspective to the mattersfor consideration by the Board. Justine is also
an effective member of the Nomination and
Governance Committee and demonstrates fullcommitment to the role as well as performing
the role of Interim Senior Independent Director.

• Non-Executive Director of The Open
Data Institute• Non-Executive Director of Boring Money

Background and experience
Justine founded Mumsnet in 2000 and is
responsible for creation, strategic direction andoverall leadership. In May 2011, Justine founded
Gransnet, a sister site to Mumsnet, for theover-50s. Before that Justine was a freelance
football and cricket journalist for the Times andDaily Telegraph, after working for Warbugs andDeutsche Bank as an economist, strategist andhead of South African Equities in New York.

SkillsAppointed
Appointed in 2016.

Financial Statements

Contributions and reasons for appointment• CEO & Founder, Mumsnet.com & Gransnet.com

Corporate Governance

Current appointments

Strategic Report

Justine Roberts, CBE

Additional Information

Jean ParkC

Non-Executive Director
Senior Independent Director
Current appointments

Contributions and reasons for appointment• (The Company announced on 22 February
2022 that Jean Park, Non-Executive Director,
took a temporary medical leave of absence andreturned to her role in the second half of 2022)

Jean is an experienced non-executive board
member with extensive understanding ofrisk management and corporate governance.
This knowledge and experience has beenacquired through a variety of senior executive
and subsequent NED roles with Admiral andother financial services companies and qualifies
her for Group Board membership and for her
roles as Chair of the Group Risk Committee andSenior Independent Director. Jean continues
to demonstrate full commitment to boththese roles and, in addition, her membershipof the Group Remuneration Committee andNomination and Governance Committee.

Background and experience
Jean was Group Chief Risk Officer at the Phoenix
Group from 2009 until June 2013, during whichtime she held responsibility for the Group’s
relationship with the regulator and founded
the Board Risk Committee. Previously, she was
Risk Management Director of the Insurance
and Investments division of Lloyds TSB and,before that, Head of Compliance and Auditat Scottish Widows. Jean is a Member of theInstitute of Chartered Accountants of Scotland.

Appointed
Appointed in 2014.

Admiral Group plc Annual Report and Accounts 2022

Skills134

Corporate Governance

Board of Directors
continued
Andy Crossley

C

Non-Executive Director
Current appointments

Contributions and reasons for appointment• Chair of EUI Limited (an AdmiralGroup subsidiary)

Andy has held a variety of senior roles relating
to financial planning, strategy and risk across
UK financial services. He has a wealth ofaccounting and financial experience and provides
progressive insights to the matters that comebefore the Board. Andy is a valuable contributor
to the Board and as a member of the Audit
Committee and the Group Risk Committee (ofwhich he is Interim Chair). Through his recent
and relevant financial experience, he is able
to effectively challenge management on thefinancial reporting matters that come before
the Audit Committee.

• Non-Executive Director, member
of Remuneration• Risk Committee and Chair of Audit Committee
at Vitality Health Ltd and Senior Independent
Director of Vitality Life Ltd• Director of Vitality Corporate Services Ltd

Background and experience
Andy was CFO at Domestic & General Group from2014 to 2017. He spent 14 years at Prudential
Plc from 2000 as Director, Group Finance;
Group Chief Risk Officer; and CFO and Deputy
Chief Executive of Prudential UK. He previously
held senior manager roles at Legal & General
Group Plc, where he was Group Financial
Controller, and Lloyds Bank Plc. Andy is a Fellowof the Institute of Chartered Accountants in
England and Wales.

SkillsAppointed
Appointed in 2018.

Jayaprakasa Rangaswami
Non-Executive Director
Current appointments

Appointed• Non-Executive Director of Allfunds Bank SA

Appointed 29 April 2020.

• Non-Executive Director of Allfunds Group Plc

Contributions and reasons for appointment• Non-Executive Director of Daily Mail and General
Trust Plc (DMGT) (now delisted)• Non-Executive Director of National Bank of
Greece S.A.
• Non-Executive Director of EMIS Group Plc• Member, Board of Trustees, Cumberland Lodge• Member, Board of Trustees, Web Science Trust

Background and experience
Jayaprakasa Rangaswami (JP) has a wealth oflarge-scale IT operational experience gained
through his roles as Chief Information Officer(CIO) with Dresdner Kleinwort (2001 to 2006) andManaging Director/Chief Scientist at BT Group(2006 to 2010). JP has also been Chief Scientist
with Salesforce (a US cloud-based software
company) (2010 to 2014) and was Chief Data
Officer (CDO) and Group Head of Innovation
with Deutsche Bank (2015 to 2018). He has
operated in financial services for over 10 years
and understands the challenges of working in a
regulated environment. JP is also a former global
CIO of the Year as well as European Innovator of
the Year.

JP brings a wide range of IT skills and digital
experience which helps to complement andenhance the existing skills around the Board
table. He has operated in financial services forover 10 years and understands the challenges
of working in a regulated environment. He is
also able to effectively contribute to the Board
debate and demonstrates full commitment to
the role. JP is also a member of the Group Risk
Committee, a role for which he has the relevant
experience and capability.

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135

Company Overview

Current appointments

Contributions and reasons for appointment• Non-Executive Director, Chair of the Audit
Committee and member of the Nomination
Committee at Marks and Spencer Group Plc

Evelyn brings valuable general management,
finance and strategy experience fromlife and health insurance, internationally.
She complements and enhances the range ofskills currently on the Board. Evelyn has held
several leadership positions in financial services
organisations and has the appropriate skills,
knowledge and experience to perform her roles
as Non-Executive Director and Chair of theRemuneration Committee.

• Non-Executive Director, Chair of the Audit
Committee, member of the Risk Committee
and Sustainability Committee Bank of IrelandGroup Plc
• Non-Executive Director, Senior Independent
Director, member of Audit Committee and Risk
and Compliance Committee at AJ Bell Plc

SkillsFinancial Statements• Charity Board Trustee of Ireland Fund forGreat Britain

Background and experience

Additional Information

Evelyn was Bupa Group’s CFO between 2012
and 2016, before becoming Bupa’s Group Chief
Executive Officer from 2016 to 2020. Evelyn has
held several senior leadership roles during her
career including Chief Commercial Officer at
Friends Life UK (2011 – 2012), CFO at Friends
Provident (2009 – 2010), CFO at Standard Life
Assurance (2006 – 2008), and CEO at Chase deVere (2004).

Appointed
Appointed on 30 April 2021.

Bill Roberts

Non-Executive Director
Current appointments

Contributions and reasons for appointment• Advisor at Hi MarleyBill brings valuable insurance experience andinsight on the US insurance market having
held several senior Executive positions with US
insurer, GEICO. Bill contributes and challenges
effectively on the matters that come before theBoard. His extensive US insurance experienceand insight is of specific value to the Group’s
US businesses as they seek to continue todevelop and grow. Bill does not currently haveany other Executive or Non-Executive Director
commitments that would impact the timecommitment requirements for his Admiral
Non-Executive Director role and member of theNomination and Governance Committee and has
capacity to fulfil the duties and responsibilities
for these roles.

• Non-Executive Director Elephant Insurance
Company, incorporated in Virginia, USA

Background and experience
Bill Roberts has a wealth of insurance,
underwriting and marketing experience gained
during his time at US insurer, GEICO, which hejoined in 1984. Whilst at GEICO, Bill held several
Executive appointments, including COO andPresident and CEO for all GEICO Insurance
Companies, a position he held from 2018 until
he was promoted to Vice Chair, GEICO Insurance
Companies in 2020. Bill held this role until heretired from GEICO in December 2020.

Appointed
Appointed on 11 June 2021.

Admiral Group plc Annual Report and Accounts 2022

Corporate GovernanceC

Non-Executive Director

Strategic Report

Evelyn Bourke

Skills136

Corporate Governance

Governance ReportCompliance with the UK Corporate Governance Code

Implementing best practice corporate governance contributes tothe successful delivery of strategy and is, therefore, important to
the Board. An effective corporate governance framework helps
the Board and management to deliver the strategy within thescope of the relevant legal and regulatory landscapes. It ensures,amongst other things, that:• The Board is composed in an appropriately balanced way
which promotes diversity and enables it to operate effectively.
Having appropriate divisions of responsibility between
Executive and Non-Executive roles provides external challenge
to the internal view. Similarly, diversity on the Board and at
a senior management level avoids groupthink and offers
different perspectives• The Board and management maintain two-way relationships
with the Group’s key stakeholders. The Board should act in a way
which promotes the success of the Company for the benefit of
its shareholders, but it should also have regard to its other key
stakeholders when making decisions. It is important that twoway engagement is maintained to enable key stakeholders toprovide input to the Group’s actions• The Group has a clear purpose and strategy, and that Admiral’sculture aligns to it. Messaging and tone from the top are crucial
and should be consistent so that everyone is clear about thegoal and, therefore, works towards the same thing• Remuneration is proportionate and supports long-term success,therefore, generating the right behaviours and outcomesThis year, the Annual Report has been structured to better help
the reader cross-reference the following key sections of the UK
Corporate Governance Code 2018 (Code), with the explanations of
the Company’s application of the Code principles and compliancewith its provisions falling under the respective sections:• Board leadership and Company purpose (from page 137)
• Division of responsibilities (from page 153)
• Composition, succession and evaluation (from page 157)
• Audit, risk and internal control (from page 171)
The mechanisms described throughout the Governance Report
are intended to demonstrate how the Group’s corporate
governance framework contributes to the delivery of the strategy.

Provisions:
Statement of Compliance

The Group complied with the provisions of the Code except forprovision 19, for which there are explanations below.

Explanations:

Provision 19 of the Code states that ‘The chair should not be inpost beyond nine years from the date of their first appointment
to the board.’ Annette Court was appointed as Board Chair in April
2017, having spent five years as a Non-Executive Director of theBoard. Annette reached her nine-year tenure as Non-Executive
Director on the Board in March 2021. As reported in the Annual
Reports for the three prior periods, in 2019, the Board considered
and agreed, having consulted shareholders, that she should remainin post as Board Chair for up to three years beyond March 2021,
with the expectation that she would serve two years, subject toannual approval by the shareholders. This represents a departurefrom the Code for the 2022 financial year.
Provision 19 of the Code goes on to state that ‘To facilitate
effective succession planning and the development of a diverse
board, this period can be extended for a limited time, particularlyin those cases where the chair was an existing non-executive
director on appointment.’ A Chair recruitment process began in
May 2022 to find a successor for Annette as she intends to step
down as Chair of the Board at the AGM in April 2023 and therefore
she will not be seeking re-election.
Annette’s re-election was supported by shareholders at theprevious AGM on 28 April 2022 (93.1% votes in favour) and thather 2022 performance review, led by the SID, concluded that she
continued to perform effectively as Board Chair, continued toexercise objective judgement and promoted constructive
challenge amongst Board members.
The 2022 Board evaluation also concluded that the Board
continued to function well, under the leadership of Annette.
In addition, the Board’s composition has continued to be refreshedduring 2022 with the appointment of the new Chair.
Jean Park assumed the role of SID on 1 January 2022, however due
to a temporary medical leave of absence, Justine Robert wasappointed the interim SID and, together with the support ofthe Board commenced the search for a Board Chair successor
during 2022.

Admiral Group plc Annual Report and Accounts 2022

137

Company Overview

Compliance with the Code Principles
UK CodePrinciple

References• Role of the Board on page 154.
• Stakeholder sections in the Strategic Report:– Customers on pages 74 to 76– People on pages 77 to 81– Partners and suppliers on pages 82 to 84– Shareholders on pages 85 to 86– Communities on pages 87 to 90

Principle
B

The Board should ensure that the necessary resources
are in place for the company to meet its objectives
and measure performance against them. The board
should also establish a framework of prudent andeffective controls, which enable risk to be assessed
and managed.

• Going concern in the Directors’ Report on page 210• Role of the Board on page 154• Board evaluation on page 167• Internal audit in the Audit Committee Report on
page 173• Risk management and internal control systems in
the Risk Committee Report on page 174

Principle
D

In order for the company to meet its responsibilities
to shareholders and stakeholders, the board should
ensure effective engagement with, and encourage
participation from, these parties.

• Stakeholder engagement on pages 74 to 94• Stakeholder sections in the Strategic Report:– Customers on pages 74 to 76– People on pages 77 to 81– Partners and suppliers on pages 82 to 84– Shareholders on pages 85 to 86– Communities on pages 87 to 90

Principle
E

The Board should ensure that workforce policies
and practices are consistent with the company’svalues and support its long-term sustainable success.
The workforce should be able to raise any mattersof concern.

Admiral Group plc Annual Report and Accounts 2022

• Culture on page 140• Whistleblowing on page 144• Whistleblowing in the Audit Committee Reporton page 177

Additional Information

PrincipleC• Purpose, values and strategy on pages 6 to 8 and
The Board should establish the company’s purpose,
28 to 37 of the Strategic Reportvalues and strategy, and satisfy itself that these and its
culture are aligned. All directors must act with integrity, • Monitoring and assessing culture on pages 141 – 142
lead by example and promote the desired culture.
• Role of the Board on page 154

Financial Statements– Environment on pages 91 to 94• Board evaluation on page 167

Corporate GovernancePrinciple
A

Description

A successful company is led by an effective andentrepreneurial Board, whose role is to promote
the long-term sustainable success of the company,
generating value for shareholders and contributing
to wider society.

Strategic Report

Board leadership and Company purpose

138

Corporate Governance

Governance Reportcontinued
Meetings and attendanceDirectors are expected to attend all meetings of the Board and the Committees on which they serve and to devote sufficient time to
the Group to perform their duties. Where Directors are unable to attend meetings, they receive papers for that meeting, giving themthe opportunity to raise any issues with the Chair in advance of the meeting. The number of scheduled Board meetings and Committee
meetings, of which they are a member, attended by each Director during 2022 is provided in the table overleaf.
In addition to the seven scheduled Board meetings held during the year, the following additional meetings were held:• In November 2022, one meeting was held to review the new Chair candidate position. Our current Chair, Annette was not involved in
the new Chair process.
The Board also delegated authority to a Board Sub-Committee on three occasions during the year to review and approve final drafts ofannouncements and proposals, which had already been considered by the Board or its Committees, on behalf of the Board.
The Board met in person for all seven of its meetings held during the year, including its strategy meeting (and October Board) which washeld over three days in the UK.

Total Meetings Held
Annette Court (Chair)
Milena Mondini de Focatiis(Chief Executive Officer)
Geraint Jones (Chief Financial Officer)
Karen Green
Jean Park
Justine Roberts
Andy Crossley
Michael Brierley
Jayaprakasa (JP) Rangaswami
Evelyn Bourke
Bill Roberts

Risk Committee
meetings

Nomination and
GovernanceCommittee
meetings

Remuneration
Committee
meetings

11
–

11
–

9
9/9

9
–

–
–
11/11
–
–
11/11
11/11
–
–
–

–
–
5/58
5/111
–
11/11
–
11/11
–
–

–
–
–
7/91
9/9
–
–
–
–
9/99

–
–
–
4/91
–
–
8/910
–
9/9
–

Board meetings

Board Sub
Committee
Meetings

Audit Committee
Meetings

7
7/7

5*
4/52

7/7
7/7
7/7
4/71
7/7
7/7
7/7
7/7
7/7
7/7

4/53
5/5
5/5
1/21*
1/24*
1/25*
2/2*
1/26*
1/27*
2/2*

1 Jean Park was unable to attend three Board meetings on 1/2 March 2022, 27/28 April 2022 and 15/16 June 2022; one ad-hoc Board meeting on 21 February 2022, two Risk Committee meetingson 7 April and 21 June 2022 and four ad hoc meetings on 16 February 2022, 4 May 2022, 17 May 2022 and 29 July 2022; two Nomination and Governance Committee meetings on 28 April 2022
and 16 June 2022 and one ad hoc meeting on 11 February 2022 and four Remuneration Committee meetings on 28 February 2022, 7 June 2022, 4 August 2022 and 12 September and one ad hoc
meeting on 15 March 2022 due to a temporary medical leave of absence
2 Annette Court did not attend the ad-hoc Board meeting on 30 November 2022 as this meeting was part of the new Chair recruitment process
3 Milena Mondini was unable to attend one ad hoc meeting of the Board called at short notice on 21 February 2022 following a Nomination & Governance meeting which urgently had to makerecommendations following news of Jean’s medical leave of absence
4 Justine Roberts was unable to attend one ad hoc meeting of the Board called at short notice on 21 February 2022 following a Nomination & Governance meeting who urgently had to makerecommendations following news of Jean’s medical leave of absence
5 Andy Crossley was unable to attend one ad hoc meeting of the Board called at short notice on 30 November 2022
6 JP Rangaswami was unable to attend one ad hoc meeting of the Board called at short notice 21 February 2022 following a Nomination & Governance meeting who urgently had to makerecommendations following news of Jean’s medical leave of absence
7 Evelyn Bourke was unable to attend one ad hoc meeting of the Board called at short notice 21 February 2022 following a Nomination & Governance meeting who urgently had to makerecommendations following news of Jean’s medical leave of absence
8 Karen Green was appointed as a member of the Risk Committee on 1 June 2022
9 Bill Roberts was appointed as a member of Nomination and Governance Committee on 21 January 2022
10 Michael Brierley was unable to attend one ad hoc meeting of the Remuneration Committee called at short notice on 27 October 2022
* The following ad-hoc Board meetings were delegated to the following members only: 2 March, 4 April & 9 August Annette Court, Milena Mondini, Karen Green and Geraint Jones

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139

Company Overview

Strategy• Review of Group purpose• Strategy deep dives throughout the year from eachGroup business• Diversity and inclusion• Directors’ duties• Financial Conduct Authority (FCA) pricing remedies for the
UK general insurance market• Group succession planning and talent management• Brand, technology and digital programme updates• Matters reserved for the Board and the Committees’
respective terms of reference• Group Strategy Review at the strategy-focused meetingin October, which considered product diversification,
Admiral 2.0 and motor evolution, as well as updates fromeach Group subsidiary business on their individual strategies• BEIS audit and governance reform consultation• New Chair recruitment

Stakeholders• Updates from the Head of International Insurance on theoverseas ECG• Update on culture and people, including Great Place toWork (GPTW) results• Updates on diversity and inclusion• Sustainability approach and the delivery against key pledges• Own Risk and Solvency Assessment Report (ORSA) review• The Prudential Regulatory Authority (PRA) attended theDecember 2022 Board meeting• Modern slavery risks in the supply chain• Assessment of key external risk factors and lessons learned
from Covid• Cyber risk updates and crisis management education,
including lessons learned• Stakeholder map and respective stakeholder updates
throughout the year, including engagement mechanisms

Operational performance• Regulatory relationships• Hybrid working updates• Reinsurance arrangements• IFRS 17 Insurance Contracts training and financial
impact assessment• Group health and safety, wellbeing and impact of
remote-working• Suppliers and partners, including prompt payment practices• Overseeing the review of the Group Reward Strategy• Impact of the Covid pandemic• Regular trading updates from the Group’s
subsidiary businesses• Group financial performance and position• The Group’s Five-Year Plan
• Dividend considerations

Principal areas of focus for the Board for 2023

• Ensure smooth transition process and support to the
new Chair• Ensure that there is a robust selection process for the newGroup Risk Committee Chair and other NED roles identified
to be required• Continuing focus on executive team succession planning• Ensure diversity and inclusion objectives are embedded• Support the continuous development of Admiral’score competencies• Ensure customers continue to be at the front and centreof new and incremental changes to improve our service
to customers

Admiral Group plc Annual Report and Accounts 2022

• Oversee the Group’s diversification strategy.
• Oversee embedding of the Group’s agreed Sustainability
strategy and ensure that it becomes integral to the Group’s
strategy and culture• Monitor progress against key pledges for Climate Change
and community, and key metrics. Submit Science Based
Targets to SBTi for approval• Continue to deepen the Board’s understanding of externalrisk factors• Provide steering and oversight for capital management,
reinsurance and clear action plan to achieve successfulinternal model application process• Oversee the roll-out and evolution of the Group
reward strategy

Additional Information• Updates from Investor Relations• Admiral Internal Model Application Process (AIM) updates

Financial Statements• Updates from the Chair of the UK Employee Consultation
Group (ECG)

Regulatory/risk updates

Corporate Governance• Progress made against the findings arising from the 2021
internal Board evaluation

Strategic Report

Principal areas of focus for the Board in 2022
Governance140

Corporate Governance

Governance Reportcontinued
Culture• It remains important that Admiral’s culture evolves and adapts
as the business environment changes, but it is even more criticalthat those parts of our culture that have been our competitive
advantage and a key driver of our success to date are fiercely
protected, especially in continuing periods of change

Aligning our culture with our purpose, values, strategy,
policies and practices• Our culture is strongly aligned to our new Group purpose to‘Help more people to look after their future. Always striving
for better, together’. Providing customers with great products
and services, whilst caring for our people and other important
stakeholders is key to what we do• Although our Group purpose was renewed in January 2022, ourunique workplace culture continues to be reinforced by our Four
Pillars of Culture:

Fun

We want our people to look forward tocoming to work, celebrate who they are,and feel happy and supported enoughto give that little bit extra.

Communication

We encourage effective and transparent
communication at all levels. This is
aided by accessible management andopportunities to encourage feedback
across the Group.

Equality

We work hard to promote a sense offairness and equality. Everyone has
the opportunity to succeed, backed bygroups supporting diversity, inclusionand social mobility.

Recognition and reward

A job well done should be appropriately
rewarded. At the heart of this pillar is ourshare ownership scheme, which rewards
success with a stake in the Company.

The Four Pillars are built into the fabric of our training,communication, policies and the way we do business. During theyear, the Board received assurance from management that theGroup purpose had been embedded within the operational
process and policies and that there continued to be alignment
with its rewards and incentives. The Board recognised that there
was evidence of the Group purpose and values having been
embedded in the Group’s policies and practices and requested
that further information on the overall embedding of the Group’s
purpose be provided in early 2023.
Further information on:• What makes Admiral a fun place to work can be found in theStrategic Report on page 10• Communication with our people can be found in the Strategic
Report on page 81• Our approach to diversity and inclusion can be found in theStrategic Report on pages 78 to 80 and the Group Nomination
and Governance Committee Report on page 158• The Group’s approach to investing in and rewarding its
workforce can be found in the Annual Report on Remuneration
on page 196

Guiding and promoting culture (See more about hybrid/
remote/Smart Working on page 28)
Our Directors have a responsibility to act with integrity, lead byexample and promote the desired culture. They do so throughtheir everyday interactions, and we also ensure that any policies
which apply to the Non-Executive Directors are consistent withthe equivalent policies for the workforce.

There are many initiatives which promote Admiral’s unique culture,some of which include:• A compensation and promotion structure based on meritocracy.
• Star lunches where colleagues are recognised for theirperformance and are invited to attend a lunch with asenior manager• Group Top 10 competition in which all departments compete
in a highly contested Group-wide competition to present toa panel of senior managers on a different subject each year
in order to be awarded the best department• Coffee Morning Away Day (CMAD) an annual offsite forsenior management• Annual Manager Awards• Local reward and recognition programmes• High five feedback programmes where colleagues can submit
feedback on colleagues across departments who have given
great service• Ministry of Fun. Further information can be found on page 10of the Company Overview

Admiral Group plc Annual Report and Accounts 2022

141

Company Overview• Training/career development• Diversity and inclusion working groups and initiatives• New employee induction workshops on Business and Culture
at Admiral see page 143• Return to in-person team days

The Trust Index comprises 60 questions from the GPTW survey, that arestable over time, benchmarked against the Best Companies in eachmarket, and highly representative of the overall people sentiment ofa positive culture.

2022: 84%

The Engagement Index is a specific measure comprising nine questions
from the GPTW survey relating to willingness to go the extra mile,intention to stay with the business and likelihood of being an employer
brand promoter. It is also benchmarked and stable over time and has
a proven correlation with business performance. According to the
GPTW institute research, the drivers that are most correlated to higher
engagement scores are: (i) teamwork, (ii) career development, (iii) values
and ethics, (iv) empowerment and accountability, and (v) innovation.

2022: 82%2021: 86%2021: 84%

GPTW Culture Index: The Culture Index is a specific measure comprising of eight questions from 2022: 89%
the GPTW survey relating to employee perception of the workplace as2021: 90%
friendly, fun and welcoming.
Pulse surveys

Pulse surveys are undertaken four times a year and ask the same questions 86% of our people feelof our people to enable management to track any trends.
they are well supported bytheir manager*
86% of our people think weare truly customer focused*
88% of our people thinkthat important knowledge
and information is sharedwith them by their manager*
92% of our people believe
Admiral Group is a diverse
and inclusive employer** Q3 2022 pulse survey results

Other people
metrics

Headcount, gender balance, absence, attrition, recruitment.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

GPTW
Engagement
Index:The Group continues to view the following people and culture
metrics that are derived from the annual GPTW survey andAdmiral’s regular internal pulse surveys as the lead indicators forpeople and culture at Admiral. The GPTW survey is an externalsurvey which collates anonymised question responses to provide
an overall result, as well as departmental results.

Financial Statements

GPTW Trust Index:

During 2022, work was progressed to update the culture scorecard.
The scorecard continues to undergo a period of evolution but
provides a good view of the key people and culture metrics inorder to help management and the Board’s assessments of
the overall health of the Group’s culture. It also supports theidentification of any trends in the evolution of the Group’s
workforce and culture, including any associated risks which could
impact the execution and support of the Group’s strategy.

Corporate Governance• Putting health and safety first, particularly in respect of the
return to office considerations

Monitoring and assessing culture
People and culture scorecard

Strategic Report• Health and wellbeing initiatives introduced during Covid to
encourage employees to speak up if they needed support,a weekly health and wellbeing bulletin, yoga classes, webinars,
art classes, amongst many other things

142

Corporate Governance

Governance Reportcontinued
Scores continue to be very high across the Group, resulting ineach Group entity being ranked among the Best Places to Workin their respective local markets. This demonstrates the strengthand impact of the Admiral culture. Admiral is ranked as the 19th
Best Workplace in Europe by Great Place to Work.
Pulse survey results in 2022 demonstrated that people at Admiralcontinued to feel well supported by their managers, the majority
enjoyed working from home and communication was scoredhighly. Some examples of action taken following comments raised
within the pulse surveys are outlined in the Our People section on
pages 77 to 81 of the Strategic Report.
The Board received an update on the People and Culture Scorecard
metrics during the year, including updates on the impact of
remote working on Admiral’s culture and how this risk would
evolve as the Group moved to a hybrid working model.
Management recognised at that time that there were several
metrics which needed to be closely monitored as a result of theculture risks associated with a move to a more permanent modelof hybrid working, including engagement, absence and attrition
trends, particularly as these metrics had increased back to preCovid levels in the UK, and recruitment, noting that improvements
were needed to enhance the Group’s critical capabilities in areas
such as technology and analytics. The Board also challenged how
further insights could be gained by tweaking some of the metrics
and noted that the fun aspect of Admiral’s culture was important
to Admiral people. Further information on the Group’s transition tohybrid working can be found in the Strategic Report on page 28.

Risk Committee – Risk events that would impact remunerationfrom a malus and clawback perspective, financial crime andmisconduct risks.
Remuneration Committee – Workforce remuneration policies
and assesses their alignment with culture and strategy, risk events
reported to it by the Risk Committee under the malus andclawback framework.
Nomination & Governance Committee – Diversity and inclusion
strategy and policies and progress against targets to ensurealignment with the Group’s strategy and values, and succession
and talent management.
As well as receiving updates on the Group’s culture at Board
meetings, the Non-Executive Directors utilise other mechanisms
to assess and monitor culture, such as attending meetings of
the UK ECG and Subsidiary Boards and performing site visits
across the different entities within the Group, where possible,
which enable the Non-Executive Directors to gauge the culture
for themselves during their discussions with a cross-section ofcolleagues. In 2022, The Board Chair visited L’olivier offices in Parisand Lille, the Admiral Seguros office in Seville, the Admiral Europe
Compañía de Seguros S.A.U. (AECS) Board meeting in Rome with
the ConTe management team and employees, Elephant office inRichmond and was accompanied by some of the Non-Executive
Directors on those visits.

Other tools

In addition to employee participation in regular monthly surveys
and the annual GPTW survey, there are several other mechanisms
used by the Group and the Board to monitor and assess culture.
For example, culture audits conducted by the internal audit
function; ‘Meet the Manager’ meetings; the ‘Ask Milena’ scheme;
regular online manager chats; ECG meetings; mandatory training
completion rates; health and safety data; whistleblowing andgrievances; and customer net promoter score (NPS).
All are felt to be valuable methods of capturing the mood of ourpeople and to gauge the health of our culture.
The Board Committees also help the Board monitor and assess
culture through their respective responsibilities, some examplesof which are highlighted below.
Audit Committee – Whistleblowing, Internal Audit, Group
Minimum Standards.

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143

Company Overview

Following the initial national Covid lockdowns, Admiral introduced a new element to its induction for those joining remotely
who had secured roles within the support functions of the business, who otherwise would not have had the four-week inductionthat our customer-facing colleagues complete, in order to safeguard its unique culture. The business and culture induction isa six hour programme covering the basics of our core values, culture and purpose and includes the following modules:

Module1• How Admiral built its business back in 1993 to become a FTSE 100 company• What brands we use to sell our product• Admiral’s purpose statement

Building our Business• Admiral Group’s business model• Admiral’s goals for 2022

Introduction to the Insurance Industry
Module3• The basics of the UK insurance market• Understanding the governing bodies within UK insurance

Financial Statements

Module2

Corporate GovernanceWelcome to Admiral

Strategic Report

Onboarding of new employees in a remote environment and protecting our culture• Principles of insurance

Module4• Our products and services• Reviewing our online websites and conducting customer research

Upholding Our Culture at Admiral
Module5• How every employee can uphold Admiral’s unique culture moving into the future• Admiral’s four pillars of culture

Personal Development at Admiral
Module6• How Admiral can look after your future through training and development• Registering for Admiral’s internal talent bankAward Winning Culture & Core Competencies
Module7• How to implement Admiral’s core competencies into your role
• Admiral’s corporate responsibility report

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Learning about Admiral’s Products & Services

144

Corporate Governance

Governance Reportcontinued
Whistleblowing

The Board has in place arrangements by which employees can raise
concerns in confidence and, if necessary, anonymously. During theyear, the Board received an update on the Group’s whistleblowing
arrangements from the management team. The Audit Committee,
chaired by the Group’s Whistleblowing Champion, Karen Green,
was satisfied that the update was proportionate for independent
investigation of the matters raised and supported an ethicalbusiness culture where colleagues felt safe raising concerns.
In addition, and on an exceptions basis, the Board is updated in
respect of reports arising from matters that have been raised byour people under the Whistleblowing Policy. The Audit Committee
receives more regular updates in respect of whistleblowing
matters. Please see page 177 for further information.

Stakeholder engagement

During the year, the Board has continued to focus on ensuring
effective engagement with its stakeholders and that their interests
are taken into account in its decision-making. Detailed informationis set out in the Strategic Report on page 112 outlining how the
Board has discharged its duties under s172(1) of the Companies Act,
including further information on the ECG, which constitutes a formal
workforce advisory panel under the Code.
Communication and interaction with shareholders remain very
important and engagement with them occurs on a regularbasis. Open and frequent dialogue with investors enables
them to fully understand the Group’s strategy, objectives andgovernance. The Investor Relations team has day-to-day primary
responsibility for managing communications with institutional
shareholders through a combination of briefings to analysts andinstitutional shareholders, both at the half-year and full-year
results and on other occasions such as roadshows and conferences.
Meetings, briefings and conferences with investors have takenplace both in-person and virtually. The Capital Markets Day on
IFRS 17 was held on 28 November 2022.
In addition, the Chair, interim Senior Independent Director(SID) and Group CEO held meetings during the year with major
shareholders to understand their views on governance andperformance against strategy and reported to the Board on
any significant issues raised with them.

The SID has specific responsibility to be available to investors
who have any issues or concerns, and in cases where contact with
the Chair, Chief Executive Officer and Chief Financial Officer has
either failed to resolve their concerns, or where such contact
is inappropriate. No such concerns have been raised in the year
under review.
All shareholders are invited to attend the Company’s Annual
General Meeting (AGM) in person. The 2022 AGM went ahead
with the required quorum and the Board and Shareholders wereinvited to attend in person. Shareholders were able to vote on theimportant customary annual business and encouraged to submit
questions to the Board in advance of the AGM.
The Chairs of the Audit, Remuneration, Nomination and Governance,
and Group Risk Committees usually attend the AGM along with theother Directors and are available to answer shareholders’ questions
on the activities of the Committees they chair. Shareholders arealso invited to ask questions during the meeting and have an
opportunity to meet with Directors after the formal businessof the meeting has been concluded, or in advance, if there are
restrictions in place on public gatherings. Details of proxy voting
by shareholders, including votes withheld, are made available
on request and are placed on the Company’s website following
the meeting.
The Group maintains a corporate website (www.admiralgroup.co.uk)
containing a wide range of information of interest to institutional
and private investors. The major shareholders of the Company arelisted in the Directors’ Report on page 210.
The regular channels of communication with both the FCA andPRA that existed throughout the year were supplemented by
the regulators being invited to attend Board meetings in 2022.
The PRA attended the Board remotely in December 2022,
which gave the Board an opportunity to hear directly their views.
The Board is also kept up to date with the regular communications
between the AIGL Board and the Gibraltar Financial Services
Commission as well as contact between the Group’s otherinsurance subsidiaries and respective regulators.

This is supplemented by feedback to the Board on meetings
between management and investors. The Investor Relations
team also regularly produces a report on their activities in
the previous quarter which is circulated to the Board for theirconsideration. The Report contains an analysis of share priceperformance; a summary of analyst reports received during themonth and of meetings that have been held with investors andanalysts; together with details of any significant changes to theshareholders’ register.

Admiral Group plc Annual Report and Accounts 2022

145

Company Overview

Membership and attendance

To ensure that the meetings remain a two-way mechanism,
Non-Executive Directors are also asked to comment on
any insights from the ECG meetings at the following Board
meeting and the Chair of the UK ECG is regularly invited toattend Board meetings to report on matters discussed by the
ECG and any areas of concern. Minutes of the ECG meetings
are also published on the intranet for all employees to view.
Non-Executive Directors also provide an update at ECG
meetings on recent matters discussed by the Board.

Feedback from the Board
provided by the ECG Chair

Meet and discuss views of our people
on topics and rotating NED shares
Board insights

Summary of meeting provided
to Board by ECG Chair

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Agenda topics influenced
by our people and upcoming
Board agenda

Financial Statements

Membership of the UK ECG comprises elected colleague
representatives and the remit of the ECG is to act as a forum
for employee consultation, gathering colleague opinion andfostering a safe environment to raise matters of interest
and generate ideas. There is a democratic member election
process and members are provided with an induction toensure that there is clarity about the role and remit of the
ECG, as well as their role as members.

Taking this approach ensures that each of the Non-Executive
Directors can engage with the workforce directly andhear first-hand the issues and matters that are affecting
the workforce.

Corporate Governance

The Board recognises the importance of engaging with its
workforce and does so through a combination of informal
and formal channels. To ensure a two-way communication
platform and an effective means by which the views of theworkforce can be heard, the Board established a UK Employee
Consultation Group (ECG) in 2019 with the aim of enhancing
and formalising its pre-existing employee engagement
arrangements. For the purposes of Provision 5 of the UK
Corporate Governance Code, the ECG is a formal workforce
advisory panel.

Non-Executive Directors are invited to attend ECG meetings
on a rotational basis and report back to the Board on matters
discussed, as well as actions agreed at the ECG meeting.

Strategic Report

Employee Consultation Group
Purpose

146

Corporate Governance

Governance Reportcontinued
Summary of meetings provided to Board by ECG Chair

There were four ECG meetings during 2022 with a range of topics discussed, including themes of pay and reward, the cost of living,and Smart Working. Presentations on the following topics were also given to the ECG before they were discussed by the Board:
Meeting

Presentations and topics discussed

Outcome / impact

April 2022

Customer Outcomes

The ECG was updated on Admiral’s approach to delivering excellent
customer service and delivering fair outcomes.
Focus was given to developing new initiatives such as the employability
program and adapting the existing approach to volunteering.
The ECG were updated on the remuneration package review anddiscussed how Admiral could support its staff regarding the increase inenergy costs.
Colleagues were excited about the launch of Pet Insurance and Admiral’scommitment to offering a diverse range of products. Staff were pleased
to hear about the promotion of new roles across Pet and its positive
impact on business growth.
The ECG debated how staff could make a positive contribution towards
carbon footprint reduction projects and how to promote them to all
employees across the business.
Staff discussed making job role advertisements more transparent
and the importance on health and wellbeing for the return to theoffice. Staff gave positive feedback on the announcement of a new
reward package.
The Board was presented with a periodic review of the efficacy
and makeup of the ECG. A feedback session was also held withrepresentatives across the business.
The review set out several recommendations including more engaging
methods of communication such as drop-in sessions and video updates
to help promote awareness of the ECG.
The ECG discussed the impact of price increases and claims inflation.
The ECG received an update on structural changes within the digital andoperations teams.

Community Strategy
Pay, benefits and costof living support
June 2022

Pet Insurance

Climate Change

Pay / Benefits and Returnto OfficeOctober 2022

ECG Periodic Review

December 2022

UK Insurance Strategy

The Board continues to believe that, whilst recognising that themechanism will evolve over time, the operation of the ECG has
been and continues to be an effective means of engaging with theworkforce, to help the Board understand the matters that concern
the workforce and their specific interests, whilst having regard
to these in the decisions that are made at Board level. The Board
will ensure that the ECG continues to develop as an effective,
formal workforce advisory panel and that regular interaction
between the Board and the ECG is maintained.

During 2022, a new Chair of the ECG was appointed following theretirement of the inaugural Chair, Stuart Morgan who was alsoGroup Head of Talent. Alan Patefield-Smith, the UK Chief Technology
Officer, was appointed in April 2022. Following Alan’s appointment,
employees were invited to join the Group via a nomination andvoting process, and applicants were decided upon by colleagues.
The growing ECG forum remains focused on important issues
such as remuneration, performance management and appraisal
processes, ideas to improve engagement, morale, attrition andabsence, proposals to support mental health and wellbeing, staff
survey results, and improving diversity.

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Company Overview

During 2022, an International Employee Consultation Group was formalised, under the direction of Costantino Moretti, Head ofInternational Insurance.

Outcome / impact

Communication relating
to transformation

Employees provided positive feedback on the communication
received regarding transformation plans, particularly relating
to product and channel transformation.
Attendees agreed that increased engagement via teammeetings and updates helped employees feel better
connected and aligned.
New hires commented that remote onboarding wassometimes a difficult and slow process and suggested that
onboarding was more efficient and personal when faceto‑face.
Attendees discussed the impact of remote working on
culture and recognised that it was sometimes morechallenging to engage employees remotely. The meetingsuggested new tools and practices to get employees
more involved.
Employees presented their thoughts on the 4-day workweek.
Employees outlined the impacts of the transition to Agile
upon their teams.
Employees celebrated Admiral’s commitment to D&I, and thesuccess of female representation.
Employees discussed the success of the agile transformation,and the enthusiasm for change.
Members discussed worries about inflation and highlighted
how salary adjustments could help employees.
Employees shared thoughts on how they felt Admiral culture
was evolving.
Members discussed how teams are encouraged to follow atest and learn culture.
Employees highlighted that generally, they feel actions on
gender diversity are well addressed, and that improvements
relating to ethnicity and racial diversity are improving andremain a focus area.

What worked well in 2022

What could be improved/ lessons
learnt in 2022

L’olivier/November 2022

Staff engagement andsense of belonging

New trends
Transition to Agile
Progress in Diversity and Inclusion
Admiral Seguros/
September 2022

Scaled Agile transformation
Inflation
Admiral Culture
Test & Learn Culture

Elephant/
August 2022

Diversity and Inclusion

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Topics discussed

ConTe/
June 2022

Financial Statements

Entity/Meeting

Corporate GovernanceThis year, four IECG meetings took place in person across the international offices of ConTe, L’olivier, Admiral Seguros and Elephantalongside the Admiral Europe Compania de Seguros (AECS) Board meetings. The meetings were attended by candidates chosen
on a voluntary basis, with an agenda created to incorporate employee interests, questions and proposals.

Strategic Report

International Employee Consultation Group (IECG)

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Corporate Governance

Governance Reportcontinueds172
Principal
DecisionsCustomerSociety

Principal Decision #1
Cost of Living Response

PeopleBusiness

Our distinctive culture and focus on ‘The Team, The Team,The Team’ has always been a powerful source of competitive
advantage. Admiral takes great pride in looking after colleagues
and helping them to look after their future. We aim to support
our employees with competitive reward structures, in addition
to health and wellbeing practices.
Against the backdrop of a challenging macroeconomic
environment in 2022, management recognised that employees
were becoming increasingly impacted by an unprecedented costof living crisis. As a result, our People Services department engaged
in several feedback and engagement activities to discover how
the business could understand and respond to growing pressures
faced by employees. Activities undertaken included competitor
benchmarking, collecting feedback from surveys1 and noting
recommendations from employee consultation groups in the
UK and international offices.
In July 2022, the management team presented several insights
gained from internal data relating attrition rates and costmodelling to the EUI Board, along with a set of recommendations
to revise the employee value proposition considering the cost-ofliving crisis.
In October 2022, the Group Board received feedback fromthe UK Employee Consultation Group (ECG) relating to how
Admiral could support employees with the rising cost of energy.
The International Employee Consultation Group (IECG) also
shared how employees at Admiral Seguros were concerned
about the impact of inflation on salaries. The Group Board
discussed additional compensation measures that would furtheralign the employee value proposition with Group purpose:‘Help more people to look after their future. Always striving for
better together.’
1 Great Place to Work Survey, and Pulse Surveys

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Company Overview

July

Corporate Governance• A series of measures to respond tothe cost-of-living crisis were presented
to the EUI Board

Principal Decision #2
Group Diversification
Strategy

September• Admiral Group Board discussed
financial measures to further support
employees and heard from the Employee
Consultation Groups

October, November, December• Cost of living payments were implemented
in the UK• Standard working hours were revisedand shortened without reducing salaries,
with a package of changes equating to a
10% salary increase for many in the UK• Similar salary adjustments and bonuses
were implemented for colleagues working
in Italy, France and Spain

Throughout the year, the management team considered how
additional payments would affect Admiral’s stakeholders,
including the financial impact on group profit and possible
challenges from shareholders. Ultimately the business consideredthreats of attrition and recruitment challenges and concluded
that an adequate response to the cost-of-living crisis wasconsistent with and supportive of the Group’s long-term success.

Admiral Group plc Annual Report and Accounts 2022

At the Group Board Strategy sessions in October 2022, theGroup Board considered and approved the Group’s refresheddiversification strategy and its alignment with the Group purpose:‘Help more people to look after their future. Always striving for
better together.’ As part of the strategy session, the Group Board
considered the Group’s long-term strategy of continuing to focus
on customer needs and fully understanding what customers
wanted so that products could be built to meet their needs and toenable the Group to maintain competitive advantage in the longterm. The Board focused not only on the market share of existingproducts, but also on expanding across different markets, different
jurisdictions, diversifying distribution channels and launchingdifferent products to achieve ‘true diversification’ outsideof insurance.

Additional Information

October

Diversification by being less dependent on a particular businesssector or geography is one of the key pillars that underpins theGroup’s strategy. The strategy is reviewed and refreshed by the
Board annually to ensure the Group accelerates on priority areas
and, if necessary, launches new products that are aligned to thediversification objectives, and which are designed to ensuresustainable future growth for the Group. As a customer centricorganisation, we also seek to create products that provide more
people with good financial services products.

Financial Statements• Admiral increased starting salaries for
all UK based employees, whilst increasing
the minimum annual salary for full time
employees. Holiday allocations andentitlements were also increased• Plans for salary adjustments in theinternational offices were also drafted
following an AECS Board meeting andfeedback from employees

Strategic Report

Timeline

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Corporate Governance

Governance Reportcontinued
In support of the Group’s diversification strategy, the Board
considered the launch of an enhanced Pet insurance product in
the UK which was intended to capitalise on the materiality ofthe overall Pet insurance market, and which was to be offered tocustomers at a competitive price with a simplified, digitised claims
process for both customers and vets alike. The Board has been
updated in parallel on the progress of the launch of Pet insurancein Italy which was launched in 2021 with continued progress during2022. The Board also reviewed the launch of loan products in Italy
during 2022 in the context of whether they were aligned with thediversification goals that had been set by the Board.
In December 2022, the Group Board had a deep dive on the
progress of the Group’s Diversification strategy and outline of theambition for 2023. The Board challenged management on the
progress of the strategy and the progress of the diversification
products that had been launched and were satisfied that they
were aligned with the Group’s strategy to capitalise on theAdmiral brand, the existing motor book and core competencies
to accelerate diversification and increase customer lifetime value.
The deep dive assured the Board that the Group diversification
strategy remains focused on the core elements of service andvalue, to support better customer experiences.

Principal Decision #3
Changes to our
Community Outreach
Programme

In 2022, our Corporate Social Responsibility (CSR) team undertook
several feedback and engagement activities with key stakeholders
to better understand the scope and impacts of our charitable andvolunteering propositions. The findings recognised many strengthsof the approach, but also noted that an overarching objective was
hard to identify and communicate, and that the ability to measure
impacts was relatively weak.
To represent the perspectives of all stakeholders potentially
impacted by changes to our long-standing community approach,findings and recommendations were circulated with the following
groups for consideration and comments:• Employee Consultation Group – Colleagues representing UK
business areas• Social Mobility Forum – Colleagues covering all UK entities• People Services International – Human resources colleagues
from across the Group’s international businesses• Admiral Leaders Offsite (ALO) – A group of our most seniorleaders including our International CEOs
• Admiral Business Club – Senior managers from across UK entities• International Insurance Group – Senior international leadersacross the Group
Consequently, a proposal for the revised Community Outreachprogram evolved, with an overarching purpose of ‘helping as
many people into jobs as possible’ and was presented to theGroup Board in October 2022. The proposal included volunteeringtargets presented as ‘impact hours’, that would not only support
communities, but also contribute to teambuilding and colleagues
building networks in and outside of the business. The proposal
also outlined plans to help support thousands of people into
employment each year.
In November 2022, the EUI Board considered the proposal in thecontext of it being of benefit to the communities in which we
operate. Management agreed that the approach would allow
Admiral to demonstrate a clearer set of community objectives,with metrics to report against. The Community strategy wasconsidered aligned with the Group Purpose of ‘Helping more
people look after their future. Always striving for better, together.’

Giving back to our communities is an integral part of ourcompany culture. Our people play a key role in how we engage
with our communities, and we work collectively to drive long-termchange in the various communities in which the Group operates.
Admiral is known for being a generous partner of community
charity initiatives and has historically supported many causes,
both financially and in terms of people resource. Our people
have a voice in decisions made, and the freedom to volunteer
two days of their time a year, fully paid, at any community
initiative or charity important to them. We believe that doing
good helps colleagues to feel good and aligns with our purpose‘always striving for better, together.’For 2023, Admiral has a robust long term community plan,with performance metrics that can be shared both internally,and externally. As the strategy is embedded across the Group,
the CSR team will closely monitor partnerships and investments,
the volume of people we can impact and support into
employment, colleague engagement, and the number of hours
spent volunteering in our communities. The Group Board willcontinue to monitor the targets set as part of the new community
strategy to ensure that the strategy continues to provide
measurable value and support to the communities in which
we operate.

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Company Overview

In November 2022, a presentation was delivered to analysts
and investors to outline reporting changes. The presentation
was delivered by the Director of Group Finance & Chief Actuary
and IFRS 17 Accounting Lead and attended by over 20 market
participants, who had the opportunity to ask about the impact
on Group strategy, solvency, dividend policy and cash generation.
A successful implementation is anticipated in Q1 2023.
Further details can be found in Audit
Committee Report on page 171

Admiral Group plc Annual Report and Accounts 2022

Additional Information

During 2022, the Group Board and all impacted subsidiaries
approved the business transition plans for the new standard
and progress on its implementation has been monitored closely
by the Group and subsidiary Audit Committees throughout
2022. The Board welcomes the new reporting standard and theopportunity to provide enhanced disclosures in respect of claims
reserves. The Group Board will report under IFRS 17 for the firsttime at Admiral’s 2023 interim results, in August 2023.

Financial Statements

In May 2017, the International Accounting Standards Board issued
a new standard for insurance contracts, IFRS 17, effective from
1 January 2023. IFRS 17 establishes the principles for the recognition,measurement, presentation and disclosure of insurance contracts
and requires companies to measure insurance contracts using
updated estimates and assumptions that reflect the timing of
cash flows and any uncertainty relating to insurance contracts.
The requirements will provide transparent reporting about acompany’s financial position and risk. The new standards apply to
the Group and its insurance subsidiaries in the UK and Gibraltar.

The Group Board received an update in January 2022 confirmingthat the business had met the regulatory deadlines, and the
new auto-renewal options were introduced successfully in late
December 2021. Significant work has been undertaken to optimise
the auto-renewal process across the customer journey to mitigate
any impact on retention and improve the customer experience.
The business provides customers with the ability to opt out during
the quote journey and prior to the conclusion of a sale.

Corporate Governance

IFRS 17/FCA Remedies
IFRS 17

The FCA published a Policy Statement on 28 May 2021 which
implemented a package of remedies to address the issues
identified in its general insurance pricing practices market study
final report. The FCA introduced a ‘pricing remedy’, which means
firms must now offer a renewal price to a consumer that is no
greater than the equivalent new business price offered to a newcustomer; enhancements to product governance; rules to offer
a range of accessible and easy options for consumers who wantto cancel auto renewal contracts and reporting requirements forhome and motor insurance markets. The pricing remedy applies
to firms operating in the home and motor insurance markets,with an implementation date of 1st January 2022. From 1 January2022, if the pricing remedy is not implemented, firms will be
expected to remediate and redress any customers affected.

Strategic Report

Principal Decision #4
Regulatory Decisions

FCA remedies

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Corporate Governance

Governance Reportcontinued
Principal Decision #5
New Chair Appointment

H&S conducted a comprehensive market wide search and identified
40 potential candidates who were felt to have a potential good
fit with the role specification and with Admiral in general.
Six candidates met with members of the Committee and othersenior management including in-person meetings with the CEO.
Following meetings with the full Board and a series ofpresentations from the final short listed candidates, Mike Rogers
was identified as the preferred candiate. The recommendation ofMike to be appointed as Chair of the Board was based on Mike’s
wide business, insurance and financial services knowledge andexperience and someone who would make a strong strategic
impact on the future of Admiral.

As a result of Annette stepping down as Chair of the Board
following the AGM in April 2023, the Board needed to identify,
select and appoint a new Chair. Justine Roberts, as interim
Senior Interim Director (SID) following Jean Park’s medical
leave of absence, led the Chair succession process on behalf of
the Nomination and Governance Committee (“Committee”).
The Committee was responsible for nominating andrecommending a candidate for consideration and approval inprinciple by the Board, subject to regulatory approval, and tocontractual terms being agreed between the candidate
and Admiral.

The Board’s preliminary decision on 8 December 2022 was toaccept the Committee’s recommendation to appoint Mike as Chairof the Board subject to regulatory approval and to agreement ofcontractual terms between Mike and Admiral. The Board finallyapproved and announced Mike’s appointment on 31 January 2023
and Mike will join the Board as a non-executive Director and Chairwith effect from the conclusion of this year’s AGM on 27 April
subject to regulatory and shareholder approval.
Read more in our Nomination and Governance Committee Reporton page 158 for detailed explanation of the process

Heidrick & Struggles (H&S), an external search firm, was retained
to support the search and Chair selection process. In May andJune 2022, H&S engaged with the Board, the senior management
team and the co-founders of Admiral to seek input on the rolerequirement and profile. These meetings were conducted inperson and virtually and, on the basis of the conversations thattook place, a role specification was approved.

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Company Overview
Strategic Report

Division of responsibilities
Compliance with the Code Principles
UK CodePrinciple

The Board should include an appropriate combinationof executive and non-executive (and in particular,
independent non-executive) directors, such thatno one individual or small group of individuals
dominates the Board’s decision-making. There should
be a clear division of responsibilities between theleadership of the Board and the executive leadershipof the company’s business.

• Board composition and succession planning on
page 167

Non-executive directors should have sufficient time
to meet their responsibilities. They should provide
constructive challenge, strategic guidance, offer
specialist advice and hold management to account• Time commitment and external appointments on
page 163• Code explanation for Provision 19 on page 136• Individual Director evaluation on page 169• Board evaluation on pages 167 to 169• Information flows to and from the Board on page 155• Code explanation for Provision 19 on page 136• Board evaluation on pages 167 to 169• Board roles and responsibilities on page 154• Board biographies (for external commitments) on
pages 130 to 135• Board evaluation on pages 167 to 169

Principle
I

The Board, supported by the company secretary,
should ensure that it has the policies, processes,
information, time and resources it needs in orderto function effectively and efficiently.

• Information flows to and from the Board on page 155• Board evaluation on pages 167 to 169

Group Board

Audit Committee

Nomination &GovernanceRisk Committee

Executive Management

Admiral Group plc Annual Report and Accounts 2022

Remunerationcommittee

Additional Information

Principle
H• Role of the Chair on page 159

Financial Statements

Principle
G

References

The Chair leads the Board and is responsible forits overall effectiveness in directing the company.
They should demonstrate objective judgement
throughout their tenure and promote a cultureof openness and debate. In addition, the Chairfacilitates constructive Board relations and theeffective contribution of all non-executive directors,
and ensures that directors receive accurate, timely andclear information.

Corporate GovernancePrinciple
F

Description

154

Corporate Governance

Governance Reportcontinued
Board roles and responsibilities

The Chair is primarily responsible for leading the Board, setting its agenda, promoting a culture of openness and debate and monitoring
its effectiveness. The Chair is supported by the SID, who acts as a sounding board and serves as an intermediary for the other Directors
if required. Neither are involved in the day-to-day management of the Group. Save for the matters reserved for the Board, the Chief
Executive Officer (with the support of the Executive Directors and the senior executives) is responsible for proposing the strategy to be
adopted by the Group, running the business in accordance with the strategy agreed by the Board and implementing Board decisions.
It is the Non-Executive Directors’ role to provide constructive challenge, strategic guidance, offer their respective specialist advice andhold management to account.
The Board has approved a statement that sets out the clear division of responsibilities between the Chair, Chief Executive Officer and SID.
This and matters reserved for decision by the Board are reviewed annually.

Chair

Senior Independent Director

Chief Executive Officer• Runs the Board and sets its agenda,
with an emphasis on strategic issues• Supports the Chair in the delivery of
their objectives• Runs the Group’s business and delivers
its commercial objectives• Ensures the Board has effective
decision‑making processes,
demonstrating objective judgement
and applying sufficient challenge
to proposals• Acts as a sounding board for the Chairand serves as an intermediary for theother Directors• Proposes and develops the Group’s
strategy, in close consultation with theGroup’s senior management, the Chair
and the Board• Available to shareholders if they haveconcerns that cannot be resolved
through the normal channels• Facilitates constructive Board relations,
including effective contribution from• Works with the Chair and other
Non-Executive Directors
Directors/ shareholders to resolve• Ensures the Board has an appropriatebalance of skills, knowledge,
experience and diversity• Leads the induction and development
plans for new and existing
Board members• Communicates with major shareholders
and ensures the Board understands
their views

significant issues where necessary• Leads the annual performance
evaluation of the Chair• Leads the Chair appointment process• Implements the decisions of the Boardand its Committees• Ensures operational policies andpractices drive appropriate behaviour,in line with the Group’s culture• Leads the communication
programme with key stakeholders,
including employees• Ensures management provides theBoard with appropriate informationand necessary resources• Ensures the Board receives accurate,
timely and clear information• Leads the annual Board evaluationRole of the Board

The Board is responsible for promoting the long-term, sustainable success of the Group, generating value for shareholders and contributing
to the wider society and its shareholders. The Board is the principal decision-making forum for the Group, providing entrepreneurial
leadership, both directly and through its Committees, and delegating authority to the Executive team.
The Board has determined the Group’s purpose which represents its values and strategy and is satisfied that it is aligned with the cultureof the Group. Part of the Board’s role is to promote the Group’s culture and, in particular, ensure that its uniqueness is safeguarded in suchtimes of change.
The Board is responsible for organising and directing the affairs of the Group in a manner that generates and preserves value over thelong term. Through the strong governance framework that it has in place, the Board is able to deliver on its strategy of providing strong
sustainable financial and operational performance. The Board is also accountable for ensuring that in carrying out its duties, the Group’s
legal and regulatory obligations are being met; and for ensuring that it operates within appropriate risk parameters.
The Group’s UK-regulated entities are accountable to the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority(PRA) for ensuring compliance with the Group’s UK regulatory obligations and that dealings with the FCA and PRA are handled in aconstructive, co-operative and transparent manner. Similar provisions apply in respect of the Group’s international businesses with regard
to the relevant regulatory authorities, such as the Gibraltar Financial Services Commission and Dirección General de Seguros y Fondos dePensiones in Spain.
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155

Company Overview• Results and financial reporting

Group conflicts of interest• The Group’s long-term objectives and corporate strategy.
• Operating and capital budgets, financial results, and any
significant changes to accounting practices or policies• The system of internal control and risk management.
• The Group’s overall risk appetite• Succession plans for the Board and senior management.
• Dividend policy and proposals for dividend payments• Major acquisitions, disposals, and other transactions outsidedelegated limits• The annual review of its own performance and that of its
Board Committees• Annual review of selected Group policies

Board Committees

The Board has delegated authority to several permanentCommittees to deal with matters in accordance with written
Terms of Reference. The principal Committees of the Board –Audit, Remuneration, Risk, and Nomination and Governance allcomply with the requirements of the Code, except where noncompliance has been explained on page 136 of this report.
All Committees are chaired by an independent Non-Executive
Director, except the Nomination and Governance Committee,
which is chaired by the Chair of the Board, and comprise a majority
of independent Non-Executive Directors. In accordance with the
UK Code, all members of the Audit Committee are independent
Non-Executive Directors. Appointments to the Committees are
made on the recommendation of the Nomination and GovernanceCommittee and are for a period of up to three years, which may be
extended for two further three-year periods, provided the Director
remains independent. The Committees are constituted withwritten Terms of Reference that are reviewed annually to ensurethat they remain appropriate and reflect any changes in goodpractice and governance. These Terms of Reference are available
on request from the Company Secretary and can also be found on
the Company’s website: www.admiralgroup.co.uk.

In addition, each Board member is asked to complete, annually,a conflicts of interest questionnaire that sets out any situationin which they, or their connected persons, have, or could have,a direct or indirect interest that could conflict with the interestsof the Company. Any current directorships that they, or theirconnected persons hold, any advisory roles or trusteeships held,
together with any companies in which they hold more than 1% of
the issued share capital are also disclosed.

Information flows to and from the Board
Agendas and papers

Agendas and papers are circulated to the Board electronically in asecure manner in preparation for Board and Committee meetings.
The Board agenda is structured by the Chair in consultation with
the Company Secretary and Chief Executive Officer. An annual
schedule of agenda items is reviewed and updated at eachmeeting to ensure that items are considered at the appropriate
point in the financial and regulatory cycle. Meetings are
structured so as to allow for consideration and debate of all
matters. Routine Board papers are supplemented by information
specifically requested by the Directors from time to time.
At each scheduled meeting, the Board receives updates fromthe Chief Executive Officer and Chief Financial Officer as to thefinancial and operational performance of the Group and any
specific developments of which the Board should be aware.
In addition, there is an update provided at each Board on thematters discussed and considered at each of the Group’s principal
subsidiary Board meetings.
Additional meetings are called when required and there iscontact between meetings, where necessary, to progress theGroup’s business.

Admiral Group plc Annual Report and Accounts 2022

Additional Information• The review of the Group’s overall corporate
governance arrangements

Financial Statements• Changes to the structure, size and composition of the Board,
including new appointments

In compliance with the requirements of the Companies Act 2006
regarding Directors’ duties in relation to conflicts of interest,
the Group’s Articles of Association allow the Board to authorise
potential conflicts of interest that may arise and to impose such
limits as it thinks fit. The Group has a Conflicts of Interest Policy
which deals with conflicts of interest, and this was reviewed andapproved by the Board in October 2022. The Policy sets out theprocess and procedure by which the Board manages potential
conflicts of interest that may arise at Board level, within Board
Committees, and within the Group’s Subsidiary Boards.
Following this review, the Board concluded that the processcontinued to operate effectively.

Corporate Governance• The Group’s capital structure

Directors are fully informed of all Committee matters by theCommittee Chairs reporting on the proceedings of their Committee
at the subsequent Board meeting. Copies of Committee minutes
are also distributed to the Board. Committees are authorised toobtain outside legal or other independent professional advice ifthey consider it necessary. The Chair of each Committee attends theAnnual General Meeting to respond to any shareholder questions
that might be raised on the Committee’s activities. An evaluation of
the performance of each Committee against the duties set out ineach Terms of Reference is carried out annually.

The Board has adopted a formal schedule of matters reserved
for the Board’s consideration. This is monitored by the Company
Secretary and reviewed by the Board on an annual basis.
Specific matters reserved to the Board include the approval of:Strategic Report

Matters reserved to the Board

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Corporate Governance

Governance Reportcontinued
Attendees

The CEO of UK Insurance (Cristina Nestares) together with
the Chief Risk Officer (James Armstrong until February 2022,
Sue Gilbert Interim Chief Risk Officer from February 2022 until
October 2022 and Keith Davies Chief Risk Officer from October2022) are invited to attend every Board meeting and regular
Board dinners, when these can take place. During 2022, the Headof International Insurance (Costantino Moretti) and the CEO of
Admiral Money (Scott Cargill) have been invited to attend material
topics of debate at the Board meetings. This has proved aneffective means of ensuring that senior managers below Board
level have exposure to and gain experience of the operation of
the Board.

Dynamics

Other information flows

The Board Chair made in-person visits to various parts of thebusiness during 2022. The Non-Executive Directors were invited tojoin her on the in-person visits. Further information on those visits
is included on page 142.
As referenced within the commentary on culture on page 140,
the Non-Executive Directors are invited to attend ECG meetingsand participate in the two-way engagement with our colleagues.
Further information about this engagement mechanism isoutlined on page 145 of the Strategic Report.
The Non-Executive Directors and the Chair met in-person
during the year without the Executive Directors being present,
including before each Board meeting.

All Board and Committee meetings during the year were held
in an open atmosphere conducive to robust and constructive
challenge and debate. All Directors have, therefore, been able tobring independent judgement to bear on issues such as strategy,
risk management, performance, and resources.

Management teams were invited to join the Board for dinner on
six occasions which gives the opportunity for informal interaction
between Directors and management. The Chair has continued tohold one-to-one meetings with members of the Group’s senior
management team either on a virtual basis or in-person.

Cross-Committee membership

Training and professional development

As shown on pages 130 to 135, Committee membership is
composed in a way that ensures that there is cross-committee
membership, which allows items of importance to be flagged from
Committee to Committee in a timely manner. This complements
the Committee briefings that the Board receives on the key points
of discussion following each Committee.

AdviceAll the Directors have access to the advice and services of theCompany Secretary. He has responsibility for ensuring that Board
procedures are followed and for advising the Board, through the
Chair, on governance matters. The Company Secretary provides
updates to the Board on regulatory and corporate governanceissues, new legislation, and Directors’ duties and obligations.
The appointment and removal of the Company Secretary is oneof the matters reserved for the Board. Dan Caunt replaced Mark
Waters as Group Company Secretary on 1 May 2022.
The Directors are also given access to independent professional
advice at the Group’s expense, should they deem it necessary to
carry out their responsibilities.

On appointment, Directors take part in a comprehensive
induction programme whereby they receive financial andoperational information about the Group; details concerning their
responsibilities and duties; as well as an introduction to the Group’s
governance, regulatory and control environment. This induction
is usually supplemented by visits to the Group’s head office in
Cardiff and certain overseas offices, and meetings with membersof the senior management team and their departments either ona virtual basis or in-person. The Non-Executive Director induction
programme has continued to be adapted in 2022.
Development and training of Directors is an ongoing process
and is considered through the year. The Directors are regularly
updated on the Group’s business; legal matters concerning theirrole and duties; the competitive environments in which the Group
operates; and any other significant changes affecting the Groupand the industry of which it is a part. During the year, the Board
received deep dive updates, briefings and training on thefollowing topics: Admiral Internal model (AIM), introductory Board
Training on Key Capital Modelling Principles, summary on Market
Abuse Regulations, IFRS 17, Group cyber risk education sessions(including a Cyber Simulation exercise), Group cyber risk crisis
management, amongst several business deep dives.

Admiral Group plc Annual Report and Accounts 2022

157

Company Overview

Compliance with the Code Principles
UK CodePrinciple• Succession planning on page 128

The Board and its committees should have a
combination of skills, experience and knowledge.
Consideration should be given to the length ofservice of the Board as a whole and membershipregularly refreshed.

• Board composition and succession planning:– Balance of skills, knowledge and experience on
page 163– Non-Executive Director tenure and independence
on page 162• Annual re-election on page 161

Financial Statements

Principle
K

References

Corporate GovernancePrinciple
J

Description

Appointments to the Board should be subject toformal, rigorous and transparent procedure, and an
effective succession plan should be maintained for
Board and senior management. Both appointments
and succession plans should be based on merit andobjective criteria and, within this context, should
promote diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths.

Strategic Report

Composition, succession and evaluation• Training and professional development on page 156

Principle
L

Annual evaluation of the Board should consider its
composition, diversity and how effectively members
work together to achieve objectives. Individual
evaluation should demonstrate whether each
Director continues to contribute effectively.

• Board evaluation on pages 167 to 169• Individual Director evaluation on page 169• Board Committee evaluations:– Nomination & Governance Committee on page 158– Audit Committee on page 171– Risk Committee on page 178– Remuneration Committee on page 183

Admiral Group plc Annual Report and Accounts 2022

Additional Information• Induction on page 160

158

Corporate GovernanceNomination and Governance Committee

Dear Shareholder,This part of the report highlights the role that the Nomination
and Governance Committee plays in monitoring the current andevolving Board’s composition, ensuring that there is a balance ofskill, experience and knowledge, as well as diversity in the broadest
sense, and oversight of the Group’s governance arrangements.
The Committee also looked at ensuring that the Group’s policy
on diversity and inclusion, was being applied to the gender andethnicity balance of the Group’s senior management and theirdirect reports and that this was being taken into account forsuccession planning.
The annual review of the Committee’s own effectiveness took
place towards the end of 2022 by an external company Bvalco Ltd,and the Committee concluded, overall, that it remained effective
but noted some areas for improvement in 2023. These are outlined
later within this report.
In line with the requirements of Solvency II, the Senior InsuranceManager Regime, and in accordance with the Group’s Senior
Managers & Certification Regime Policy, I have also carriedout the process of assessment for the Group CEO, Group NonExecutive Directors, and the Chairs of the Group’s material,
regulated subsidiaries (EUI Limited, Admiral Insurance Company
Limited and Admiral Insurance (Gibraltar) Limited, Able Insurance
Services Limited, Elephant Insurance Company and AECS) toensure they meet the requirements in terms of qualifications,capability, honesty and integrity for 2022.

“We also continue totake what we do welland what we learn
to new markets andnew products, both in
the UK and abroad.”

Annette Court
Chair of the Nomination and Governance Committee
7 March 2023

Annette Court	Chair of the Nomination
and Governance Committee

Committee members
Focus area

Annette Court (Chair)
Jean Park*
Justine Roberts
William (Bill) Roberts

Attendance

9/9
7/9
9/9
9/9

9
meetings
in 2022(*Jean retired from the Board and all of her committee memberships on 20 January 2023)

Admiral Group plc Annual Report and Accounts 2022

159

Company Overview

Attendance at meetings

Meetings held

Four Committee meetings in 2022 were held in-person andfive were held remotely. Details of member attendance at theCommittee meetings held during the year are outlined on
page 138.

How the Committee keeps up to date

The Committee is kept up to date regularly on proposed
appointments and governance changes across the Group, as wellas key developments in the corporate governance landscape.
The Terms of Reference of the Committee include all the
relevant matters under the Code and are reviewed annually by
the Committee.

Role and responsibilities of the Committee and key
activities in 2022

The Committee reviews the leadership and succession needs of
the Board and ensures appropriate procedures are in place fornominating, training and evaluating Directors. A description of its
responsibilities and the activity it has focused on during the year
is outlined under the following headings.

Appointments during 2022

Appointments to the Board are the responsibility of the Board
as a whole, acting on the advice and recommendations of theNomination and Governance Committee. The Nomination
and Governance Committee seeks to balance the retirement
and recruitment of Non-Executive Directors ahead of theirreplacement so as to avoid a dislocation of Board process by losing
experience and skills. The Board is mindful of the need to promote
Admiral Group plc Annual Report and Accounts 2022

As a result of Annette stepping down as Chair at the AGM in
April 2023, the Board needed to identify, select and appointa new Chair. Justine Roberts, as interim Senior Interim
Director (“SID”) following Jean Park’s medical leave ofabsence, led the Chair succession process on behalf of theCommittee. The Committee was responsible for nominating
and recommending a candidate for consideration andapproval in principle by the Board, subject to regulatory
approval, and to contractual terms being agreed between
the candidate and Admiral.
Heidrick & Struggles (H&S), an external search firm, was retained
to support the search and Chair selection process. In May andJune 2022, H&S engaged with the Chair, the Board, the senior
management team and the co-founders of Admiral to seek
input on the role requirement and profile. These meetings
were conducted in person and virtually and, on the basis of theconversations that took place, a role specification was drafted,
circulated, debated and approved. Key elements of the brief
included: experience of retail financial services (a backgroundgained in general insurance was viewed as helpful but notessential); senior executive leadership experience, ideally in a listedcompany; prior experience as a non-executive director, preferably
as a Chair, SID or committee chair.
H&S conducted a comprehensive market wide search andidentified 40 potential candidates who were felt to have apotential good fit with the role specification and with Admiralin general. Working with the Committee, H&S prioritised 25
candidates to approach. Following this process, H&S interviewed
eight individual candidates, in July and August 2022. Of these,
six candidates were recommended by H&S to meet with membersof the Committee and preliminary meetings took place in
September 2022 with member of the Committee and othersenior management including in-person meetings with the CEO.
H&S drafted detailed candidate reports for each of the candidates
presented which included an assessment of skills against theagreed role specification. Three candidates were invited to make

Additional Information

The Committee meets at least twice per year and at such othertimes as the Chair may require. In 2022, there were six scheduled
meetings, but the Committee met formally on nine occasions,as well as informally on several other occasions to meet withindividuals identified as possible Chair and other candidates tojoin the Board. The Committee Chair played no part in the Chair
recruitment or interview process, this was led by the interim Senior
Independent Director. The Committee Chair agrees the meetings
and agendas for each meeting, which are linked to an agenda
planner covering the responsibilities of the Committee.

Financial Statements

The Company Secretary acts as Secretary to the Committee.
Other individuals, such as the Chief Executive Officer, the Group
Head of People Experience and representatives of different partsof the Group, may be invited to attend all or part of any meeting,as and when appropriate.

The policy on Board appointments involves the Committee
developing an appropriate specification that identifies
the required skills and experience for the role and, in most
instances, engaging external recruitment consultants, to lead therecruitment process and identify suitable candidates. Interviews of
the shortlisted candidates are held with the Chair and membersof the Committee. After consideration by the Committee, arecommendation is made to the Board to appoint the preferredcandidate. The Committee is satisfied that this constitutes aformal, rigorous and transparent process for the appointment of
new Directors to the Group Board and its subsidiaries, embracing
a full evaluation of the skills, knowledge and experience requiredof Directors.

Corporate GovernanceMembership of the Committee at the year-end was Annette Court(Chair), Jean Park and Justine Roberts and Bill Roberts. Bill Roberts
was appointed a member of the Committee from 1 January
2022. Justine Roberts, Jean Park and Bill Roberts are independent
Non-Executive members of the Committee, in accordance with
the Code which requires that the majority of members should be
independent Non-Executive Directors. Jean Park took a temporary
medical leave of absence which was effective from February 2022.
Jean returned to Board duties in early August 2022 including as amember of the Committee.

diversity in appointments to the Group Board and across therest of the Group. Appointments are made on merit and against
objective criteria, having due regard to the benefits of diversity,with a view to ensuring the Board has the appropriate mix of
personality, skills, and experience.

Strategic Report

How the Committee operates
Membership

160

Corporate GovernanceNomination and Governance Committee
continued
final presentations to the full Admiral Board in November 2022.
In parallel H&S obtained full external references in respect of theexternal candidates.
The Board met on 30 November 2022 following the presentations
specially to discuss the presentations and to debate the relative
merits of each of the final three candidates and to review thereferences provided. The Committee further met on 8 December
where Mike Rogers emerged as the preferred candidate.
The recommendation of Mike to be appointed as Chair of theBoard was based on Mike’s wide business, insurance and financial
services knowledge and on him being someone who would make astrong strategic impact on the future of Admiral. Mike has over 30
years of international financial services experience and was Group
Chief Executive Office of insurer LV= from 2006 until 2016 andoversaw its transformation into a significant player in the generalinsurance and life and pensions markets. Prior to that, Mike worked
at Barclays Bank for 20 years and held a number of senior roles
including Managing Director of UK Retail Banking and Managing
Director of Small Business Banking. On top of this, Mike has 10
years of chair and other non-executive director experience from anumber of other high-profile organisations. Mike was previously
a non-executive director of the Association of British Insurers.
The Board’s preliminary decision on 8 December 2022 was toaccept the Committee’s recommendation to appoint Mike
Rogers as Chair of the Board subject to regulatory approval and toagreement of contractual terms with Admiral. The Board finallyapproved and announced Mike’s appointment on 31 January 2023
and Mike will join the Board as a non-executive Director and Chairwith effect from the conclusion of this year’s AGM on 27 April
subject to regulatory and shareholder approval.
Mike is currently also Chair of Experian plc, the global information
services company, and Aegon UK, a pensions, investments andinsurance provider. He is also an Independent Non-Executive
Director at NatWest Group plc, Chair of its Group Sustainable
Banking Committee and member of its Group Performance andRemuneration Committee. Natwest Group plc has announced
that Mike will be stepping down as an Independent Non-Executive
Director on 25 April 2023. Further, Aegon UK had confirmed that
Mike will be stepping down as Chair and Non-Executive Director
of its Board at the end of September 2023. Mike will continue as
Chair of Experian alongside his role as Chair of Admiral Group.

Induction

Upon appointment, Non-Executive Directors embark on acomprehensive induction programme, comprising common
elements for all Non-Executive Directors, as well as elements
tailored to the individual depending on their role, skills,
knowledge and experience. The induction covers topics such as
the role of a Non-Executive Director and their responsibilities,
the workings of the Board and the Group’s Subsidiary Boards,
and the Company’s operations. Non-Executive Directors areprovided with a suite of background reading before induction
sessions are arranged with individuals from each of theGroup businesses, again, depending on the induction needs.
Ongoing professional development needs of newly appointed
Non-Executive Directors are then monitored via annual individual
Director evaluations and the Committee’s oversight of theNon‑Executive Director skills matrix.

Other Board Committee changes and term extensions
in 2022
The Board, on the recommendation of the Nomination and
Governance Committee, agreed to the following proposals
during the year:• Bill Roberts was appointed as a member of Nomination and
Governance Committee on 21 January 2022
• Due to Jean Park’s temporary medical leave of absence which
was effective from 22 February 2022, the following interim
appointments were agreed:– The appointment of Justine Roberts as Interim SID effectivefrom 22 February 2022
– The appointment of Andy Crossley as Interim Risk Committee
Chair Director effective from 22 February 2022
– The appointment of JP Rangaswami as an Interim memberof the Remuneration Committee“Diversity and thevariety of perspectives
that it brings has been
proven in studies toincrease innovation andcreativity, and, as a result,improves performance.”
Annette Court	Chair of the Nomination
and Governance Committee

Admiral Group plc Annual Report and Accounts 2022

161

Company Overview• Jean Park retired from the Board including all of her committee
memberships on 20 January 2023
• The appointment of Justine Roberts as permanent SID which
was effective from 31 January 2023

As set out in the Group’s Articles of Association, all Directors
should retire and offer themselves for re-election at each AGM,
in accordance with the UK Corporate Governance Code and theCompany’s current practice. Therefore, all Directors apart from the
Chair Annette Court will be submitting themselves for election or
re-election by shareholders at the forthcoming AGM.
The Board is satisfied that all are properly qualified for theirelection or re-election by virtue of their skills and experience andtheir contribution to the Board and its Committees. Further detailsof why each Director’s contribution is, and continues to be,important to the Company’s long-term sustainable success isprovided within the notes to the Notice of the 2023 Annual
General Meeting.

Additional Information

Jean returned to Board duties in early August 2022 including
as a member of the Committee, the Group Risk Committee
and the Remuneration Committee. Jean retired from the Board
including all of her committee memberships on 20 January
2023. Subsequently, the Board, upon recommendation of theCommittee, approved that Justine Roberts be appointed as SID on

Balance of skills,
knowledge andexperience

Annual Board
evaluation & individual
Director appraisals

Board composition& succession planning

Non-Executive tenure& independence

Admiral Group plc Annual Report and Accounts 2022

Financial Statements

Due to Jean Park’s temporary leave of absence which was effectivefrom February 2022 the Committee considered candidates
from a Non-Executive Director tenure perspective, the qualities
required to successfully perform the role of the SID, as well as
the SID responsibilities, particularly in light of the fact that the
SID would need to lead the Board on the appointment of a newGroup Board Chair during 2022. Subsequently, the Board, upon therecommendation of the Committee, approved that Justine Roberts
be appointed as the Interim SID and Andy Crossley be appointed
as the Interim Group Risk Committee Chair with effect fromFebruary 2022. The SID appointment was made on the basis that,
Justine had a strong sense of Admiral’s culture which would be
helpful during the Board Chair succession process. The Group Risk
Chair appointment was made on the basis that Andy, who has
been a member of the Group Risk Committee since 2020,
had extensive experience in insurance risk and finance.

Annual re-election

Corporate Governance• The appointment of Justine Roberts as a permanent memberof the Remuneration Committee which was effective from
31 January 2023

a permanent basis with effect from 31 January 2023. In addition to
Justine’s above stated strong sense of Admiral’s culture, the Board
agreed with the Committee that Justine had successfully run athorough and robust Chair succession process during 2022 and istherefore highly qualified for the role of SID. Further, Justine hassignificant people and remuneration experience as a result of herrole as CEO and founder of Mumsnet since 2000 and is therefore astrong candidate to join the Remuneration Committee.

Strategic Report• The appointment of Karen Green as a permanent member ofthe Risk Committee which was effective from 1 June 2022

Time commitment
and external
appointments

Board diversity

162

Corporate GovernanceNomination and Governance Committee
continued
Composition

As at 31 December 2022, the Board comprised eleven Directors:
the Chair (who was independent on appointment), two Executive
Directors, and eight independent Non-Executive Directors.
The Committee carefully considers the independence,composition and balance of skills and knowledge of the Board.
As a result, the Group continues to monitor the need to refresh
Board and Committee membership in an orderly manner so as
to maintain the continuity of Board process and the strengthof personal interaction which underlies the effectiveness of
the Board.

Non-Executive Director tenure and independence

The graph below details the length of service of the Chair and eachof the current Non-Executive Directors, illustrates the balance ofexperience and fresh perspectives, as well as the independence ofeach of the Non-Executive Directors.
Independent Non-Executive Directors are currently appointed for
fixed periods of three years, subject to election by shareholders.
The initial three-year period may be extended for two further
three-year periods subject to re-election by shareholders.
Their letters of appointment may be inspected at the Company’s
registered office or can be obtained on request from theCompany Secretary.
Jean Park and Justine Roberts both undertook the SID role forthe year (and Justine Roberts undertaking the role on an interim
basis from February 2022 to January 2023 while Jean took aperiod of medical leave of absence). The Board was satisfied
that Jean had the requisite knowledge and experience gained
through her Board positions. Jean Park as Chair of the Risk
Committee, her membership of the Nomination and GovernanceCommittee and her prior experience as SID for FTSE 250 company,
Murray Income Trust. As stated above, the Board was satisfied
that Justine Roberts had the requisite knowledge and experience
to undertake the role of SID on an interim basis while Jean wason (and returned from) medical leave and approved Justine’s
succession in the permanent SID role following Jean’s retirementin January 2023.
The Board, having given thorough consideration to the matter,
considers the eight Non-Executive Directors to be independentand is not aware of any relationships or circumstances, other than
the above, which are likely to affect, or could appear to affect,
the judgement of any of them.

“The Directors have a broad
range of skills and experienceand can bring independentjudgement to bear on issuesof strategy, performance, risk
management, resources andstandards of conduct which
are integral to the successof the Group.”
Board tenure
Annette Court

10y 9mJean Park8y 11mJustine Roberts

6y 6m

Andy Crossley

4y 10mMike Brierley

4y 3m

Karen Green

4y 0m

JP Rangaswarmi

2y 8m

Evelyn Bourke

1y 8m

Bill Roberts

1y 6m>9 years
6-9 years

3-6 years<3 years* In accordance with the Code** Provision 19 of the Code relating to the tenure of the Chair
was not complied with during the year. An explanation of
non-compliance is located on page 136

An explanation for the Group Board Chair’s extended term beyond
the nine years recommended by the Code are provided
on page 136.

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163

Company Overview

The Committee regularly reviews the Board skills matrix,
particularly in the context of succession planning and skills thatare potentially lost at the end of a Director’s tenure on the Board.
The current matrix is outlined below and an explanation regarding
how it feeds into succession planning follows later in this report.

Strategic Report

Balance of skills, knowledge and experience

Total Board Director skills

Corporate Governance

The Directors have a broad range of skills and experience andcan bring independent judgement to bear on issues of strategy,
performance, risk management, resources and standards ofconduct which are integral to the success of the Group.

Time commitment and external appointments

Overall assessment of composition

The Board remains satisfied that it has the appropriate balanceof skills, experience, independence and knowledge of the Groupto enable it and its Committees to discharge their duties andresponsibilities effectively, as required by the Code. In addition,
the Directors are aware of their legal duties to act in a way they
consider, in good faith, will be most likely to promote the successof the Company for its shareholders, as well as considering theinterests of other stakeholders. Further details of how the Board
fulfils its duty in this regard are outlined on pages 74 to 94.

Board and senior management diversity and inclusion

The Listing Rules and Disclosure Guidance and Transparency Rules
have been amended to include new disclosure requirements forlisted companies for financial years starting on or after 1 April
2022. The FCA is, however, encouraging voluntary compliancefor those companies with financial years beginning on or after
1 January 2022. The board diversity targets (which are substantiallyin-line with the targets set by the FTSE Women Leader’s Review
and the Parker Review) are: at least 40% of the board are women;
at least one of the senior board positions (Chair, SID, CEO and CFO)
is held by a woman; and at least one member of the board is froma minority ethnic background. As set out below, the Committee iscontent that Admiral meets the targets set out in the Listing Rules
and Disclosure Guidance and Transparency Rules 9.8.6(9)(a).

Admiral Group plc Annual Report and Accounts 2022

11 Finance
10 Risk
8 Insurance
11 Executive/Strategic Leadership
5 Marketing/Retail
8 M&A
10 City

8 International
8 Tech/Digital/Data
8 Operations
6 Entrepreneurial
3 Loans
7 Small / Medium Enterprise
11 Remuneration/People
7 ESG/Sustainability

Additional Information

The Committee also reviews the time commitment required of
Non-Executive Directors at least annually to consider whether
the guidance on time commitment of certain roles needs to beextended due to market or responsibility changes. Alongside this,a review of the external commitments of Non-Executive
Directors is performed. The most recent review concluded thatthe independent Non-Executive Directors have sufficient time
available to perform their duties.

Financial Statements

As well as considering the demands of a Director’s time upon
appointment, any subsequent external appointments of NonExecutive Directors and Executive Directors require prior approvalof the Committee and the Board.

164

Corporate GovernanceNomination and Governance Committee
continued
Gender diversity

Diversity and the variety of perspectives that it brings has been
proven in studies to increase innovation and creativity, and, as aresult, improves performance. It also has other positive impacts,
such as providing greater awareness, widens the talent pool andchallenges the views or practices that have become embedded
over time. Admiral’s strategy depends on all of these things,
which are enhanced by diversity, and supports our goals.

Board gender diversity

Total Board Director skills

During the year, the Committee reviewed the Group Board
Diversity and Inclusion Policy and discussed the appropriatenessof the measurable targets to increase diversity and inclusion atGroup Board, Subsidiary Board and senior management level.
The Committee seeks to ensure that a clear recruitment strategy
for Board appointments is in place and is aligned to this policy.

6 Women

5 Men
Board Ethnicity

Measures that are covered under the Policy, including progress
updates against each, include:(i) Having one member of the senior executive team who is
responsible and accountable for gender diversity and inclusion
at Group level. Cristina Nestares (EUI CEO) is the accountable
executive for gender diversity.
(ii) Setting internal targets for gender diversity in senior
management. Progress against the Group’s target of 40% of
women in senior management by 2023 is detailed below.

10 White British
or other White(including minority
white groups)

1 Asian/Asian British

Age diversity (by bracket)(iii) Publishing progress annually against these targets in reportson the Group’s website. Progress updates on the Group’s
progress against the HM Treasury’s Women in Finance Charter
commitments are provided on an annual basis on the Group’s
corporate website.
(iv) Linking the pay of the CEO to the progress made against theseinternal targets on gender diversity. In 2021, the Remuneration
Committee considered and approved a proposal to link
the progress against the Women in Finance target within
the non-financial performance measures of the EUI CEO,
Cristina Nestares. Further information on this is contained
within the Remuneration Committee Report on page 183.
The Group has continued to exceed the target set by both
Lord Davies in his report: Women on Boards, and the Hampton
Alexander Review (that builds on the Davies Review) which
encouraged FTSE 350 companies to achieve at least 33% womenon Boards. Women on the Admiral Group Plc Board represented
55% of its 11 director membership as at 31 December 2022,
compared with 50% on 31 December 2021. Further, Admiral is only
one of 5 FTSE100 companies where each of the board positionsof Chair, SID and CEO are held by women. Official data publishedby the FTSE Women Leaders (succeeding the Women on Boards
Report and Hampton Alexander Review) issued in February 2023
reported that the percentage of women on FTSE 100 Boards was
40.2% improving from 39.1% in 2022, which demonstrates thegood progress Admiral has made compared with the averageof the FTSE 100. The data also highlights that the combinationof women in the Chair, CEO and SID roles is still not common,
demonstrating Admiral’s continued strong support of the
progression of women in leadership roles.

40s 18.2%
50s 27.2%

60s 45.5%70s 9.1%

Board Nationality

8 British

3 Non-British

Non-Executive Director tenure>9 years
6–9 years

3–6 years<3 years
Admiral Group plc Annual Report and Accounts 2022

165

Company Overview

The Group remains strongly supportive of the principle ofboardroom diversity, of which gender and ethnicity are important,but not the only, aspects. What is important is diversity of thought,
experience and approach and each new appointment mustcomplement what already exists at the Board table.
Ethnic diversity amongst senior management and the wider
workforce is something that Admiral has increased its focus on
in 2022. However, the Committee recognises that the workforce
is not always comfortable with voluntarily sharing such personal
information. There have been initiatives to encourage more
people to make such voluntary disclosures, in respect of otherdiversity questions, and this has been discussed by the Employee
Consultation Group during the year.

Activity to improve diversity in the talent pipelineUK• Admiral appointed Senior Management Sponsors for all diversity
and inclusion working groups.
• Admiral achieved 45% female representation at executive level,in line with its commitment to the Women in Finance pledge.
• Admiral was placed 3rd in the UK’s Best Workplaces for Women
award in 2022.

Admiral Group plc Annual Report and Accounts 2022

• Admiral has paired with Code First Girls (“CFG”), in respectof which our funding will enable 495 places on an 8-weekprogramme to learn the fundamentals of coding and web
development. In addition, we will also pay the fees for 40
participants to complete a nanodegree, which is the equivalentof a Data Science degree. The degree takes 14 weeks tocomplete, and on completion of the programme, CFG will
work with their network of employers across UK (e.g KFC,
BlackRock, Natwest etc.) to seek to secure employment
for graduates• Admiral has achieved Disability Confident Leader status• Admiral has signed several pledges such as the Menopause
Pledge, Endometriosis Friendly Employer, Neurodiversity
Friendly Employer and continued our commitment to theRace at Work Charter by signing up to their extended initiatives• Admiral was the headline sponsors of Pride Cymru for the
22nd consecutive year
• Admiral achieved Top 75 employers with the Social
Mobility FoundationGroup• Admiral launched its Get Discovered programme aimed atdeveloping talented women within Admiral to become theleaders of tomorrow• Admiral has planned to launch a “reverse mentoring” scheme.
We will ask people to apply for this, then we will train them as
mentors. The successful applicants and all participating senior
top executives will benefit from this new scheme• Admiral will launch two “Employee Resource Groups”, one
focused on gender and one on ethnicity, to create a stronggroup network of people, selected from our staff, with the aimof designing and delivering internal initiatives to offer equal
opportunities to our underrepresented groups of people• Admiral will launch a program designed to develop employees
from an ethnic background, in partnership with McKinsey.
We are designing a talent and development program tonurture talent across Admiral, focusing on finding talented
employees from an ethnic background at different levels into
leadership roles• Admiral has designed Group D&I employer branding inorder to increase our external reputation as diversity

Additional Information

The Board continues to monitor the requirements of theParker Review’s report on ethnic diversity in the context of thecomposition of its Group and Subsidiary Boards, the initiatives
that are being implemented to increase diversity and discuss
how measures to develop a diverse pipeline of talent as regards
to Board appointments could be developed and monitored.
The Group Board includes one Board member from an
ethnic minority, which meets one of the Parker Review’s key
recommendations for FTSE 100 companies as well as Listing
Rules and Disclosure Guidance and Transparency Rule 9.8.6(9)(a).
Further information on how the Group is developing candidates forthe pipeline is outlined in the sections below and in the Strategic
Report on pages 77 to 79.

• Admiral has continued our partnership with
PricewaterhouseCoopers’ #TechSheCan, aimed at developing
internship and work experience programmes

Financial Statements

Ethnic diversity• Strengthening our partnerships aimed at increasing female
representation, we have joined with Women in Data,a movement and force for change in the realm of data
science and analytics

Corporate GovernanceDuring the year, the Committee reviewed the gender balanceof those in senior management and their direct reports andconsidered the initiatives that have been proposed to focus on
improving gender balance. The FTSE Women Leaders (formerly
Hampton-Alexander Review) target of 33% female representation
within senior management has been achieved across the Group,with females representing 44% of our Senior Executives and 35%of their direct reports.

• Admiral’s recruitment strategy aims at increasing candidates
from an ethnic background and women onto shortlists forleadership roles

Strategic Report

As a result of the continued progress to balance gender diversity
at Group Board level and to align with the Women in Finance
Charter’s aim of increasing female representation at the UK
senior executive level to 40% by the end of 2023, the Committee
approved a proposal to increase the annual target from a minimumof 33% women to 40%. The aim is to achieve this level of gender
diversity at an aggregate level across the Subsidiary Boards too.
As at 31 December 2022, women represented 38% of all of theSubsidiary Boards compared to 29% as at 31 December 2021,
while improvements have been made in 2022 there is further
work to improve gender diversity at this level.

166

Corporate GovernanceNomination and Governance Committee
continued
leader in the market and attract new diverse talent in the
recruitment pipeline• Admiral is offering training to all of our D&I sponsors andhuman resources managers on how to better work together
as a team to deliver meaningful D&I outcomes. The Boardand senior management recognise that longer-term remote
working brought about by the Covid pandemic could make it
more difficult to identify discrimination and support those that
may be impacted. Admiral is committed to adapt to the newenvironment and ensure that it provides an equal workplace
for all our people.
The Group remains committed to providing equal opportunities,
eliminating discrimination, and encouraging diversity amongst
its employees both in the UK and overseas. A breakdown of
the gender of Directors and senior employees at the end of
the financial year together with details of the Group’s Equality,
Diversity and Dignity at Work Policy are set out in the Strategic
Report on pages 113 and 127.

Succession planning

The Committee is responsible for ensuring that plans are in placefor orderly succession for appointments to the Board and also
reviews the succession plans for Executive Directors and otherkey senior management positions.

Non-Executive Directors

Non-Executive Director succession planning is split into short,medium and longer term horizons to ensure that all eventualities,
as far as possible, are planned for.
Horizon: Emergency cover
Description: There are emergency succession plans to ensurethat there is sufficient cover or a plan in place for key roles of theBoard, namely, the Chair, the SID, Committee Chairs and, in turn,
Committee members if a Committee Chair’s absence is longer
than expected. These plans take account of any requirements
under the respective Committee’s Terms of Reference, as wellas any Code requirements.

The regular review of these succession plans provides anopportunity for the Committee to discuss the insights
provided by the data in order to inform the desired mix of skills,
experience and diversity that the Board needs now and in the
future, in the context of the Group’s strategic objectives.
The Committee will this year be starting a search for new NonExecutive Directors with the appropriate skills and experience tosucceed the Chair and the Group Risk Committee Chair. In doing
so, the Committee will consider the skills, experience and diversity
gaps that could materialise with the departure of the present
Chair and Group Risk Committee Chair.

Executive Directors and senior management

Responsibility for making senior management appointments
rests with the Chief Executive Officer and talent management
continues to be a key area of focus for the Committee to ensurethat there is a diverse pipeline of talent for senior management
and potentially Executive Director succession.
During the year, the Committee considered progress to improvetalent management and succession planning within the Group.
This was in response to the review in 2020 which identified several
improvements that needed to be made to Admiral’s succession
planning to improve the talent pipeline. Effective internal talentmanagement ensures that Admiral’s unique culture is preserved
as far as possible.
The Committee received an update in 2022 on the new succession
framework which is now used across the Group. It has encouraged
more structured thinking about opportunities across departments
and internationally, even in circumstances where this is a wellembedded practice already within Admiral. Discussions on successprofiles have also helped to visualise how success will look in
the future for the critical senior management roles, whilst also
providing future talent with visibility on what future development
might look like for them. Other parts of the overall succession
planning process continue to be embedded with the introductionof better:• Scoping and anticipating future critical capabilities

Horizon: Medium term (3–6 year tenure)• Success profiling

Description: The Committee’s medium-term succession
planning involves considering the replacement of Non-Executive
Directors over time to refresh the Board. The Committee
considers (i) each Director’s period of tenure and aims to havestaggered departure dates, (ii) the skills and experience gapsthat will be created as each Director’s tenure comes to an end,and (iii) the diversity gaps that might also become present.

• Identification of career aspirations• Assessment• Development plans (noting that some Group entities are morematured than others)• Collective analytics

Horizon: Longer term (6–9 year tenure)
Description: The Committee’s longer-term succession planning
involves the consideration of the skills, experience, and diversitythat the Board will need over the longer term, taking into
account the Group’s strategy and the main trends and factorsthat are likely to affect the Group’s long-term success.

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Company Overview

2019
External Board Evaluation

2020
Internal Board Evaluation

2021
Internal Board Evaluation

The 2022 Committee’s annual review was conducted by an
external company Bvalco Limited. Each Committee member
was interviewed and asked a set of questions designed toprovide objective assessment of the Committee’s performance,
including its effectiveness in monitoring Board composition,
considering Executive and Non-Executive succession,
overseeing talent management, succession planning anddeveloping directors’ knowledge.
The Committee discussed the results of the review at its meetingin January 2023 and concluded that, overall, the Committee
remained effective. Areas of focus and improvement for theCommittee in 2023 were identified and in particular, the part of
the nomination committees work on succession, the Committee
should in future canvas the executives on their views of the skills
and expertise that would be helpful to strengthen the Board.

Admiral Group plc Annual Report and Accounts 2022

2022
External Board Evaluation

Progress with 2021 Board Evaluation recommendations

Having last carried out an external Board evaluation in 2019in accordance with the Code requirement that FTSE 350
companies should carry out an externally facilitated evaluationof the Board at least every three years, the 2021 Board evaluation
process was again facilitated internally with use of a questionnairedeveloped by Independent Audit, who has no other connection
with the Group or its Directors. The results of the evaluation
were discussed at the January 2022 Board and showed a Board
that appeared to be functioning well with some identified
opportunities for improvement. The recommendations from theBoard evaluation fed into the Board’s agreed objectives for 2022
and were detailed in the 2021 annual report as “principal areasof focus for the Board in 2022”. At the June 2022 Board, the Board
received a six-month update on progress against agreed areas forfocus as set out in the evaluation report and as against the agreed
2022 Board Objectives.

Additional Information

Committee Effectiveness Review

Financial Statements

Governance

The Committee also regularly reviews the Group’s governancearrangements, including any changes to the Subsidiary or
Committee structure, as well as oversight of the regulatory
applications made under the Senior Managers Regime.

Corporate Governance

The Committee remains satisfied that effective succession
plans for Directors and senior management are in place to ensure
the continued ability of the Group to implement strategy andcompete effectively in the markets in which it operates.

Board Evaluation

Strategic Report

Overall, this year’s review of succession planning concluded that
there was a healthy pipeline of talent across the Group, with noimmediate risk in respect of leadership continuity, and the rightlevel of talent to execute our ‘internally grown leaders’ strategy.
However, it also concluded that some critical functions in the UK
fell short on gender diversity, as well as some international entities,
such as Spain. This gap represents a risk to the achievement ofour commitment and ambition on gender diversity at senior
management level and so this will be closely monitored by theCommittee in 2023. In addition, further work will be undertaken
to improve the ethnic diversity of entities located in geographies
where such diversity should be better represented, which will also
be overseen by the Committee in 2023.

168

Corporate GovernanceNomination and Governance Committee
continued
The following progress was made during 2022 in respect of the key findings from the 2021 review:
Agreed areas of focus for 2022
Ensure that there is a robust selection
process for the new Group Board Chair,Group Risk Committee Chair and SID
Continuing focus on executive teamsuccession planning

Ensure diversity and inclusion objectives
are embedded

Support the continuous developmentof Admiral’s core competencies

Assess market implementation of the
FCA’s market study on general insurance
pricing and ensure Admiral delivers
a strong response
Ensure customers continue to be at
the front and centre of new propositions
and incremental change

Progress update
Refer to page 159 of this section and Principal Decisions on page 148.

During the year, the Board approved the appointment of Keith Davies as Admiral’s
new Chief Risk Officer following a robust recruitment process. The Board and theCommittee received Group Succession Planning and Talent Development updates
throughout 2022.
During the year, the Board received a diversity update highlighting the Group’s
ambition to have 40% of women in senior positions by 2025 at Group level andrepresentation of ethnic minorities at senior levels consistent with representationof the whole workforce. The Board has been updated on Admiral’s submissions in
respect of the FTSE Women Leaders and the Parker Review.
The Board agreed an objective for 2022 to “Defend and support continuous
development of Admiral historical advantages” in particular relating to culture,technical/underwriting leadership and cost efficiency. The Board received regular
updates confirming that each of these areas had received substantial attention andmade good progress.
Refer to Principal Decisions.

The Board has been updated on customer related issues at each Board in 2022 fromthe perspective of all Group entities and businesses. “The Customer, the Customer,
the Customer” remains a core part of Admiral’s philosophy and Board updates
throughout the year reflect this.
Oversee the Group’s diversification strategy Refer to Principal Decisions.
Monitor the development and execution
During the year, the Board has increased the number of updates and sessions heldof Admiral’s sustainability approach andon ESG matters, receiving updates on the embedding of the new Group Purposethe delivery against key pledges(approved at the beginning of 2021), the Group’s sustainability strategy, response to
climate change, stakeholder engagement, progress to meet diversity and inclusion
targets, and the responsible investment strategy, amongst other things.
The October Board update on sustainability provided the Board with detailed
analysis on the 2022 progress against Admiral’s stated nine sustainability targets.
The Board noted that good progress had been made.
Continue to deepen the Board’s
During the year, the Board also increased the updates and sessions received onunderstanding of external risk factors
information security and cyber risk, BEIS Reforms, IFRS17, general technology
updates and received an update on the Admiral cyber risk event playbook. In
October 2022, the Board undertook a cyber crisis simulation session facilitated by
an expert, external supplier. The lessons learned from the cyber crisis simulation
helped management to refine the cyber risk event playbook.
Provide steering and oversight for capital
During the year, the Board received regular updates and training sessions relating
management, reinsurance and the internal to the Admiral internal model process. Good progress was made during the year
model application process
noting that the application process will continue to be progressed and refinedin 2023.
Oversee the roll-out and evolution of
The Board was regularly updated on progress against the Group Reward Strategy.
the Group reward strategy
The Board was further updated on the Group’s plans to improve reward and inrespect of the Group’s plans to help staff though the “cost of living crisis”. Refer to
Principal Decisions.

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169

Company Overview• Strengths and Value• Purpose and Strategy• Board Dynamics and Culture• Succession and composition/skills• Performance and development• Frequency of meetings, Board information and agendas• Commitments outside of the Boardroom• The Chair• The new Chair• What do you value about your fellow Board directors• Committee Chairs• Impact and Value• Three most important areas for next 12 – 18 months
The results of the evaluation were discussed at the January2023 Board meeting and showed a Board and Committees
that appeared to be functioning well, with some identified
opportunities for improvement. Bvalco’s overall impression is that
this is a strong Board and one that is reflective and supportiveof the Admiral culture. The majority of those interviewed felt
it was an open, inclusive and participative Board committed
to the success of Admiral. It is also a Board with good humour.
Everything that Bvalco observed and heard during their review
demonstrated a commitment to the success of Admiral and thewellbeing of its staff. There were key areas where Bvalco maderecommendations to the Board and Committees in order tocontinuously and progressively improve how it works. There is asummary table of recommendations set out below. In making
the recommendations, Bvalco wished to re-emphasise theiroverall conclusion that the Admiral Board is a strong board, andthe recommendations set out in the report are made against thisbackground. The recommendations set out below have fed into
the Board’s agreed objectives for 2023 and are detailed under the“principal areas of focus for the Board in 2023” on page 139.

Admiral Group plc Annual Report and Accounts 2022

Individual Director Evaluation

The performance of the Chief Financial Officer is appraisedannually by the Chief Executive Officer, to whom he reports.
The Chair, taking into account the views of the other Directors,
reviews the performance of the Chief Executive Officer. The Chairalso carries out the performance assessments of each of the NonExecutive Directors. Each of the Directors were determined tohave continued to effectively contribute to the work of the Board
in 2022.
The performance of the Chair is reviewed by the Board led by
the SID. Following the latest review, the SID considered anddiscussed with the Chair the comments and feedback that had
been received from the Directors as part of the Chair’s evaluationquestionnaire and was able to confirm that the performance of
the Chair continues to be effective. In addition, Bvalco Limited
reported that all those interviewed as part of the external
evaluation were unanimous in their praise for Annette. Bvalco waspositive in their assessment of all aspects of how Annette chairs
the Board. Bvalco concluded that “this is a well Chaired Board.”

Additional Information• The CEOFurther information on each of the Board Committee’s
evaluations conducted externally by Bvalco Limited of their own
performance can be found within the respective other Board
Committee reports.

Financial Statements• Risk2022 Board Committee Effectiveness Reviews

Corporate GovernanceHaving last carried out an external Board evaluation in 2019 inaccordance with the Code requirement that FTSE 350 companies
should carry out an externally facilitated evaluation of the Board
at least every three years, the 2022 Board evaluation process was
facilitated externally by Bvalco Ltd, which has no other connection
with the Group or its Directors. Each Board member and standing
attendee was interviewed and asked a set of questions to evaluate
the Board’s performance and dynamics in 2022. The themes andquestions considered by all Board members and regular Board
attendees in November 2022 were:

Strategic Report

2022 Board Evaluation

170

Corporate GovernanceNomination and Governance Committee
continued
Outcomes and areas of focus for 2023
Decision making frameworks

Review how the balance of Board agenda
time is split between strategy versus
governance/regulatory matters

Strategy development

Forward plan of metrics and milestones
Overarching approach to ESG
Improving hybrid meetings

Company Secretary

The Board and management to review the overall framework that the Board uses
to make key decisions. At the same time, management will review how information
is presented to the Board in a way which assists and feeds into the overall decisionmaking framework.
The Board should review the balance of time spent at board meetings between
governance/regulatory matters and strategic/business matters. The Board
supported by the Legal and Company Secretarial team to consider if any
governance and regulatory matters could be delegated to relevant Board
Committees, Board Sub-Committees or Subsidiary Boards.
Build on the acknowledged success of strategy days. The Board should discussand agree additional conventions for the strategy days to ensure the Board has
sufficient early involvement in contributing to the development of proposals.
This should include the addition of formal ‘wash-up’ sessions and ‘action lists’with agreed milestone dates.
The Board should discuss and agree with management improved metrics andmilestones to enable the Board to better measure strategy implementation..
The Board to consider the value of establishing an overarching and coordinatedapproach to ESG initiatives.
The Board and Company Secretarial team shall continue to look at ways of
improving hybrid meeting arrangements, looking at techniques for mitigating
the risk that remote participants are unable to contribute fully to Board andCommittee meetings.
The Company Secretarial team should take steps to remind those presenting papers
to the Board or a Committee that they follow properly the guidelines as to form,
content and paper submission deadlines. This should include proper completion of
the paper’s standardised front sheet, avoiding the unnecessary usage of technicallanguage and developing conventions for assisting the non-technical reader.

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171

Company Overview

Audit Committee Report

Strategic Report“I am pleased to set
out in this report an
update on the main
activities of theCommittee in 2022.”

Corporate GovernanceKaren Green	Chair of the Audit Committee

Focus area

Attendance

Karen Green (Chair)
Andy Crossley
Mike Brierley

11/11
11/11
11/11

Audit, risk and internal control
Compliance with the Code Principles
UK CodePrinciple

Principle
M

Description

References

The Board should establish formal and transparent
policies and procedures to ensure the independence
and effectiveness of internal and external audit
functions and satisfy itself on the integrity of financial
and narrative statements.

• Roles and Responsibilities on page 173• Non-audit fees on page 177• Effectiveness of external audit process on page 177• Effectiveness of internal audit on page 174• Directors’ responsibilities and responsibility statementin the Directors’ Report on page 213• Principal risks and uncertainties within the Strategic
Report on pages 114 to 121

Principle
N

PrincipleO

The Board should present a fair, balanced andunderstandable assessment of the company’s
position and prospects.

• Reporting, accountability and audit within the
Directors’ Report on page 212

The Board should establish procedures to manage
risk, oversee the internal control framework, anddetermine the nature and extent of the principal risks
the company is willing to take in order to achieve its
long-term strategic objectives.

• Role of internal audit and associated processes
on page 174

Admiral Group plc Annual Report and Accounts 2022

• Principal risks within the Strategic Report on
pages 114 to 121• Reporting, accountability and audit within the
Directors’ Report on page 212

Additional Information

meetings
in 2022

Committee members

Financial Statements

11

172

Corporate Governance

Audit Committee Reportcontinued
Dear Shareholder

I am pleased to set out in this report an update on the main
activities of the Committee in 2022.

Areas of Focus in the Reporting Period

The Committee considered the economic backdrop facing
the Group and gave particular consideration to current UK
inflationary pressures and the impact on the key accounting andactuarial judgements made by management in relation to thevaluation of claims reserves and credit loss provisions, as well as
the potential impact on going concern and viability assumptions.
The Committee also continued to consider the ongoing impactof the Covid pandemic on the Group’s financial reporting anddisclosures, along with the continued effectiveness of the Group’s
key internal controls in a hybrid working environment.

Significant financial reporting issues

The setting of insurance claims reserves in accordance with
the Group’s agreed reserving methodology is a key accounting
judgement in the Group’s Financial Statements as set out in Note
3 to the Financial Statements), and the Committee continues toplace considerable focus on this area. The Committee challenged
the key reserving assumptions and judgements, movements,
emerging trends and analysis of uncertainties underlying theanalysis of outstanding claims for the UK Car Insurance businessproposed by management alongside that of the Group’s external
independent actuarial advisers. In 2022, this included the impact
of inflation on the claims reserves as set out in more detail below,
future scenarios for the Ogden discount rate and post-pandemic
trends of claims frequency and severity. It also focused on
management’s assessment of the level of uncertainty inherent
in the claims reserves and the changes in this assessment fromprior periods. The Committee also received reports on the claims
reserving processes performed for insurance businesses otherthan UK Car and recommended to the Board the aggregate
claims reserves for inclusion in the Group’s Financial Statements.
In addition to claims reserving, the Committee spent timereviewing management’s support for a number of other significant
financial reporting matters including the expected credit loss
provision held in relation to the Loans receivable balance heldby the Group’s loans business Admiral Money, other potential
provisions and contingent liabilities, and the results of impairment
testing performed in relation to the Group parent company’s
investments in Group subsidiaries.

IFRS 17 (Insurance Contracts) implementation

Ahead of the 1 January 2023 implementation date for IFRS 17(Insurance Contracts), the Committee placed significant focus
during the year on monitoring progress of the Group’s IFRS 17
programme, reviewing and challenging key judgements andaccounting considerations, the Group’s transition balance sheet
as at 1 January 2022, as well as the financial statement disclosureson the impact of the new standard required by IAS 8 (Accounting
Policies, Changes in Accounting Estimates and Errors) and related
accounting disclosures.

Corporate governance and reporting changes

The Committee was kept abreast of the Group’s engagementwith the Department for Business, Energy & Industrial Strategy(BEIS) consultation on ‘Restoring trust in audit and corporate
governance: proposals on reforms’ during 2022 including the
Financial Reporting Council’s draft proposal for a minimum
standard for audit committees, and will continue to monitor
developments in this area. The Committee also oversaw,
in conjunction with the Group’s Risk Committee, the Group’s
progress in further aligning reporting with the Taskforce
for Climate-related Financial Disclosures (TCFD) publishedrecommendations. The Committee received a briefing fromthe Group’s external auditor on TCFD regulation and trends
in the market.

Internal controls

The Committee has continued to review the effectiveness of
the internal control systems across the Group, including areasof potential weakness highlighted through audit and otherassurance reports.
I hope you find the above summary, and the more detailed report,
both useful and informative.
Karen Green
Chair of the Audit Committee
7 March 2023

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173

Company Overview

Membership of the Committee at the end of the year was:Karen Green (Chair), Andy Crossley and Mike Brierley.

The external auditor was invited to attend all of the Committee’s
meetings held in 2022, except in respect of those agenda items
when its own performance, reappointment and fees were reviewed
and discussed, or where any other conflict was identified.

Meetings held

The Committee meets at least six times per year and has anagenda planner linked to events in the Company’s financial
calendar and other significant issues that arise throughout theyear, which fall for consideration by the Committee under its
remit. The Committee Chair agrees the meetings and agendas
for each meeting.
There were eight scheduled Committee meetings held during
the year (with two of these meetings focused on reserving
matters in conjunction with the half year and full year
reporting). Three additional meetings were held during theyear, primarily focused on the transition to IFRS 17 and year-end
reporting related matters.
Details of member attendance at the Committee meetings held
during the year are outlined on page 171.

Admiral Group plc Annual Report and Accounts 2022

The Chair of the Audit Committee meets with the Group Headof Internal Audit, Group Chief Financial Officer, Director of Group
Finance and Chief Actuary, Head of Reserving, the external auditor
and UK Head of People Services (who has overall responsibility
for coordinating the Group’s whistleblowing arrangements) on aregular basis. The Committee also held (i) two private meetings
with the Group Head of Internal Audit, (ii) one private meetingwith the Chief Financial Officer, and (iii) two private meetings withthe external auditor during the year.

Role and responsibilities of the Committee

The Audit Committee’s primary responsibilities are to:

Financial reporting• Monitor the integrity of the Group’s Financial Statements andany formal announcement relating to the Group’s financial
performance, including the Group’s Solvency and Financial
Condition Report, reviewing any significant financial reporting
judgements which they contain, including that of the Group’s
Going Concern status• Provide advice (where requested by the Board) on whether
the Annual Report and Accounts, taken as a whole, is fair,balanced and understandable, and provides the informationnecessary for shareholders to assess the Group’s position andperformance, business model and strategy• Oversee the Group Risk Committee’s work on climate-related
financial disclosures under TCFD

Internal controls and internal audit• Keep under review the effectiveness of the Company’s internalfinancial controls, internal control and risk management systems• Monitor and assess the role and effectiveness of the Group’s
internal audit functions in the context of the Group’s overall
internal control and risk management systems

Additional Information

The Company Secretary acts as Secretary to the Committee.
The Group Chief Financial Officer, Group Chief Risk Officer,
Director of Group Finance & Chief Actuary and Group Head ofInternal Audit routinely attend all Committee meetings (otherthan certain private sessions). Other individuals, such as the
Chair of the Board, Chief Executive Officer, Head of Compliance,and representatives of different parts of the Group, may be invited
to attend all or part of any meeting as and when appropriate.

The Terms of Reference of the Audit Committee include all thematters required under the Code and are reviewed annually by
the Committee.

Financial Statements

Attendance at meetings

The Committee is kept up to date with changes to AccountingStandards and relevant developments in financial reporting,company law, and the various regulatory frameworks throughpresentations from the Group’s external auditor, Group Chief
Financial Officer, Group Chief Actuary and Group Company
Secretary. In addition, members attend relevant seminars andconferences provided by external bodies. The Committee also
receives tailored briefings from management and the Group’s
external auditors from time to time. Topics included the Task
Force for Climate-related Financial Disclosures (TCFD) and IFRS 17
implementation in 2022.

Corporate GovernanceTwo of the Committee’s members are Fellows of the Instituteof Chartered Accountants in England and Wales. Given theinsurance and financial services experience of the membersof the Committee, the Board considers that they have a broad
range of skills, experience and knowledge of the insurance
sector, which represents the principal market in which theGroup operates, and also the area of consumer lending in which
the Group has a growing business, such that they are able toeffectively analyse, challenge and debate the issues that fall within
the Committee’s remit. The Board is satisfied that the Committee
as a whole has competence relevant to the sectors in which
the Group operates and further considers that a number of its
members have recent and relevant financial experience.

How the Committee keeps up to date

Strategic Report

How the Committee operates
Membership

174

Corporate Governance

Audit Committee Reportcontinued
External audit• Make recommendations to the Board, to be put to shareholders
for their approval at the AGM, in relation to the appointment,
reappointment and removal of the Group’s external auditor• Reports assessing the accounting and disclosure impacts of risk
events arising across the Group• Approve the remuneration and terms of engagement of theGroup’s external auditor• The financial statement disclosures on the impact of the newstandard required by IAS 8 (Accounting Policies, Changes in
Accounting Estimates and Errors) (further detail on theCommittee’s work in relation to IFRS 17 is set out below)• Review and monitor the Group external auditor’s independence
and objectivity, and the effectiveness of the audit process,taking into consideration relevant UK professional andregulatory requirements• The Group’s disclosures relating to climate risk, including those
disclosures required by the TCFD, and received a briefing fromthe external auditor on regulatory developments in climaterelated disclosure requirements• Review the policy on the engagement of the Group external
auditor to provide non-audit services, ensuring that there isprior approval of non-audit services, considering the impact thismay have on independence and taking into account the relevant
ethical guidance in this regard

Internal audit and internal controls

Other• Oversee the Group’s procedures for handling allegations
from whistleblowers• Report to the Board on how it has discharged its responsibilities

Summary of key activities during 2022

During the year the Committee reviewed the following:

Financial reporting• The Group Annual Report and interim results announcement,
including key accounting judgements and disclosures• Parent company Financial Statements (both annual and interim),
and related key accounting judgements and disclosures,
including impairment testing of the parent company’s
investments in subsidiaries• Reports from the Chair of the Group Risk Committee
on the principal risks faced by the Group and the work
undertaken by the Group Risk Committee to ensure risk isappropriately managed• Reports from the Chair of the Admiral Insurance Company
Limited (AICL) and Admiral Insurance (Gibraltar) Limited (AIGL)
Audit Committees on the Financial Statements for AICL and
AIGL, including key accounting judgements and disclosures• The Group Solvency and Financial Condition Report,
including disclosures specific to AICL and AIGL• Presentations from the Group’s actuarial reserving team andindependent external actuarial experts to assist the Committee
in concluding on the adequacy of the Group’s IFRS reserves andSolvency II technical provisions• Information supporting the Group’s Going Concern assumption• Reports prepared by management demonstrating risk transfer
within reinsurance contracts in line with the requirements of
IFRS 4 (Insurance Contracts)• Updates from the Group’s loans business on the IFRS 9 (Financial
Instruments) expected credit loss provision• Reports from the internal audit functions within the Group on
the effectiveness of the Group’s risk management and internal
control procedures and progress against the 2022 Audit Plan,approval of changes requested to the 2022 Plan and the Audit
Plan for 2023 including resourcing levels, details of key audit
findings, and actions taken by management to manage andreduce the impact of the risks identified• Performance and effectiveness of the Internal Audit function• A summary of the key findings from all reports from Internal
Audit, including management responses to the conclusions set
out in the reports• Reports on the controls in place, including significant breaches
or incidents, across the Group and its overseas subsidiaries• European insurance internal audit updates, including an updatefrom the Chair of the European Audit Committee (of the Group’s
subsidiary Admiral Europe Compañía de Seguros, S.A., (AECS)
which underwrites the Group’s European insurance businesses)on the activities of that Committee• US insurance internal audit updates, including an update fromthe Chair of the Audit Committee of the Group’s US subsidiary
Elephant, on the activities of that Committee• Reports on the output of the assessment of adherence
to and embedding of the Group Minimum Control
Standards’ framework• Reports on the various improvements underway to the Group’s
control environment including an assessment of the Group’s IT
access control management

External audit• Reports from the external auditor highlighting system andcontrol recommendations, key accounting and audit issues
and conclusions on the half year and full year reporting• Confirmation of the external auditor’s independence• Reports from Deloitte, the external auditor, on their proposed
audit scope and plan
• Proposed external audit fee and the drivers of the year-onyear increase

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175

Company Overview• Updates on tax matters, including the Group Tax Strategy which
was recommended to the Board for approval and is available atwww.admiralgroup.co.uk• The effectiveness of the Group’s Whistleblowing Policy, whichsets out the arrangements for raising and handling allegations
from whistleblowers, and receiving regular reports on instancesof whistleblowing that have been raised• The Committee’s terms of reference• The Committee’s effectivenessSignificant issues considered by the Committee

Secondly, given the 1 January 2023 implementation date for
IFRS 17, a key audit matter was also highlighted in respect of the2022 year end IAS 8 (Accounting Policies, Changes in Accounting
Estimates and Errors) disclosures setting out the impact of IFRS 17
on the Group
These significant issues were discussed with management during
the year and with the external auditor at the time the Committee
reviewed and agreed the external auditor’s Group audit plan,
when the external auditor reviewed the interim Financial
Statements in August 2022 and also at the conclusion of theexternal audit of these full year Financial Statements.

Valuation of gross insurance claims reserves

The Committee continued to spend significant time reviewing
and challenging the approach, methodology and key assumptions
adopted by management in setting reserves for insurance liabilities
in the Financial Statements to ensure consistency with the Group’s
stated reserving approach to set reserves at a prudent level.
In this context, the Committee challenged management on
the important judgements and assumptions used in estimating
outstanding claims. Further information is set out in more detailin the critical accounting estimates section of Note 3 to the
Financial Statements.
As in previous periods, the Committee held meetings specificallyfocused on reserving, receiving presentations on UK Car Insurance
reserves from the internal actuarial reserving and finance teams,

Admiral Group plc Annual Report and Accounts 2022

The Committee also received reports on the reserving processes
for the Group’s insurance businesses other than UK Car Insurance.
Whilst acknowledging that the setting of reserves for claims
which will settle in the future is a complex and judgemental areaand having had the opportunity to challenge management’s
proposal in respect of both best estimate reserves and margin
held above best estimate to cover unforeseen deteriorationsin the best estimate, the Committee is comfortable that an
appropriate process has been followed, and that there has been
sufficient scrutiny, challenge and debate to give confidence thatthe reserving levels set provide an appropriate margin above
best estimate.

Inflation assumptions applied within valuation of UK
motor bodily injury claims reserves

The Committee placed focus during the year on reviewing
and challenging the approach, data inputs, methodology andkey assumptions adopted by management in determining anallowance for excess inflation on bodily injury claims, included ingross claims reserves. Whilst acknowledging that ultimate
outcome is highly uncertain, the Committee had the opportunity
to challenge management’s judgements in respect of selected
projections of inflation, in particular future wage inflation as wellas the elements of bodily injury claims that will be subject to thisexcess inflation. The Committee concluded that the data andunderlying methodology used in calculating excess inflation was
reasonable, and in line with market practice and that the inflation
assumptions adopted were appropriate.

Additional Information

After discussion with both management and the external
auditor, the Audit Committee determined that the key risks of
misstatement of the Group’s Financial Statements, as in prioryears, related to the valuation of gross insurance claims reserves.
Two additional key audit matters were also identified. Given theeconomic backdrop referenced above, a significant risk was agreed
in relation to inflation assumptions applied to UK motor bodily
injury claims reserves given the long-tail nature of the claims andthe current higher inflationary environment.

The Committee also received updates from the Group’s external
auditor, Deloitte, on its work in relation to this significant audit
risk. This included reviewing management’s actuarial data
quality assessments, best estimate reserve projections and themargin included above best estimate, as well as support for
management’s qualitative and quantitative support for grossclaims reserves included in the Financial Statements. Based on
this work, the auditor was satisfied that the financial statement
reserves remain appropriate and consistent with the Group’s
accounting policy.

Financial Statements• Meetings held with the external auditors, the Group Head ofInternal Audit, and the Chief Financial Officer, respectively,
without management being present

The Committee reviewed and discussed the effects of inflationarypressures on claims reserves in relation to both damage and bodily
injury claims. In addition, the continuing impact of Covid on bothclaims frequency and claims severity as well as changes in claims
settlement patterns were considered, as well as scenarios in
relation to the future Ogden rate. The Committee also reviewed
management’s assessment of the level of uncertainty inherent
in the claims reserves and changes to that assessment fromprevious periods.

Corporate Governance• Progress updates on the BEIS consultation relating to audit andcorporate governance reforms, including updates received fromthe external auditor

as well as the independent external actuarial advisors. At thesemeetings management provided further information on the
projected best estimate gross claims reserves, as well as themargin to be held above best estimate in the Financial Statements
and were challenged by the Committee as to their adequacy andthe consistency of the level of prudence with prior periods.

Strategic Report

Other

176

Corporate Governance

Audit Committee Reportcontinued
Other financial reporting issues
IFRS 9 provision for expected credit losses

During the year, the Committee has continued to review andchallenge the IFRS 9 provision for expected credit loss arisingthrough the Group’s loans business, Admiral Money. Areas of focus
included the potential impact of UK inflationary pressures andthe increase in UK market interest rates on default experience,
the assessment of circumstances indicating a significant increase incredit risk and underlying forward-looking economic assumptions.
Further information on the provision and key assumptions arefound in Note 3 to the Financial Statements.
On the basis of the work performed and having had theopportunity to challenge management’s proposal in respectof the provision for expected credit losses, the Committee was
comfortable that an appropriate process has been followed,
noting the enhancements made to the provisioning methodology,
and that there has been sufficient scrutiny and challenge to giveconfidence that the provision has been set in line with the IFRS 9
requirements and included appropriate allowance for uncertainties
arising from the current macro-economic environment.

Misstatements

No material unadjusted audit differences were reported by theexternal auditor. The Committee confirms that it is satisfied thatthe auditor has fulfilled its responsibilities with diligence andappropriate professional scepticism.
After reviewing the presentations and reports from management
and consulting, where necessary, with the auditor, the Committee
is satisfied that the Financial Statements appropriately address
the critical judgements and key sources of estimation uncertainty(both in respect to the amounts reported and the disclosures).
The Committee is also satisfied that the significant assumptions
used for determining the value of assets and liabilities have been
appropriately scrutinised, challenged and are sufficiently robust.

IFRS 17 implementation

IFRS 17 is a new insurance accounting standard that came into
effect from 1 January 2023. Given the fundamental changes to
the Group’s Financial Statements and systems and processes thatwill be required because of the new standard, the Committee
has continued to dedicate a significant amount of time tounderstanding and assessing the impact of the standard on
the Group’s financial reporting process and the progress of
implementation of chosen software solutions.
Through the year the Committee received the following updates:• Regular updates as to the programme status, including progressagainst plans for individual workstreams and other issues such as
resourcing levels• The Group’s transition balance sheet as at 1 January 2022,
including the work of the external auditor Deloitte in respect of
the transition• The policy on judgements and materiality• Updates as to the status of the software solution for IFRS 17 andthe dependencies with other finance transformation projects,
including the implementation of new general ledger systems inseveral of the Group’s businesses• The financial statement disclosures on the impact of the newstandard required by IAS 8 (Accounting Policies, Changes in
Accounting Estimates and Errors)• Updates from the Group’s external auditor on their audit of
the Group’s IFRS 17 work and IFRS 17 developments in themarket generally
The Committee also reviewed the presentation to the Group’s
analyst and investor community on the likely impact of IFRS 17.

External audit
External auditor appointment

The Group last completed an audit tender during 2020/21 when,
following the completion of a transparent and independent
audit tender process, Deloitte LLP were recommended toshareholders as the Group’s auditor at the Annual General Meeting(AGM) in April 2021 and a resolution was passed to that effect.
The Committee confirms it is in compliance with the provisionsof the Statutory Audit Services for Large Companies Market
Investigation Order 2014.
On the recommendation of the Committee, the Board approvedthat Deloitte should be recommended to shareholders for
re-appointment as the Group’s auditors at the 2022 AGM.
A resolution to that effect will be proposed at the AGM.

Audit fee

During 2022, the Committee reviewed and approved the audit fee
proposal for the 2022 year end Group audit. The agreed fee for theaudit and other assurance related services for 2022 is £2.76 million(2021: £2.25 million), with the increase reflecting inflation in linewith market increases and the audit work performed to datein relation to the Group’s implementation of IFRS 17 (Insurance
Contracts) and the extended requirements for ESEF (European
Single Electronic Format).
The Committee approved the fee increase having discussed withthe auditor the rationale for the proposal.

Safeguarding the external auditor’s independence
and objectivity

The Committee reviewed and approved its policy on non-audit
services in February 2022 and was satisfied that it continued
to align with current regulatory guidance. Under the policy,
the Group’s statutory auditor will only be engaged to carry out
non-audit services in exceptional circumstances or where there isa regulatory request, and where agreed by the Committee. This is
to ensure that the independence and objectivity of the external
auditor is safeguarded.
Pursuant to the policy and unless required by law or regulation,
any non-audit services will: a) be subject to ratification by theCommittee, if the cost does not exceed £15,000, or be subject• Reports setting out management’s assessment of key technicalaccounting matters and accounting policy choices, including thestatus of the work of the external auditor Deloitte in respect of
those technical issues
Admiral Group plc Annual Report and Accounts 2022

177

Company Overview• The nature of the service would compromise
auditor independence

Effectiveness of the external audit process

As part of its review, the Committee considered, among otherthings, the following: the output of a questionnaire completedby all Committee members and relevant members of the Group’s
Finance and Internal Audit functions and the findings of the FRC
Audit Quality Reviews (AQR) published in July 2022. Following thisreview, the Committee concluded that the external auditor,
Deloitte LLP, remained independent and that the external audit
process remained effective.

Committee effectiveness review

The 2022 Committee effectiveness review was conducted by
an external company, Bvalco Limited. As part of the review,each Committee member was interviewed and asked a seriesof questions designed to provide objective assessment of
the Committee’s performance, including its effectiveness inmonitoring internal and external audit.

Internal audit

The Committee discussed the results of the review at its meetingin early February 2023 and concluded that the Committee
continued to operate effectively and the evaluators highlighted
good discussions on technically involved matters and efficientdecision-making. There were some areas identified for further
improvement, such as continued focus on the timeliness of thecirculation of papers in advance of meetings.

The Group Head of Internal Audit also carries out an annual reviewof the effectiveness of the Group’s systems of internal control
and risk management and reports on the outcome of this review
to the Committee. In February 2023, the Group Head of Internal
Audit reported an adequate level of assurance in relation to theGroup’s arrangements for risk management, control infrastructure,
governance and fraud prevention controls.

Whistleblowing

The Group Head of Internal Audit attended all Audit Committee
meetings and provided a range of presentations and papers
to the Committee, through which the Committee monitored
the effectiveness of the Group’s material internal controls,
including financial, operational and compliance controls onbehalf of the Board.

The Committee reviewed and approved the Group Internal
Audit Policy, which includes the Group Internal Audit Terms ofReference setting out the role; objectives; reporting lines andaccountability; authority; independence; and objectivity of theInternal Audit function. The Committee also monitored andAdmiral Group plc Annual Report and Accounts 2022

On behalf of the Board, the Committee considered and reviewed
the Group’s whistleblowing policy and received quarterly updates
on the use and effectiveness of the policy, whistleblowing metrics
and the instances of whistleblowing that had been raised acrossthe Group during the year. During the year, the Committee
concluded that the Group’s current whistleblowing arrangements
were an appropriate means by which employees could raise
concerns in confidence and anonymously.

Additional Information

The Committee undertakes an annual review to assess theindependence and objectivity of the external auditor and theeffectiveness of the audit process, taking into consideration
relevant professional and regulatory requirements, the progressachieved against the agreed audit plan, and the competencewith which the auditor handled the key accounting andaudit judgements.

The European operations in Spain, Italy and France have a
dedicated internal audit team and the US business also has its
own locally based team. All reports are evaluated by the Group
Head of Internal Audit to ensure the quality and effectivenessof the reported findings, and a summary of the key findings ofeach completed audit is provided to the Committee as part of
the Group Head of Internal Audit’s regular Committee update.
In addition, the UK internal audit function carries out high-levelgovernance reviews of all foreign operations, assessing the internal
control frameworks and system of risk management.

Financial Statements

The Committee will continue to monitor regulatory developmentsin this area to ensure that its policy on non-audit fees adheres tocurrent guidance.

Members of the Committee also receive all issued audit reports,
enabling them to challenge the reports’ content, including therating, and related recommendations. The Committee approves
the internal audit plan at the start of each calendar year whilst theeffectiveness and workload of the Internal Audit functions andthe adequacy of available resources are monitored throughout
the year.

Corporate Governance• It is probable that an objective, reasonable and informed
third party would conclude that the understanding of theGroup obtained by the auditor for the audit of the Financial
Statements is relevant to the service

discussed the evolution and development of the Internal Audit
function, and considered the role, competence and effectivenessof each internal audit function across the Group. The Group Headof Internal Audit continues to have responsibility to ensure thequality of the internal audit activities in the Group’s overseas
locations. The Chairs of the European and US Audit Committees
each attended a meeting to provide an update on theirrespective activities.

Strategic Reportto prior approval from the Committee where the cost exceeds£15,000 or such costs in the aggregate exceed £30,000 and b) inaggregate and where applicable, shall not cost more than 70% of
the average statutory audit fee for the past three financial years.
In considering whether to approve such non-audit services, theCommittee shall consider whether:

178

Corporate GovernanceGroup Risk Committee ReportStatement from Andy Crossley
Interim Chair of the Group Risk Committee
Dear Shareholder,

As Interim Chair of the Group Risk Committee, I am pleased topresent the Committee’s report for 2022.
The Committee has received updates on each of the Groupbusinesses as part of the Group’s Enterprise Risk Management
Framework (‘ERMF’). Developments considered by the Committee
throughout the year included:• Admiral’s risk strategy and approach to risk management
including regular reviews of the Group’s risk strategy andrisk appetite; consideration of a refreshed suite of Key Risk
Indicators; and oversight of the management of material
notable risk events• Ongoing risk assessment and monitoring of the impact ofinflation, market volatility, Covid-19 and economic outlook on
capital and liquidity risks across the Admiral Group• Oversight of work required to ensure Admiral is prepared tomeet the challenges of climate change• Developments linked to the launch of new products and themonitoring of plans to develop existing products“The Group Board is of
the view that the Group’s
risk management andinternal control systems haveoperated effectively during
the year.”• Oversight of Admiral’s Technology and Information Security
work, including improvements in controls throughout the Group• The continuing development of the Admiral Internal Model
Risk strategy and approach to risk management: During the year
the Committee reviewed and proposed the Group risk strategy
and appetite to the Admiral Group Board (hereafter ‘the Board’)
for approval. The Committee approved a refresh of the suite of Key
Risk Indicators with associated triggers and limits, reflecting the
updates to the Group Risk Appetite.
The on-going focus on monitoring and reporting customer
outcome risks continues with the Committee reviewing the Group
Conduct Risk Framework (aligned with the ERMF). The Committee
also reviewed the Group Minimum Standards which continue to beenhanced and embedded.
The Committee has spent time on key risks that affect the Group
as well as reviewing the management and outcomes of notablerisk events reported during the year.

Andy Crossley	Interim Chair of the Group Risk Committee

Committee members
Focus area

Andy Crossley (Interim Chair)
Jayaprakasa (JP) Rangaswami
Cristina Nestares
Karen Green
Jean Park

Attendance

11/11
11/11
10/11
5/5
5/11

11
9
meetings
in 2022

The Committee held five scheduled meetings, with a further six
additional meetings taking place.

Admiral Group plc Annual Report and Accounts 2022

179

Climate change: The Committee has received regular updates on
the work being undertaken relating to climate change to ensurethat Admiral is meeting current requirements and is appropriately
preparing to meet future challenges. These updates includecommentary on risk management, investments, ongoing climaterelated-strategic developments, and the changes that may benecessary for compliance with emerging regulatory requirements.
This is further described in the Viability Statement (page 122),
and additional information on Admiral’s approach to climatechange can be found in disclosures related to the Task Force on
Climate-Related Financial Disclosures framework (page 97).

Admiral Group plc Annual Report and Accounts 2022

Andy Crossley
Interim Chair of the Group Risk Committee
7 March 2023

Additional Information

Covid-19: The impact of Covid-19 on Admiral’s PR&Us, as well as
the steps taken to appropriately manage these risks, continues tobe overseen by the GRC, including oversight of the return to theoffice, in line with all applicable local and national guidance.

Progress of Admiral Internal Model (AIM): The project teamhas continued to provide status updates against key milestones
at each Group Risk Committee and Board meeting during 2022.
The model enhancement stage is ongoing and expected toconclude in the first half of 2023. The Board will oversee an endto-end process of reviewing the enhanced model output across
two year-ends, supported by robust independent validation before
entering a regulatory pre-application process.

Financial Statements

Economic Uncertainty: The Committee has reviewed andconsidered developments in the external environment throughout
this year. The combination of extraordinary factors such as theRussian invasion of Ukraine, supply chain disruption, inflation levels,interest rate increases and political instability have been thesubject of a number frequent of stress tests. In the UK insurance
market, the impact of whiplash reform and introduction of the
FCA’s General Insurance Pricing Practices have also been reviewed.

Technology and Information Security: The level of oversight ofTechnology Risks including operational resilience has increased
over the year with the recruitment of additional resources in theseareas and with the embedding of improved KRIs for Technology
and Cyber/Information Security risks. The cyber security
programme of work in the European Insurance businesses is close
to completion, with a number of areas strengthened around cybersecurity and business resilience. The GRC has received regular
updates on these topics including the future technology strategy.

Corporate Governance

Solvency and Liquidity: The Committee has reviewed andcontinues to monitor the Group’s solvency and liquidity positions
in response to market volatility and wider economic uncertainty,
considering factors such as increases in inflation, the wider
impact of supply chain disruption, and the pressures on individual
household finances.

New product developments and existing product escalation:
As a result of the Committee’s oversight of individual Group
entities, combined with the oversight afforded by the Group’s
project governance framework, the Committee has considered
and challenged updates relating to material projects and change
programmes within the Group, including those designed todevelop new products, and those that will develop and accelerate
existing products.

Strategic Report

Capital Management: The Committee has reviewed the Group’s
proposed dividend level, capital plan and capital buffer in linewith the Capital Policy. The review considered several sensitivities,stress tests and scenarios tests, including assessing the uncertainty
around inflation impacts. The Group continues to make use of
Undertaking Specific Parameters (USPs) for AIGL and the Volatility
Adjustment (VA) across its UK insurance entities.

Company Overview

Group Risk Committee Reportcontinued

180

Corporate GovernanceGroup Risk Committee Reportcontinued
Duties and Responsibilities of the Group Risk Committee

The duties and responsibilities of the Committee are set out in theCommittee’s Terms of Reference, and were reviewed and approvedby the Admiral Group Board.
The responsibilities of the Committee are:• Overseeing the development, implementation and maintenanceof the Group’s overall Risk Management Framework and ensuringthat it is in line with emerging regulatory, corporate governanceand best practice guidelines• Considering and recommending to the Board for approval theGroup’s risk appetite, as well as ongoing monitoring and reviewof the Group’s risk exposures• Monitoring the Group’s prudential risk exposure, which includes
ensuring that the Group’s capital resources and liquidity profile
are appropriate to its needs, whilst meeting minimum regulatory
requirements, including overseeing and challenging the designand execution of the Group’s stress and scenario testing• Reviewing the Group’s proposed interim and final
dividend payments• Reviewing the annual Group ORSA Report and any required
interim ORSA Reports, with recommendations being provided
to the Board for approval• Reviewing and approving the Solvency II Actuarial Function
Reports on Reinsurance and Underwriting each year.
• Reviewing the Group’s progress towards approval of the Group’s
internal capital model• Monitoring the adequacy and effectiveness of the Group’s Risk
and Compliance functions• Approving the annual plans and resourcing for the Group Risk
and Compliance functions which include reviewing regulatory
developments and any planned meetings between the PRA andFCA and the business• Reviewing any significant risk issues that have a material impact
on the customers of the business and / or concern the regulator• Ensuring the adequacy and effectiveness of the Group’s systems
and controls for the prevention of financial crime, and dataprotection systems and controls• Reviewing the Group’s compliance with Solvency II• Considering the annual process for the review and appraisal ofadherence to Group Minimum Standards• Reviewing compliance with Group policies, including theGroup’s Reinsurance Policy, Group ORSA Policy, and Group
Underwriting Policy• Reviewing the proposed risk-based adjustments toremuneration for senior managers and making subsequent
recommendations for approval to the Group Remuneration
Committee, as well as providing feedback on the Directors
Remuneration Policy, and commenting on remuneration
metrics to help ensure there is no conflict with risk
management objectives• Reviewing reports from the Group Risk, Group Compliance,
Group Data Protection and Privacy, and Group Internal
Audit functions• Formally reporting to the Group Audit Committee to facilitate
their recommendation of the Annual Report and Accounts to
the Board on the following key areas and disclosures; principal
risks and uncertainties, risk management and internal control,
viability, risks associated with material transactions and/or
strategic proposals, and the Taskforce on Climate-Related
Financial Disclosures
The Committee Chair reports formally to the Board on theCommittee’s proceedings after each meeting, on all matterswithin its duties and responsibilities, as set out in previously
circulated minutes to the Board. The Committee Chair also
reports on the activities of the Committee in a formal written
report that is submitted to and discussed by the Board annually.
The work of the Committee is supported by more detailed
work undertaken by subsidiary Boards and/or executive Risk
Management Committees in each of the Group’s operational
entities. At each meeting, the Risk Management Committees
consider notable: movements in the operation’s risk profile;risk events; and emerging risks. Risk Management Committees
also assess and monitor regulatory issues, ensuring that theirresolution and the actions taken are appropriately recorded.
The Risk Management Committees receive regular information
on Conduct Risk, such as complaint handling reports and otherrelated management information. The Group Risk Management
function reviews and collates information from across the Groupfor consideration by the Committee.
In addition, to ensure that the Committee is operating effectively,
it conducts a periodic review of its performance (in 2022,
this review was performed externally by Bvalco) and at least
annually reviews its constitution and terms of reference (lastreviewed in November 2022). Any changes it considers necessary
are recommended to the Group Board for approval. As partof the Committee’s 2022 annual review, performed by Bvalco,each Committee member undertook an interview designed toprovide objective assessment of the Committee’s performance,
including its effectiveness.
The Committee discussed the results of the review at its meetingin February 2023 and concluded that, overall, the Committee
remained effective. An area of focus and improvement for theCommittee in 2023 was identified as ensuring that effective
summaries highlighting major points, results, conclusions or
recommendations are presented to support more complex Risk
Committee material.

Admiral Group plc Annual Report and Accounts 2022

181

Company Overview

During the year the Committee:• Reviewed the Group’s updated Risk Strategy, Risk Appetite andassociated triggers and limits in the context of the Group’s
agreed strategic objectives• Reviewed the Group’s regulatory capital add-on applicationas part of Solvency II capital requirements• Received regular monitoring reports on customer outcome risk
and reviewed updates to the Group Minimum Standards andPolicy Framework• Received in-depth updates of individual Group entities,
including Admiral Europe Compañia De Seguros (AECS),EUI, Admiral Money (AFSL), Elephant and Able
• Considered in-depth analysis of a number of the Group’s mostsignificant risk areas, via stress and scenario testing and reverse
stress testing• Considered the adequacy of risk mitigation measuresand contingency plans including a review of the Group’s
reinsurance provisions• Dedicated a significant amount of time to the developmentof the Admiral internal model, receiving regular updates on the
progress of the project and providing challenge to key projectwork streams, in particular the model validation• Received regular updates on climate change-related initiatives,
including continued progress to reduce scope 1 and 2 emissions,progress to validating scope 3 emissions, and updates on
staff involvement• Received regular risk monitoring reports on performance of Key
Risk Indicators within the overall risk management framework.
• Received updates on the impact of notable risk events
throughout 2022
• Received regular updates in relation to key programmes ofwork including IFRS 17, Neo, Guidewire Upgrade and PCIAgentless Payments, as part of the Group’s enhanced project
governance framework• Considered the annual renewal of the Group’s corporate
insurance coverage

Admiral Group plc Annual Report and Accounts 2022

Risk management and internal control systems

Furthermore, risk management can only provide reasonable andnot absolute assurance against material misstatement or loss.
The Group Board is ultimately responsible for the Group’s systemof risk management and internal control and the Audit Committee
has reviewed the effectiveness of this system (a summary of
Audit Committee duties and responsibilities, as well as key Audit
Committee activities in 2022 is available on page 171).
The Group Board is of the view: that there is an ongoing process for
identifying, evaluating and managing the Group’s risks and internal
controls; that it has been in place for the year ended 31 December
2022 and that it has operated effectively; and that, up to thedate of approval of the Annual Report and Accounts, it is regularly
reviewed by the Group Board and accords with the internal
control guidance for Directors provided in the 2018 UK Corporate
Governance Code.

Additional Information• Reviewed the Group’s proposed dividend level, capital planand capital buffer in line with the Capital Policy

Information on how key risk drivers have impacted on the Group’s
principal risks has been included within the Viability Statement,
page 122.

Financial Statements• Recommended the “2022 Group ORSA Report” and ORSA
Policy for Board approval prior to submission of the reportto the regulator

The Board of Directors confirms that it has performed arobust assessment of the Group’s principal and emerging risks.
These risks, along with explanations of how they are being
managed and mitigated, are included in the Strategic Report,
page 114.

Corporate Governance• Received and challenged regular updates related to
Covid-19, including: impact on the Group’s principal risks anduncertainties; staff health and wellbeing; return to officeplans; IT and information security updates; and the impact tosubsidiaries within the Group

Principal risks and uncertainties

Strategic Report

Summary of Key Group Risk Committee Activities in 2022

The system of risk management and internal control over Admiral’sinsurance, operational, market, credit and group risk is designed
to manage rather than eliminate the risk of failure to achievebusiness objectives and breaches of risk appetites.

The Group Board confirms that it has performed a robust
assessment of the Group’s principal and emerging risks.
These risks, along with explanations of how they are being
managed and mitigated, are included in the Strategic Reporton page 114, with key risk drivers impacting Admiral’s principal
risks and uncertainties being further discussed in the Viability
Statement on page 122. The Group Board is responsible fordetermining the nature and extent of the principal risks it iswilling to take in achieving its strategic objectives. This assessment
supports the Group Board in monitoring the integrity of theGroup’s reported Financial Statements.
The Group Board meets at least seven times a year to discuss the
direction of the Group and to provide oversight of the Group’s risk
management and internal control systems.
The Group Board has delegated the development, implementationand maintenance of the Group’s overall risk management
framework to the Group Risk Committee (GRC). The GRC reports
on its activities to the Group Board and the GAC, supporting the

182

Corporate GovernanceGroup Risk Committee Reportcontinued
overall assurance provided by the GAC that the Group’s internal
control, risk management and compliance systems continue tooperate effectively.
The Group Board has delegated to the GAC the review of theadequacy and effectiveness of the Company’s internal financial
controls, and internal control and risk management systems.
The Group operates a “three lines of defence” approach to Risk
and Internal Control.
1st Line of Defence: The Group Board recognises that the day-today responsibility for implementing policies for risk identification,assessment and management lies with the senior management,
whose operational decisions must take into account risk and how
it can be controlled effectively.
2nd Line of Defence: The “second line of defence” is led by theGroup Chief Risk Officer and comprises the Corporate Governancefunctions and Committees that are in place to provide oversightof the effective operation of the internal control framework.
The Corporate Governance functions facilitate the oversight andoperation of the Group Policy Framework and Group MinimumStandards, covering risk management and controls for all notablerisks to the Group. The Corporate Governance functions performsecond line reviews, including reviews of the capital modellingand business planning processes to support the Group Board’s
assessment of the Group’s on-going viability. Regular reviews of
all risks are undertaken in conjunction with senior management,with the results of these reviews recorded in risk registers andreported to the appropriate governance forums and Boards.

The Subsidiary Boards, GRC, and entity Risk Committees receive
reports setting out key performance and risk indicators andconsider possible control issues brought to their attention
by early warning mechanisms that are embedded within theoperational units. They, together with the GAC, also receive
regular reports from the Internal Audit function, which
include recommendations for improvement of the control andoperational environments.
The Chair of the GRC provides a written report to the Group Boardof the activities carried out by the Committee on an annual basis(a summary of GRC duties and responsibilities, as well as key GRC
activities in 2022 is available on pages 178 to 182). In addition, theGroup Board receives reports from the Chair of the GAC as to its
activities, together with copies of the minutes from Subsidiary
Board meetings, the GRC and the GAC.
The GAC’s ability to provide assurance to the Group Board depends
on the provision of periodic and independent confirmation,
primarily by Group Internal Audit, that the controls establishedby Management are operating effectively and where necessary
provides a high-level challenge to the steps being taken by the
GRC to implement the risk management strategy.

3rd Line of Defence: The “third line of defence” comprises theindependent assurance provided by the GAC and the GroupInternal Audit function. Internal Audit undertakes a programmeof risk-based audits covering all aspects of both the first andsecond lines of defence. The findings from these audits arereported to all three lines, i.e. Management, the Executive andoversight Committees, and the GAC.

Admiral Group plc Annual Report and Accounts 2022

183

Company Overview

Remuneration Committee Report

On behalf of the Remuneration Committee, I am delighted topresent the Director’s Remuneration Report for the year ended
31 December 2022.

2022 Business Context

2022 has been another turbulent year where we have needed tobe agile in adapting to fast developing circumstances to arrive at
the right outcomes quickly, but robustly for all our stakeholders.

“For Admiral, like man yother companies, 2022 hasbeen a challenging year
when it comes to pa y for ourpeople affected by the risingcost of living. The Committee
have been focused on how wesupport all the people whowork for Admiral..”Evelyn Bourke	Chair of the Remuneration Committee

Committee members
Focus area

Attendance

Evelyn Bourke (Chair)
Jean Park
Mike Brierley
1 Michael Brierley was unable to attend one ad hoc meeting of the Remuneration
Committee called at short notice on 27 October 2022

Admiral Group plc Annual Report and Accounts 2022

9/9
4/9
8/91

9
meetings
in 2022

Additional Information

We needed to show agility to support the people who work for
Admiral and whose dedication and hard work make our businesssuccessful. During 2022 we have taken steps to ensure our people
are supported through the cost-of-living challenge.

Financial Statements

As Milena has made clear in her statement this year, while wehaven’t been immune to external conditions, we continued todeliver the right products and service to our customers, andin return we have grown our customer base to 9.28 million,
while delivering profits of £469 million. This is a solid performancein uncertain times. We have been able to deliver this performance
because we reacted quickly to the changing market conditions.

Corporate Governance

I would like to thank shareholders for supporting Admiral’s Annual
Report on Remuneration at the April 2022 AGM with a vote of
97.31%. I look forward to welcoming you at our AGM in 2023 andto your continued support for this year’s remuneration resolution.

Strategic Report

Dear Shareholder,

184

Corporate Governance

Remuneration Committee Reportcontinued
Pay across the Group – Supporting our people

We recognised the extra squeeze many of our people felt.
The increases in energy prices, rising inflation, and general costof living pressures have been on everyone’s minds during 2022.
Our colleagues have always been at the heart of our business,so we automatically sought to support them through this difficult
time. Our response was tailored by population and to the situationin countries where we have operations to ensure we delivered theright solutions.
During 2022 we provided cost-of-living support payments to
help with rising costs, particularly over the winter months.
These payments are on top of additional salary increases awarded
to a significant number of colleagues as part of our ongoing review
of how we reward colleagues at Admiral. We also provided support
to colleagues in a less direct way though free car parking anddiscounts in the office restaurants. Finally, we have reminded ourpeople of the support that is always available to them, but which
may be even more relevant at the moment such as discounts on
the weekly supermarket shop, mortgage review services as well
as free debt advice and life event loans.

Remuneration for 2022

Taking into account the approved remuneration structure andAdmiral’s business performance, the Committee made thefollowing decisions during 2022:

2020–22 Discretionary Free Shares Scheme (DFSS)

Based on our performance for the period 2020–2022, 59.24% and59.21% of the DFSS award granted in 2020 will vest to Milena
Mondini de Focatiis and Geraint Jones, respectively.
The 2020 DFSS awards were granted during the pandemic,
a period when the shares price were lower in many companies.
The awards granted under the DFSS are a fixed number of shares.
As such the awards granted to Milena Mondini de Focatiis andGeraint Jones in 2020 were not impacted by the change in theshare price. However, as always, the Committee have given
thorough consideration to the outcomes to satisfy themselvesthat it is reflective of the overall performance of the Group.
The full details of the vesting outcomes are on page 199.

2022 DFSS Bonus

Milena Mondini de Focatiis and Geraint Jones will receive a DFSS
bonus of £399,085 and £260,516 respectively. This bonus isequivalent to dividends which would have been paid during theyear on all outstanding DFSS and salary shares awarded, but not
yet vested, plus a 6.48% adjustment for performance against ascorecard of Non-Financial Metrics. In addition, the DFSS bonus
was subject to a potential downward adjustment to take into
account any risk events which were considered to have a material
customer, regulatory or financial impact. For this year there wereno such risk adjustments. The full details of the DFSS bonus
calculations are on page 200.

2022 DFSS AwardOn 26th September 2022, Milena Mondini de Focatiis was granted
an award of 90,000 shares and Geraint Jones was granted an award
of 52,500 shares under the DFSS. Using the share price on the dateof the grant of £21.21, this is the equivalent to £1,908,900 or 267%
of Milena’s base salary and £1,113,525 or 267% of Geraint’s basesalary respectively.
The awards will vest based on:• EPS – 26.67% weighting• TSR vs. FTSE 350 (excluding investment companies) –26.67% weighting• RoE – 26.67% weighting, and• the average outcomes of the scorecards of Non-Financial
Metrics used to assess DFSS bonus adjustments over the
performance period – 20% weighting
There will also be the potential for downwards adjustment subject
to an assessment which will take account of risk events which areconsidered to have a material customer, regulatory or financial
impact over the course of the performance period. Further details
can be found on page 201.

2022 DFSS Financial Measures review

One of the key changes to the way we have implemented
remuneration during 2022 is a review of the performance range
for the financial measures that apply to the 2022 DFSS which
covers the performance period from 2022 to 2024.
The financial performance ranges for the financial performancemeasures are set at the point of each grant of the awards.
The grants are usually made in the autumn. Over several years
the measures and the performance ranges have been largely
unchanged from one year to the next. However, in 2022 theRemuneration Committee has reviewed the performance ranges
that apply to awards granted on 26th September 2022 andapproved a change. This impacts approximately 4,000 people
in the Group, including Milena and Geraint as Group CEO andGroup CFO.
The Remuneration Committee believe it is appropriate to makethe changes to the performance ranges in 2022 to reflect boththe unique operating environment experienced during the
pandemic and to ensure they reflect the growth strategy of
the Group. Without this change it is extremely likely that thevesting outcome would be nil which would undermine the reward
and retention elements of the scheme for both the company
and participants.
In summary, the Earnings Per Share (EPS) performance range has
been set on an absolute EPS outcome rather than growth because
the pandemic resulted in exceptional EPS outcomes in 2020 and
2021 that make an EPS growth measure unachievable, 2021 would
be the basis year for any growth. The Return On Equity (ROE)
performance range has been set to reflect the current growth anddiversification strategy and business mix. The Total Shareholder
Return (TSR) target remains unchanged from previous schemes.

Admiral Group plc Annual Report and Accounts 2022

185

Company Overview

Full detail of the change to the 2022 DFSS financial targets can befound in the Annual Report on Remuneration on page 200.

2023 remuneration arrangements

It is anticipated that Milena Mondini de Focatiis will be granted anaward of 90,000 shares and Geraint Jones will be granted an award
of 52,500 shares under the DFSS for 2023. The Committee will
review these awards prior to the September grant date to ensure
the quantum remains appropriate.
The Committee reviewed the metrics that will apply to DFSSand DFSS bonus awards for 2023. Further details are shown on
page 200. In particular, the Committee considered the use ofEnvironmental, Social and Governance (‘ESG’) measures. For 2023,
DFSS and DFSS bonus awards will be subject to performance
ranges based on diversity in senior management and across theGroup. We plan to include targets for climate impact when we
have completed the validation of our scope 3 emissions, and once
Science-Based Targets have been set. The Committee will keep
this under close review during 2023.
In addition to the Executive Director arrangements for 2023 theCommittee has agreed the package for the incoming Group Chair,details of which can be found on page 205.

Admiral Group plc Annual Report and Accounts 2022

As Justine Roberts has recently joined the Remuneration Committee,
I would like to extend a warm welcome to her, and I am sure her
people and remuneration expertise will be highly valuable to
the Committee.

Looking ahead

Our Directors’ Remuneration Policy, approved by shareholders
at the 2021 AGM for a period of three years, is nearing its end
and is scheduled for renewal and shareholder vote at the 2024
AGM. The Committee will consider how the policy and its
implementation will need to evolve to ensure the continuedalignment to our strategy and purpose. Simplicity andtransparency will be key areas of focus for the review.
We will complete this review during 2023 and will undertakea consultation with our regulators and largest shareholders tounderstand their perspectives on any changes and will take carefulconsideration of feedback received before finalising the proposals.
The Annual Report on Remuneration (subject to an advisory vote)will be put to our shareholders at the AGM in 2023. We hopethat you vote in favour of the report. I am available to discuss
our Remuneration Policy and Annual Report on Remuneration
with shareholders.
Evelyn Bourke
Chair of the Remuneration Committee
7 March 2023

Additional Information

Milena Mondini de Focatiis’ salary was increased by 3.00% to£737,326 and Geraint Jones’s salary was increased by 4.00% to£433,472, effective from 1 January 2023. These increases are below
the proposed base pay changes across the wider Group for 2023.
We anticipate the average increase to be in the order of 5% as we
continue to support our people through the impact of the highly
inflationary environment.

I would like to extend my thanks to JP Rangaswami for his insightful
contribution as Interim Member of the Remuneration Committee
over the course of 2022.

Financial Statements

Executive Director remuneration arrangements for 2023 willcontinue to be in line with the 2021 Remuneration Policy.

As mentioned elsewhere in the Annual Report, Jean Park retired
from the Board and all her committee memberships in January
2023. I would like to thank her for her invaluable contribution to
the Committee and wish her all the very best for the future.

Corporate GovernanceWe engaged with our major shareholders, who were generally very
supportive of the changes.

Composition of the Remuneration Committee

Strategic Report

Admiral has always focused on building a long-term sustainablebusiness and has adopted a flexible approach to optimise
outcomes in the medium term so as to maintain a focus on
creating long term value. We believe this approach is a key factor
in our success. In making these adjustments the Remuneration
Committee continue to support this approach, while seeking toensure that the DFSS will continue to act as an incentive for all
the participants and align them to delivering strong results forall our stakeholders.

186

Corporate Governance

Remuneration at a Glance

How did we perform during 2022?

Earnings per share (pence)

Return on equity (%)

124.3p35%(2021: 212.2p)“I would like to thankshareholders forsupporting Annual
Report on Remuneration
at the April 2022 AGM
with a vote of 97.31%.”(2021: 56%)

Full year dividend
per share (pence)

Evelyn BourkeChair of the Remuneration Committee

1 year TSR

-26%

112p
(2021: 187p)

10-year TSR performance: Admiral vs. FTSE100
and FTSE350 indices

What did our Executive Directors earn in 2022?

Growth in the value of a hypothetical £100 holding over ten years
to 31 December 2022
£500

• Pension, benefits and SIP includes 2022 pension contribution of£15,000, and £15,000 for the CEO and CFO, respectively• DFSS bonus of £399,085 and £260,516 for the CEO and CFO,
including an adjustment for performance against scorecards of
non-financial measures• DFSS value for the CEO and CFO relates to 59.24% and 59.21%of their 2020 DFSS awards vesting, respectively£400£1,016,647

£300

£200

£537,942£399,085£19,069£260,516£100£19,069£715,850£416,800£0
Dec 12AdmiralDec 13

Dec 14
FTSE 100

Dec 15

Dec 16

Dec 17

FTSE 350

Dec 18Dec 19Dec 20Dec 21CEO

Dec 22
SalaryPension, benefits & SIP

CFODFSS Bonus

DFSS Shares

Admiral Group plc Annual Report and Accounts 2022

187

Company Overview

Director’s Remuneration Policy

This Remuneration Report has been prepared according to the requirements of the Companies Act 2006 (the Act), Regulation 11
and Schedule 8 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2018,
the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 and other relevant requirementsof the FCA Listing Rules. In addition, the Board has adopted the principles of good corporate governance set out in the UK Corporate
Governance Code (the Code) and the guidelines issued by its leading shareholders and bodies such as ISS, the Investment Association,and the Pensions and Lifetime Savings Association.
The following Remuneration Policy (the “2021 Policy”) was approved by a 98.6% shareholder vote and therefore came into effect fromthe April 2021 AGM. There have been no changes to the Remuneration Policy since the 2021 AGM.

Compliance with the Code Principles
References

Remuneration policies and practices should bedesigned to support strategy and promote longterm sustainable success. Executive remuneration
should be aligned to company purpose and values
and be clearly linked to the successful delivery of thecompany’s long-term strategy.

• Key Principles on page 187

A formal and transparent procedure for developing
policy on executive remuneration and determining
director and senior management remuneration
should be established. No director should be involved
in deciding their own remuneration outcome.

• Executive Director Remuneration Policy on page 187

Principle
Q

Directors should exercise independent judgementand discretion when authorising remuneration
outcomes, taking account of company and individual
performance, and wider circumstances.

• Remuneration outcomes for 2022 on page 199

Principle
R

PrincipleP• Executive Director Remuneration Policy on page 187• Remuneration outcomes for 2022 on page 199• Implementation of remuneration policy for 2023 on
page 196• Incentive outcomes on page 199• Remuneration Committee overview on page 183• Remuneration Committee overview on page 183

Key Principles of Admiral Remuneration Arrangements

The Group is committed to the primary objective of maximising shareholder value over time in a way that also promotes effective risk
management and excellent customer outcomes ensuring that there is a strong link between performance and reward. This is reflectedin the Group’s stated Remuneration Policy of paying competitive, performance-linked and shareholder-aligned total remuneration
packages comprising basic salaries coupled with participation in performance-based share schemes to generate competitive total reward
packages for superior performance. The Board is satisfied that this Policy continues to meet the objectives of attracting and retaining
high quality executives across the Group. This policy will be reviewed in 2023 as part of the usual three year review and will be put to ashareholder vote at the 2024 AGM.
The Committee reviews the remuneration framework and packages of the Executive Directors and senior managers and recognises theneed to ensure that the Remuneration Policy is firmly linked to the Group’s strategy, including its risk management approach. In setting
the Policy and making remuneration decisions, the Committee takes into account pay and conditions elsewhere in the Group. The mainprinciples underlying the Remuneration Policy are:• Competitive total package – the Group aims to deliver total remuneration packages that are market-competitive, taking into accountthe role, job size, responsibility, and the individual’s performance and effectiveness. Prevailing market and economic conditions anddevelopments in governance are also considered, as are general salary levels throughout the organisation• Significantly share-based – our base salaries are typically targeted towards the lower end of market but are combined withmeaningful annual share awards that vest on long-term performance to ensure strong alignment with shareholders and the longterm interests of the Group. Executives are also encouraged to build up significant shareholdings in the Group to strengthenshareholder alignment• Long-term perspective – a significant part of senior executives’ remuneration is based on the achievement of appropriate but
stretching performance ranges that support the delivery of the Group’s strategy and shareholder value. The extended performanceand vesting horizons promote a long-term perspective that is appropriate to the insurance sector
Admiral Group plc Annual Report and Accounts 2022

Additional Information

Description

Financial Statements

UK CodePrinciple

Corporate Governance

Unless otherwise stated, information contained within this Remuneration Report is unaudited.

Strategic ReportCompliance Statement

188

Corporate GovernanceDirector’s Remuneration Policy
continued• Effective risk management – incentives are designed to ensure they do not encourage excessive risk-taking. They are aligned withthe delivery of positive customer outcomes and reinforce the Group’s risk policy• Open and honest culture – the Group has a strong culture of focussing on collective success, whilst still recognising individual
contribution to the Group’s performance, and this is reflected in our remuneration structure across the business, and• Transparency for stakeholders – the remuneration structure is designed to be easy to understand, and all aspects are clear toemployees and openly communicated to employees, shareholders, and regulators

Remuneration Policy table

This table describes the key components of the remuneration arrangements for Executive Directors.
Purpose and link to strategy

Operation

Opportunity and performance metrics

Base Salary
To attract and retain
talent by settingbase salaries at levels
appropriate forthe business.

Salaries are reviewed annually or following asignificant change in responsibilities.

Any salary increases are applied in line with the outcomeof the review.

Salary levels/increases take account of:In respect of existing Executive Directors, it is anticipatedthat increases in cash salary will not normally exceed
the increase for the general employee population over
the term of this Policy. More significant increases may
be awarded in certain circumstances including, but notlimited to: where there has been a significant increase inrole size or complexity, to apply salary progression for a
newly appointed Executive Director, or where the Executive
Director’s salary has fallen significantly behind market.

• Scope and responsibility of the position• Individual performance and effectiveness,and experience of the individual in the role
• Average increase awarded across the Group

PensionTo provide
retirement benefits.

The Group operates a Personal Pension Plan,a Defined Contribution Scheme.
This is available to all employees following
completion of their probationary period.

Other Benefits
To provide
competitive benefits.

Includes (but not limited to):• Death in service scheme• Private medical cover• Permanent health insurance• Relocation, at the Committee’s discretion
All benefits are non-pensionable

Where increases are awarded in excess of that for thegeneral employee population, the Committee will
provide the rationale in the relevant year’s Annual Report
on Remuneration.
In the UK, the Group matches employee contributions up
to a maximum of 6% of base salary subject to an overallmaximum employer contribution of £15,000 or provides theequivalent value in cash. Base salary is the only element of
remuneration that is pensionable.
The pension provision and rules are the same for Executive
Directors and the main body of staff.
Benefits may vary by role.
None of the existing Executive Directors received total
taxable benefits exceeding 5% of base salary during themost recent financial year, and it is not anticipated that thecost of benefits provided will exceed this level over the termof this Policy.
The Committee retains the discretion to approve ahigher cost in exceptional circumstances (e.g., relocation),or in circumstances driven by factors outside theCompany’s control (e.g., material increases in healthcare
insurance premiums).

Admiral Group plc Annual Report and Accounts 2022

189

Company Overview

Maximum opportunity: A maximum face value on award
of 500% of base salary applies. Threshold performance will
result in vesting of up to 25% of the maximum award.

Awards may be in the form of nil or nominal
priced options or conditional shares. Awards arenormally granted on an annual basis and vest
after a minimum of three years subject to Group
performance and continued employment.
A two-year holding period applies to vested
awards, during which time Executive Directors
may not sell the vested awards except to cover
tax liabilities.
Awards are subject to a potential downwards
adjustment based on an assessment to take into
account of risk events which are considered tohave a material customer, regulatory or financial
impact over the course of the performance period.

DFSS shares are granted as a fixed number of shares(subject to the quantum limits of the plan, as describedabove). The number granted is reviewed and may be
adjusted by the Committee, for example, if there has beena significant change in share price.
Vesting of DFSS awards is subject to the Group’s
performance over a three-year performance period.
The performance measures may include EPS growth,
ROE, relative TSR and a scorecard of Non-Financial metrics
selected by the Committee. Details of the measures,
weightings and performance ranges used for specific
DFSS grants are included in the relevant year’s Annual
Report on Remuneration.

The DFSS bonus
To further alignincentive structureswith shareholderinterests through thedelivery of dividend
equivalent bonuses.

The Remuneration Committee has discretion toadjust the formulaic vesting outcome to ensure
the final outcome is a fair and true reflection ofunderlying business performance, both financial
and non-financial.
To incentivise shareholder value creation andefficient use of capital, management participatesin a bonus scheme which directly links theirawards to dividends paid to shareholders. Bonus iscalculated to be equivalent to dividends thatwould have been payable during the year on all
outstanding DFSS shares awarded but not vested.
The DFSS bonus is subject to a +/- 20%
adjustment based on performance against targets
based on a set of strategic, customer and othernon-financial metrics. Whilst the bonus may be
adjusted upwards or downwards by up to 20%
in any given year, it is not anticipated that theadjustment will increase the Executive Directors’
remuneration on average over the long term.
The DFSS bonus is subject to the Group’s Malus
and Clawback Framework.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Awards are subject to malus and clawback
provisions, i.e., forfeiture or reduction ofunvested awards and recovery of vested awards.
Events which may lead to the application of malus
and clawback are set out in the Group’s Malus
and Clawback Framework and include material
financial misstatement, responsibility for conduct
which results in significant losses, material failureof risk management, misconduct, reputational
damage and corporate failure.

Financial Statements

Opportunity and performance metrics

Executive Directors may be granted awards
annually at the discretion of the Committee.

Corporate GovernanceOperation

Discretionary Free
Share Scheme (DFSS)
To motivate andreward longer term
performance, aid
long term retentionof key executive
talent, use capitalefficiently, growprofits sustainably
and further
strengthen thealignment of
the interestsof shareholders
and staff.  

Strategic Report

Purpose and link to strategy

Maximum opportunity: sum equal to the dividends payable
during the year on awarded but unvested DFSS shares,
subject also to a possible 20% upwards or downwards
adjustment based on performance against a scorecard of
non-financial metrics.
No bonus is payable unless dividends are payable on
Admiral shares.

190

Corporate GovernanceDirector’s Remuneration Policy
continued
Purpose and link to strategy

Operation

Opportunity and performance metrics

Approved Free Share
Incentive Plan (SIP)
To encourage shareownership across all
employees, using
HMRC approved
schemes for eligible
UK employees.
In-employment
shareholding
requirement
To align interests of
Executive Directors
with shareholders.
Post-termination
shareholding
requirement
To further align theinterests of Executive
Directors withshareholders andencourage a focus on
long-term sustainable
performance

All eligible UK employees participate in the SIP
after completing a minimum 12 months’ service.
Grants are made twice a year based on the resultsof each half year and vest after three years subject
to continued employment.

The SIP is an all-employee scheme and Executive Directors
participate on the same terms as other employees.
The acquisition of shares is therefore not subject to thesatisfaction of a performance target.

Guideline to be met within five years of the laterof the introduction of the guidelines and an
Executive Director’s appointment.

400% of base salary.

Maximum opportunity is in line with HMRC limits.

400% of base salary (or number of shares held at time of
Shareholding required to be maintained at thein-employment requirement (or number of shares termination, if lower).
held at time of termination, if lower) for a periodof two years post termination.

The Committee is satisfied that the above Remuneration Policy is in the best interests of shareholders and does not promote excessiverisk-taking. The Committee retains discretion to make changes required to satisfy legal or regulatory requirements and other nonsignificant changes to the Remuneration Policy without reverting to shareholders.

Notes to the Remuneration Policy table
Payments from Existing Awards

Executive Directors are eligible to receive payment from any award made prior to the approval and implementation of the 2021
Remuneration Policy. This includes all outstanding awards under the previous 2015 and 2018 Remuneration Policies, or any awards madeprior to appointment to the Board. Details of any such payments will be set out in the Annual Report on Remuneration as they arise.

Selection of Performance Measures

Vesting under the DFSS is linked to the following financial measures: EPS, ROE, and relative TSR.
EPS has been selected as a performance measure as the Committee feels it is a strong indicator of both long-term shareholder returnand the underlying financial performance of the business. It is transparent and highly visible to executives.
ROE has been selected as the Committee believes that a returns metric reinforces the focus on capital efficiency and delivery of strong
returns for our shareholders, thereby further strengthening the alignment of incentives with Admiral’s strategy.
Relative TSR vs. the FTSE 350 (excluding investment companies) has been selected to reflect value creation for Admiral’s shareholders ascompared to the general market.
Since the 2019 award, vesting of DFSS awards is also linked to non-financial measures which may include strategic, customer and othermeasures. The Committee believes that the additional emphasis on these measures reinforces Admiral’s focus on our customers andon other non-financial Group priorities, whilst also more clearly demonstrating alignment of Group remuneration practices with therequirements of Solvency II.
The specific performance measures and their respective weightings in respect of each DFSS award may vary to reflect the strategic
priorities at the time of the award.
Performance ranges are set taking into account the Company’s strategic priorities and the economic environment in which the Company
operates. The Committee believes that the performance ranges set are stretching and motivational, and that maximum outcomes areavailable only for outstanding performance.

Admiral Group plc Annual Report and Accounts 2022

191

Company Overview

The Company’s approach to annual salary reviews is consistent across the Group, with consideration given to the role size, complexity,
experience required, individual performance and pay levels in comparable companies.
In general, the Remuneration Policy which applies to other senior executives is consistent with that for Executive Directors.
Remuneration is typically linked to Company and individual performance in a way that reinforces shareholder value creation.

All holders of DFSS awards receive the DFSS bonus, with the bonus for a number of senior managers being adjusted for performanceagainst a scorecard of customer and other non-financial metrics.

All UK employees who have served a minimum tenure at Admiral are eligible to participate in the SIP on the same terms. Most overseas
employees receive an equivalent award to the UK SIP awards and these awards have no performance measures attached.

Service Contracts and Leaver/Change of Control Provisions

Executive Director

Date of appointment

Contract duration

Geraint Jones
Milena Mondini de Focatiis

13 August 2014
11 August 2020

Rolling contract, 12-month notice period
Rolling contract, 12-month notice period

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The Company’s Policy is to limit payments upon termination of employment to pre-established contractual arrangements. In the eventthat the employment of an Executive Director is terminated, any compensation payable will be determined in accordance with the termsof the service contract between the Company and the employee, as well as the rules of any incentive plans. Under normal circumstances,
Executive Directors are entitled to receive termination payments in lieu of notice based on base salary and compensation for loss ofbenefits. The Company has the ability to pay such sums in instalments. The notice period for all Executive Directors is one year.

Financial Statements

The Company operates a personal pension scheme which is available to all employees once they have completed their probationary
period. For all employees, including the Executive Directors, the Company matches the employee contribution up to a maximum of 6%
of salary, subject to an overall maximum of £15,000 or provides the equivalent value in cash.

Corporate GovernanceAround 4,000 employees from across the Group, including the Executive Directors, participate in the DFSS. The Committee determines
DFSS awards for those executives within its remit and on an aggregate basis for all other participants in the DFSS. For the Executive
Directors, all DFSS share awards are subject to performance conditions. For other senior managers and employees, a proportion of awards(ranging from half to two-thirds) are subject to performance, with performance conditions either in line with those described aboveor set based on key performance drivers of the individual’s relevant business unit, and the remainder has no performance conditions
attached other than the requirement that the recipient remains an employee of the Group at the date of vesting. Award sizes vary byorganisational level and an assessment of both financial and non-financial individual and business unit performance.

Strategic Report

Remuneration Policy for Other Employees

192

Corporate GovernanceDirector’s Remuneration Policy
continued
There is no provision in the Executive Directors’ contracts for compensation to be payable on early termination of their contract over andabove the notice period element. The Executive Directors’ service contracts are available to view at the Company’s registered office.
When considering termination payments, the Committee reviews all potential incentive outcomes to ensure they are fair to bothshareholders and participants. The table below summarises how the awards under the DFSS and DFSS bonus scheme are typically treatedin specific circumstances, with the final treatment remaining subject to the Committee’s discretion:
Plan

Scenario

Treatment of awards

Timing of vesting

DFSS

Resignation.

Awards lapse under most circumstances e.g.,
dismissal for cause or resignation.
Any unvested award will be pro-rated for timewith reference to the proportion of the vesting
period remaining at termination, and performance,
unless the Committee determines otherwise.
Unless the Committee determines otherwise,
any unvested award will be pro-rated for timewith reference to the proportion of the vesting
period remaining at change of control, and extent
to which the Committee determines that theperformance conditions have been met or are likely
to be met at the point of change of control.
n/a
Not payable after the event.

n/aDeath, injury or disability,
redundancy, retirement, or any
other reasons the Committee
may determine.
Change of control.

DFSS bonus

Salary shares(CFO only, awards
under 2018 Policy)

Resignation
Death, injury or disability,
redundancy, retirement, or any
other reasons the Committee
may determine.
Change of control.
Resignation.
Death, injury or disability,
redundancy, retirement or any
other reasons the Committee
may determine.
Change of control.

Not payable after the event.
Awards lapse under most circumstances e.g.,
dismissal for cause or resignation.
Any unvested award will be pro-rated for time withreference to the proportion of the vesting period
remaining at termination, unless the Committee
determines otherwise.
Unless the Committee determines otherwise, any
unvested award will be pro-rated for time withreference to the proportion of the vesting period
remaining at the point of change of control.

Normal vesting date.

Immediately.

n/a
n/a

n/a
n/a
Normal vesting date,with Committee
discretion toaccelerate.
Immediately.

For all leavers (with the exception of in the event of termination for cause), in respect of vested DFSS and vested salary share awards thatare still subject to a holding period, awards will normally be released in full at the end of the holding period, though the Committee has
discretion to determine otherwise, taking into account the circumstances at the time.

Admiral Group plc Annual Report and Accounts 2022

193

Company Overview

The Company has entered into letters of appointment with its Non-Executive Directors (NEDs). Summary details of terms and notice
periods are included below.
Term

Initial date of appointment

Commencementof current contract

Notice period

Annette Court
Jean Park
Justine Roberts
Andy Crossley
Michael Brierley
Karen Green
Jayaprakasa Rangaswami
Evelyn Bourke
Bill Roberts

3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years

21 March 201217 January 201417 June 201627 February 201805 October 201814 December 201829 April 2020
30 April 2021
11 June 2021

26 April 202017 January 2020
17 June 201927 February 2021
05 October 2021
14 December 2021
29 April 2020
30 April 2021
11 June 2021

Three months
One month
One month
One month
One month
One month
One month
One month
One month

Details of the 2021 Policy on NED fees are set out in the table below:
Purpose and link to strategy

Operation

Opportunity and performance metrics

Fee levels are set by reference to NED fees atcompanies of a similar size and complexity.
In the event that there is a material
misalignment with the market or a change in thecomplexity, responsibility or time commitment
required to fulfil a NED role, the Board has
discretion to make an appropriate adjustment
to the fee level.

Additional fees are payable for acting as Senior
Independent Director or as Chair or memberof a Board Committee and may be payable
The maximum aggregate annual fee for NEDs
as appropriate in relation to other additional
responsibilities (e.g., attending meetings overseas). is capped at the limit provided for in the
Company’s Articles of Association.
Fees are paid in a mix of cash and Company sharesfor the Company Chair, and in cash for other NonExecutive Directors. The Board retains discretion
to vary the mix or determine that fees are paid
entirely in cash or Company shares.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

To attract and retain NEDs of the Fees are reviewed annually.
highest calibre with experience
The Group Chair fee is determined by therelevant to the Company
Committee after consultation with the Executive
Directors. The NED fees are determined by theGroup Chair together with the Executive Directors.

Financial Statements

The NEDs are not eligible to participate in the SIP, DFSS or DFSS bonus scheme and do not receive any pension contributions.

Corporate Governance

NED

Strategic Report

Non-Executive Directors

194

Corporate GovernanceDirector’s Remuneration Policy
continued
Pay-for-Performance: Scenario Analysis

The following charts provide an estimate of the potential future reward opportunities for the Executive Directors, and the potential split
between the different elements of pay under four different performance scenarios: ‘Minimum’, ‘On-target’, ‘Maximum’ and ‘Maximum
with share price growth’.
As described above, Admiral’s DFSS bonus is directly aligned with dividends received by our shareholders, with an adjustment for
performance on a selection of non-financial measures. Whilst the Executive Directors’ final DFSS bonus outcome may be adjusted
upwards or downwards for these measures by up to 20% in any given year, it is anticipated that the average adjustment over the longterm will be close to 0%.

Pay-for-Performance: Scenario Analysis£4,000,000£3,000,000

70%£2,000,000

61%
28%

£1,000,000

£0

35%

25%

69%
60%

13%

10%

37%

65%

47%

25%

19%

63%

Minimum

On-target

Maximum

Maximum withshare price growth

Minimum

27%

Milena Mondini de Focatiis
On appointment as CEO
Fixed remuneration

27%

15%

11%

46%

25%

20%

On-target

Maximum

Maximum withshare price growth

Geraint Jones
CFO
DFSS BonusDFSS

The value of DFSS awards is calculated based on the average share price in the last three months of 2022 £20.19 and the number of DFSS
shares awarded in 2023 (90,000 and 52,500 shares respectively).
Component‘Minimum’‘On-target’

Base salary

Annual cash salary for 2023

Pension£15,000 annual contribution for CEO and CFO

Benefits

Taxable value of annual benefits provided in 2022

DFSS

• 0% vesting

DFSS bonus

Based on the DFSS bonus paid in respect of 2022

• 25% average vesting‘Maximum’‘Maximum with share price growth’• 100% vesting• 100% vesting plus 50%
share price appreciation

Admiral Group plc Annual Report and Accounts 2022

195

Company Overview

Internal Appointments

Remuneration for new Executive Directors appointed by way
of internal promotion will similarly be determined in line with
the Policy for external appointees, as detailed above. Where an
individual has contractual commitments made prior to theirpromotion to the Board, the Company will continue to honour
these arrangements. Incentive opportunities for below-Board
employees are typically no higher than for Executive Directors,
but measures may vary if necessary.

Admiral Group plc Annual Report and Accounts 2022

The Committee considers the pay and employment conditions
elsewhere in the Group when determining remuneration for
Executive Directors.

Considerations of Shareholder Views

When determining remuneration, the Committee takes
into account best practice guidelines issued by institutional
shareholder bodies. The Committee is open to feedback fromshareholders on the Remuneration Policy and will continue tomonitor trends and developments in corporate governance andmarket practice to ensure the remuneration structure for our
Executive Directors remains appropriate.

Considerations of Regulatory Requirements

The Committee regularly reviews the Remuneration Policy andstructure in the context of Solvency II remuneration guidance,and EBA, PRA, and FCA expectations regarding the supervisionof insurance firms. The Chief Risk Officer periodically attends
Committee meetings as part of this process and provides
support to the Committee in understanding any risk-related
implications of remuneration decisions. Whilst the Remuneration
Policy includes several features which help ensure compliancewith current regulatory guidance, the Committee reserves
the discretion to adjust the Remuneration Policy, and its
execution, to take into account any developments in such
regulatory guidance.

Additional Information

The Committee may also make an award in respect of a
new Executive Director appointment to ‘buy out’ incentive
arrangements forfeited on leaving a previous employer. In doing
so, the Committee will consider relevant factors including any
performance conditions attached to the forfeited awards andthe likelihood of those conditions being met to ensure that thevalue of the buy-out award is no greater than the fair value ofthe awards it replaces. The Committee may also avail itself ofListing Rule 9.4.2 R if appropriate in respect of buy-out incentive
arrangements (i.e., if the terms of participation for the prospective
Executive Director are similar to all, or substantially all employees
who participate in the plan, then approval by ordinary resolutionof the shareholders of the listed company in general meeting is
not required).

Considerations of Conditions Elsewhere in the Group

Financial Statements

In determining the appropriate remuneration for a new Executive
Director, the Committee will consider all relevant factors to ensurethat arrangements are in the best interests of the Company andits shareholders. Where an individual is appointed on an initial basesalary that is below market, any shortfall may be managed withphased increases over a period of time, subject to the individual’s
performance and development in the role. This may result inabove-average salary increases during this period.

Executive Directors are permitted to accept appointments as
Non-Executive Directors of companies with prior approval of theGroup Board. Approval will be given only where the appointment
does not present a conflict of interest with the Group’s activities,
and where the wider exposure gained will be beneficial to thedevelopment of the individual.

Corporate Governance

When appointing a new Executive Director, the Committee may
make use of any of the existing components of remuneration
as set out in the Policy Table. The Committee’s policy is to set
the remuneration package for a new Executive Director inaccordance with the approved Remuneration Policy at the timeof the appointment.

Other Directorships

Strategic Report

Approach to Remuneration Relating to New Executive
Director Appointments
External Appointments

196

Corporate Governance

Annual Report on Remuneration

This section of the report provides detailsof how Admiral’s Remuneration Policy
was implemented in 2022 and how the
Remuneration Committee intends to implement
the proposed Remuneration Policy in 2023
(subject to shareholder approval).
Remuneration Committee Membership in 2022

The Board sets the Group’s Remuneration Policy and, through theauthority delegated to it by the Board, the Committee is responsible
for making recommendations to the Board on the implementationof the Remuneration Policy. Its remit includes recommending
the remuneration of the Group Board Chair and the Executive
Directors; approving the remuneration of senior management;
and determining the composition of and awards made under the
performance-related incentive schemes.
At the end of 2022 the Committee comprised Evelyn Bourke,
Jayaprakasa Rangaswami , Jean Park and Michael Brierley.
The Committee met 8 times during the year.
The Group Chair, CEO, CFO and CRO are invited to meetings
where the Committee considers it appropriate to obtain theiradvice on Group strategy and performance and senior executive
pay strategy. No director is involved in deciding their own
remuneration outcome. The members of the Committee do nothave any personal financial interests (other than shareholdings),
or any conflicts, that relate to the business of the Committee.
The Committee members do not have any day-to-day involvementin the running of the Group.

Committee activities

During the year ended 31 December 2022, in addition to its
regular activities, the Committee also:• Reviewed the strategic, customer and ESG metrics introduced
for adjusting of variable pay of Executive Directors• Reviewed the implementation of non-financial performancemeasures for a broader employee population in the UK
Insurance Business• Reviewed the performance ranges for the financial measures
for the 2022 DFSS and the associated engagement withshareholders, and• Reviewed the design of annual incentives as part of on-goingwork on the Group’s reward strategy
As mentioned in the Governance Report, during the year
ended 31 December 2022, the Committee also performed its
regular activities:• Reviewed the DFSS vesting and bonus arrangements for
Executive Directors, senior management and relevant staff(Material Risk Takers) covered under Solvency II• Reviewed workforce remuneration, including alignment of theGroup’s current remuneration structure with the Living Wage
• Reviewed Admiral’s Gender Pay Gap reporting statistics• Reviewed risk events and their impact on variable pay;
• Undertook an evaluation of the Committee’s performance
during the year

• Reviewed the Committee’s terms of reference• Reviewed the Group’s Malus and Clawback Framework, and• Reviewed external remuneration trends and market conditions
Remuneration topics were discussed with employees at the
Employee Consultation Group (ECG), which met four times over
the year. Key themes discussed at the ECG were: pay in thecontext of the cost-of-living crisis; the use of shares in employee
remuneration packages; weekly working hours; and the level ofcompany-matched pension contributions.
In February 2023, the Chair of the Remuneration Committee andGroup Head of Reward met with the ECG to specifically discuss
the remuneration of the Executive Directors. The following topics
were discussed: the approach to Reward at Admiral; a summaryof the rules and regulations Admiral is subject to; the current
arrangements for the Executive Directors; and the alignment of
Executive Director remuneration with the rest of the company.
There was time allotted to listen to feedback and to answer any
questions from the ECG, during which the members of the ECG
had questions on how the reward package and pay increases for
Executive Directors are determined.
The chair of the remuneration committee wrote to the major
shareholders about the changes to the 2022 DFSS performance
ranges and had meetings with a number of shareholders.
Details are provided on page 202.

Committee Effectiveness Review

For 2022, the Committee Effectiveness Review was undertaken
externally by Bvalco. The report observed that the Remuneration
Committee is an effective and well run forum, with potentiallysensitive issues being dealt with efficiently, following considered
and constructive exchanges of views. Discussion was active
and open. Various potential courses of action were consideredresulting in next steps being agreed. Where debate on a question
was not closed, additional information was requested. There werealso constructive suggestions regarding how some matters may
be dealt with in a more timely manner and that an update to theannual timetable is required.
The Committee discussed the results of the review at its meetingin February 2023 and noted the content of the review.

Advisors to the Committee

During the year, in order to enable the Committee to reach
informed decisions, advice on market data and trends was
obtained from independent consultants Willis Towers Watson(WTW). WTW reported directly to the Committee Chair
and are signatories to and abide by the Code of Conduct
for Remuneration Consultants (which can be found atwww.remunerationconsultantsgroup.com). WTW also provided
advice to the Company in relation to capital modelling and pricing.
The fees paid to Willis Towers Watson in respect of work carriedout in relation to the Committee in 2022 (based on time andmaterials) totalled £109,774.
The Committee undertakes due diligence periodically to ensurethat advisors remain independent of the Company and thatthe advice provided is impartial and objective. The Committee
is satisfied that the advice provided by Willis Towers Watson
is independent.
Admiral Group plc Annual Report and Accounts 2022

197

Company Overview

The table below shows the results of the advisory vote on the 2021 Annual Report on Remuneration.
Total number of votes
Annual Report on Remuneration% of votes castFor

AgainstTotal votes cast

Abstentions

228,106,529
97.31%

6,306,229
2.69%

234,412,758

3,952

The table below sets out the total single figure remuneration received by each Executive Director for the years ended 31 December 2022
and 31 December 2021:
1. BasesalaryExecutive Director

Milena Mondinide Focatiis
Geraint Jones£715,850£695,000£416,800£404,660

3. Pension

Total
fixed pay

£480 £15,000 £731,330£454 £15,6437 £711,097£480 £15,000 £432,280£454 £15,000 £420,114

6. DFSS
bonus

Total
variable pay

Total
remuneration£3,589 £1,016,647 £399,085£3,601£713,644 £653,849£3,589£537,942 £260,516£3,601£842,327 £471,763£1,419,321£1,371,094£802,047£1,317,691£2,153,1518£2,082,191£1,234,327£1,737,805

4. SIP

5. DFSSThe figures have been calculated as follows:
1 Base salary: amount earned for the year.
2 Benefits: the taxable value of annual benefits received in the year.
3 Pension: the value of the Company’s contribution during the year.

Financial Statements

2022
2021
2022
2021

2. Benefits

Corporate GovernanceTotal Single Figure of Remuneration for Executive Directors (audited)

Strategic Report

Summary of Shareholder Voting at the 2022 AGM

4 SIP: the face value at grant.

6	DFSS bonus: the bonus is equivalent to dividends that were paid in respect of the performance year on all outstanding DFSS sharesawarded but not yet vested. The bonus is paid in two tranches annually:i) in respect of H1 2022: a bonus of £301,011 was paid to Milena Mondini de Focatiis, based on 265,000 unvested shares, a scorecard
outcome of 108.18% and the interim dividend of 105p per share; and a bonus of £176,063 was paid to Geraint Jones based on
155,000 unvested shares and a scorecard outcome of 108.18% and the interim dividend of 105p per share.
ii) in respect of H2 2022, due for payment in May 2023: a bonus of £98,074 is due to Milena Mondini de Focatiis, based on 180,000
unvested shares, a scorecard outcome of 104.78% and the final dividend of 52p per share; and a bonus of £84,453 is due to Geraint
Jones based on 155,000 unvested shares and a scorecard outcome of 104.78% and the final dividend of 52p per share.
The payments in respect of H2 2022 are subject to completion of internal governance procedures.
7	It is an oddity of the calculation basis that the pension contribution in respect of 2021 appears to exceed the policy. Milena’s pension
arrangements for April 2020 to March 2021 and April 2021 to March 2022 are £15,000, respectively, which is in line with the policy.
8	Milena Mondini de Focatiis received an Anniversary award of £2,500 during 2022 which is included in the total remuneration number.
Anniversary payments are made to all colleagues who reach significant milestones in their employment with the Group.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

5	DFSS: the value at vesting of shares vesting on performance over the three-year periods ending 31 December 2022 and 31 December
2021. For the 2022 figures, given that vesting occurs after the 2022 Directors’ Remuneration Report is finalised, the figures are basedon the average share price in the last three months of 2022 of £20.19. The 2021 figures have been trued up based on the actual shareprice on vesting of £20.11. For 2022, unfavourable movements of £145,523 and £191,304 are included in the DFSS value, attributable
to a decrease in the share price over the vesting period for Milena Mondini de Focatiis and Geraint Jones, respectively. For 2021,
a decrease of £31,583 and £37,279 of the DFSS value is attributable to share price depreciation over the vesting period, for Milena
Mondini de Focatiis and Geraint Jones, respectively.

198

Corporate Governance

Annual Report on Remuneration
continued
Total Single Figure of Remuneration for Non-Executive Directors (audited)

The table below sets out the total single figure remuneration received by each NED for the years ended 31 December 2021 and
31 December 2020.
Total fees
2022
Director

Annette Court1
Karen Green2
Jean Park3
Justine Roberts4
Andy Crossley5,6Michael Brierley5
Jayaprakasa Rangaswami7
Evelyn Bourke8
Bill Roberts9

2021

Fees

Taxable benefits10,11

Fees

Taxable benefits10£346,084£103,750£153,000£87,875£170,667£140,000£93,583£95,000£75,000£3,281£1,525£220£1,326£3,197£1,710£997£2,860£10,169£336,004£88,000£118,000£70,000£130,200£132,600£71,777£54,717£35,947

£228
£692
£498
£368
£1,367
£45
£206
£316
£0

1 The 2022 fee for Annette Court is £346,084 (a cash fee of £242,259 and a share fee of £103,825)
2 Karen Green was appointed to the Group Risk Committee effective 1 June 2022
3 Jean Park’s fees for 2022 include additional fees relating to her position as Chair of the Group Risk Committee and is in recognition of the increased time commitment required of her as aconsequence of Solvency II regulations and the Admiral Internal
4 Justine Roberts was appointed as interim Senior Independent Director effective 21 February 2022
5 The fees for Andy Crossley and Michael Brierley include additional fees in relation to their positions as Chairman of the EUI Limited Board of Directors and Admiral Financial Services Limited Boardof Directors, respectively
6 Andy Crossley was appointed interim Chair of the Group Risk Committee effective 21 February 2022. An administrative error has meant that Andy was paid an additional £1,633.70 in fees inrespect of 2022. This has been corrected and will reflect in his 2023 fees
7 Jayapraska Rangaswami was appointed to the Group Remuneration Committee effective 21 February 2022
8 Evelyn Bourke was appointed as an independent Non-Executive Director and member of the Remuneration Committee on 30 April 2021. She was subsequently appointed as Chair of theRemuneration Committee on 1 September 2021
9 Bill Roberts was appointed as an independent Non-Executive Director on 11 June 2021. He was appointed to the Nomination and Governance Committee on 21 January 2022. An administrative
error has meant that Bill was paid an additional £291.67 in fees in respect of 2022. This has been corrected and will reflect in his 2023 fees
10 Taxable benefits represent those expense reimbursements relating to travel, accommodation and subsistence in connection with the attendance at Board, Subsidiary and Committee meetings
during the year, which are deemed by HMRC to be taxable. The amounts in the table are ‘grossed-up’ to include the UK tax paid by the Company on behalf of the Non-Executive Directors.
Non‑taxable expense reimbursements have not been included in the table
11 The NED taxable benefits for 2022 have returned to normal pre-pandemic levels

Incentive Outcomes for Financial Year to 31 December 2022 (audited)
DFSS Awards Vesting on Performance to 31 December 2022

On 24 April 2020, Milena Mondini de Focatiis was granted an award under the DFSS of 85,000 shares with a value at the date of award of£1,961,800 (based on a grant date share price of £23.08).
On 24 September 2020, Geraint Jones was granted an award under the DFSS of 45,000 shares with a value at the date of award of£1,231,650 (based on a grant date share price of £27.37).
Vesting of the award was based 80% on the achievement of financial performance measures and 20% on a scorecard of nonfinancial measures.

Financial performance outcomes

The performance measures applicable to these awards are, EPS growth vs. LIBOR, TSR vs. FTSE 350 (excluding investment companies),
and ROE, weighted equally and all measured over the three-year period 1 January 2020 to 31 December 2022.
Over this period, the returns to our shareholders were strong, with TSR just shy of the upper quartile versus FTSE350 companies and with
ROE of 46.8%. This is in contrast to EPS growth which was below the LIBOR index for the period. The combination of these shareholder
returns and EPS growth contributed to a vesting level of 56.5 percent for the financial measures. The Committee reviewed this vestingoutcome and concluded that it was appropriate.

Admiral Group plc Annual Report and Accounts 2022

199

Company Overview

Performance range
Performance measureThreshold

Vesting Contribution(% of maximum)

Actual outturn

EPS growth vs. LIBOR Growth in line with
LIBOR

Growth of 36 points(equivalent to 10%p.a.) in excess of
LIBOR

Underperformed
LIBOR by 15.92pts

0%

TSR vs. FTSE 350
Median(excluding investmentcompanies)

Upper quartile

71st percentile

89.9%

Return on Equity
(ROE)

55%

10% for achieving
threshold withstraight line
relationship to100% for maximum
performance
25% for median,with straight line
relationship to 100%for upper quartile
25% for achieving
threshold withstraight line
relationship to100% for maximum
performance

46.8%

79.6%

25%

Vesting

Financial Statements

Vesting schedule

Corporate GovernanceMaximum

56.5%

Non-financial performance outcomes

Further details of the scoring for 2022 can be seen on page 200.

Overall Vesting

The combined vesting outcomes for Milena Mondini de Focatiis and Geraint Jones can be seen in the below table.
Award Weighting
DFSS Vesting Component

Financial performance measures:
EPS growth vs. LIBOR, TSR vs. FTSE 350(excluding investment companies) and
Return on Equity (ROE)
Non-financial performance measures
Total

80.00%
20.00%
100.00%

Geraint Jones

Performance outcomes
Milena Mondinide Focatiis

Geraint Jones

56.50%
70.20%
70.05%

Vesting (% of maximum)
Milena Mondinide Focatiis

Geraint Jones

14.04%
59.24%

45.20%
14.01%
59.21%The Committee reviewed the vesting outcomes and concluded that they were appropriate, and that no adjustments were required.
Based on performance and scorecard outcomes the total amount that will vest to Milena Mondini de Focatiis in April 2023 will therefore
be 59.24% (i.e., 50,354 shares), and the total amount that will vest to Geraint Jones in September 2023 will be 59.21% (i.e., 26,644 shares),subject to their continued employment on the vesting date.
Although the 2020 DFSS awards were granted during the pandemic, a period when the shares price were lower in many companies,
the awards granted under the DFSS are based on a fixed number of shares. The awards granted to Milena Mondini de Focatiis and Geraint
Jones in 2020 were not impacted by the change in the share price. The Committee have given thorough consideration to the outcomesto satisfy themselves that it is reflective of the overall performance of the Group.
Vested DFSS awards are subject to clawback provisions. Events which may lead to the application of clawback are set out in the Group’s
Malus and Clawback Framework and include material financial misstatement, responsibility for conduct which results in significant losses,
material failure of risk management, misconduct, reputational damage or corporate failure.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The individual vesting contribution in relation to the non-financial measures for Milena Mondini de Focatiis and Geraint Jones are set
out in the table below. These aggregated to an overall rating across the 3 years of 70.20% and 70.05% respectively and have a weighted
outcome of 14.04% and 14.01%, respectively.

Milena Mondinide Focatiis

Strategic Report

The table below details the Company’s performance against the performance range.

200

Corporate Governance

Annual Report on Remuneration
continued
DFSS bonus in Respect of 2022

In line with the Remuneration Policy, the Group paid a bonus to all holders of DFSS shares in 2022, which was equivalent to the dividend
payable on all outstanding DFSS shares awarded but not yet vested. The 2022 Bonus for Executive Directors also includes a potential +/20% adjustment to the DFSS bonus based on performance of a set of non-financial performance metrics, which for 2022 was grouped
into three categories: Strategy, customer and ESG.
For the customer and ESG strategic pillars, relevant quantitative data was used to assess performance and an outcome was determined.
For the strategy, the board members derived a collective view on the progress against the strategic priorities.
Details of the measures used in the scorecard and outcomes are summarised in the table below:
Outcomes (% out weighting for each category)Category

Metrics

Strategy

Overall scoring from the board onscorecard of measures around:• Progress towards Admiral 2.0• Diversification – existing non-motor
product development (both top line and
KPIs), in particular Household and Loans

TargetMax

16.50%

33.00%

8.50%
8.50%
9.00%
3.75%

17.00%
17.00%
18.00%
7.50%

3.75%
50.00%
100.00%7.50%
100.00%120.00%H1

H224.75%• Diversification – development of
new products

Customer
ESG• Progress towards defining motor
mobility strategy
Customer Feedback (NPS)
Customer Outcomes (CRMI)
People (Trust Index)
Diversity & Inclusion (Female
representation at Senior level)
Inclusion (Inclusion survey results)

Total
Overall scorecard
multiplier12.48%
12.78%

11.42%
5.33%
9.00%
6.00%
5.44%

70.45%
108.18%61.94%
104.78%Strategic outcomes have been assessed by the Board as 75% of maximum on the basis of strong progress towards Admiral 2.0 andDiversification, with positive performance in UK Household and Admiral Money in particular. Progress towards defining motor mobility
strategy continues apace.
Customer outcomes are taken as a weighted average across the Group on the basis of customer headcount. CRMI data measuring
customer outcomes trailed off in H2, with complaints data reflecting pressure in the claims area for the UK Insurance business, which
had a significant downwards impact on the overall outcome for the half as it is weighted at c.75%. Customer Feedback outcomes
were generally strong over the year, with outcomes for each entity ranging from 50–100% of maximum, with outcomes concentrated
between 60 and 70% of maximum.
The Trust Index outcome of 84% was 2% lower than the benchmark of 86%, resulting in achievement of 50% of maximum.
Inclusion survey results were generally at the benchmark, with one question exceeding, resulting in an outcome of 72.50% of maximum.
The year-end figures for females in senior leadership roles was 37.20% across the Group, which resulted in an outcome of 80.00%
of maximum.
The overall outcome of the scorecard was assessed to be a 108.18% multiplier to the DFSS bonus paid for H1 2022 and a 104.78%
multiplier to the DFSS bonus for H2 2022 (to be paid in 2023) for Milena Mondini de Focatiis and Geraint Jones.
In addition, the Executive Directors’ DFSS bonus is subject to a further risk adjustment (downwards only) to take into account of risk
events which are considered to have a material customer, regulatory or financial impact.
During the year, and in addition to the above, the Committee took into account relevant trigger events as part of the established risk
adjustment process, and determined it was not appropriate to apply a downwards adjustment on that basis.
DFSS bonus payments are subject to malus and clawback provisions.

Admiral Group plc Annual Report and Accounts 2022

201

Company Overview

On 26th September 2022, Milena Mondini de Focatiis was granted an award of 90,000 shares and Geraint Jones was granted an award of
52,500 shares under the DFSS. This is the equivalent to £1,908,900 or 267% of Milena’s base salary and £1,113,525 or 267% of Geraint’s
cash salary respectively (based on share price of £21.21).

The award will vest on EPS, TSR vs. FTSE 350 (excluding investment companies), ROE and a scorecard of strategic, customer and othernon-financial measures, inclusive of customer outcomes, customer feedback, ESG, strategic measures and people metrics. There will
also be the potential for downwards adjustment subject to an assessment to take into account of risk events which are considered tohave a material customer, regulatory or financial impact over the course of the performance period. The performance conditions are
summarised in the table below.

Corporate Governance

The three-year period over which performance will be measured is 1 January 2022 to 31 December 2024. The award is eligible to vest on
the third anniversary of the date of grant i.e., September 2025, subject to performance and to continued employment. Vested awards will
be subject to an additional two-year post-vest holding period.

Strategic Report

Scheme Interests Granted in 2022 (audited)
DFSS

Performance range
ThresholdMaximum

EPS

26.67%120p

150p

TSR vs. FTSE 350 (excluding investmentcompanies)

26.67%

Return on Equity (ROE)

26.67%

Scorecard non-financial measures

20%

Vesting

25% for reaching
threshold, rising to
100% at maximum
performanceMedianTop Quartile
25% for median,with straight line
relationship to 100%for upper quartile
20%
40%
25% for reaching
threshold, rising to
75% for reaching
stretch at 30%
ROE, rising to
100% at maximum
performance
Vesting of between 0% and 100% of this element is based on theaggregate outcomes of the scorecards used to determine the
DFSS bonus adjustments over the 3-year performance period.
Further details of the aggregation of these scorecards will be
provided upon vesting

DFSS awards are subject to malus and clawback provisions, which are set out in the Group’s Malus and Clawback Framework, as outlined inpage 189.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Weighting

Financial Statements

Performance measure202

Corporate Governance

Annual Report on Remuneration
continued
Setting the 2022 DFSS Financial Measures

The financial measures, including the performance ranges which informs the scheme vesting are usually set prior to the granting ofawards in the autumn each year. While not a documented policy, in the past we have often rolled the financial measures, including theperformance ranges, from one year to the next. This approach has worked historically, but the unusual operating environment of thepandemic, coupled with the current business phase and our plans for growth, has led the Remuneration Committee to review theperformance ranges for 2022 to 2024.

Earnings Per Share

The assessment of performance against our previous EPS measure compares one fixed point at the start of the performance period withanother fixed point at the end of the performance period, with a threshold to maximum range based on growth in EPS over the period of
the plan. In the 2022 DFSS this would mean comparing the end of 2021 with the end of 2024.
Due to exceptional profitability in the 2021 financial year, the previous approach would result in performance range which would be very
difficult to achieve. As such we have changed from a performance range based on growth against the 2021 profit to a range based on
absolute EPS over the performance period.
In setting the new performance range, the Committee have considered the extent to which our people, including the directors,
have benefited from the exceptional levels of financial performance in prior years. It is evident that they have not benefited from the full
outperformance due to outcomes being in excess of the maximum vesting level. For example, EPS in the 2018 scheme which vested in
2021 was 51.3% against a maximum of 36%, meaning 15.3% was not rewarded. In the most recent scheme, which vested earlier this year,
EPS was 45.8% against the 36% maximum, resulting in 9.8% not counting towards the reward.

Return On Equity

The impact of exceptional performance during the pandemic also impacts the ROE, resulting in a comparatively more challenging target
to achieve. In addition, the Group’s strategic approach to pursue growth through, amongst other things diversification into new products
and markets, may impact future ROE. Hence, the performance range for ROE has been set by reference to our strategic intent and theoperating environment.

Total Shareholder Return

TSR is assessed on relative performance and so is not so obviously impacted by historic over-performance or the operating environment,
and as such we do not intend to make changes to either the measure or the performance range at this point.

Shareholder Engagement

Changing the performance ranges is not a step that the Committee took lightly. In doing so the committee ensured there wasgood engagement with shareholders. UBS Brokers were engaged throughout the process of setting the new performance ranges,
attending a Remuneration Committee meeting and advising the Committee and management through the target setting process.
Following internal approval, letters were sent to our largest shareholders explaining the case for change and offering them the opportunity
to speak with us regarding the change. Four meetings with external shareholders were undertaken. The feedback which was provided was
generally positive and supportive of the changes, however, for the purpose of balance, it must be noted that in one meeting there wasnegative feedback for the proposal.

SIP

In March 2022, Milena Mondini de Focatiis and Geraint Jones were granted awards under the SIP of 72 shares with a face value of£1,786.32, which will mature on 11 March 2025, subject to continued employment.
In August 2022 Milena Mondini de Focatiis and Geraint Jones were granted awards under the SIP of 81 shares with a face value of£1,802.25, which will mature on 24 August 2025, subject to continued employment.

Exit Payments (audited)

No exit payments were made to an Executive Director during the year.

Payments to Past Directors (audited)

Following stepping down from the role of CEO on 31 December 2020, David Stevens has continued as an adviser to the Group in a parttime capacity, with a salary of £70,033 per annum.
He also sits as a Non-Executive Director on the Board of Admiral Financial Services Limited for which he receives no fee.

Admiral Group plc Annual Report and Accounts 2022

203

Company Overview

Implementation of Remuneration Policy for 2023
Executive Directors
Salary, Pension and Benefits

Strategic Report

Due consideration was given to ensure these increases are below the proposed increases for employees across the Group for 2023.
The average pay review in 2023 is expected to be 5% as we continue to support our people through the impact of the cost ofliving challenges.

Corporate Governance

Salaries for the Executive Directors in 2023 have been determined in line with the Remuneration Policy. Milena Mondini de Focatiis’ salary
was increased by 3.00% to £737,326 effective 1 January 2023 and Geraint Jones’ salary was increased by 4.00% to £433,472 effective
1 January 2023.

The Executive Directors will continue to participate in the Group Personal Pension Plan on a consistent basis with other employees,
where employee contributions are matched up to a maximum 6% of base salary with a cap on the maximum employer contribution of£15,000 per annum. The Company will offer individuals a choice between pension contributions and cash in lieu. Both Executive Directors
will continue to receive benefits in line with the Policy.
The Committee intends to make awards under the DFSS to Milena Mondini de Focatiis and Geraint Jones in September 2023 of 90,000
and 52,500 shares, respectively. The Committee will confirm the size for each of the 2023 DFSS awards closer to the award date.
In determining whether the award size should differ from the above number of shares, the Committee will consider any large share pricechange over the prior year, and in particular whether this is due to external factors out of management control. The actual 2023 DFSS
awards will be disclosed in the 2023 Annual Report on Remuneration.

It has been an aim of the Committee to include carbon emissions targets as part of the NFM scorecard to support the delivery of
the Group’s net zero targets. Good progress has been made in 2022 on verifying the Group’s scope 3 emissions. This process is nearlycomplete after which targets will be decided on.
The Committee is mindful of the potential impact of the forthcoming change to the IFRS 17 accounting standard on the Group’sreported financial results. At this stage the nature and degree of any such impact has not been confirmed. For DFSS awards which will
straddle the change in accounting standard, the Committee intends to set targets on the current basis. However, it will keep these underreview and apply its discretion to ensure that the performance ranges remain no more or less stretching than originally anticipated as aresult of the accounting change.
There will be the potential for downwards adjustment subject to an assessment to take account of risk events which are considered tohave a material customer, regulatory or financial impact over the course of the performance period.

DFSS bonus

As in prior years, Milena Mondini de Focatiis and Geraint Jones will be eligible to receive DFSS bonus in 2023. The bonus is calculated to beequivalent to dividends that would have been payable during the year on all outstanding DFSS shares and any salary shares awarded but
not vested. The DFSS bonus will include a +/- 20% adjustment based on performance against a set of non-financial performance metrics.
The details of the metrics and any adjustment applied will be provided in the 2023 Annual Report on Remuneration.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

It is currently anticipated that the vesting of 2023 DFSS awards for Milena Mondini de Focatiis and Geraint Jones will continue to beassessed across the three-year performance period using an 80% performance weighting on EPS, TSR vs. FTSE 350 (excluding investmentcompanies) and ROE, and a 20% weighting on a scorecard of strategic, customer and other non-financial metrics. The committee will
confirm the conditions and performance ranges for the 2023 DFSS award in quarter one of 2023 and will disclose them in the 2023
Annual Report on Remuneration.

Financial Statements

DFSS

204

Corporate Governance

Annual Report on Remuneration
continued
The table below summarises the strategic, customer, ESG and other non-financial metrics which will apply to 2023 DFSS bonus. There will
also be the potential for downwards adjustment subject to an assessment to take into account of risk events which are considered tohave a material customer, regulatory or financial impact over the course of the performance period.
Strategic Pillar

Measures

Customer – 34%

Customer outcomes (CRMI)
Customer feedback (NPS)

Weighting %

17%
17%

Strategy – 33%

Overall scoring from the board on scorecard of measures around:• Progress towards Admiral 2.0 (data and analytics goal)

33%• Diversification – existing non-motor product development (both top line and KPIs), in particularHousehold and Loans• Diversification – development of new products
ESG – 33%

• Progress towards defining motor mobility strategy
Great Place to Work Trust Index
Diversity

18%
15%

Chair and Non-Executive Directors

Fees for the Board Chair and other Non-Executive Directors were reviewed in January 2023 having previously been last reviewed in 2022.
Increases were made, effective 1 January 2023, to reflect the increased time commitment of these roles.
Measures2022 fee (p.a.)2021 fee (p.a.)

Chair1£356,467£346,084

NED base fee
Additional fee for chairing:• Audit Committee• Group Risk Committee2• Remuneration Committee• Nomination and Governance Committee
Additional fee for membership of:• Audit Committee• Group Risk Committee• Remuneration Committee• Nomination and Governance Committee3
Additional fee for being Senior Independent Director£70,000£70,000£25,000£43,000£25,000£10,000£25,000£43,000£25,000£10,000£15,000£15,000£12,000£8,000£17,000£15,000£15,000£10,000£5,000£15,000

1 The 2023 fee for the incumbent Board Chair increased by 3% from £346,084 to £356,467 and comprises a cash fee of £249,527 and a share fee of £106,940 with which the Chair is required undera Share Agreement entered into with the Group to use the net proceeds in two equal instalments to purchase Group shares after the Group’s Full Year Results and Half Year Results are announced
each year. Annette Court will step down from her duties as Chair after the AGM on 27 April 2023. These arrangements are to be pro-rated in line with time served. The Board Chair does not receive
any additional fees (e.g., for committee membership) as these are included in the overall Chair fee, for example as shown in footnote 3 below
2 The fee payable for 2023 for Chairing the Group Risk Committee continues to include an additional fee of in recognition of the increased time commitment required because of the Admiral
Internal Model process. It comprises a base fee of £25,000 and an additional fee of £18,000
3 To the extent that the Group Board Chair continues to chair the Nomination and Governance Committee, no extra fee will be paid over and above the overall Group Board Chair fee

Admiral Group plc Annual Report and Accounts 2022

205

Company Overview

It was announced on 31st January 2023 that Mike Rogers is to be appointed as Admiral Group Chair subject to regulatory approval and his
appointment’s approval at the Admiral AGM. His fee will be £375,000, and upon appointment Mike is required to purchase shares, which
he is to retain for his tenure. As part of his remuneration arrangements, Mike is expected to reach a shareholding of 150% of his annual
fee within three years of appointment.

Strategic Report

New Group Chair

CEO pay ratio
Year

MethodLower quartile

MedianUpper quartile

2022
2021

Option A

80:1
95:1

69:1
81:1

45:1
50:1

The Committee has considered the pay data for the three employees identified and believes that it fairly reflects pay at the relevant
quartiles amongst our UK workforce. The three individuals identified were full time employees during the year. None received an
exceptional incentive award which would otherwise inflate their pay figures. No adjustments or assumptions were made by theCommittee with the total remuneration of these employees calculated in accordance with the methodology used to calculate the single
figure of the CEO. It should be noted that the lower quartile employees were in receipt of DFSS bonus and/or DFSS vesting in the year.

Financial Statements

The lower quartile, median and upper quartile employees were determined using calculation methodology A which involved calculating
the actual full-time equivalent remuneration for all UK employees for 2022. From this analysis, three employees were then identified
as representing the 25th, 50th and 75th percentile of the UK employee population. Admiral chose this method as it is the preferredapproach of the government and that of investor bodies and Admiral had the systems in place to undertake this method. It is also
consistent with the approach used to calculate the ratios for 2018 to 2021.

Corporate Governance

The table below sets out the pay ratios for the CEO for the periods ended 31 December 2021 and 31 December 2022.

The employee pay levels for 2022 are detailed below:
P25(lower quartile)

P50(median)P75(upper quartile)£715,850£2,153,151£21,451£26,775£26,500£31,144£38,000£47,648

1 The single figure of remuneration for the CEO includes actual salary and pension costs paid during 2022, in line with The Companies (Miscellaneous Reporting) regulations 2018. For other
employees, salary and pension costs are included on an FTE basis, in line with the legislation. While the basis of calculation differs between CEO and other employees, management considers this afair comparison of remuneration

The pay ratio has fallen over the course of 2022. This is largely due to the fall in share price between reporting periods, which has
impacted the CEO numbers more proportionately due to the higher percentage of share-based variable pay in the CEO pay mix
compared to the wider workforce.
A significant proportion of the Milena Mondini de Focatiis’ remuneration is dependent on the company’s performance and therefore it
may vary more materially, resulting in movements in the CEO pay ratio from year to year moving forwards. However, the reward policies
and structures applying to the CEO are broadly aligned with those of the wider workforce and therefore consistent performance is likely
to lead to a broadly consistent CEO pay ratio.

Relative Importance of Spend on Pay

The table below shows the percentage change in dividends and total employee remuneration spend from the financial year ended
31 December 2021 to the financial year ended 31 December 2022.

Distribution to shareholders
Employee remuneration

2022
£m

2021
£m

% change

465
532

816
500

-43%
6%

The Directors are proposing a final dividend for the year ended 31 December 2022 of 52 pence per share bringing the total dividend for2022 to 157 pence per share (2021: 279 pence per share).

Admiral Group plc Annual Report and Accounts 2022

Additional Information

SalaryTotal Remuneration1

CEO

206

Corporate Governance

Annual Report on Remuneration
continued
Pay for Performance

The following graph sets out a comparison of Total Shareholder Return (TSR) for Admiral Group plc shares with that of the FTSE 100 and
FTSE 350 indices, of which the Company is a constituent, over the ten-year period to 31 December 2022. The Directors consider these
to be the most appropriate indices against which the Company should be compared. TSR is defined as the percentage change over theperiod, assuming reinvestment of income.

10 year TSR performance: Admiral vs. FTSE100 and FTSE350 indices
Growth in the value of a hypothetical £100 holding over the 10 years to 31 December 2022
£500

£400

£300

£200

£100

£0
Dec 12AdmiralCEO

Dec 13
FTSE 1002013

Dec 14

Dec 15

Dec 16

Dec 17

Dec 18Dec 19Dec 20Dec 21

Dec 22

FTSE 350

2014

2015

2016

2017

2018

2019

2020

2021

2022
MilenaMondini deFocatiis

Incumbent

Henry
Engelhardt

Henry
Engelhardt

Henry
Engelhardt

Henry
Engelhardt1

David
Stevens2

David
StevensDavid
StevensDavid
StevensDavid
Stevens

MilenaMondini deFocatiis5

CEO single figureof remuneration£387,546£393,260£397,688£148,776£246,023£395,019£403,662£413,724£421,285£2,082,1914£2,153,151

DFSS vestingoutcome (% ofmaximum)

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

98.57%

59.24%6

CFO

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Geraint Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones

Geraint
Jones£1,204,164£363,551£539,704£599,139£1,184,445£1,461,813£1,773,303£2,329,513£1,737,8054£1,234,327

70%

85%

69%

50% and 0%

74.20%

87.60%

88.8%

98.5%

93.08%

59.21%6

Incumbent

Kevin
Chidwick

Kevin
Chidwick

CFO single figureof remuneration£1,444,443

DFSS vestingoutcome (% ofmaximum)

100%

3

1 Henry Engelhardt stepped down from the Board on 13 May 2016. His 2016 remuneration includes salary and benefits in respect of his service as CEO
2 David Stevens was appointed as the CEO on 13 May 2016. His 2016 remuneration includes salary, pension and benefits in respect of his service as CEO
3 Geraint Jones was appointed to the Board as CFO on 13 August 2014. His 2014 remuneration includes salary, pension and benefits in respect of his service as CFO, his full year DFSS and his full year
DFSS bonus
4 This figure has been trued up since the 2021 report for the value of the 2019 DFSS based on the actual share price on vest of £20.11
5 Milena Mondini De Focatiis was appointed as the CEO on 1 January 2021. Her 2021 remuneration includes salary, pension and benefits in respect of her service as CEO
6 59.24% of Milena Mondini De Focatiis’ and 59.21% Geraint Jones’ 2020 DFSS award will vest in April 2023 and September 2023, respectively, subject to their continued employment on thevesting date

There are no annual bonus outcomes to report in the table as the Admiral DFSS bonus is not structured as a traditional annual bonus
scheme and consequently a vesting outcome (as a percentage of max) is meaningless.

Admiral Group plc Annual Report and Accounts 2022

207

Company Overview

The following table summarises the annual percentage change of each director’s remuneration compared to the annual percentagechange of the average remuneration of the company’s employees, calculated on a full-time equivalent basis.
Financial year-ended 31 December 2022
Percentage change in director’s remuneration

DFSS bonus

3.00%
3.00%

5.73%
5.73%

-38.96%-44.78%3.00%
73.62%
17.90%
29.66%
30.38%
25.54%
31.08%
5.58%
108.64%9.32%

1,399.04%805.06%120.387%-55.82%383.98%260.33%133.87%3,700.00%
n/a
8.52%

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

The percentage change in employee base pay is a view across the whole group, but it should be noted that a large percentage value ofthese increases has generally been concentrated in colleagues at the lower end of the pay spectrum.

Dilution

The Company currently uses newly issued shares to fund the DFSS, SIP and salary shares. The Company has controls in place to ensurethat shares awarded under the incentive schemes operated by the Company within any rolling ten-year period do not exceed 10% of thenumber of ordinary shares in the capital of the Company in issue at the time of each award. It is currently anticipated that a combinationof attrition and actual vesting will result in dilution of less than 10%. As required by the rules of our share schemes, the Company will inany event ensure that the actual dilution level does not exceed 10% in any rolling ten-year period by funding of any vested (and future)share scheme awards as appropriate with market-purchased shares.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The percentage increases for the Non-Executive Director taxable benefits relate to expenses for travel, accommodation and subsistencein relation to business needs, which compare 2021 which travel to meetings was minimal, and 2022 where more normal in-person activity
has been undertaken in a return to pre-pandemic levels. Generally, NED fees have increased in line with additional responsibilities andtime commitments undertaken over the course of the year, and in the case of Evelyn Bourke and Bill Roberts are reflective of part-year
fees for 2021 vs. full year fees for 2022.

Financial Statements

Taxable benefits

Corporate Governance

Executive Directors
Milena Mondini de Focatiis*
Geraint Jones
Non-Executive Directors
Annette Court
Evelyn Bourke
Karen Green
Jean Park
Jayaprakasa Rangaswami
Justine Roberts
Andy Crossley
Michael BrierleyBill Roberts
Percentage change in employees’ remuneration

2022 (% change)
Base salary/ fees

Strategic Report

Annual change of each director’s pay compared to the annual change in average employee pay

208

Corporate Governance

Annual Report on Remuneration
continued
Interests held by Directors (audited)

The Company has adopted Executive Director shareholding guidelines whereby all Executive Directors are required to acquire and retain
a beneficial shareholding in the Company equal to at least 400% of base salary (excluding salary shares, where applicable), which canbe built up over a period of five years from the later of the introduction of the guidelines and the individual’s date of appointment.
Both Executive Directors meet the shareholding requirement.
As at 31 December 2022, the Directors held the following interests:
Director

Milena Mondini de Focatiis5
Geraint Jones
Annette Court
Evelyn Bourke
Jean Park
Jayaprakasa Rangaswami
Justine Roberts
Andy Crossley
Michael Brierley
Karen Green
Bill Roberts
1
2
3
4
5
6

Shares held
Beneficiallyowned outright6

Subject tocontinued
employment only

97,0621
127,5661
14,760
7,459
4,000
0
0
4,984
4,104
0
8,860

50,3543
31,6442

Shareholding
Current
requirement
shareholding
Subject toperformance (% of 2022 salary) (% of 2022 salary)conditions

180,000
105,000

400%
400%

Requirement
met?4

>400%
>400%

Yes
Yes

Total includes SIP shares both matured and awarded.
Total reflects shares from the 2020 DFSS award (performance test has been applied, and award is due to vest in September 2023) and salary shares awarded in 2020
Total reflects shares from the 2020 DFSS award (performance test has been applied, and award is due to vest in April 2023)
The final column in the above table relates to meeting the current Remuneration Policy requirement of 400% of salary, based on a share price of £21.37 at closing on 31st December 2022
Milena Mondini de Focatiis has 5 years from her appointment as Executive Director (11 August 2020) to meet the guideline
There have been no changes in the Directors’ holdings in the share capital of the Company, as set out in the table above, between 31 December 2022 and the date of this Report

There have been no changes to Directors’ shareholdings since 31 December 2022.
None of the Directors had an interest in the shares of any subsidiary undertaking of the Company or in any significant contracts of
the Group.

Admiral Group plc Annual Report and Accounts 2022

209

Company Overview

TypeAwardedduring year

36,00085,00090,000–––90,000
–
–
–
–
–
–
72
81

45,00045,00052,500––––52,500

Salary Shares
Salary Shares
Salary Shares
Salary Shares

2,500
2,500
2,500
2,500
84
83
88
68
61
50
–
–

SIP
SIP
SIP
SIP
SIP
SIP
SIP
SIP

84
83
–
–
–
–
–
–

–
–
88
68
61
50
72
81

£21.46£21.45£20.58£26.40£29.44£36.11£24.81£22.25

7 March 2023

Admiral Group plc Annual Report and Accounts 2022

Final vesting/maturity date

18/03/2019
30/08/2019
13/03/2020
02/09/2020
12/03/2021
01/09/2021
11/03/2022
24/08/2022

18/03/2022
30/08/2022
13/03/2023
02/09/2023
12/03/2024
01/09/2024
11/03/2025
24/08/2025

41,886– £21.00£945,000£842,327 26/09/2019– 45,000 £27.37 £1,231,650£961,650 24/09/2020– 52,500 £34.52 £1,812,300 £1,121,925 23/09/2021– 52,500 £21.21 £1,113,525 £1,121,925 22/09/2022

26/09/2022
24/09/2023
23/09/2024
22/09/2025

–
–
–
–

2,500
2,500
–
–

–
–
2,500
2,500

£21.46£21.45£20.58£26.40£53,650£53,625£51,450£66,000£64,925£53,975£53,425£53,425

18/03/2019
30/08/2019
13/03/2020
02/09/2020

18/03/2022
30/08/2022
13/03/2023
02/09/2023

–
–
–
–
–
–
72
81

84
83
–
–
–
–
–
–

–
–
88
68
61
50
72
81

£21.46£21.45£20.58£26.40£29.44£36.11£24.81£22.25£1,803£1,780£1,811£1,795£1,796£1,806£1,786£1,802£2,181£1,792£1,881£1,453£1,304£1,069£1,539£1,731

18/03/2019
30/08/2019
13/03/2020
02/09/2020
12/03/2021
01/09/2021
11/03/2022
24/08/2022

18/03/2022
30/08/2022
13/03/2023
02/09/2023
12/03/2024
01/09/2024
11/03/2025
24/08/2025

The closing price of Admiral shares on 31 December 2022 was £21.37 per share.

Evelyn Bourke
Chair of the Remuneration Committee

Date of Award

35,487– £21.00£756,000£713,644 26/09/2019 26/09/2022– 85,000 £23.08 £1,961,800 £1,816,450 24/04/2020 24/04/2023– 90,000 £34.52 £3,106,800 £1,923,300 23/09/2021 23/09/2024– 90,000 £21.21 £1,908,900 £1,923,300 22/09/2022 22/09/2025£1,803£1,780£1,811£1,795£1,796£1,806£1,786.32£1,802.25

1 The value at maturity relates only to shares vested.
2 For SIP and Salary Shares, the price at award reflects the average closing share price over the five days prior to the award date

By order of the Board,

Value at
31 Dec 2022
or maturity(£)£2,181£1,792£1,881£1,453£1,304£1,069£1,539£1,731

Additional Information

84
83
88
68
61
50
–
–

Value ataward date(£)

Financial Statements

SIP
SIP
SIP
SIP
SIP
SIP
SIP
SIP
Geraint Jones
DFSS
DFSS
DFSS
DFSS

At endof yearPriceat award(£)

Corporate Governance

Milena Mondini de Focatiis
DFSS
DFSS
DFSS
DFSS

At startof year

Vested/maturedduring year

Strategic Report

Executive Directors’ Interests in Shares under the DFSS and SIP and salary share awards (audited)210

Corporate GovernanceDirectors’ Report

The Directors present their Annual Report andthe audited Financial Statements for the year
ended 31 December 2022.

Significant contracts of material interest to shareholders

Information included in the Strategic Report

The Group considers its co-insurance and reinsurance contracts tobe significant and of material interest to shareholders. A numberof the Group’s contractual arrangements with reinsurers include
features that, in certain scenarios, allow for reinsurers to recoverlosses incurred to date. The overall impact of such scenarios
would not lead to an overall net economic outflow from theGroup. No other contractual arrangements are considered to besignificant to the running of the Group’s business.

Disclosure

Financial instruments

As permitted by legislation, some of the matters required to be
included in the Directors’ Report have instead been included in theStrategic Report as the Board considers them to be of strategic
importance. Specifically, these are:Page reference

Future business developments
Pages 28 to 37
Greenhouse gas emissions, energy consumption Pages 92
and energy efficiency action
and 96
Employment of disabled persons (as defined byPage 80
the Disability Discrimination Act 1995)
Engagement with colleagues
Pages 77 to 81
Engagement with suppliers, customers and others Pages 74 to 76
in a business relationship with the Company
and 82 to 84

Disclosure of information under Listing Rule 9.8.4
Sub-sectionof Listing
Rule 9.8.4
DetailPage reference

1
7–Page 285

12, 13

Interest capitalised by the Group
Allotment of shares for cash pursuant
to Group employee share schemes
Shareholder waiver of dividend

Page 211

Group results and dividends

The profit for the year, after tax but before dividends, amounted
to £371.8 million (2021: £996.7 million). The Directors declared andpaid dividends of £658.3 million during 2022 (2021: £720.9 million).
Refer to note 12b for further details.
The Directors have proposed a final dividend of £155 million (52.0pence per share). Subject to shareholders’ approval at the 2023
Annual General Meeting (AGM), the final dividend will be paid on
2 June 2023 to shareholders on the register at the close of businesson 5 May 2023.
Further information on the Groups’ dividend policy is located innote 12e and on page 26 of the Strategic Report.

Research and development

The objectives and policies for managing risks in relation tofinancial instruments held by the Group are set out in note 6 to
the Financial Statements.

Directors and their interests

The present Directors of the Company are shown on pages
130 to 135 of this Report, whilst Directors’ interests in the sharecapital of the Company are set out in the Remuneration Report on
page 208. A list of Directors in the financial period to 31 December
2022 is shown on page 130.

Going concern

Under Provision 30 of the 2018 UK Corporate Governance Code,the Board confirms that it considers the Going Concern basisof accounting appropriate. In considering this requirement,
the Directors have taken into account the factors below.
In particular, as part of this assessment the Board considered
updated projections of performance and profitability a numberof times throughout the year, with some key highlights including:• The Group’s profit projections, including:– Changes in premium rates and projected policy volumes
across the Group’s insurance businesses, including the impactof the UK FCA general insurance pricing reform which cameinto effect at the start of 2022
– The impacts of the current elevated inflationary environmenton the cost of settling claims across all of the Group’s
insurance businesses– The return of motor claims frequency towards prepandemic levels– Projected trends in other revenue generated by theGroup’s insurance businesses from fees and the sale ofancillary products

Details of costs incurred in respect of research and development
can be found in note 9 on page 271.

– Projected contributions to profit from businesses other thanthe UK Car insurance business

Political donations– Expected trends in unemployment and inflation in thecontext of credit risks and the growth of the Group’s
Loans business

No political donations were made during the year.

Interest capitalised

No interest was capitalised by the Group during the year.

– Assessment of wider market risk and investment performance
given the market volatility in H2 2022

Admiral Group plc Annual Report and Accounts 2022

211

Company Overview• The adequacy of the Group’s liquidity position after considering
all of the factors noted above• The regulatory environment, focusing on regulatory guidanceissued by the FCA and the PRA in the UK and ongoing
communications between management and regulators

31 January 2023
2 February 2023

15,617,104
15,624,439

5.14%
5.14%

There are no people who hold shares carrying special rights withregard to control of the Company.
Further information on the rights attaching to shares
under the employee share schemes are provided in the
Remuneration Report.

Directors’ interests• A review of the Company’s principal risks and uncertainties
and≈the assessment of emerging risks

Other than as stated below, as far as the Company is aware,
there are no persons with significant direct or indirect holdings in
the Company. Information provided to the Company pursuant to
the FCA’s Disclosure and Transparency Rules (DTRs) is published on
a Regulatory Information Service and on the Company’s website.
The Company received notifications in accordance with the FCA’s
DTRs of the following notifiable interests in the voting rights in the
Company’s issued share capital:
As at 31 December 2022
Number of Shares%

24,605,472

8.1%

21,727,558
17,243,242
14,400,000
12,560,052
11,711,392
9,147,150
8,422,950

7.2%
5.7%
4.8%
4.1%
3.9%
3.0%
2.8%

5,297,781

1.7%

Notes:
1 % as at date of notification. The DTRs require notification when the % voting rights (throughshares and financial instruments) held by a person reaches, exceeds of falls below anapplicable threshold specified in the DTRs
2 Notifications received by the Company in accordance with the FCA’s DTRs in the period from31 December 2022 to 3 March 2023 were as follows:

Shares held in Employee Benefit Trust (EBT)The EBT does not use its voting rights in respect of the shares it
holds in the EBT at general meetings, however, it may choose to
do so if recommended by the Company via a letter of wishes. If any
offer is made to shareholders to acquire their shares, the trustee
will not be obliged to accept or reject the offer in respect of any
shares which are at that time subject to subsisting awards but
will have regard to the interests of the award holders and will
have power to consult them to obtain their views on the offer.
Subject to the above, the trustee may take action with respect toany offer it thinks fair. The trustee has waived its right to dividends
on the shares held in the trust.

Additional information for shareholders

The following provides the additional information required forshareholders in accordance with the Takeovers Directive and therespective UK law.
At 31 December 2022, the Company’s issued share capitalcomprised a single class of shares referred to as ordinary shares.
Details of the share capital and shares issued during the year
can be found in note 12d. The rights and obligations attachedto the Company’s ordinary shares are set out in the Articles of
Association of the Company, copies of which can be obtained
from Companies House.
If a poll is called at a general meeting, every member present inperson or by proxy and entitled to vote shall have one vote forevery ordinary share held. The notice of the general meeting
specifies deadlines for exercising voting rights either by proxynotice or present in person or by proxy in relation to resolutions to
be passed at general meeting. All proxy votes are counted and thenumbers for, against or withheld in relation to each resolution are
announced at the Annual General Meeting and published on the
Company’s website after the meeting.
There are no restrictions on the transfer of ordinary shares in the
Company other than:• Certain restrictions may from time to time be imposed by laws
and regulations (for example, insider trading laws)• Pursuant to the Listing Rules of the FCA whereby certain
employees and Directors of the Company require the approvalof the Company to deal in the Company’s securities

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Share Capital, AGM and related matters
Major Shareholders

The interests of Directors and Officers and their connected
persons in the issued share capital of the Company are given in
the Remuneration Committee Report on page 183.

Financial Statements

Following consideration of the above, the Directors havereasonable expectation that the Group has adequate resources
to continue in operation for the foreseeable future, a period of
not less than 12 months from the date of this Report, and that
it is therefore appropriate to adopt the going concern basis inpreparing the Financial Statements. Further information is shownin the viability statement on page 122.

Henry Engelhardt & Diane Brierede I’Isle
Mawer Investment
Management Ltd.
BlackRock Inc.
Moondance Foundation
Vanguard Group Holdings
FMR LLC
N.M. Rothschild & Sons Ltd.
David & Heather Stevens
Münchener RückversicherungsGesellschaft AG

Date of notification

BlackRock Inc.
BlackRock Inc.

Corporate Governance• The results of business plan scenarios and stress tests on the
projected profitability, solvency and liquidity positions including
the impact of severe downside scenarios that assume severe
adverse economic, credit and trading stresses

Shareholder% of shares
Number of shares as at as at date ofdate of notification
notification

Strategic Report• The Group’s solvency position, which has been closely monitored
through periods of market volatility. The Group continues tomaintain a strong solvency position above target levels

212

Corporate GovernanceDirectors’ Reportcontinued
The Company has not purchased any of its own shares during
the period.
There are no agreements between the Company and its Directors
or employees providing for compensation for loss of office or
employment (whether through resignation, purported redundancy
or otherwise) that occur because of a takeover bid.
There are a number of agreements that alter or terminate upona change of control of the Company following a takeover bid,such as commercial contracts (entered into in the normal courseof business). None are considered to be significant in terms of theirimpact on the business of the Group as a whole.

Powers of the Company Directors

The Directors are responsible for managing the business of theCompany and may exercise all powers of the Company subject
to the provisions of relevant statutes, to any directions given
by special resolution and to the Company’s Memorandum andArticles. The Articles, for example, contain specific provisions andrestrictions concerning the Company’s power to borrow money.
Powers relating to the issuing of new shares and buyback of sharesare also included in the Articles and such authorities are renewedby shareholders at the Annual General Meeting each year.

Power to issue shares

At the last Annual General Meeting, held on 28 April 2022,
authority was given to the Directors to allot unissued relevant
securities in the Company up to a maximum of £199,929,
representing the Investment Association’s Guidelines limit ofapproximately two thirds of the issued share capital as at 18 March
2022. This authority expires on the date of the Annual General
Meeting to be held on 27 April 2023 and the Directors will seek torenew this authority for the following year.
A further special resolution passed at that meeting granted
authority to the Directors to allot equity securities in the Company(up to a maximum of 5% of the issued share capital of theCompany) for cash, without regard to the pre-emption provisionsof the Companies Act 2006. This authority also expires on the dateof the Annual General Meeting to be held on 27 April 2023 and the
Directors will seek to renew this authority for the following year.
The Board is aware of the principles published by the Pre-Emption
Group in November 2022, and their template resolutions
published on 4 November 2022, allowing a company the ability
to seek authority over a further 10% of the issued ordinary sharecapital on a non-pre-emptive basis subject to certain conditions.
The Board does not wish to increase the disapplication thresholdat this time but will keep this matter under review.

Appointments of Directors

The Company’s Articles of Association (the Articles) give the
Directors power to appoint and replace Directors. Under theTerms of Reference of the Group Nomination and GovernanceCommittee, any appointment must be recommended by theGroup Nomination and Governance Committee for approval by
the Board of Directors. At the Group’s Annual General Meetingon 26 April 2022, new “Articles” were approved by shareholders
which provide that all Directors will retire and offer themselves
for re-election at each Annual General Meeting, in accordancewith the UK Corporate Governance Code and the Company’s

current practice. Therefore, with the exception of Annette Court,
all Directors will be submitting themselves for either election or
re-election by shareholders at the forthcoming AGM.

Articles of Association

The Articles may only be amended by special resolution of
the shareholders.

Directors’ indemnities and insurance

Directors and Officers insurance cover is in place for all Directors
to provide cover against certain acts or omissions on behalf of theCompany. A Deed Poll of Indemnity was executed in October 2015,
indemnifying each of the Directors and the Company Secretary,
in relation to certain losses and liabilities that they might incur inthe course of acting as Directors of the Company. The Deed Pollof Indemnity is categorised as qualifying third party provisions as
defined by Section 234 of the Companies Act 2006 and remains inforce for all past and present Directors of the Company.
The Board is of the view that it is in the best interests of the Groupto attract and retain the services of the most able and experienced
Directors by offering competitive terms of engagement, including
the granting of such indemnities. Neither the Deed Poll of
Indemnity nor insurance cover would provide any coverage inthe event that a Director is proved to have acted fraudulently
or dishonestly.

Annual General Meeting (AGM)

It is proposed that the next AGM be held at Tŷ Admiral,
David Street, Cardiff, CF10 2EH on Thursday 27 April 2023 at
2.00pm, notice of which will be sent to shareholders with theAnnual Report.

Reporting, accountability and audit
UK Corporate Governance Code

Admiral is subject to the UK Corporate Governance Code (theCode), published by the Financial Reporting Council (FRC) in July
2018 and available on its website, www.frc.org.uk. The Company’s
Annual Report and Accounts, taken as a whole, addresses therequirements of the 2018 Code.
The Code 2018 (the Code) was applicable for the Group during
the year under review, and the Group has applied the principles
and complied with the provisions of the Code except with regard
to non-compliance with provision 19 as set out in the Governance
Report on page 136.
The Directors confirm that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable andprovides the information necessary for shareholders to assess
the Company’s position and performance, business modeland strategy.
The Board is ultimately responsible for the Group’s system ofrisk management and internal control and, through the Group
Audit Committee, has reviewed the effectiveness of the Group’s
internal control and risk management arrangements relating
to the financial reporting process and the principal risks facing
the business. The Board is satisfied that the Group’s internal
control and risk management framework is prudent and effective
and that, through the Group Audit Committee and Group Risk
Committee, risk can be assessed, managed and assurance giventhat all material controls are reviewed and monitored.
Admiral Group plc Annual Report and Accounts 2022

213

Company Overview

the assets of the Group and to prevent and detect fraud andother irregularities.

• Governance Report on page 136 in respect of the Board

Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate GovernanceStatement that complies with that law and those regulations.

• Nomination and Governance Committee Report on page 158• Audit Committee Report on page 171• Remuneration Committee Report on page 183
The Group’s gender diversity information for the financial year,
together with an explanation of the policies related to diversity,
are set out in the Strategic Report on pages 77 to 81 and in the
Nomination and Governance Committee Report on page 158.

Branches

Directors’ responsibilities

The Directors are responsible for preparing the Annual Report and
the Group and Parent Company financial statements in accordancewith applicable law and regulations.

Under company law, the Directors must not approve the Financial
Statements unless they are satisfied that they give a true andfair view of the state of affairs of the Group and Parent Company
and of their profit or loss for that period. In preparing each of theGroup and Parent Company financial statements, the Directors are
required to:• Select suitable accounting policies and then apply
them consistently• Make judgements and estimates that are reasonable
and prudent• For the Group financial statements, state whether they havebeen prepared in accordance with IFRS as adopted by the UK• For the Parent Company financial statements, state whether
applicable UK Accounting Standards, including FRS 101 Reduced
Disclosure Framework, have been followed, subject to any
material departures disclosed and explained in the Parent
Company financial statements
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Parent Company andenable them to ensure that its Financial Statements comply with
the Companies Act 2006. They have general responsibility fortaking such steps as are reasonably open to them to safeguard

Admiral Group plc Annual Report and Accounts 2022

Responsibility statement

The Directors confirm that to the best of their knowledge:• The financial statements, prepared in accordance with theapplicable set of accounting standards, give a true and fair viewof the assets, liabilities, financial position and profit or loss of theCompany and the undertakings included in the consolidation
taken as a whole, and• The Directors’ Report and the Strategic Report include a fairreview of the development and performance of the business andthe position of the Company, and the undertakings included in
the consolidation taken as a whole, together with a descriptionof the principal risks and uncertainties

Disclosure of information to auditor

The Directors who held office at the date of approval of thisDirectors’ Report confirm that, so far as they are each aware, there
is no relevant audit information of which the Company’s auditor isunaware; and each Director has taken all the steps that they ought
to have taken as a Director to make themselves aware of any
relevant audit information and to establish that the Company’s
auditor is aware of that information.

Auditor

Following completion of the tender for the Group’s audit
services and the Board’s approval of the Audit Committee’s
recommendation to re-appoint the Company’s auditor,
Deloitte LLP has indicated willingness to continue in office andresolutions to reappoint it and to authorise the Directors to fix
its remuneration will be proposed at the AGM.
The Directors’ Report has been approved by the Board,
For and on behalf of the Board,		Dan Caunt		Company Secretary		
7 March 2023		

Geraint Jones
Chief Financial Officer
7 March 2023

Additional Information

Company law requires the Directors to prepare Group and Parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group Financial Statementsin accordance with United Kingdom adopted international
accounting standards and applicable law and have elected toprepare the Parent Company financial statements in accordancewith UK Accounting Standards, including FRS 101 Reduced
Disclosure Framework.

Legislation in the UK governing the preparation and disseminationof Financial Statements may differ from legislation inother jurisdictions.

Financial Statements

The Group has several branches located in Canada, India, France
and Italy, through its subsidiary structure. Further details of theCompany’s subsidiaries, associated undertakings and branches arecontained in note 12f.

The Directors are responsible for the maintenance and integrityof the corporate and financial information included on the
Company’s website.

Corporate Governance• Group Risk Committee Report on page 178

Strategic Report

Information on the composition and operation of the Board and
its Committees is located in the following sections:

214

Financial Statements

Financial
Statements
Contents

Adding value.
Delivering
difference.
For our people

215 Independent Auditor’s Report
226 Consolidated Income Statement227	Consolidated Statement ofComprehensive Income
228 Consolidated Statement of Financial Position
229 Consolidated Cash Flow Statement
230 Consolidated Statement of changes in Equity
231 Notes to the Financial Statements
293 Parent Company Financial Statements
296	Notes to the Parent Company
Financial Statements
304 Consolidated Financial Summary (unaudited)

Admiral Group plc Annual Report and Accounts 2022

215

to the members of Admiral Group plc

In our opinion:• the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:• the Consolidated and Parent Company Statements of Comprehensive Income;• the Consolidated and Parent Company Statements of Financial Position;• the Consolidated Cash Flow Statement;• the Consolidated and Parent Company Statements of Changes in Equity;• the related notes 1 to 14 to the Group financial statements, excluding the capital adequacy disclosures in note 12e calculated inaccordance with the Solvency II regime which are marked as unaudited; andThe financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law andUnited Kingdom adopted international accounting standards. The financial reporting framework that has been applied in the preparationof the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced
Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of
our report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our auditof the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services
provided to the Group for the year are disclosed in note 9c to the financial statements. We confirm that we have not provided any nonaudit services prohibited by the FRC’s Ethical Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3. Summary of our audit approach
Key audit matters

The key audit matters that we identified in the current year were:• Valuation of gross insurance claims reserves;• Inflation assumptions applied to UK motor bodily injury claims reserves; and• Disclosure of the impact of the adoption of IFRS 17.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk

Admiral Group plc Annual Report and Accounts 2022

Additional Information• the related notes 1 to 15 to the Parent Company financial statements.

Financial Statements• the Consolidated and Parent Company Income Statements;

Corporate Governance• the financial statements of Admiral Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and fair viewof the state of the Group’s and of the Parent Company’s affairs as at 31 December 2022 and of the Group’s profit for the year
then ended;

Strategic Report

Report on the audit of the financial statements
1. Opinion

Company Overview

Independent Auditor’s Report

216

Financial Statements

Independent Auditor’s Reportcontinued
to the members of Admiral Group plc
Materiality

The materiality that we used for the Group financial statements was £23.4 million which was
determined on the basis of 5% of profit before tax (‘PBT’).

Scoping

We identified five reporting components which we determined should be subjected to full scope
audits this year.
Specific audit procedures were completed in respect of eight further components which, although notfinancially significant, did present some specific audit risks which needed to be addressed.
The components within the scope of our audit procedures account for 98% of the Group’s profit
before tax, 99% of the Group’s revenue and 99% of the Group’s net assets.

Significant changes in
our approach2022 has seen a rise in inflation which has been particularly significant in impacting the generalinsurance industry as a whole. Given these changes in the macroeconomic environment in which
the Group operates, as well as the fact that the UK motor reserves are one of the largest and mostjudgmental balances in the Group financial statements, we have identified an additional key audit
matter related to the inflation assumptions applied to the bodily injury claims reserves. The inflationary
impacts on bodily injury claims require the application of significant judgment as they are less closely
linked to the consumer price index (‘CPI’) and due to the longer-term nature of the Group’s exposure(compared to property damage claims).
We have also identified the disclosure of the impact of the Group’s adoption of IFRS 17 as an additional
key audit matter, as this is a new and complex accounting standard which has required considerable
judgment and interpretation in its implementation.

4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis ofaccounting included:• We obtained an understanding of the relevant controls relating to management‘s going concern assessment process;• We inspected the Group ORSA (‘Own Risk and Solvency Assessment’) to support our understanding of the key risks faced by the Group,
its ability to continue as a going concern, and the longer-term viability of the Group;• We evaluated management’s going concern assessment in light of the current macroeconomic uncertainties;• We considered the available cash and cash equivalents balance at year-end of £297 million and assessed how this is forecast to
fluctuate over the coming 12 months in line with management’s forecasted performance. This analysis included assessing the amountof headroom in the forecasts considering cash and regulatory liquidity requirements;• We assessed management’s reverse stress testing over the projected profitability, solvency and liquidity positions and the likelihood of
the various scenarios that could adversely impact upon the Group’s liquidity and solvency headroom; and• We obtained and inspected correspondence between the Group and its regulators, as well as reviewed the Group Risk Committee
meeting minutes, to identify any items of interest which could potentially indicate either non-compliance with legislation or potential
litigation or regulatory action held against the Group.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern for aperiod of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.

Admiral Group plc Annual Report and Accounts 2022

217

Company Overview

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statementsof the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in theaudit; and directing the efforts of the engagement team.

5.1. Valuation of gross insurance claims reserves
Key audit matter description

The Group’s gross insurance claims reserves total £3,456 million as at 31 December 2022 (2021year-end: £3,045 million). Judgments made in determining the valuation of claims reserves are by far
the most significant in terms of their impact on the Group’s financial position. Setting these claims
reserves is an inherently subjective exercise and small changes in underlying assumptions may have amaterial impact on the overall year-end result reported.

Specifically, the consistency of the level of prudence within the margin for the UK Car Insurance
reserves, related to large bodily injury claims, is our key area of focus.
Refer to page 172 in the Audit Committee report where this is included as a significant issue and note
3 and note 5d in the financial statements which refer to this matter.
How the scope of our audit
responded to the key
audit matter

We obtained an understanding of and tested the operating effectiveness of relevant controls relating
to the key actuarial assumptions identified and the setting of the management margin applied as an
uplift on the projected actuarial best estimate.
We obtained and inspected the reports from both management, and management’s external expert
actuary, and have involved our actuarial specialists to challenge key assumptions. We also assessed theobjectivity, competence and capability of management’s expert.
We benchmarked the frequency assumptions against available industry data and considered thecomparison in the context of the risk profile of the Group’s portfolio and the year-on-year changes inthese assumptions.
We undertook a graphical analysis of incurred development patterns to assess and challenge theseverity assumptions. We benchmarked the average cost per claim assumptions against available
third-party industry data in the context of this incurred development analysis.
We inspected management’s accounting judgment papers and tested the relevant controls governing
the claims distribution model in order to assess the qualitative and quantitative support for themargin held over the actuarial best estimate reserves. We analysed the consistency of prudence within
the booked reserves against previous reporting periods in the context of the underlying uncertainty inincurred claims development and challenged management’s support for the booked position.

Key observations

Based on the procedures described above, we consider that the valuation of the gross insurance claims
reserves remain appropriate and in line with the Group’s accounting policy.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

In line with the Group’s accounting policy, management adds a margin to the actuarial best estimate toarrive at the booked gross claims reserves. This margin reflects the inherent uncertainty in estimating theultimate losses on claims, over and above that which can be projected actuarially based on the underlying
claims development data. This is a significant area of judgment and, therefore, a focus of our audit.

Financial Statements

Specifically, our significant areas of focus are the Group’s selection of the frequency and severity
assumptions for large bodily injury claims arising in the UK Car Insurance business. These particular
claims result in higher individual claims reserves and are more judgmental, in terms of the developmentof the ultimate losses, due to the longer-term nature of the Group’s exposure (compared to property
damage claims).

Corporate Governance

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

Strategic Report

5. Key audit matters

218

Financial Statements

Independent Auditor’s Reportcontinued
to the members of Admiral Group plc

5.2. Inflation assumptions applied to UK motor bodily injury claims reserves
Key audit matter description

Given the ongoing uncertainty associated with the UK’s current and future inflationary environment,
the impact of future inflation assumptions requires the application of significant judgment which
has a material impact on the best estimate reserves. In the current macroeconomic environment,
there is a greater level of uncertainty associated with projecting future assumptions than in previous
periods owing to the uncertainty in forecast future inflation and the extent to which this will impact
claims inflation.
The most significant impact of such inflation assumptions relates to bodily injury claims, given therelatively low implicit inflation in historical data trends and the time it takes for such claims to develop
and settle; therefore, the effect of such inflationary pressures will not be observable in the claims data
for some time. This is unlike for damage claims where the impact of inflation is already rising due to
inflationary trends in historical data, their faster development, and the fact that they are more closely
linked to the Consumer Price Index (‘CPI’).
Our audit work to respond to the specific risks associated with inflationary assumptions in the UK
motor bodily injury claims reserves required significant input from our actuarial specialists and was
the focus of a significant amount of audit effort; therefore, we considered this a key audit matter.
Refer to page 172 in the Audit Committee report where this is included as a significant issue and note
3 and note 5d in the financial statements which refer to this matter.

How the scope of our audit
responded to the key
audit matter

We obtained an understanding of and tested the operating effectiveness of relevant controls relating
to the key inflation assumptions identified.
We obtained and inspected the reports from both management, and management’s external expert
actuary, and have involved our actuarial specialists to challenge the key assumptions. We also assessed
the objectivity, competence and capability of management’s expert.
We benchmarked management’s inflation assumptions against available industry data and considered
the results of this comparison.
We inspected and challenged the methodology applied in determining the impact of excess inflationon the year-end reserves, including challenging the future inflation assumptions with reference tocurrent and future expectations of market wage inflation.

Key observations

Based on the procedures described above, we consider that the inflation assumptions applied to UK
motor bodily injury claims reserves remain appropriate and in line with the Group’s accounting policy.

Admiral Group plc Annual Report and Accounts 2022

219

Company Overview

Key audit matter description

With effect from 1 January 2023, the Group transitioned to IFRS 17: Insurance Contracts which replaced
the existing standard for insurance contracts, IFRS 4.

How the scope of our audit
responded to the key
audit matter

While further testing of the financial impact will be performed as part of our 2023 year-end audit,
we have performed sufficient audit procedures for the purposes of assessing the disclosures madein accordance with IAS 8.
We have obtained an understanding of and tested the operating effectiveness of the relevant controls
governing management’s estimate of the transitional adjustment.

We involved our actuarial specialists in performing procedures to challenge the Group’s IFRS 17
calculation models, including those related to the estimate of the fulfilment cashflows and risk
adjustment which form the Liability for Incurred Claims.
We tested the journal entries resulting from the IFRS 17 model outputs which derive the Group’s IFRS
17 position as at 1 January 2022 from the underlying IFRS 4 Balance Sheet through reconciling to theaudited transition adjustments.
We evaluated the disclosures related to the transition impact against the requirements of IAS 8 andreconciled the disclosed impact to underlying accounting records.
Key observations

Based on the procedures described above, we consider the assumptions, methodologies and models
applied in preparing the IFRS 17 transition disclosure to be reasonable.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

We challenged the appropriateness of key technical accounting decisions, judgments, assumptions
and elections made in determining the estimate to assess compliance with the requirements ofthe standard.

Financial Statements

We have deemed the disclosure of the impact of the adoption of IFRS 17 a key audit matter as this is a
new and complex accounting standard which has required considerable judgment and interpretationin its implementation. Furthermore, the new standard has introduced a number of significant changes,
including new requirements regarding the recognition and measurement of insurance contracts andrelated account balances and classes of transactions. In order to meet the requirements of the newstandard, significant changes have also been made to the systems, processes and controls with effectfrom 1 January 2023.

Corporate Governance

The estimated transitional impact is disclosed in Note 2 to the financial statements for the
year-ended 31 December 2022 in accordance with the requirements of IAS 8: Accounting Policies,
Changes in Accounting Estimates and Errors. The disclosures in 2022 are intended to provide users withan understanding of the estimated impact of the new standard and, as a result, are more limited thanthe disclosures to be included in the first year of adoption, being 2023.

Strategic Report

5.3. Disclosure of the impact of the adoption of IFRS 17

220

Financial Statements

Independent Auditor’s Reportcontinued
to the members of Admiral Group plc

6. Our application of materiality
6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisionsof a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work
and in evaluating the results of our work.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Group financial statements

Parent company financial statements

Materiality£23.4 million (2021: £36.2 million)£4.2 million (2021: £2.9 million)

Basis for determining
materiality

5% of profit before tax (2021: 5% of profit before 3% of two-year average of net assets (2021: 3%
tax from continuing and discontinued operations of two-year average of net assets).
excluding ‘profit on sale’).

Rationale for the benchmark
appliedWe consider profit before tax to be the criticalbenchmark of the performance of the Group andconsider this benchmark to be suitable having
compared to other benchmarks. Our materiality
equates to 1% of gross earned premium and 2%of equity (2021: 1% of gross earned premium and
3% of equity).

The Parent Company primarily exists as theholding company which carries investments
in Group subsidiaries and is the issuer of listed
securities. We consider that net assets is thecritical benchmark for the Company. The measureuses a two-year average of net assets which we
consider appropriate given the inherent volatility
associated with the timing of dividend payments.

Group materiality£23.4mComponentmateriality range£2.9m to £22.2m

PBT
£469m

Audit Committee
reporting threshold
£1.1m
PBT
Group materiality

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected andundetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements

Parent company financial statements

Performance materiality

70% (2021: 70%) of Group materiality

70% (2021: 70%) of Parent Company materiality

Basis and rationale fordetermining performancemateriality

In determining performance materiality, we considered the following factors:• our risk assessment, including our assessment of the Group’s overall control environment and that
we consider it appropriate to rely on controls over a number of business processes; and• our past experience of the audit, which has indicated a low number of uncorrected misstatements
identified in prior periods.

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £1.1 million(2021: £1.8 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of thefinancial statements.

Admiral Group plc Annual Report and Accounts 2022

221

Company Overview

The five (2021: five) significant components of the Group which were identified in our audit planning are Admiral Insurance (Gibraltar)
Limited, Admiral Insurance Company Limited, EUI Limited, Admiral Europe Compañía de Seguros, and the Parent Company, Admiral Group plc.

Additionally, we have completed specific audit procedures, designed to address specific audit risks, for eight (2021: seven)further components.
The components within the scope of our audit procedures account for 98% (2021: 99%) of the Group’s profit before tax,
99% (2021: 99%) of the Group’s revenue and 99% (2021: 99%) of the Group’s net assets.

7% 1%

6%

2%

9%

1%

Profitbefore tax

Net assets

92%

92%

90%

Full audit scope

Full audit scope

Specified audit proceduresSpecified audit procedures

Full audit scope
Specified audit procedures

Review at group level

Review at group level

Review at group level

7.2. Our consideration of the control environment

We obtained an understanding of and tested the relevant controls within the Group, including controls over the following businessprocesses: financial reporting, premiums written, other revenue, claims paid, claims reserves, reinsurance and coinsurance, cash andinvestments. We also identified the key IT systems in the UK that were relevant to the audit, including the policy administration system,
claims administration systems and the data warehouse. Our audit approach was reliant upon the effectiveness of the controls over allthese business processes.

7.3. Our consideration of climate-related risks

In planning our audit, we have considered the impact of climate change on the Group’s operations and subsequent impact on its financial
statements. The Group sets out its assessment of the potential impact on pages 121 to 124 of the Emerging Risks section.
In conjunction with our Task Force on Climate Related Financial Disclosures (TCFD) specialists, we have held discussions with the Group to
understand management’s:• process for identifying affected operations, including the governance and controls over this process, and the subsequent effect on thefinancial reporting of the Group; and• long-term strategy to respond to climate-related risks as they emerge including the effect on the Group’s forecasts.
In addition, our audit work also involved:• challenging the completeness of the physical and transition risks identified and considered in the Group’s climate risk assessment andthe conclusion that there is no material impact of climate change risk on the current year financial reporting;• assessing the Group’s qualitative analysis which supports the Group’s conclusion that there is no material financial statement impact ofclimate risk on expected credit losses; and• assessing disclosures in the Annual Report against the requirements of the TCFD framework, paragraph 8(a) of Listing Rule 9.8.6R.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Revenue

Financial Statements

For the remaining components, which were not subject to full-scope audits or specified audit procedures, we performed analysis
at an aggregated Group level to re-assess our evaluation that there were no significant risks of material misstatement in any ofthese components.

Corporate Governance

Each of these significant components was subjected to a full-scope audit, completed to individual component materiality levels
which ranged from £2.9 million to £22.2 million (2021: £2.9 million to £31.4 million) dependent upon the relative significance of eachindividual component.

Strategic Report

7. An overview of the scope of our audit
7.1. Identification and scoping of components

222

Financial Statements

Independent Auditor’s Reportcontinued
to the members of Admiral Group plc
We have not been engaged to provide assurance over the accuracy of TCFD disclosures set out on pages 97 to 111 of the Annual Report.
As part of our procedures, we are required to read these disclosures and to consider whether they are materially inconsistent with thefinancial statements or our knowledge obtained during the course of our audit. We did not identify any material inconsistencies as aresult of these procedures.

7.4. Working with other auditors

We engaged local component auditors, being Deloitte member firms in the US and Spain, to perform the audit work in these respective
territories on our behalf. We directed and supervised the work of Deloitte Spain, including through visits to the operations in Madrid,and remote communication and review of their work.
Due to the relative significance of the Group’s operations in the US, while we did not undertake visits to the operations in the US,
we directed and supervised the work of the component auditor by having frequent phone calls with the component audit team,participating in video conferences and reviewing certain key audit documentation remotely.

8. Other information

The other information comprises the information included in the Annual Report other than the financial statements and our auditor’sreport thereon. The directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in ourreport, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise toa material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is amaterial misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s ability tocontinue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative
but to do so.

10. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.

11. Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which ourprocedures are capable of detecting irregularities, including fraud is detailed below.

Admiral Group plc Annual Report and Accounts 2022

223

Company Overview

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, we considered the following:• the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;

Strategic Report

11.1. Identifying and assessing potential risks related to irregularities• the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error;• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; andAs a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud andidentified the greatest potential for fraud in the following areas: valuation of gross insurance claims reserves and inflation assumptions
applied to UK motor bodily injury claims reserves. In common with all audits under ISAs (UK), we are also required to perform specificprocedures to respond to the risk of management override.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s
operating licence, and the Financial Conduct Authority and the Prudential Regulation Authority regulations.

11.2. Audit response to risks identified

As a result of performing the above, we identified the valuation of gross insurance claims reserves and the inflation assumptions applied
to UK motor bodily injury claims reserves as key audit matters related to the potential risk of fraud. The key audit matters sectionof our report explains the matters in more detail and also describes the specific procedures we performed in response to those key
audit matters.
In addition to the above, our procedures to respond to the risks identified included the following:• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;• enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims;• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
due to fraud;• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with
HMRC, the Financial Conduct Authority and the Prudential Regulation Authority; and• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and otheradjustments; assessing whether the judgments made in making accounting estimates are indicative of a potential bias; and evaluating
the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members includinginternal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of thoselaws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.
The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, Solvency II regulation andrelevant tax legislation.

Financial Statements• the matters discussed among the audit engagement team including significant component audit teams and relevant internal
specialists, including tax, actuarial, financial instruments, IT, climate, and industry specialists regarding how and where fraud mightoccur in the financial statements and any potential indicators of fraud.

Corporate Governance• results of our enquiries of management, internal audit, the directors and the Audit Committee about their own identification andassessment of the risks of irregularities, including those that are specific to the Group’s sector;

224

Financial Statements

Independent Auditor’s Reportcontinued
to the members of Admiral Group plc

Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with theCompanies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in thecourse of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.

13. Corporate Governance Statement

The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified
for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 210;
• the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period isappropriate set out on page 122 to 124;
• the directors’ statement on fair, balanced and understandable set out on page 212;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 114;
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems
set out on pages 114 to 120; and• the section describing the work of the Audit Committee set out on page 171.

14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:• we have not received all the information and explanations we require for our audit; or• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received
from branches not visited by us; or• the Parent Company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have notbeen made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.

Admiral Group plc Annual Report and Accounts 2022

225

Company Overview

Following the recommendation of the Audit Committee, we were appointed by shareholders’ approval at the Annual General Meeting on
28 April 2022 to audit the financial statements for the year ending 31 December 2022 and subsequent financial periods. The period of
total uninterrupted engagement including previous renewals and reappointments of the firm is seven years, covering the years ending
31 December 2016 to 31 December 2022.

16. Use of our report

Corporate GovernanceAs required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format (‘ESEF’) prepared Annual Financial Report filed on the National Storage
Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides noassurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS.

Financial Statements

15.2. Consistency of the audit report with the additional report to the Audit Committee

Strategic Report

15. Other matters which we are required to address
15.1. Auditor tenure

Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with
ISAs (UK).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state tothem in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions wehave formed.

7 March 2023

Admiral Group plc Annual Report and Accounts 2022

Additional Information

David Rush
(Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom

226

Financial Statements

Consolidated Income Statement
For the year ended 31 December 2022

Year ended

Continuing operations

Insurance premium revenue
Insurance premium ceded to reinsurers
Net insurance premium revenue
Other revenue
Profit commission
Interest income
Interest expense
Net interest income from loans
Investment return – interest income at effective interest rate
Investment return – other
Investment return recoverable from co- and reinsurers
Net revenue
Insurance claims and claims handling expenses
Insurance claims and claims handling expenses recoverable from reinsurers
Net insurance claims
Operating expenses and share scheme charges
Operating expenses and share scheme charges recoverable from co- and reinsurers
Expected credit losses
Net operating expenses and share scheme charges
Total expenses
Operating profit
Finance costs
Finance costs recoverable from co- and reinsurers
Net finance costs
Profit before tax from continuing operations
Taxation expense
Profit after tax from continuing operations
Profit before tax from discontinued operations
Gain on disposal
Taxation expense
Profit after tax from discontinued operations
Profit after tax from continuing and discontinued operations
Profit after tax attributable to:Equity holders of the parent
Non-controlling interests (NCI)
Earnings per share – from continuing operations
Basic
DilutedEarnings per share – from continuing and discontinued operations
Basic
DilutedDividends declared and paid (total)
Dividends declared and paid (per share)

31 December
2022£m

31 December
2021£m

2,705.4(1,794.4)
911.0
318.8
170.9
58.7
(12.6)
46.1
52.3
12.3
(20.0)
1,491.4(2,081.4)
1,575.3(506.1)(924.8)439.3(18.9)(504.4)(1,010.5)
480.9(13.4)
1.5(11.9)
469.0(97.2)
371.8
–
–
–
–
371.8

2,492.3(1,637.3)
855.0
314.8
304.5
36.6
(6.1)
30.5
40.6
6.2
(1.6)
1,550.0(1,506.8)
1,174.5(332.3)(970.1)491.1(13.3)(492.3)(824.6)725.4(13.7)
1.8(11.9)
713.5(130.2)
583.3
11.3
404.4
(2.3)
413.4
996.7

373.0
(1.2)
371.8

997.9
(1.2)
996.7

12
12

124.3p123.7p196.7p196.1p

12
12
12
12

124.3p123.7p658.3
223.0p335.5p334.5p720.9
247.0p

Note

5
8
5
7
7
6
6
6
5
5
9
9
6, 9

6
6

10

13

Admiral Group plc Annual Report and Accounts 2022

227

Company Overview

Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022

Note

10

996.7

(255.6)
13.0
6.9
25.1
(7.0)
(217.6)154.2(50.1)
1.4(10.4)
6.6–(52.5)
944.2

155.3
(1.1)
154.2

945.7
(1.5)
944.2

Financial Statements

371.8

Corporate Governance

Profit for the period – from continuing and discontinued operations
Other comprehensive income
Items that are or may be reclassified to profit or loss
Movements in fair value reserve
Deferred tax charge in relation to movement in fair value reserve
Exchange differences on translation of foreign operations
Movement in hedging reserve
Deferred tax charge in relation to movement in hedging reserve
Other comprehensive income for the period, net of income tax
Total comprehensive income for the period
Total comprehensive income for the period attributable to:Equity holders of the parent
Non-controlling interests

31 December
2021£mStrategic Report

Year ended
31 December
2022£m

Additional Information

Admiral Group plc Annual Report and Accounts 2022

228

Financial Statements

Consolidated Statement of Financial Position
As at 31 December 2022

As at
31 December
2022£m

31 December
2021
£m

11
11
10
10
5
7
6
6
6

89.8
248.3
18.5
–
2,714.0823.9
1,335.8
3,411.2
297.0
8,938.5

103.2
179.9
9.3
10.6
2,176.1
556.8
1,208.5
3,742.6
372.7
8,359.7

12

0.3
13.1
(173.7)
1,114.5
954.2
1.2
955.4

0.3
13.1
44.0
1,348.8
1,406.2
2.3
1,408.5

4,792.5
939.1
2,158.0
88.5
5.0
7,983.1
8,938.5

4,215.0670.9
1,960.0
105.3–
6,951.2
8,359.7

Note

ASSETS
Property and equipment
Intangible assets
Deferred income tax
Corporation tax asset
Reinsurance assets
Loans and advances to customers
Insurance and other receivables
Financial investments
Cash and cash equivalents
Total assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interests
Total equity
LIABILITIESInsurance contract liabilities
Subordinated and other financial liabilities
Trade and other payables
Lease liabilities
Corporation tax liability
Total liabilities
Total equity and total liabilities

12

5
6
6, 11
6
10

The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of Directors on 7 March 2023 and were signed on its behalf by:

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

Admiral Group plc Annual Report and Accounts 2022

229

Company Overview

Consolidated Cash Flow Statement
For the year ended 31 December 2022

18.2
(1.2)
23.7
–
11.7
57.3
–
12.6
(64.6)
13.4
97.2
577.5
(537.9)(129.8)(280.6)198.0
367.3(3,198.0)
3,328.3
58.7
556.3(91.2)
465.1

23.6
23.8
44.7
(404.4)
13.3
65.2
(0.8)
6.1
(45.2)
12.0
132.5
133.7
(92.9)(9.2)(205.2)(56.1)
637.8(3,710.2)
3,397.1
46.6
371.3(126.7)244.6

11(98.6)(2.4)––(101.0)(69.2)–
471.8(14.8)
387.8

6
6, 7
6
12

267.8
(25.3)(9.2)(658.3)(425.0)(60.9)
372.7–(14.8)
297.0

185.9(20.2)(9.6)(720.9)(564.8)67.6
351.7(41.3)(5.3)
372.7

Admiral Group plc Annual Report and Accounts 2022

11
11
11
13
6
9

6
10
5
5
6, 11
7
11

6

6

Additional Information

996.7

Financial Statements

371.8

Note

Profit after tax – from continuing and discontinued operations
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– Gain on disposal of Comparison entities held for sale
– Movement in expected credit loss provision– Share scheme charges– Accrued interest income from loans and advances to customers– Interest expense on funding for loans and advances to customers– Investment return– Finance costs, including unwinding of discounts on lease liabilities– Taxation expense
Change in gross insurance contract liabilities
Change in reinsurance assets
Change in insurance and other receivables
Change in loans and advances to customers
Change in trade and other payables, including tax and social security
Cash flows from operating activities, before movements in investments
Purchases of financial instruments
Proceeds on disposal/maturity of financial instruments
Interest and investment income received
Cash flows from operating activities, net of movements in investments
Taxation payments
Net cash flow from operating activities
Cash flows from investing activities:
Purchases of property, equipment and software
Investment in associates
Proceeds from sale of Comparison entities
Net costs paid on sale of Comparison entities
Net cash used in investing activities
Cash flows from financing activities:
Proceeds on issue of loan backed securities
Finance costs paid, including interest expense paid on funding for loans
Repayment of lease liabilities
Equity dividends paid
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents included in disposal of comparison entities
Effects of changes in foreign exchange rates
Cash and cash equivalents at 31 December

Corporate Governance

31 December
2021£mStrategic Report

Year ended
31 December
2022
£m

230

Financial Statements

Consolidated Statement of Changes in Equity
For the year ended 31 December 2022

Attributable to the owners of the Company
Sharecapital£mSharepremium
account£m

Fair value
reserve£m

Hedging
reserve£m

Foreignexchangereserve
£m

0.3

13.1

85.4

(3.6)

13.1

–

–

–

–

–

–

(50.1)

–
–
–

–
–
–

–
12
9
10

Note

Balance at 1 January 2021
Profit/(loss) for the period– from continuing anddiscontinued operations
Other comprehensive income
Movements in fair value reserve
Deferred tax credit in relation to
movement in fair value reserve
Movement in hedging reserve
Currency translation differences
Total comprehensive income forthe period
Transactions with equity holders
Dividends
Share scheme credit
Deferred tax credit on shareschemes credit
Transfer to gain on disposal of
assets held for sale
Change in ownership interests onsale of comparison
Change in ownership interests
without a change in control
Total transactions withequity holders
As at 31 December 2021
Balance at 1 January 2022
Profit/(loss) for the period– from continuing anddiscontinued operations
Other comprehensive income
Movements in fair value reserve
Deferred tax credit in relation to
movement in fair value reserve
Movement in hedging reserve
Deferred tax on charge in relation
to movement in hedging reserve
Currency translation differences
Total comprehensive income forthe period
Transactions with equity holders
Dividends
Share scheme credit
Deferred tax charge on shareschemes credit
Change in ownership interests
without a change in control
Total transactions withequity holders
As at December 2022

10

Retained
profitand loss£m

Noncontrolling
Totalinterests
£m
£m

Total
equity£m

1,004.4 1,112.7

10.7 1,123.4

–

997.9

997.9

(1.2)

996.7

–

–

–

(50.1)–(50.1)

1.4
–
–

–
6.6
–

–
–
(10.1)

–
–
–

1.4
6.6
(10.1)

–
–
(0.3)

1.4
6.6
(10.4)–(48.7)

6.6(10.1)

997.9

945.7

(1.5)

944.2

–
–

–
–

–
–

–
–

–
–

(720.9) (720.9)
63.1
63.1

–
–

(720.9)
63.1

–

–

–

–

–

6.0

6.0

–

6.0

–

–

–

–

1.3

(2.0)

(0.7)

0.1

(0.6)

–

–

–

–

–

–

–

(6.7)

(6.7)

–

–

–

–

–

0.3

0.3

(0.3)

–

–
0.3
0.3

–
13.1
13.1

–
36.7
36.7

–
3.0
3.0

1.3
4.3
4.3

–

–

–

–

–

–

(255.6)

–
–

–
–

–
–

(653.5) (652.2)
1,348.8 1,406.2
1,348.8 1,406.2(6.9) (659.1)
2.3 1,408.5
2.3 1,408.5

–

373.0

373.0

(1.2)

371.8

–

–

–

(255.6)–(255.6)

13.0
–

–
25.1

–
–

–
–

13.0
25.1

–
–

13.0
25.1

–
–

–
–

(7.0)
–

–
6.8

–
–

(7.0)
6.8

–
0.1

(7.0)
6.9

–

–

(242.6)

18.1

6.8

373.0

155.3

(1.1)

154.2

12
9

–
–

–
–

–
–

–
–

–
–

(658.3) (658.3)
57.3
57.3

–
–

(658.3)
57.3

10

–

–

–

–

–

(6.3)

(6.3)

–

(6.3)

–

–

–

–

–

–

–

–

–

–
0.3

–
13.1

–
(205.9)–21.1–(607.3) (607.3)
11.1 1,114.5
954.2

–
1.2

(607.3)955.4

10Admiral Group plc Annual Report and Accounts 2022

231

For the year ended 31 December 2022

Admiral Group plc is a public limited company incorporated in England and Wales. Its registered office is at Tŷ Admiral, David Street,
Cardiff CF10 2EH and its shares are listed on the London Stock Exchange. The nature of Admiral Group operations and its principal
activities is set out in the Business model section on page 6.

2. Basis of preparation

The consolidated financial statements have been prepared on a Going Concern basis. In making this assessment, the Directors’ haveconsidered in detail the impact of the pandemic on the Group’s financial position and performance, including the projection of theGroup’s profits, regulatory capital surpluses and sources of liquidity for the next 12 months and beyond.
The following areas were focused on as part of this review:– Changes in premium rates and projected policy volumes across the Group’s insurance businesses, including early indications of the
impact of the FCA general insurance pricing reform which came into effect at the start of 2022
– Potential impacts on the cost of settling claims across all insurance businesses, including the impact of inflationary pressures– Projected trends in other revenue generated by the Group’s insurance business from fees and the sale of ancillary products– Projected contributions to profit from businesses other than the UK Car insurance business– Expected trends in unemployment in the context of credit risks and the growth of the Group’s Loans business• The adequacy of the Group’s liquidity position after considering all of the factors noted above• The results of business plan scenarios and stress tests on the projected profitability, solvency and liquidity positions including theimpact of severe downside scenarios that assume severe adverse economic, credit and trading stresses• The regulatory environment, in particular focusing on regulatory guidance issued by the Group’s regulators and ongoing
communications between management and regulators• A review of the Company’s principal risks and uncertainties and the assessment of emerging risks
Following consideration of the above, the Directors have reasonable expectation that the Group has adequate resources to continue inoperation for the foreseeable future, a period of not less than 12 months from the date of this report, and that it is therefore appropriate
to adopt the going concern basis in preparing the financial statements.
Further information regarding the Company’s business activities, together with the factors likely to affect its future development,
performance and position, is set out in the Strategic Report. Further information regarding the financial position of the Company,
its cash flows, liquidity position and borrowing facilities are also described in the Strategic Report. In addition, notes 6 and 12 to thefinancial statements include the Company’s objectives, policies and processes for managing its capital; its financial risk management
objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk. The accounting policies set out in thenotes to the financial statements have, unless otherwise stated, been applied consistently to all periods presented in these Groupfinancial 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 the nearest £0.1 million.
Cash flows from operating activities before movements in investments comprise all cash flows arising from the Group’s insurance andreinsurance activities, and from loans and advances issued to customers. Cash flows from financing activities include the cash flows on
issues of loan backed securities, lease liabilities and other financial liabilities.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns fromits involvement with the entity and can affect those returns through its power over the entity.

Admiral Group plc Annual Report and Accounts 2022

Additional Information• The Group’s solvency position, which has been closely monitored through periods of market volatility. The Group continues to maintaina strong solvency position above target levels

Financial Statements• The Group’s profit projections, including:Corporate GovernanceThe consolidated financial statements have been prepared and approved by the Directors in accordance with United Kingdom adopted
international accounting standards in conformity with the requirements of the Companies Act 2006. The Company has elected toprepare its parent company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework(FRS 101).

Strategic Report

1. General information

Company Overview

Notes to the Financial Statements

232

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022
In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is thedate on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date control ceases. Losses applicable to the non-controlling interests in a
subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
The Group has securitised certain loans and advances to customers by the transfer of the loans to special purpose entities (“SPEs”)
controlled by the Group. Securitisation enables a subsequent issuance of debt by the SPEs to investors who gain the security of theunderlying assets as collateral. These SPEs are fully consolidated into the Group financial statements under IFRS 10, as the Group controls
the entity in line with the above definition.
The preparation of financial statements in conformity with adopted IFRS requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimatesand associated assumptions are based on historical experience and various other factors that are believed to be reasonable under thecircumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are notreadily apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the year in which the estimate is reviewed. To the extent that a change in an accounting estimate gives rise to changes in assets andliabilities, the movement is recognised by adjusting the carrying amount of the related asset or liability in the period in which thechange occurs.

Adoption of new and revised standards

The Group has adopted the following IFRSs and interpretations during the year, which have been issued and endorsed:• Amendments to IFRS 3 Reference to the Conceptual Framework (effective 1 January 2022)• Amendments to IAS 16 Property, Plant and Equipment–Proceeds before Intended Use (effective 1 January 2022)• Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract (effective 1 January 2022)• Annual Improvements to IFRS Standards 2018–2020 Cycle: Amendments to IFRS 1 First-time Adoption of International Financial
Reporting Standards, IFRS 9 Financial Instruments, and IFRS 16 Leases (effective 1 January 2022)

New and revised IFRS Standards in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Standards thathave been issued but are not yet effective:• IFRS 17 Insurance Contracts (effective 1 January 2023)• Amendments to IAS 1 Classification of Liabilities as Current or Non-current and Presentation of Financial Statements and IFRS PracticeStatement 2: Disclosure of Accounting Policies (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 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a single transaction(effective 1 January 2023)
The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of
the Group in future periods, except as noted below:

Admiral Group plc Annual Report and Accounts 2022

233

Company Overview

IFRS 17 Insurance Contracts, as issued by the IASB and endorsed by the UK Endorsement Board on 16 May 2022, is a replacement for
IFRS 4 Insurance Contracts, effective for annual periods beginning on or after 1 January 2023, with a transition balance sheet date of
1 January 2022.

Applying IFRS 17 to the Group’s contracts, the scope of the standard is aligned to IFRS 4, with insurance liabilities comprised of the
Liability for Remaining Coverage (‘LRC’), and the Liability for Incurred Claims (‘LIC’). Reinsurance assets are comprised of the Asset for
Remaining Coverage (‘ARC’) and Asset for Incurred Claims (‘AIC’).
IFRS 17 outlines a general model, which is simplified if certain criteria are met by measuring the liability for remaining coverage using thepremium allocation approach (‘PAA’).

• The Group’s insurance contracts issued have coverage periods of 6 to 12 months in duration and therefore automatically qualify for the
PAA under IFRS 17.53(b); and• Whilst the Group’s reinsurance contracts have coverage periods which extend beyond 12 months, modelling of these contracts showsthat using the PAA produces a measurement of the LRC which is not materially different from the LRC produced using the generalmodel. These contracts are therefore eligible to be measured applying the PAA under IFRS 17.53(a).
The Group therefore intends to apply the PAA across all of its insurance contracts issued and reinsurance contracts held.
The measurement principles of the PAA differ from the approach used by the Group under IFRS 4 in the following key areas:• The measurement of insurance liabilities and reinsurance assets is performed at a more granular level than IFRS 4, taking into account:– the type of risk and how it is managed (a “portfolio” of insurance contracts);– the projected level of profitability; and– disaggregating the contracts into annual cohorts (i.e. each “group” of contracts is considered by underwriting year for the Group.
• The measurement of the liability for incurred claims (claims outstanding under IFRS 4, comprised of the best estimate of claims
outstanding plus a margin held above actuarial best estimates for adverse development) is determined on a discounted probabilityweighted expected value basis plus an explicit risk adjustment for non-financial risk, which is separately reported• The measurement of the liability for remaining coverage reflects premiums received less any deferred insurance acquisition cash flows(unless these are expensed as incurred) and less amounts recognised in revenue for insurance services provided. This corresponds toitems reported under IFRS 4 as the unearned premium reserve, less deferred acquisition costs and insurance receivables• Where facts and circumstances exist indicating that a group of contracts may be onerous, the Group must assess whether an onerous
loss component should be recognised. The calculation of the onerous loss component compares the fulfilment cashflows relating to
the liability for remaining coverage measured using the general model (including the risk adjustment for non-financial risk) to therecognised liability for remaining coverage, with any deficiency recognised as an onerous loss component• The asset for remaining coverage reflects reinsurance premiums paid for reinsurance held, less ceded earned reinsurance premiums.
Ceded reinsurance premiums under IFRS 17 are presented and earned net of any ceded reinsurance expense recoveries, which were
presented separately under IFRS 4 and recognised in line with the timing of the gross expenses incurred. In addition, the asset forremaining coverage is adjusted to include a loss-recovery component to reflect the expected recovery of onerous contract losses(on the underlying insurance contracts issued) where such contracts reinsure onerous direct contracts• The asset for incurred claims reflects the expected reinsurance recoveries of claims related cashflows on a discounted, probability
weighted expected value basis, inclusive of the risk adjustment• Under IFRS 17, income that is currently recognised immediately as commission income on underwritten ancillary products is required
to be recognised over the life of the policy as insurance revenue. This is because the commission income is not considered a separable
component under IFRS 17. As a result, part of the income that was recognised under IFRS 4 at year end 2021 is deferred under IFRS 17

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Differences in measurement principles

Financial Statements

Under IFRS 17, the Group’s insurance contracts issued and reinsurance contracts held are all eligible to be measured by applying the PAA,
given that:

Corporate Governance

The adoption of IFRS 17 does not change the classification of the Group’s insurance contracts. However, IFRS 17 establishes specificprinciples for the recognition, measurement, presentation and disclosure of insurance contracts issued and reinsurance contracts held by
the Group.

Strategic Report

IFRS 17: Accounting for Insurance contracts

234

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

Key accounting policy decisions• As set out above, both the Group’s insurance and reinsurance contracts have been deemed eligible for the PAA, and the Group isintending to apply the PAA across all of its insurance and reinsurance contracts• The application of the disaggregation requirements of IFRS 17 have resulted in the Group determining its portfolios of insurance
contracts as being by country of issue and line of business• The Group intends to take the option to expense its insurance acquisition cashflows immediately (with all contracts eligible for thistreatment, given the coverage period of < 12 months), having previously deferred these expenses under IFRS 4• The Group will compute its discount yield curves using a risk-free rate, plus an illiquidity premium reflective of the illiquidity of theunderlying claims. The illiquidity premium will be set by reference to several illiquidity data points, principally using illiquidity on
internal asset information supplemented by quantitative analysis when required• The Group intends to implement the option to take the difference arising from changes in the discount yield curve through Other
Comprehensive Income rather than the Income Statement, with insurance finance expenses thereby only comprising the unwinding of
discounting based on the locked-in rate at the time the claims are incurred• Although IFRS 17 requires a risk adjustment to be included in the measurement of the liability for incurred claims, there is noprescribed methodology or range. The Group has made an accounting policy decision to base its risk adjustment on a confidence levelapproach, setting the risk adjustment between the 85th and 95th percentile at an entity level basis, based on Group risk appetite. At thedate of transition, the Group expects the risk adjustment to be at the upper end of the corridor

Estimated impact of transition

The Group is in the advanced stages of implementing the standard. The Group will be applying the standard using a fully retrospective
approach, and with its first reporting in 2023 will restate the 2022 comparatives, including the opening Balance Sheet under IFRS 17 as
at 1 January 2022. The estimated impact on the opening Balance Sheet is expected to be a reduction in the Group’s equity of between£100 million and £130 million. The final impact within the range presented is dependent on the final outcome of a small number ofoutstanding technical judgements in respect of the calculation of the risk adjustment for non-financial risk.
The key changes driving the estimated adverse impact on transition are:
• An adverse impact arising from the Group’s accounting policy choice to expense acquisition costs, which results in a write off of theGroup’s gross deferred acquisition cost asset• A reduction in quota share reinsurance assets as a result of the change in timing in recognition of ceded quota share expense recoveries• An adverse impact due to the deferral of revenue in relation to underwritten ancillary products, which was previously recognised
immediately as commission income• An offsetting favourable impact due to changes in the Group’s claims liabilities, net of reinsurance, as a result of the requirements forthe liability and asset for incurred claims to be calculated using a probability weighted, discounted best estimate plus risk adjustment
for non-financial risk.
• The tax treatment of the transition impact follows the accounting treatment, with no transitional relief available. The tax impact ontransition has been calculated at an entity level, based on the tax rates that are expected to be in place in 2023, when the transition
impacts will be realised. Deferred tax assets in relation to carried forward losses are recognised only to the extent that it is probablefuture taxable profit will be available against which the assets can be utilised, in accordance with the Group’s accounting policy
for taxation
These estimates are based on accounting policies, assumptions, judgements and estimation techniques that remain subject to change
until the Group finalises and reports its interim results in August 2023.
In addition to the impact on equity at transition, there are a number of presentational changes that will result in a reduction in insurance
contract liabilities and reinsurance contract assets, primarily as a result of these balances being offset by the related insurance receivables
and reinsurance receivables and payables.
The cash flows and underlying capital generation of our businesses are not materially affected by IFRS 17, and we do not expect thestandard to have an impact on the Group’s Solvency II performance metrics.

Admiral Group plc Annual Report and Accounts 2022

235

Company Overview

In applying the Group’s accounting policies as described in the notes to the financial statements, the Directors are required to makejudgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimatesand assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates andassociated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.

Critical accounting judgements

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the
Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
A contract is required to transfer significant insurance risk in order to be classified as such. Management reviews all terms and conditionsof each such insurance and reinsurance contract in order to be able to make this judgement. In particular, all reinsurance contracts (bothexcess of loss and quota share contracts) held by the Group have been assessed and it has been concluded that all contracts transfer
significant insurance risk and have therefore been classified and accounted for as reinsurance contracts within these financial statements.

Consolidation of the Group’s special purpose entities (‘SPEs’)

The Group has set up SPEs in relation to the Admiral Loans business, whereby the Group securitises certain loans by the transfer of theloans to the respective SPEs. The securitisation enables a subsequent issue of debt by the SPEs to investors who gain the security of theunderlying assets as collateral.

The SPEs have been fully consolidated into the Group’s financial statements.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may havea significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, arediscussed below.

Calculation of insurance claims provisions and reinsurance assets

The Group’s reserving policy requires management to set provisions for outstanding claims for the purpose of the financial statements,
above the projected best estimate outcome to allow for unforeseen adverse claims development. In the application of this policy,
management applies judgement in:• Calculating the best estimate of the gross ultimate total cost of settling claims that have been incurred prior to the balance
sheet date;• Calculating the best estimate of the non-proportional excess of loss reinsurance recoveries relating to outstanding claims; and• Determining where, above the projected best estimate outcomes of gross outstanding claims and reinsurance recoveries,
the insurance claims provisions should sit in line with the Group’s reserving methodology
Estimation techniques are used in the calculation of the provisions for claims outstanding, which represent a projection of the ultimate
estimated total cost of settling claims that have been incurred prior to the balance sheet date and remain unsettled at the balance sheet
date, along with a margin to allow for unforeseen adverse claims development.
The primary areas of estimation uncertainty are as follows:
1) Calculation of gross best estimate claims provisions
The key area where estimation techniques are used is in the ultimate projected cost of reported claims, which includes the emergence ofclaims that occurred prior to the balance sheet date, but had not been reported at that date.
The Group, utilising internal actuarial teams, projects the best estimate claims reserves using a variety of different recognised actuarial
projection techniques (for example incurred and paid chain ladders, and initial expected assumptions) to allow an actuarial assessmentof their potential outcome. This includes an allowance for unreported claims. The projection techniques are subject to review by anindependent external actuarial specialist to provide an impartial assessment.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The accounting treatment of SPEs has been assessed and it has been concluded that the entities should be fully consolidated into theGroup’s financial statements under IFRS 10. This is due to the fact that despite not having legal ownership, the Group has control of theSPEs, being exposed to the returns and having the ability to affect those returns through its power over the SPEs.

Financial Statements

Classification of the Group’s contracts with reinsurers as reinsurance contracts

Corporate Governance

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if therevision affects both current and future periods.

Strategic Report

3. Critical accounting judgements and key sources of estimation uncertainty

236

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022
Claims are segmented into groups with similar characteristics and which are expected to develop and behave similarly, for example bodily
injury (attritional and large) and damage claims, with specific projection methods selected for each head of damage. Key sources of
estimation uncertainty arise from both the selection of the projection methods and the assumptions made in setting claims provisions
through the review of historical development of underlying case reserve estimates, overlaid with emerging market trends.
Allowance is made for changes arising from the internal and external environment which may cause future claim cost inflation to deviate
from that seen in historic data. Examples of these factors include:• Changes in the reporting patterns of claims impacting the frequency of bodily injury claims;• Emerging inflationary trends on the average cost of bodily injury and damage claims;• The likelihood of bodily injury claims settling as Periodic Payment Orders;• Changes in the regulatory or legal environment that lead to changes in awards for bodily injury claims and associated legal costs;• Changes to the underlying process and methodologies employed in setting and reviewing case reserve estimates
Implicit assumptions in the actuarial projections include average cost per claim and average claim numbers by accident year, future rates ofclaims inflation and loss ratios by accident year and underwriting year. These metrics are reviewed and challenged as part of the process formaking allowance for the uncertainties noted.
2) Calculation of excess of loss reinsurance recoveries
The Group uses excess of loss reinsurance in order to mitigate the impact of large claims. The reinsurance is non-proportional andrecoveries are made on individual claims above the relevant thresholds.
As for the underlying gross claims, actuarial teams project the best estimate excess of loss reinsurance recoveries using a variety ofactuarial projection techniques that focus on both the ultimate frequency of reported recoveries and the average size of the recovery.
Key sources of estimation uncertainty arise from both the selection of the projection methods and the assumptions made in calculating
the recoveries through the review of historical development of underlying case reserve estimates, overlaid with emerging market trends.
The most significant element of the estimation relates to large bodily injury claims. The key assumption in the calculation of excess
of loss recoveries relates to the numbers of large claims in the Group’s UK Motor insurance business that will attract recoveries, where
the high retention means that a small number of additional large claims would potentially result in a material increase in the excess ofloss recoveries.
3) Calculation of the margin held for adverse development
A wide range of factors inform management’s recommendation in setting the margin held above actuarial best estimates, which is
subject to approval from the Group’s Reserving and Audit Committees, including:• Reserve KPIs such as the level of margin as a percentage of the ultimate reserve;• Results of stress testing of key assumptions underpinning key actuarial assumptions within best estimate reserves;• A review of a number of individual and aggregated reserve scenarios which may result in future adverse variance to the ultimate best
estimate reserve;• Qualitative assessment of the level of uncertainty and volatility within the reserves and the change in that assessment compared toprevious periods
In addition, for the Group’s UK Car insurance business, the Group’s internal reserve risk distribution is used to determine the approximate
confidence level of the recommended booked reserve position which enables comparison of the reserve strength to previous periods andof it’s compliance with IFRS 4.
For sensitivities in respect of the claims reserves, refer to note 5d(ii) of the financial statements. These sensitivities are provided basedon booked loss ratios, as it is impractical to disaggregate the assumptions further, but for the disaggregated assumptions it is reasonably
possible, on the basis of existing knowledge, that outcomes within the next financial year that are different from the assumption could
require a material adjustment to the carrying amount. For further detail on objectives, policies and procedures for managing insurance
risk, refer to note 5 of the financial statements.
Future changes in claims reserves also impact profit commission income, as the measurement of this income is dependent on the loss
ratio booked in the financial statements, and cash receivable is dependent on actuarial projections of ultimate loss ratios.

Admiral Group plc Annual Report and Accounts 2022

237

Company Overview

The Group is required to calculate an expected credit loss (‘ECL’) allowance in respect of the carrying value of the Admiral loans book inline with the requirements of IFRS 9. Due to the size of the loan book, the calculation of the ECL is deemed to be a critical accounting
judgement and includes key sources of estimation uncertainty. Management applies judgement in:• Determining the appropriate modelling solution for measuring the ECL;

Strategic Report

Calculation of expected credit loss provision• Calibrating and selecting appropriate assumptions;• Identification of key scenarios to include and determining the credit loss in these instances
The key areas of estimation uncertainty are in the calculation of the probability of default (PD) in the base scenario for stage 1 and 2
assets, and the determination, impact assessment and weighting of the forward-looking scenarios.
Refer to the analysis in note 7 to the financial statements for further detail on the Group’s ECL methodology applied in the period.

The consolidated financial statements comprise the results and balances of the Company and all entities controlled by the Company,
being its subsidiaries and SPEs (together referred to as the Group), for the year ended 31 December 2022 and comparative figures forthe year ended 31 December 2021. The financial statements of the Company’s subsidiaries and its SPEs are consolidated in the Groupfinancial statements.
The Company controls 100% of the voting share capital of all its principal subsidiaries, except Admiral Law Limited, Inspop USA LLC,
comparenow.com Insurance Agency LLC (indirect holding).
The parent company financial statements present information about the Company as a separate entity and not about its Group.
In accordance with IAS 24, transactions or balances between Group companies that have been eliminated on consolidation are notreported as related party transactions in the consolidated financial statements.

(ii) Foreign currency translation

Items included in the financial records of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in pounds
sterling, the Group’s presentational currency, rounded to the nearest £0.1 million.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of thetransactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Non-monetary items measured at cost are translated at their historic rate and non-monetary items held at fair value are translated using
the foreign exchange rate on the date that the fair value was established.
The financial statements of foreign operations whose functional currency is not pounds sterling are translated into the Group
presentation currency (pound sterling) as follows:• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet• Income and expenses for each income statement are translated at average monthly exchange rates (unless this average is not areasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the date of the transaction)• All resulting exchange differences are recognised in other comprehensive income and in a separate component of equity except to theextent that the translation differences are attributable to non-controlling interests
On disposal of a foreign operation, the cumulative amount recognised in equity relating to that particular operation is recognised in theincome statement.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

An SPE is fully consolidated into the Group financial statements under IFRS 10, where the Group has control over the SPE.

Financial Statements

4. Operating segments
4a. Accounting policies(i) Group consolidation

Corporate Governance• Setting the criteria for what constitutes a significant increase in credit risk;

238

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

4. Operating segments continued
4b. Segment reporting

The Group has four (five for financial year 2021 including discontinued operations) reportable segments, as described below.
These segments represent the principal split of business that is regularly reported to the Group’s Board of Directors, which is considered
to be the Group’s chief operating decision maker in line with IFRS 8 Operating Segments.

UK Insurance

The segment consists of the underwriting of Motor, Household, Pet and Travel insurance and other products that supplement theseinsurance policies within the UK. It also includes the generation of revenue from additional products and fees from underwriting
insurance in the UK. The Directors consider the results of these activities to be reportable as one segment as the activities carried out
in generating the revenue are not independent of each other and are performed as one business. This mirrors the approach taken in
management reporting.

International Insurance

The segment consists of the underwriting of car and home insurance and the generation of revenue from additional products and feesfrom underwriting car insurance outside of the UK. It specifically covers the Group operations Admiral Seguros in Spain, ConTe in Italy,
L’olivier Assurance in France and Elephant Auto in the US. None of these operations are reportable on an individual basis, based on thethreshold requirements in IFRS 8.

Admiral Money

The segment relates to the Admiral Money business launched in 2017, which provides unsecured personal loans and car finance productsin the UK, primarily through the comparison channel.

Other

The ‘Other’ segment is designed to be comprised of all other operating segments that are not separately reported to the Group’s Boardof Directors and do not meet the threshold requirements for individual reporting. It includes compare.com and Admiral Pioneer.

Discontinued operations – 2021 Financial YearAs set out in note 13 to the financial statements, on 29 December 2020 the Group announced its planned sale of the majority of its
comparison businesses. The sale was completed on 30 April 2021. The comparison operations are presented as discontinued operationsin 2021. The results for 2021 are reflective of the profit on disposal and four months of trading prior to disposal.
The segment relates to the comparison businesses disposed of including: Confused.com in the UK, Rastreator in Spain, LeLynx in France,
and Preminen entities.
Taxes are not allocated across the segments and, as with the corporate activities, are included in the reconciliation to the consolidated
income statement and consolidated statement of financial position.

Admiral Group plc Annual Report and Accounts 2022

239

Company Overview

Year ended 31 December 2022
Other Eliminations*4£m£m

2,784.3
628.8
440.8
–
35.0
1,104.6(260.4)(228.3)
615.9

59.0
–
0.3
44.6
–
44.9
–
(42.8)
2.1

41.7
30.5
8.8
–
(0.1)
39.2
(18.4)(40.0)(19.2)

795.9
251.7
40.1
–
2.3
294.1
(227.3)(120.6)(53.8)

(0.3)
–
(0.3)
1.5
(2.2)
(1.0)
–
0.3
(0.7)

Total
£m

3,680.6
911.0
489.7
46.1
35.0
1,481.8(506.1)(431.4)
544.3

122.2
63.9

44.7
50.4

2.3
1.0

13.6
7.6

–
–

182.8
122.9

Additional Information(75.3)
11.4(11.4)
469.0(97.2)
371.8

Financial Statements

Admiral Group plc Annual Report and Accounts 2022

AdmiralMoney£m

Corporate GovernanceTurnover*1
Net insurance premium revenue
Other Revenue and profit commission
Net interest income
Investment return*2
Net revenue
Net insurance claims
Expenses
Segment profit/(loss) before tax
Other central revenue and expenses, including share scheme
charges
Investment and interest income
Finance costs*3
Consolidated profit before tax
Taxation expense
Consolidated profit after tax
Other segment items:– Intangible and tangible asset additions– Depreciation and amortisation

UK International
Insurance
Insurance£m£mStrategic Report

An analysis of the Group’s revenue and results for the year ended 31 December 2022, by reportable segment, is shown below.
The accounting policies of the reportable segments are materially consistent with those presented in the notes to the financial
statements for the Group.

240

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

4. Operating segments continued

Revenue and results for the corresponding reportable segments for the year ended 31 December 2021 are shown below.
Year ended 31 December 2021

Turnover*1
Net insurance premium revenue
Other Revenue and profit
commission
Net interest income
Investment return*2
Net revenue
Net insurance claims
ExpensesGain on disposal
Segment profit/(loss) before tax
Other central revenue and expenses,
including share scheme charges
Investment and interest income
Finance costs*3
Consolidated profit before tax *5
Taxation expense
Consolidated profit after tax
Other segment items:– Intangible and tangible asset
additions– Depreciation and amortisation

UK
Insurance£mInternational
Insurance£mAdmiral
Money
£m

Other
£m

2,751.7
612.6

690.3
230.0

37.6
–

27.9
12.4

67.2
–

577.8
–
40.8
1,231.2(144.5)(246.7)
–
840.0

34.6
–
0.5
265.1
(176.2)(100.5)–(11.6)

1.0
27.8
–
28.8
–
(34.3)
–
(5.5)

6.1
–
–
18.5
(11.6)(20.6)–(13.7)

67.2
–
–
67.2
–
(55.5)
404.4
416.1

94.8
65.5

47.6
44.5

0.6
0.7

1.2
0.2

Total
(continuing)
£m

Total
£m

(7.8)
–

3,507.3855.0

3,566.9
855.0

(7.8)
2.7
(2.7)
(7.8)
–
7.8
–
–

619.3
30.5
38.6
1,543.4(332.3)(401.9)
–
809.2

678.9
30.5
38.6
1,603.0(332.3)(449.8)404.4
1,225.3(88.3)
4.0(11.4)
713.5(130.2)583.3(88.7)
4.0(11.4)
1,129.2(132.5)
996.7

144.2
110.9

144.2
110.9

Discontinued
operations*6 Eliminations*4
£m
£m

–
–

–
–

*1 Turnover is an Alternative Performance Measure presented before intra-group eliminations and consists of total premiums written (including co-insurers’ share) and Other revenue. Refer to theglossary and note 14 for further information*2 Investment return is reported net of impairment on financial assets, in line with management reporting*3 £0.5 million (2021: £0.6 million) of IFRS 16 interest expense (being the Group’s net share of IFRS 16 interest expense) included within Finance Costs in the income statement has been reallocatedto individual segments within expenses, in line with management segmental reporting*4 Eliminations are in respect of the intra-group trading between the Group’s comparison and UK and International insurance entities and intra-group interest. Of the £0.3 million (2021: £7.8 million)
elimination of other revenue and profit commission, £nil (2021: £7.6 million) relates to discontinued operations, with the remaining £0.3 million (2021: £0.2 million) relating to compare.com.
£1.5 million (2021: £2.7 million) of intra-group interest charges related to the UK Insurance and Admiral Money segment and £0.7 million (2021: £nil) related to UK Insurance and central financecosts have also been eliminated on consolidation*5 Profit before tax for the year ended 31 December 2021 above of £1,129.2 million includes profit before tax from continuing operations (£713.5 million) and discontinued operations(£415.7 million, including £0.4 million of central expenses)*6 See note 13 for further detail on discontinued operations

Segment revenues

The UK and International insurance reportable segments derive all insurance premium income from external policyholders.
Revenue within these segments is not derived from an individual policyholder that represents 10% or more of the Group’s total revenue.
Revenues from external customers for products and services are consistent with the split of reportable segment revenues.

Information about geographical locations

All material revenues from external customers, and net assets attributed to a foreign country, are shown within the International
insurance reportable segment shown on the previous pages.

Admiral Group plc Annual Report and Accounts 2022

241

Company Overview

The identifiable segment assets and liabilities at 31 December 2022 are as follows:
As at 31 December 2022
Admiral
Money
£m

Other
£m

Elimination
£m

Total
£m

6,908.0
5,884.7
1,023.3

929.2
902.1
27.1

285.3
500.1
(214.8)(693.4)(683.5)(9.9)

8,742.9
7,753.7
989.2(33.8)
955.4

1,313.8
1,150.3
163.5

Unallocated assets and liabilities consist of other central assets and liabilities, plus deferred and current corporation tax balances.
These assets and liabilities are not regularly reviewed by the Board of Directors in the reportable segment format.

The segment assets and liabilities at 31 December 2021 are as follows:
As at 31 December 2021
International
Insurance£mAdmiral
Money
£m

Other
£m

Eliminations
£m

Total
£m

6,428.8
5,342.8
1,086.0

1,059.0
934.8
124.2

762.2
629.4
132.8

150.8
429.3
(278.5)(635.0)(589.5)(45.5)

7,765.8
6,746.8
1,019.0
389.5
1,408.5

5. Premium, claims and profit commissions
5a. Accounting policies(i) Revenue – premiums

Premiums relating to insurance contracts are recognised as revenue, net of expected cancellations and insurance premium tax,
proportionally over the period of cover. Premiums with an inception date after the end of the period are held in the statement offinancial position as deferred revenue. Outstanding collections from policyholders related to unexpired risk are recognised withinpolicyholder receivables. A corresponding unearned premium provision is recognised (see note 5a(iii)).

(ii) Revenue – profit commission

Some of the co-insurance and reinsurance contracts under which motor premiums are shared or ceded, profit commission may be earned
on a particular year of account, which is usually subject to performance criteria such as loss ratios and expense ratios. The commission isdependent on the ultimate outcome of any year, with revenue being recognised when loss and expense ratios used in the preparation of
the financial statements move below a contractual threshold.
Profit commission receivable from reinsurance contracts is accounted for in line with IFRS 4, whereas profit commission receivable fromco-insurance contracts with third parties is in line with IFRS 15. Further detail of the policy under IFRS 15 is set out in note 8.

(iii) Insurance contracts and reinsurance assets
Premiums
The proportion of premium receivable on in-force policies relating to unexpired risks is reported in insurance contract liabilities andreinsurance assets as the unearned premium provision – gross and reinsurers’ share respectively.
ClaimsClaims and claims handling expenses are charged as incurred, based on the estimated direct and indirect costs of settling all liabilities
arising on events occurring up to the balance sheet date.
The provision for claims outstanding comprises provisions for the estimated cost of settling all claims incurred but unpaid at the balance
sheet date, whether reported or not. Anticipated reinsurance recoveries are disclosed separately as assets.
Whilst the Directors consider that the gross provisions for claims and the related reinsurance recoveries are fairly stated on the basisof the information currently available to them, the ultimate liability will vary as a result of subsequent information and events and may
result in significant adjustments to the amounts provided.
Admiral Group plc Annual Report and Accounts 2022

Additional Information

Reportable segment assets
Reportable segment liabilities
Reportable segment net assets
Unallocated assets and liabilities
Consolidated net assets

UK
Insurance£mFinancial Statements

Eliminations represent inter-segment funding, balances included in insurance and other receivables and deemed loan receivables inrespect of securitised loan receivables.

Corporate Governance

Reportable segment assets
Reportable segment liabilities
Reportable segment net assets
Unallocated assets and liabilities
Consolidated net assets

UK International
Insurance
Insurance£m£mStrategic Report

Segment assets and liabilities

242

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

5. Premium, claims and profit commissions continued

Adjustments to the amounts of claims provisions established in prior years are reflected in the income statement for the period in which
the adjustments are made and disclosed separately if material. The methods used, and the estimates made, are reviewed regularly.
A provision for unexpired risk is made where necessary for the estimated amount required over and above unearned premiums (net ofdeferred acquisition costs) to meet future claims and related expenses.
Co-insurance
The Group has entered into certain co-insurance contracts with external parties under which insurance risks are shared on a proportional
basis, with the co-insurer taking a specific percentage of premium written and being responsible for the same proportion of each claim.
The co-insurer therefore takes direct insurance risk from the policyholder and is directly responsible to the claimant for its proportion of
the claim. As the contractual liability is several and not joint, neither the premiums nor claims relating to the co-insurance agreementswith external parties are included in the income statement. Under the terms of these agreements, the co-insurers reimburse the Groupfor the same proportionate share of the costs of acquiring and administering the business.
Reinsurance assets
Contracts entered into by the Group with reinsurers under which the Group is compensated for losses on the insurance contracts issued
by the Group are classified as reinsurance contracts. A contract is only accounted for as a reinsurance contract where there is significant
insurance risk transfer between the insured and the insurer.
Reinsurance assets are comprised of balances due from reinsurance companies for ceded insurance liabilities. Amounts recoverable fromreinsurers are estimated in a consistent manner with the outstanding claims provisions or settled claims associated with the reinsured
policies and in accordance with the relevant reinsurance contract.
The Group assesses its reinsurance assets for impairment on a regular basis, and in detail every six months. If there is objective evidence
that the asset is impaired, then the carrying value will be written down to its recoverable amount.
On commutation of reinsurance contracts, the reinsurer is discharged from all obligations relating to the contract. Reinsurance assets andliabilities relating to the commuted contracts are settled in the period in which the commutation agreement is signed.

5b. Net insurance premium revenue

Total insurance premiums including co-insurers’ share*1
Group gross premiums written excluding co-insurance
Outwards reinsurance premiums
Net insurance premiums written
Change in gross unearned premium provision
Change in reinsurers’ share of unearned premium provision
Net insurance premium revenue

31 December
2022£m

31 December
2021£m

3,243.1
2,849.7(1,922.4)
927.3(144.3)
128.0
911.0

3,098.7
2,513.6(1,643.0)
870.6(21.3)
5.7
855.0*1 Alternative Performance Measures – refer to the end of the report for definition and explanation, and to note 14a for reconciliation to Group gross premiums written

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

Admiral Group plc Annual Report and Accounts 2022

243

Company Overview

31 December
2021
£m

54.4
35.8
31.5
48.5
–
–
170.2
0.7
170.9

94.4
18.6
27.6
150.0
–
–
290.6
13.9
304.5

Sensitivities of the recognition of profit commission to movements in the booked loss ratio are shown in note 5d (ii).

5d. Reinsurance assets and insurance contract liabilities(i) Objectives, policies and procedures for the management of insurance risk

The Group’s primary business is the issuance of insurance contracts that transfer risk from policyholders to the Group and its coinsurance partners.

The Board of Directors is responsible for the management of insurance risk, although as mentioned in note 6, it has delegated thedetailed oversight of risk management to the Group Risk Committee.
The Group also has a Group Reserving Committee as well as local Reserving Committees which are comprised of senior managers within
the finance, claims, pricing and actuarial functions in the respective businesses. The Reserving Committees primarily recommends theapproach for insurance reserving but also reviews the systems and controls in place to support accurate reserving and considers material
reserving issues such as large bodily injury claims frequency and severity.
The Board implements certain policies to mitigate and control the level of insurance risk accepted by the Group. These include pricing
policies and claims management and administration processes, in addition to reserving policies and co- and reinsurance arrangements asdetailed below.
Reserve risk
Reserve risk is mitigated through a series of processes and controls. The key processes are as follows:• Regular management and internal actuarial review of individual and aggregate case claim reserves, including regular reporting ofmanagement information and exception reporting of significant movements;• Regular management and internal actuarial review of large claims, including claims settled or potentially settled by PPOs for which theuncertainty is increased by factors such as the lifetime of the claimant and movements in the indexation for the cost of future care of
the claimant;• Bi-annual external actuarial review of best estimate claims reserves using a variety of recognised actuarial technique;• Internal actuarial analysis of reserve uncertainty through qualitative analysis, scenario testing and a range of stochastic
reserving techniques;• Ad hoc external reviews of reserving related processes and assumptions;• Use of a reserving methodology which informs management’s reserving decisions for the purposes of the Group’s financial statements.
As described in note 3, critical accounting judgements and estimates, the methodology determines that reserves should be set above
projected best estimate outcomes to allow for unforeseen adverse claims development
As noted above, the Group shares a significant amount of the insurance business generated with external underwriters. As well as these
proportional arrangements, excess of loss reinsurance programmes are also purchased to protect the Group against very large individual
claims and catastrophe losses.
Admiral Group plc Annual Report and Accounts 2022

Additional Information

Insurance risk involves uncertainty over the occurrence, amount or timing of claims arising on insurance contracts issued. It is primarily
comprised of reserve risk; the risk that the value of insurance liabilities established is insufficient to cover the ultimate cost of claims
incurred at the balance sheet date, and premium risk; the risk that the claims experience on business written but not earned is higher
than allowed for in the premiums charged to policyholders.

Financial Statements*1 From the total UK Motor profit commission of £170.2 million (2021: £290.6 million), £130.4 million (2021: £162.9 million) relates to co-insurance arrangements and £39.8 million(2021: £127.7 million) to reinsurance arrangements. The UK Household and International profit commission relates solely to reinsurance arrangements

Corporate Governance

Underwriting year (UK Motor only)
2017 and prior
2018
2019
2020
2021
2022
Total UK Motor profit commission*1
Total UK Household and International profit commission*1
Total profit commission

31 December
2022£mStrategic Report

5c. Profit commission

244

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

5. Premium, claims and profit commissions continued
Claims reserving
Admiral’s reserving policy (both within the claims function and in the financial statements) is initially to reserve conservatively, above
internal and independent projections of actuarial best estimates. This is designed to create a margin held in reserves to allow for
unforeseen adverse development in open claims and typically results in Admiral making above industry average reserve releases.
Admiral’s booked claims reserves continue to include a significant margin above projected best estimates of ultimate claims costs.
The margin held above ultimate outcomes in the financial statement reserves remains both significant and prudent. In relative terms, it islower than that held at the end of 2021, reflecting the crystallisation of some of the uncertainty previously held in the margin, in the best
estimate reserves.
As profit commission income is recognised in the income statement in line with loss ratios accounted for on Admiral’s own claims
reserves, the reserving policy also results in profit commission income being deferred and recognised over time due to the application of
constraint on variable consideration.
Premium risk
As noted above, the Group defines premium risk as the risk that claims cost on business written but not yet earned is higher than allowed
for in the premiums charged to policyholders. This also includes catastrophe risk, the risk of incurring significant losses as a result of theoccurrence of manmade catastrophe, or natural weather events.
Key processes and controls operating to mitigate premium risk are as follows:• Experienced and focused senior management and teams in relevant business areas including pricing and claims management;• A data-driven and analytical approach to regular monitoring of claims and underwriting performance;• Observations of weather events trends to understand climate impacts on frequency and severity;• Capability to identify and resolve underperformance promptly through changes to key performance drivers, in particular pricing
In addition, as mentioned above, excess of loss reinsurance programmes are also purchased to protect the Group against very large
individual claims and catastrophe losses.
Other elements of insurance risk include reinsurance risk, the risk of placement of ineffective reinsurance arrangements, or the economicrisk of reduced availability of co-insurance and reinsurance arrangements in future periods.
The Group mitigates these risks by ensuring that it has a diverse range of financially secure reinsurance partners, including a long-term
relationship with Munich Re and a number of other large reinsurers.
Concentration of insurance risk
The Directors do not believe there are significant concentrations of insurance risk. This is because the risks are spread across a large
number of policies and a wide regional base. The International Car insurance, UK Household, and UK Travel business further contribute to
the diversification of the Group’s insurance risk.
Information regarding reinsurance credit risk is provided in note 6j to the financial statements.

(ii) Sensitivity of recognised amounts to changes in assumptions
Underwriting year loss ratios – UK Car insurance
The following table sets out the impact on equity and post-tax profit or loss at 31 December 2022 that would result from a 1%, 3%
and 5% increase and decrease in the UK Car insurance loss ratios used for each underwriting year for which material amounts remain
outstanding. This includes the impact on profit commission of the respective changes in booked loss ratios, which are also shown
separately below.
Underwriting year
Total impact on income statement (including profit commission)

2019

2020

2021

2022

Booked loss ratio
Impact of 1% deterioration in booked loss ratio (£m)
Impact of 3% deterioration in booked loss ratio (£m)
Impact of 5% deterioration in booked loss ratio (£m)
Impact of 1% improvement in booked loss ratio (£m)
Impact of 3% improvement in booked loss ratio (£m)
Impact of 5% improvement in booked loss ratio (£m)

67%
(15.5)(46.2)(76.4)
15.5
46.6
77.6

61%
(16.4)(49.2)(82.0)
16.4
49.2
82.0

89%
(3.7)
(11.0)(18.3)
3.7
11.0
18.3

102%
(1.9)
(5.6)
(9.3)
1.9
5.6
9.3

As above, the impact is stated net of reinsurance and includes the change in net insurance claims along with the associated profit
commission movements that result from changes in loss ratios. The figures are stated net of tax at the current rate.

Admiral Group plc Annual Report and Accounts 2022

245

Company Overview

Underwriting year
2019

2020

2021

2022

Booked loss ratio
Impact of 1% deterioration in booked loss ratio (£m)
Impact of 3% deterioration in booked loss ratio (£m)
Impact of 5% deterioration in booked loss ratio (£m)
Impact of 1% improvement in booked loss ratio (£m)
Impact of 3% improvement in booked loss ratio (£m)
Impact of 5% improvement in booked loss ratio (£m)

67%
(5.6)
(16.5)(26.8)
5.6
16.8
28.0

61%
(8.0)
(23.9)(39.8)
8.0
23.9
39.8

89%
–
–
–
–
–
–

102%
–
–
–
–
–
–

(iii) Analysis of recognised amounts

31 December
2021£m

3,456.1
1,336.4
4,792.5

3,045.0
1,170.0
4,215.0

1,807.5
906.5
2,714.0

1,415.7760.4
2,176.1

1,648.6429.9
2,078.5

1,629.3
409.6
2,038.9*1 Gross claims outstanding at 31 December 2022 is presented before the deduction of salvage and subrogation recoveries totalling £125.9 million (2021: £87.6 million)*2 Admiral typically commutes quota share reinsurance contracts in its UK Car insurance business 36 months following the start of the underwriting year. After commutation, claims outstanding fromthese contracts are included in Admiral’s net claims outstanding balance. Refer to note (v) below

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Gross
Claims outstanding*1
Unearned premium provision
Total gross insurance liabilities
Recoverable from reinsurers
Claims outstanding
Unearned premium provision
Total reinsurers’ share of insurance liabilities
Net
Claims outstanding*2
Unearned premium provision
Total insurance liabilities – net

31 December
2022£mFinancial Statements

Sensitivities to key assumptions in the best estimate reserves have not been presented, given the significant and prudent margin held
above best estimate reserves and the co- and reinsurance arrangements that are also considered when determining the net impact
on the income statement. The underwriting year sensitivities presented above are considered to provide relevant and transparent
information on the changes to key inputs to the financial statements. Sensitivities exclude any impact on climate given the assessmentof low short term risk.

Corporate GovernanceImpact on profit commission only

Strategic Report

The following table sets out the impact on equity and post-tax profit or loss at 31 December 2022 that would result from a 1%, 3%
and 5% increase and decrease in the UK Car insurance loss ratios used for each underwriting year for which material amounts remain
outstanding, on profit commission only.

246

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

5. Premium, claims and profit commissions continued(iv) Analysis of claims incurred

The following tables illustrate the development of gross and net UK insurance and International insurance claims incurred for the pastten financial periods, including the impact of re-estimation of claims provisions at the end of each financial year. The first table shows
actual gross claims incurred and the second shows actual net claims incurred. Figures are presented on an underwriting year basis.
Financial year ended 31 December
Analysis of claims
incurred (gross amounts)

Underwriting year
(UK insurance)
2013 and prior
2014
2015
2016
2017
2018
2019
2020
2021
2022
UK insurance grossclaims incurred
Underwriting year
(International
insurance)
2013 and prior
2014
2015
2016
2017
2018
2019
2020
2021
2022
International
insurance grossclaims incurred
Other gross claims
incurred
Claims handlingcosts
Total gross claims
incurred

2022
£m

Total
£m

30.0
22.5
34.0
46.1
79.5
52.8
(476.2)(697.4)
–
–

31.7
15.1
19.0
13.6
25.8
18.9
50.3
41.0
82.5
37.5
80.3
104.3
89.8
71.1
(519.5)95.2(864.5) (749.6)– (1,089.0)(310.8)(619.8)(627.9)(718.8)(984.2)(1,128.3)(1,127.7)(1,121.7)(1,614.1)(1,089.0)(991.4) (1,153.5) (1,074.0)(908.7)(1,004.6) (1,441.9)(9,342.3)

18.3
4.4(101.6)(138.9)
–
–
–
–
–
–

7.7
5.8
7.7
(125.3)(174.1)
–
–
–
–
–

10.6
5.5
3.1
11.7
(147.3)(204.9)
–
–
–
–

4.4
2.0
0.1
6.9
16.5
(165.7)(293.8)
–
–
–

(0.2)
(0.4)
(0.1)
3.6
8.6
20.1
(141.2)(233.6)
–
–

0.8
0.5
0.1
1.4
5.0
6.2
13.3
(160.6)(284.5)
–

0.2
(0.3)
0.1
0.9
(0.4)
2.8
9.1
19.6
(225.5)(353.6)(114.1)(133.2)(183.2)(239.7)(291.7)(341.5)(412.6)(374.6)(510.0)(353.6)(146.9)(217.8)(278.2)(321.3)(429.6)(343.2)(417.8)(547.1)(2,954.2)

(7.1)

(5.4)

(0.1)

(3.6)

(1.1)

–

–

(18.4)(16.6)(54.5)(22.9)(21.4)(22.6)(27.1)(35.5)(37.9)(64.5)(66.7)(66.0)(75.8)(440.4)(826.6)(794.5)(769.1) (1,103.8) (1,308.7) (1,513.8) (1,568.1) (1,318.6)

2013
£m

2014
£m

2015
£m

2016
£m

2017
£m

2018
£m

2019
£m

2020
£m

(680.7)
–
–
–
–
–
–
–
–
–

(196.3)(438.2)
–
–
–
–
–
–
–
–

181.3
(347.1)(428.4)
–
–
–
–
–
–
–

56.2
25.6
(411.2)(529.4)
–
–
–
–
–
–

125.3
17.1
21.7
(463.7)(691.8)
–
–
–
–
–

92.9
52.0
53.3
82.1
(615.0)(818.8)
–
–
–
–

33.7
15.7
58.0
54.8
123.1
(546.9)(812.4)–––(680.7)(634.5)(594.2)(858.8)(120.8)
–
–
–
–
–
–
–
–
–

(46.3)(85.2)
–
–
–
–
–
–
–
–

11.2
(65.5)(92.6)
–
–
–
–
–
–
–

(120.8)(131.5)(2.2)

2021*1£m(1,506.8) (2,081.4) (12,791.4)

Admiral Group plc Annual Report and Accounts 2022

247

Company Overview

2016
£m

2017
£m

2018
£m

2019
£m

2020
£m

20211
£m

2022
£m

Total
£m

(242.3)
–
–
–
–
–
–
–
–
–

(5.8)
(187.0)
–
–
–
–
–
–
–
–

165.2
(144.1)(182.1)
–
–
–
–
–
–
–

91.1
(16.4)(162.0)(219.4)
–
–
–
–
–
–

133.1
25.3
(2.6)
(180.7)(214.3)
–
–
–
–
–

85.2
38.4
42.6
48.1
(182.9)(261.0)
–
–
–
–

26.5
17.2
48.2
50.7
77.8
(165.2)(258.1)
–
–
–

25.3
18.6
26.1
46.6
67.1
40.6
(142.5)(218.5)
–
–

29.4
13.6
27.8
41.8
72.6
62.3
56.9
(157.8)(277.2)
–

14.2
11.3
15.0
33.5
35.0
98.0
53.5
52.5
(231.0)(327.9)321.9(223.1)(187.0)(179.4)(144.7)(225.3)(290.2)(323.8)(508.2)(327.9)(242.3)(192.8)(187.0)(306.7)(239.2)(229.6)(202.9)(136.7)(130.6)(245.9) (2,087.7)(49.1)
–
–
–
–
–
–
–
–
–

(18.9)(31.6)
–
–
–
–
–
–
–
–

5.1
(23.3)(33.4)
–
–
–
–
–
–
–

9.2
1.8
(39.6)(47.9)
–
–
–
–
–
–

3.1
1.8
5.1
(43.5)(60.7)
–
–
–
–
–

5.3
2.2
1.3
6.3
(51.5)(71.2)
–
–
–
–

2.1
0.8
1.3
2.4
5.5
(58.4)(89.6)
–
–
–

–
(0.1)
–
1.5
3.2
7.8
(50.1)(95.4)
–
–

0.3
0.2
0.1
0.6
2.3
2.7
4.9
(64.0)(114.3)
–

0.2
(0.1)
–
0.3
0.1
0.9
2.2
5.3
(88.0)(133.9)(49.1)(50.5)(51.6)(76.5)(94.2)(107.6)(135.9)(133.1)(167.2)(213.0) (1,078.7)

(2.1)
(9.5)

(6.9)
(8.9)

(5.4)
(9.4)

(0.2)
(11.2)(2.6)(11.1)(1.1)(11.8)–(20.5)–(23.4)(11.6)(22.9)(18.0)(29.2)(303.0)(259.1)(227.4)(394.6)(347.1)(350.1)(359.3)(293.2)(332.3)(506.1) (3,372.2)(42.7)(48.3)(65.2)(80.3)(101.1)(118.2)(132.6)(154.1)(202.3)(133.9)(47.9)(157.9)*1 Financial Year 2021 has been restated to disclose gross claims and net claims incurred in relation to the other segment and net claims in relation to a reclassification between UK insurance andInternational insurance

The table below shows the development of UK Car insurance loss ratios for the past six financial periods, presented on an underwriting
year basis.
Financial year ended 31 December
UK Car insurance loss ratio development

2017

2018

2019

2020

2021

2022

Underwriting year (UK Car only)
2017
2018
2019
2020
2021
2022

87%
–
–
–
–
–

83%
92%
–
–
–
–

75%
81%
92%
–
–
–

70%
78%
76%
72%
–
–

65%
73%
72%
66%
90%
–

62%
67%
67%
61%
89%
102%

Admiral Group plc Annual Report and Accounts 2022

Additional Information

2015
£m

Financial Statements

2014
£m

Corporate Governance

Underwriting year
(UK insurance)
2013 and prior
2014
2015
2016
2017
2018
2019
2020
2021
2022
UK insurance net
claims incurred
Underwriting year
(International
insurance)
2013 and prior
2014
2015
2016
2017
2018
2019
2020
2021
2022
International
insurance net
claims incurred
Other net claims
incurred
Claims handling costs
Total net claims
incurred2013£mStrategic Report

Financial year ended 31 December
Analysis of claims incurred(net amounts)

248

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

5. Premium, claims and profit commissions continued(v) Analysis of claims reserve releases

The following table analyses the impact of movements in prior year claims provisions on a gross and net basis. Figures are presented onan underwriting year basis.
Financial year ended 31 December
Gross

Underwriting year (UK Motor insurance)
2017 and prior
2018
2019
2020
2021
Total gross release (UK Motor insurance)
Total gross release (UK Household insurance)
Total gross release (UK Travel insurance)
Total gross release (International insurance)
Total gross release (Other insurance)
Total gross release

2017
£m

2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

214.0
–
–
–
–
214.0
1.6
–
23.2
–
238.8

270.5
–
–
–
–
270.5
4.6
–
35.2
–
310.3

252.4
83.2
–
–
–
335.6
8.3
–
39.1
–
383.0

186.0
57.3
54.8
–
–
298.1
9.2
–
53.2
–
360.5

187.5
64.1
76.2
52.9
–
380.7
6.0
2.2
52.0
–
440.9

109.4
100.3
70.6
87.5
13.8
381.6
3.6
0.4
46.1
5.6
437.3

2017
£m

2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

165.9
–
–
–
–
165.9
0.5
–
9.5
–
175.9

221.0
–
–
–
–
221.0
1.4
–
13.5
–
235.9

217.6
25.8
–
–
–
243.4
2.5
–
14.4
–
260.3

183.9
40.7
17.0
–
–
241.6
2.8
–
18.6
–
263.0

184.9
61.9
54.6
15.9
–
317.3
2.5
2.2
16.4
–
338.4

108.2
97.2
52.7
51.4
3.6
313.1
1.6
0.4
15.8
3.3
334.2

92.1

111.4

121.7

104.3

128.1

124.0

73.8
165.9

109.6
221.0

121.7
243.4

137.3
241.6

189.2
317.3

189.1
313.1

Financial year ended 31 December
Net

Underwriting year (UK Motor insurance)
2017 and prior
2018
2019
2020
2021
Total net release (UK Motor insurance)
Total net release (UK Household insurance)
Total net release (UK Travel insurance)
Total net release (International insurance)
Total net release (Other insurance)
Total net release
Analysis of net releases on UK
Motor insurance:– Releases on original Admiral net share(UK Motor)– Releases on commuted quota sharereinsurance contracts (UK Motor)
Total UK Motor net release as above

Admiral Group plc Annual Report and Accounts 2022

249

Company Overview

Financial year ended 31 December
2018
£m

2019
£m

2020
£m

2021
£m

2022
£m

73.8
–
–
–

109.6
–
–
–

121.7
–
–
–

113.9
23.4
–
–

116.4
43.5
29.3
–

66.0
66.5
31.4
25.2

73.8

109.6

121.7

137.3

189.2

189.1

(vi) Reconciliation of movement in claims outstanding

Reinsurance
£m

Net
£m

3,045.0
2,443.0(437.3)–(1,594.6)
3,456.1(1,415.7)(1,631.9)
103.1
194.1
942.9
(1,807.5)

1,629.3
811.1(334.2)194.1(651.7)
1,648.6

31 December 2021

Claims outstanding at start of period
Claims incurred (excluding claims handling costs and releases)
Reserve releases
Movement in claims outstanding due to commutation
Claims paid and other movements*1
Claims outstanding at end of period

Gross
£m

Reinsurance
£m

Net
£m

2,919.9
1,881.8(440.9)–(1,315.8)
3,045.0(1,319.3)(1,234.0)
102.5
318.4
716.7
(1,415.7)

1,600.6
647.8(338.4)318.4(599.1)
1,629.3*1 Claims and other movements includes foreign exchange impacts of £33.9 million adverse (2021: £3.8 million adverse) on a gross basis, £28.3 million gain (2021: £3.4 million gain) on a reinsurance
basis resulting in a £5.6 million adverse (2021: £0.4 million) impact on a net basis(vii) Reconciliation of movement in net unearned premium provision

Unearned premium provision at start of period
Written in the period
Earned in the period
Translation differences
Unearned premium provision at end of period

31 December 2022
Gross
£m

Reinsurance
£m

Net
£m

1,170.0
2,849.7(2,705.4)
22.1
1,336.4(760.4)(1,922.4)
1,794.4(18.1)(906.5)

409.6
927.3
(911.0)4.0
429.9

31 December 2021

Unearned premium provision at start of period
Written in the period
Earned in the period
Translation differences
Unearned premium provision at end of period
Admiral Group plc Annual Report and Accounts 2022

Gross
£m

Reinsurance
£m

Net
£m

1,161.4
2,513.6(2,492.3)(12.7)
1,170.0(763.9)(1,643.0)
1,637.3
9.2(760.4)

397.5
870.6
(855.0)
(3.5)
409.6

Additional Information

Claims outstanding at start of period
Claims incurred (excluding claims handling costs and releases)
Reserve releases
Movement in claims outstanding due to commutation
Claims paid and other movements*1
Claims outstanding at end of period

31 December 2022
Gross
£m

Financial Statements

Profit commission is analysed in note 5c.

Corporate Governance

Underwriting year2017 and prior
2018
2019
2020
Total releases on commuted quota sharereinsurance contracts (UK Motor)

2017
£m

Strategic Report

Admiral typically commutes quota share reinsurance contracts in its UK Car insurance business 36 months following the start of theunderwriting year. After commutation, any changes in claims costs on the commuted proportion of the business are reflected withinclaims costs and are separately analysed here. Releases on the share of business originally reinsured but since commuted are analysed byunderwriting year as follows:250

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs
6a. Accounting policies
i) Financial assets
Classification and measurement
The classification and subsequent measurement of the financial asset under IFRS 9 depends on:a. the Group’s business model for managing the financial assets; andb. the contractual cash flow characteristics of the financial asset.
Based on these factors, the financial asset is classified into one of the following categories:• Amortised cost – assets which are held in order to collect contractual cash flows and the contractual terms of the financial asset giverise to cash flows which are solely payments of principal and interest on the principal amount outstanding (SPPI), where the asset is
not designated as fair value through profit or loss (FVTPL)For the Group, these include deposits with credit institutions, cash and cash equivalents, insurance receivables, trade and otherreceivables and loans and advances to customers.
The interest income generated from these assets is included in investment returns, with the exception of loans and advances tocustomers, where the interest receivable is recognised in interest income.
Impairment is recognised on these assets using the expected credit loss model.
• Fair value through other comprehensive income (FVOCI) – assets which are held both to collect contractual cash flows and to sell theasset, where the contractual terms of the financial asset give rise to cash flows which are solely payments of principal and interest on
the principal amount outstanding (SPPI), where the asset is not designated as FVTPL
For the Group, these assets include corporate, government and private debt securities.
In addition, IFRS 9 allows an irrevocable election at initial recognition to designate equity investments at FVOCI that otherwise would beheld at FVTPL, provided these are not held for trading. The Group has made this election for certain equity investments.
Movements in the carrying amount are taken through OCI, with the exception of recognition of impairment gains or losses, interest
revenue and foreign exchange gains or losses which are recognised in profit or loss.
• Fair value through profit or loss (FVTPL) – assets which do not meet the criteria for amortised cost or FVOCI, or which are designatedas FVTPL
For the Group these assets include liquidity funds investing in short duration assets, other funds and derivative financial instruments.
A gain or loss on disposal of an investment measured at FVOCI is presented within investment return in the period in which it arises.
Impairment
The expected credit loss model is used to calculate any impairment to be recognised for all assets measured at amortised cost, as well as
financial investments measured at FVOCI. The general approach, which utilises the three-stage model, is used for Loans and advances tocustomers (see note 7) whilst impairment for the remaining assets is measured using the simplified approach.
Derecognition
A financial asset is derecognised when the rights to receive cash flows from that asset have expired, or when the Group transfers theasset and all the attached substantial risks and rewards relating to the asset to a third party.

ii) Financial liabilities
Classification and subsequent measurement
All financial liabilities are classified as subsequently measured at amortised cost using the effective interest method, except forderivatives that are classified at fair value through profit or loss and subsequently measured at fair value.
Movements in the amortised cost are recognised through the income statement.
Derecognition
A financial liability is derecognised when the obligation under that liability is discharged, cancelled or expires.

Admiral Group plc Annual Report and Accounts 2022

251

Company Overview

Investment return from financial assets comprises distributions as well as net realised and unrealised gains on financial assets classified as
FVTPL, interest income and net realised gains from financial assets classified as FVOCI, and interest income from financial assets classified
as amortised cost.

6b. Investment return

31 December 2021
£m

Other

Total

At EIR

Other

Total

–
50.3
2.0

8.4
2.3
–

8.4
52.6
2.0

–
40.0
0.6

3.6
2.3
–

3.6
42.3
0.6

–
–

0.5
(0.1)

0.5
(0.1)

–
–

–
–

–
–

–

(20.0)(20.0)

–

(1.6)

(1.6)

–
52.3

1.2
(7.7)

1.2
44.6

–
40.6

0.3
4.6

0.3
45.2

31 December
2022£m

31 December
2021
£m

11.4
2.0
(1.5)
11.9

11.4
2.3
(1.8)
11.9

*1 Interest received during the year was £58.7 million (2021: £46.6 million)*2 Total investment return excludes £2.2 million of intra-group interest (2021: £2.7 million)*3 Realised gains on sales of debt securities classified as FVOCI are £2.2 million (2021: £2.3 million)

6c. Finance costs
Continuing operations

Interest payable on subordinated loan notes and other credit facilities*1*2
Interest payable on lease liabilities
Interest recoverable from co- and reinsurers
Total finance costs on continuing operations*1 Interest paid during the year was £13.4 million (2021: £14.1 million)*2 See note 7e for details of credit facilities

Finance costs represent interest payable on the £200.0 million (2021: £200.0 million) subordinated notes 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 acash payment.

6d. Expected credit losses

Expected credit losses/(gains) on financial investments
Expected credit losses on Loans and advances to customers*1
Total expense for expected credit losses

6f
7b*1 Includes £7.2 million (2021: £2.5 million) of write-offs, with total movement in the expected credit loss provision being £20.7 million (2021: £10.7 million)

See note 6f and note 7b for details of the impairment methodology.

Admiral Group plc Annual Report and Accounts 2022

31 December
2022£m

31 December
2021
£m

(1.8)
20.7
18.9

2.6
10.7
13.3

Additional Information

At EIR

Financial Statements

Investment return
On assets classified as FVTPL
On assets classified as FVOCI*1*3
On assets classified as amortised costs*1
Net unrealised losses
Unrealised gains on forward contracts
Share of associate profit/ loss
Accrual for reinsurers’ share of investment
returnInterest receivable on cash and cash
equivalents*1
Total investment and interest income *2

31 December 2022£m

Corporate Governance

Finance costs from financial liabilities comprise interest expense on subordinated notes, loan backed securities, credit facilities andlease liabilities, calculated using the effective interest rate method. The effective interest rate method calculates the amortised costof a financial asset or liability (or group of financial assets or financial liabilities) and allocates the interest income or expense over the
expected life of the asset or liability.

Strategic Reportiii) Investment return and finance costs

252

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued
6e. Financial assets and liabilities

The Group’s financial assets and liabilities can be analysed as follows:
Continuing operations

Financial investments measured at FVTPL
Money market funds
Other funds
Derivative financial instruments
Equity Investments (designated FVTPL)
Investment in Associate
Financial investments classified as FVOCICorporate debt securities
Government debt securities
Private debt securities
Equity investments (designated FVOCI)
Financial assets measured at amortised cost
Deposits with credit institutions
Total financial investments
Other financial assets
Insurance receivables
Trade and other receivables (measured at amortised cost)
Insurance and other receivables
Loans and advances to customers (note 7)
Cash and cash equivalents
Total financial assets
Financial liabilities
Subordinated notes
Loan backed securities
Other borrowings
Subordinated and other financial liabilities
Trade and other payables*1
Lease liabilities
Total financial liabilities

31 December
2022£m

31 December
2021
£m

706.5
188.8
33.0
6.4
2.4
937.1

868.0
187.6
5.2
2.2
–
1,063.0

1,701.2
479.8
166.6
2,347.6
25.1
2,372.7

2,101.0
348.5
125.5
2,575.0
19.3
2,594.3

101.4
3,411.2

85.3
3,742.6

1,009.5
326.3
1,335.8823.9
297.0
5,867.9

956.6
251.9
1,208.5556.8
372.7
5,880.6

204.4
714.7
20.0
939.1
2,158.0
88.5
3,185.6

204.4
446.5
20.0
670.9
1,960.0
105.3
2,736.2*1 Trade and other payables total balance of £2,158.0 million (2021: £1,960.0 million) above includes £1,807.6 million (2021: £1,528.4 million) in relation to tax and social security, deferred income andreinsurer balances that are outside the scope of IFRS 9*2 Insurance receivables are treated under IFRS4

Admiral Group plc Annual Report and Accounts 2022

253

Company Overview

Between1 and 2 years£m> 2 years
£m

–
–
33.3
33.3
–
–
297.0
330.3

915.2
101.4
398.1
1,414.7
1,335.8
235.1–
2,985.6

8.8
–
263.1
271.9
–
237.3
–
509.2

4.3
–
1,653.1
1,657.4–
351.5–
2,008.9

–
–
–
–
–

11.0
241.0
20.0
1,864.1
2,136.1

211.0
187.8
–
–
398.8

–
285.8
–
–
285.8

The maturity profile of financial assets and liabilities under the scope of IFRS 4 and 9 at 31 December 2021 was as follows:

Financial investments
Money market funds and derivative financial instruments
Deposits with credit institutions
Debt securities
Total financial investments
Trade and other receivables
Loans and advances to customers
Cash and cash equivalents
Total financial assets
Financial liabilities
Subordinated notes*2
Loan backed securities
Other borrowings
Trade and other payables*1
Total financial liabilities

On demand£m< 1 year£m

Between1 and 2 years£m> 2 years
£m

–
–
–
–
–
–
372.7
372.7

1,057.9
75.3
713.2
1,846.4
1,208.5
171.3–
3,226.2

1.7
10.0
362.4
374.1
–
174.7
–
548.8

1.1
–
1,499.2
1,500.3–
210.8–
1,711.1

–
–
–
–
–

11.0
170.2
20.0
1,706.5
1,907.7

11.0
126.7
–
–
137.7

211.0
172.0
–
–
383.0

*1 Of the £1,706.5 million held within trade and other payables in the maturity table, £1,274.9 million do not meet the definition of a financial liability under IFRS 9 but fall within the scope of IFRS 4
hence are included in the above maturity profile*2 Maturity analysis has been performed on a cash-settled basis

Admiral Group plc Annual Report and Accounts 2022

Additional Information*1 Of the £1,864.1 million held within trade and other payables in the maturity table, £1,513.7 million do not meet the definition of a financial liability under IFRS 9 but fall within the scope of IFRS 4
hence are included in the above maturity profile*2 Maturity analysis has been performed on a cash-settled basis

Financial Statements

Financial liabilities
Subordinated notes*2
Loan backed securities
Other borrowings
Trade and other payables*1
Total financial liabilities< 1 year£m

Corporate Governance

Financial investments
Money market funds and derivative financial instruments
Deposits with credit institutions
Debt securities
Total financial investments
Trade and other receivables
Loans and advances to customers
Cash and cash equivalents
Total financial assets

On demand£mStrategic Report

The maturity profile of financial assets and liabilities under the scope of IFRS 4 and 9 at 31 December 2022 is as follows:254

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued

The maturity profile of discounted gross insurance liabilities at the end of 2022 was as follows

Claims outstanding
Unearned premium provision
Total gross insurance liabilities< 1 year£m

1 –3 years£m> 3years£m

1,342.0
1,336.4
2,678.4

886.3
–
886.3

1,227.8–
1,227.8< 1 year£m

1 –3 years£m> 3years£m

909.9
1,170.0
2,079.9

829.8
–
829.8

1,305.3–
1,305.3

The maturity profile of discounted gross insurance liabilities at the end of 2021 was as follows:

Claims outstanding
Unearned premium provision
Total gross insurance liabilities

6f. Financial investments

AAA- AAA
BBB
Sub BBBNot rated*1
Total financial investments

31 December 2022
FVTPL
£m

FVOCI
£m

Amortised
Cost*2
£m

Total
£m

410.5
328.3
56.4
33.4
106.1
934.7

922.8
847.3
410.2
43.4
149.0
2,372.7

23.5
355.4
19.2
–
0.3
398.4

1,356.8
1,531.0
485.8
76.8
255.4
3,705.8*1 £59.4 million of the unrated exposure stems from money market funds, which are rated AAA, but the underlying securities are not. The remaining unrated exposure is a mixture of private debt(£123.9 million) and other holdings (£71.8 million)*2 Investments held at amortised cost comprise deposits with credit institutions, and cash

31 December 2021

AAA- AAA
BBB
Sub BBBNot rated*1
Total financial investments

FVTPL
£m

FVOCI
£m

Amortised
Cost*2
£m

Total
£m

500.6
401.0
42.6
22.0
96.8
1,063.0

906.9
1,007.9
477.9
71.7
129.9
2,594.3

21.2
426.2
10.6
–
–
458.0

1,428.7
1,835.1
531.1
93.7
226.7
4,115.3*1 £72.3 million of the unrated exposure stems from money market funds, which are rated AAA, but the underlying securities are not. The remaining unrated exposure is a mixture of private debt(£127.5 million) and other holdings (£26.8 million)*2 Investments held at amortised cost comprise deposits with credit institutions, and cashClassification and measurement
At initial recognition, the Group measures financial investments at fair value plus or minus, in the case of financial instruments notmeasured at fair value through profit and loss, directly attributable transaction costs. Transaction costs of financial instruments
measured at fair value through profit and loss are expensed to the profit and loss when incurred.
Money market funds and derivative financial instruments are measured at FVTPL. The regulatory capital within the Group is used toinvest in these instruments in addition to any surplus funds which may be held. Buying and selling activity occurs depending on timing ofdifferent cash flows.
Debt securities are measured at FVOCI and as such fall under the scope of the ECL model. These assets are held to match policyholder
liabilities or interest on debt liabilities. If sold before maturity, gains or losses on these assets impact the P&L.
Private Equity investments have been designated as being reported through FVOCI due to these being long term, strategic investments.
Dividends are recognised in the income statement whilst a change in fair values will be reflected in OCI. Other funds are measured
at FVTPL.

Admiral Group plc Annual Report and Accounts 2022

255

Company Overview

The calculated impairment loss within the fair value is recognised through the income statement whilst fair value movements arerecognised in other comprehensive income. Deposits are held with well rated institutions and are held at book value, with impairment
calculated in a similar manner to debt securities.

Any assets downgraded to below BBB or any sub BBB asset that is downgraded by 1 full credit rating, are considered by the Group to havesignificantly increased in credit risk, and therefore are stage 2 under IFRS 9.

Fair value measurement
IFRS 13 requires assets and liabilities that are held at fair value to be classified according to a hierarchy which reflects the observability ofsignificant market inputs, based on three levels. The Group policy is to recognise transfer between fair value hierarchy levels as at the endof the reporting period. There were no transfers between fair value hierarchy levels in the reporting period (2021: none).
The table below shows how the financial assets held at fair value have been measured using the fair value hierarchy:
31 December 2022

31 December 2021

FVTPL
£m

FVOCI
£m

FVTPL
£m

FVOCI
£m

900.2
28.1
6.4*1
934.7

2,180.9–
191.8
2,372.7

1,060.8–
2.2*1
1,063.0

2,449.5–
144.8
2,594.3*1 Gains through the income statement are recognised within Investment return. See note 6b for further information

Fair value measurement using significant unobservable inputs (level three)

Level three investments consist of debt securities and equity investments. Debt securities are comprised primarily of investments indebt funds which are valued at the proportion of the Group’s holding of the Net Asset Value (NAV) reported by the investment vehicle.
In addition, there is a small allocation of privately placed bonds which do not trade on active markets, these are valued using discounted
cash-flow models designed to appropriately reflect the credit and illiquidity of these instruments. The key unobservable input acrossprivate debt securities is the discount rate which is based on the credit performance of the assets.
Equity securities are primarily comprised of investments in Private Equity and Infrastructure Equity funds, which are valued at the
proportion of the Group’s holding of the NAV reported by the investment vehicle. These are based on several unobservable inputs
including market multiples and cash flow forecasts.
There were no significant inter-relationships between unobservable inputs that materially affect fair values.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

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

Financial Statements

The impairment provision at 31 December 2022 is £9.4 million (£11.3 million at 31 December 2021). Given there is no material change
in the credit quality or type of financial assets in the year and the movement in provision is immaterial, no further disclosure has
been made.

Corporate GovernanceAll assets which require a calculation of impairment, are considered based on an external credit rating agency or an assessment from
Admiral’s external asset managers. The credit rating of all assets is regularly monitored. As at the year-end reporting date, the vast
majority of financial assets are of investment grade and considered low risk under IFRS 9. These therefore remain within stage 1 and a
12-month expected loss is used to calculate the impairment provision required.

Strategic Report

Impairment
All financial investments held at FVOCI and at amortised cost have been assessed for impairment using the expected credit loss model
under IFRS 9. The assessment has been made based on the credit ratings of the entities and externally available credit loss ratios.

256

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued

The table below presents the movement in the period relating to financial instruments valued using a level three valuation:
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
Balance as at 31 December 2022

Equity Securities£m

Debt Securities
£m

Total
£m

21.5
1.8
1.1
9.4
(2.5)
0.3
31.6

125.5
3.9
(9.6)
74.4
(27.6)
–
166.6

147.0
5.7
(8.5)
83.8
(30.1)
0.3
198.2

31 December 2021
Level Three Investments

Balance as at 1 January 2021
Gains/(losses) recognised in IS
Gains/(losses) recognised in OCI
Purchases
Disposals
Translation differences
Balance as at 31 December 2021

Equity Securities£m

Debt Securities
£m

Total
£m

11.3
0.2
2.6
8.5
(0.6)
(0.5)
21.5

63.5
1.4
1.5
80.9
(21.8)
–
125.5

74.8
1.6
4.1
89.4
(22.4)(0.5)
147.0

31 December
2022£m

31 December
2021
£m

297.0
297.0

372.7
372.7

6g. Cash and cash equivalents

Cash at bank and in hand*1
Total cash and cash equivalents*1 Cash at bank and in hand includes £36.6 million (2021: £37.6 million) related to special purpose entities which is not available for use by the Group

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term deposits with original maturitiesof three months or less. All cash and cash equivalents are measured at amortised cost.
An assessment has been completed for impairment purposes in line with that set out in note 6f above. Given the short-term duration ofthese assets and low risk of these assets, no impairment provision has been recognised.
For cash at bank and cash deposits and other receivables, the fair value approximates to the book value due to their short maturity.

6h. Other assets
Insurance and other receivables

Insurance receivables*1
Amounts owed by co- and reinsurers*2
Trade and other receivables
Prepayments and accrued income
Total insurance and other receivables

31 December
2022£m

31 December
2021£m

1,009.5
48.4
236.6
41.3
1,335.8

956.6
–
221.5
30.4
1,208.5*1 Insurance receivables include £125.9 million in respect of salvage and subrogation recoveries (2021: £87.6 million)*2 Amounts owed by co- and reinsurers include £44.6 million for amounts owed by reinsurers. The amount owed by reinsurers has been included within the credit rating analysis within note 6j

Admiral Group plc Annual Report and Accounts 2022

257

Company Overview

Insurance receivables are measured at historic cost. Given that non-repayment would result in a withdrawn policy and the short-term
duration of these assets no bad debt provision has been recognised.

Trade and other receivables

Classification. Trade and other receivables are measured at amortised cost, being made up of multiple types of receivable balances.

(i)

aged debtor analysis;(ii) historic experience of write-offs for each receivable,(iii) any specific indicators of credit deterioration observed, and(iv) management judgement.
The amortised cost carrying amount of receivables is a reasonable approximation of fair value.

Contract balances

The following table provides information about receivables and contract assets from contracts with customers. Both balances areincluded in trade and other receivables.
Continuing operations

31 December
2021
£m

20.0
19.3

16.8
23.8

The contract asset relates to the Group’s right to consideration for work undertaken in the law companies on behalf of clients which is
ongoing or where the final fee has not yet been billed. The contract asset is transferred to trade receivables once the fee has been billed.
Significant changes in the contract asset balance during the period are as follows:
Contract asset balance

At 1 January 2022
Revenue recognised
Transferred to trade receivables
Write-offs
At 31 December 2022

31 December
2022
£m

23.8
16.3
(20.2)(0.6)
19.3

The amount of revenue recognised in 2022 from performance obligations satisfied (or partially satisfied) in previous periods in relation to
the above contract balances is £nil (2021: £nil). See note 5c for details of profit commission recognised on previous underwriting years.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Receivables
Contract assets

31 December
2022£mFinancial Statements

The level of provision is immaterial.

Corporate GovernanceImpairment. Where a provision is required for these receivables, it is calculated in line with the simplified method for trade receivables
per IFRS 9, whereby lifetime expected credit losses are recognised irrelevant of the credit risk. In this case, the provision is based on a
combination of:Strategic Report

Insurance receivables

258

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued
6i. Financial and lease liabilities

31 December 2022
Subordinated
notes
£m

Financial liability at the start of the period
Interest payable per income statement
Cash flows*1
Other foreign exchange and non-cash movements
Financial liability at the end of the period

Loan backed Other borrowings
securities
and derivatives
£m
£m

204.4
11.0
(11.0)
–
204.4

446.5
11.7
256.5
–
714.7

20.0
1.3
(0.9)
(0.4)
20.0

Lease
liabilities
£m

Total
£m

105.3
2.0
(11.3)
(7.5)
88.5

776.2
26.0
233.3
(7.9)
1,027.6

Leaseliabilities
£m

Total
£m

122.8
2.3
(12.3)
(7.5)
105.3

611.4
19.8
156.1
(11.1)
776.2*1 Cash amounts relating to the interest proportion of the lease liability were £2.1 million in 2022 (2021: £2.7 million)

31 December 2021
Subordinated
notes
£m

Financial liability at the start of the period
Interest payable per income statement
Cash flows*1
Other foreign exchange and non-cash movements
Financial liability at the end of the period

Loan backed Other borrowings
securities
and derivatives
£m
£m

204.3
11.1
(11.0)
–
204.4

260.7
5.5
180.3
–
446.5

23.6
0.9
(0.9)
(3.6)
20.0

*1 Cash amounts relating to the interest proportion of the lease liability were £2.1 million in 2022 (2021: £2.7 million)

Subordinated notes

Financial liabilities are inclusive of £200.0 million subordinated notes issued on 25 July 2014 at a fixed rate of 5.5% with a redemption dateof 25 July 2024.
The notes are unsecured subordinated obligations of the Group and rank pari passu without any preference among themselves.
In the event of a winding-up or bankruptcy, they are to be repaid only after the claims of all other creditors have been met.
There have been no defaults on any of the notes during the year. The Group has the option to defer interest payments on the notes but
to date has not exercised this right.
The fair value of subordinated notes (level one valuation based on quoted prices in active markets) at 31 December 2022 is £196.4 million(2021: £217.1 million).

Other borrowings

The Group holds various revolving credit facilities including a £200.0 million facility which expires in April 2023, a £20.0 million facility
which expires in August 2023 and a €100.0 million facility which expires in August 2024. £20.0 million was drawn under the agreement
expiring in August 2023 as at 31 December 2022 (2021: £20.0 million), which is shown within other borrowings in the table above.
The carrying value is a reasonable approximation of fair value.

Loan backed securities

Asset backed senior loan note facilities of £1,000.0 million have been established in relation to the Admiral Money business (see note 3 fordetails of the accounting treatment of SPEs). As at the year end, £714.7 million (2021: £446.5 million) of these facilities had been utilised.
The carrying value is a reasonable approximation of fair value.

Lease liabilities

The Group leases various properties, with rental contracts typically for fixed periods of 5 to 25 years although these may have extension
options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The leaseagreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
For each lease, a right-of-use asset and corresponding lease liability is recognised at the date at which the leased asset becomes available
for use by the Group.
The lease liability is initially measured at the present value of remaining lease payments, which include the following:• fixed payments (including in-substance fixed payments), less any lease incentives receivable• variable lease payments that are based on an index or a rate
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option
Admiral Group plc Annual Report and Accounts 2022

259

Company Overview

Subsequently, lease payments are allocated to the lease liability, split between repayments of principal and interest. A finance cost is
charged to the profit and loss so as to produce a constant period rate of interest on the remaining balance of the lease liability.

6j. Objectives, policies and procedures for managing financial assets and liabilities

The Group’s activities expose it primarily to financial risks of credit, interest rate, liquidity and foreign exchange risk. The Board of
Directors has delegated the task of supervising risk management and internal control to the Group Risk Committee. There is also an
Investment Committee that makes recommendations to the Group and subsidiary Boards on investment strategy, and overseas theGroup’s investments.

Credit risk

The Group defines credit risk as the risk of financial loss if another party fails to perform its obligations. The key areas of exposure tocredit risk for the Group result through its reinsurance programme, investments, bank deposits, loans and advances to customers andpolicyholder receivables.

The impact on equity of 100 and 200 basis point increases in credit spreads at the relevant valuation date, is as follows:
Reduction in equity – 100bps
Reduction in equity – 200bps

31 December 2022£m

31 December 2021£m

(64.4)(128.7)(71.0)(142.0)The impact on the income statement from movements in credit spreads on the portfolio classified as FVOCI is £nil. There is no significant
exposure to credit risk for assets classified as FVTPL.
Also see notes 7 and 6f for further information on credit risk in relation to loans and advances to customers, and financial investments.

Financial investments and cash

Credit and counterparty risk is managed by the Group by investing in high quality money market funds, and setting suitable parameters
for asset managers to adhere to when purchasing debt securities. Cash balances and deposits are placed only with highly rated credit
institutions. The detailed holdings are reviewed regularly by the Investment Committee.

Invested assets

As noted above, the Group primarily invests the following asset types:• Debt securities are held within segregated mandates and investment funds. This includes government debt, private debt and asset
backed securities. The guidelines of the investments ensure management of credit risk. Generally, the duration of the securities isrelatively short and similar to the duration of the on book claims liabilities• Liquidity funds, which in turn invest in a mixture of short-dated fixed and variable rate securities, such as cash deposits, certificates ofdeposits, floating rate notes and other commercial paper• Deposits with well rated institutions and are short in duration (one to three years). These are classified as held at amortised cost.
Therefore, neither the carrying value of the asset, nor the interest return will be impacted by fluctuations in interest rates

Reinsurance assets

To mitigate the risk arising from exposure to reinsurers (in the form of reinsurance recoveries and profit commissions), the Group only
conducts business with companies of appropriate financial strength ratings. In addition, many reinsurance contracts are operated on afunds withheld basis, which substantially reduces credit risk, as the Group retains the cash received from policyholders.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The Directors consider credit quality and counterparty exposure frequently and in significant detail. The Directors consider that thepolicies and procedures in place to manage credit exposure continue to be appropriate for the Group’s risk appetite and, during 2022 andhistorically, no material credit losses have been experienced by the Group.

Financial Statements

There are several key elements to the risk management environment throughout the Group. These are detailed in full in the Corporate
Governance Statement. Specific considerations for the risks arising from financial assets and liabilities are detailed below.

Corporate Governance

Whereby a change in lease term is identified, the lease liability is recalculated based on the present value of the remaining
lease payments.

Strategic Report

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s
incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset ofa similar value in a similar economic environment, with similar terms and conditions. Generally, the Group uses its incremental borrowing
rate as the discount rate.

260

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued
Loans and advances to customers

The risk appetite for the lending business is set to ensure that the risk taken is commensurate with the expected returns. Management has
defined an amber and a red loan loss limit, representing points at which action is required. These limits have been defined by management
to reflect the business maturity, the business’ ambitions and the economic climate. Risk appetite is assessed at least annually, while the limits
are continuously monitored.

Insurance assets

A further principal form of credit risk is in respect of amounts due from policyholders, largely due to the potential for default by
instalment payers. The impact of this is mitigated by the large customer base and low average level of balance recoverable. There is also
mitigation by the operation of numerous high- and low-level controls in this area, including payment on policy acceptance as opposed toinception and automated cancellation procedures for policies in default.
The amount of bad debt expense relating to policyholder debt charged to the income statement in 2022 and 2021 is insignificant.

Trade and other receivables

Trade receivables and other debtors are also subject to credit risk, although this is mitigated by a review of the credit worthiness of all
counterparties prior to them being accepted.

Other assets

All other assets are assessed as low credit risk under IFRS 9, with no significant amounts past due or impaired. No further disclosure isprovided due to this having an immaterial impact on the financial statements.
The Group’s credit risk exposure to assets with external ratings is as follows:

Financial institutions – credit institutions
Financial institutions – credit institutions
Financial institutions – credit institutions
Financial institutions – credit institutions
Government securities
Government securities
Government securities
Government securities
Reinsurers
Reinsurers
Reinsurers

Rating31 December
2022£m

31 December
2021
Restated
£m

AAA
AA
A
BBB and belowAAAAAA
BBB and below
AAA
BBB and below

324.6
556.1
1,529.4
818.2
266.6
209.4
1.7
2.1
816.5
421.8
6.6

355.0
746.6
1,801.5
863.7
103.1
231.4
14.0
–
685.5
210.3
5.4

*1 BBB and below includes not rated.

The Group’s maximum exposure to credit risk at 31 December 2022 is 31 December is £5,901.3 million (2021: £5,675.4 million), being thecarrying value of financial investments and cash, the carrying value of loans and advances to customers, and the excess of reinsurance
assets over amounts owed to reinsurers under funds withheld arrangements which are settled on a net basis. The Group does not use
credit derivatives or similar instruments to mitigate exposure.
There were no further significant financial assets that were past due at the close of either 2022 or 2021

Interest rate risk

The Group considers interest rate risk to be the risk that unfavourable movements in interest rates could adversely impact on the capitalvalues of financial assets and liabilities.
The impact on equity of 50 and 100 basis point increases and decreases in interest rates at the relevant valuation date, is as follows:

Increase in interest rates – 50bps
Increase in interest rates – 100bps
Decrease in interest rates – 50bps
Decrease in interest rates – 100bps

31 December
2022£m

31 December
2021£m(37.6)(75.2)
37.6
75.2(51.0)(101.9)51.0
101.9

Admiral Group plc Annual Report and Accounts 2022

261

Company Overview

Loans and advances to customers

Hedge accounting

Hedge accounting is applied when the criteria specified in IFRS 9 (including amendments, as set out above) are met. In line with IFRS 9,
the gain or loss on the hedged position as at the balance sheet date is recognised through other comprehensive income.
This results in a hedging reserve in relation to the interest rate swap.

Corporate Governance

The Group’s loan portfolio consists of fixed rate loans, which are funded at a floating variable rate. The Group has interest rate swap
arrangements, the risk management objective of which is to eliminate the majority of the interest rate risk variability in the cash flows
payable on the loan backed securities. This relates to the difference between fixed rate on loans written and floating variable rate
on funding.

Strategic Report

The impact reflects movements in the Group’s asset portfolio and is stated before any offsetting movements in liabilities. The Group’s
solvency II balance sheet, which includes technical provisions discounted using Bank of England and EIOPA yield curves reflects a low
sensitivity to interest rates as a result of well-matched durations of assets and liabilities.

Financial liabilities

Other financial assets and liabilities

There is no significant exposure to interest rate risk for other financial assets and liabilities due to these being held at amortised cost.

Liquidity risk

The Group holds appropriate liquidity buffers at the parent company and subsidiary levels.
The Group is strongly cash-generative due to the large proportion of revenue arising from non-underwriting activity. Further, as noted
above, a significant portion of insurance funds are invested in investment funds with same day liquidity, meaning that a large proportionof the Group’s cash and investments are immediately available.
A breakdown of the Group’s other borrowings, trade payables and other payables is shown in note 11.
The subordinated notes have a maturity date of July 2024, whereas all trade and other payables will mature within three to six months ofthe balance sheet date (Refer to the maturity profile at the start of this note for further detail).
In practice, the Group’s Directors expect actual cash flows to be consistent with this maturity profile except for amounts owed to coinsurers and reinsurers. Of the total amounts owed to co-insurers and reinsurers of £1,623.2 million (2021: £1,436.8 million), £1,389.4 million(2021: £1,169.8 million) is held under funds withheld arrangements and therefore not expected to be settled within 12 months.
A maturity analysis for insurance contract liabilities is included in note 6e. The maturity profile for financial assets is included at the startof this note.
The Group’s Directors believe that the cash flows arising from these assets will be consistent with this profile. Liquidity risk is not,therefore, considered to be significant.

Foreign exchange risk

Foreign exchange risk arises from unfavourable movements in foreign exchange rates that could adversely impact the valuation ofoverseas assets and liabilities.
The Group is exposed to foreign exchange risk through its operations overseas. Although the relative size of the international operations
means that the risks are relatively small, increasingly volatile foreign exchange rates could result in larger potential gains or losses.
Assets held to fund insurance liabilities are held in the currency of the liabilities; however, surplus assets held as regulatory capital inforeign currencies remain exposed.
The Group’s exposure to net assets and profits in currencies other than the reporting currency is immaterial other than for US dollars andeuros. The Group’s exposure to net assets held in dollars at the balance sheet date was £34.7 million (2021: £21.3 million); the exposure to
net assets held in euros was £124.4 million (2021: £102.8 million).
If the sterling exchange rates against US dollars had strengthened/weakened by 10%, the Group’s profit before tax for the year would
increase/decrease by £5.1 million (2021: £1.9 million).
If the sterling rates with euros had strengthened/weakened by 10%, the Group’s profit before tax for the year would increase/decreaseby £1.0 million (2021: £1.1 million).
Admiral Group plc Annual Report and Accounts 2022

Additional Information

Liquidity risk is defined as the risk that the Group does not have sufficient available financial resources to enable it to meet its obligations
as they fall due, or can only secure them at excessive cost.

Financial Statements

The Group also holds a financial liability in the form of £200.0 million of subordinated notes with a ten year maturity and fixed rate
coupon of 5.5%. This liability is valued at amortised cost and therefore neither the carrying value of the deposits, nor the interest payable,
will be impacted by fluctuations in interest rates.

262

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

6. Investment income and costs continued
6k. Investment in Associates

Investment in Associates

31 December
2022£m

31 December
2021
£m

2.4

–

On 21 September 2022, Admiral Group announced a £2.5m investment into Wagonex Limited resulting in a holding of 23.56% of
the company.

7. Loans and advances to customers
7a. Accounting policies

Loans and advances to customers relate to the Admiral Money’s business, consisting of unsecured personal loans and car finance products.

Classification

Loans and advances to customers are measured at amortised cost. This is because assets are held in order to collect contractual cash
flows and the contractual terms of the financial asset demand cash inflows which are solely payments of principal and interest on theprincipal amount outstanding.

Interest income and expense

Interest income received in relation to loans and advances to customers is calculated using the effective interest method which
allocates interest, direct and incremental fees and costs over the expected lives of the assets and liabilities. There has been no change inrecognition of interest income from the comparative period.
Interest expense is calculated using the process appropriate to each source of funding, which is not linked to individual accounts.

Finance leases

Included within loans and advances to customers are personal contract purchase (PCP) and hire purchase (HP) arrangements which areclassified as finance leases under IFRS 16. A receivable equal to the net investment in the lease has been recognised. The net investment
is equal to the gross investment in the lease discounted at the rate implicit in the lease.
Lease interest income is recognised within interest income in the income statement over the term of the lease using the effective
interest rate method.
The title to the underlying vehicle remains with the Group until the lessee has made all contractual payments, at which point ownershipis transferred to the lessee. In the event of breach of contract, such as non-payment, the vehicle itself acts as collateral for the financelease, becoming available for repossession in most cases.
Some of the ways in which the Group maintains its rights to the vehicle, and thus manages the risk of loss associated with the financelease, include:• The Group does not enter into any finance leases with a maximum loan-to-value limit, reducing the risk of shortfall on termination of
the contract• The Group requires the lessee to insure the underlying vehicle at all times, reducing the risk of non-recovery if the asset is stolen
or destroyed• The estimated future value of each vehicle, which is sourced externally, is considered in the pricing of the lease contracts to provide
protection against deterioration in that value.

7b. Loans and advances to customers

Loans and advances to customers – gross carrying amount
Loans and advances to customers – provision
Total net loans and advances to customers

31 December
2022£m

31 December
2021
£m

887.6
(63.7)
823.9

607.0(50.2)
556.8

31 December
2022£m

31 December
2021
£m

856.0
31.6
887.6

566.9
40.1
607.0

Loans and advances to customers are comprised of the following:

Unsecured personal loans
Finance leases
Total loans and advances to customers, gross

Admiral Group plc Annual Report and Accounts 2022

263

Company Overview

The loans and advances are recognised at fair value at the point of origination and then subsequently on an amortised cost basis. This isdeemed a reasonable approximation of fair value.

Expected credit losses• Probability of Default (PD): The likelihood of an account defaulting; calibrated through analysis of historic customer behaviour.
Where customers have already met the definition of default this is 100%. For customers that are not in default the PD is determinedthrough analysis of historic data at a credit grade level. A behavioural PD is then used after 2 months based on observed default rates
by month on book and risk grade• Exposure at Default: The amount of balance at the time of default. For loans that are in arrears the EAD is taken as the current balanceplus any expected interest arrears. For up-to-date loans the EAD is calculated as the expected balance 3 months prior to each period,
plus 3 months of interest arrears to account for the time it takes to default following falling into arrears

The PD is applied to the EAD to calculate the expected loss excluding recoveries. The LGD is then applied to this loss to calculate the total
expected loss including recoveries. A forward-looking provision is also calculated, as set out later in this note.
Loan assets are segmented into three stages of credit impairment:• Stage 1 – no significant increase in credit risk of the financial asset since inception• Stage 3 – financial asset is credit impaired
For assets in stage 1, the allowance is calculated as the expected credit losses from events within 12 months after the reporting date.
For assets in stages 2 and 3 the allowance is calculated as the expected credit loss from events in the remaining lifetime of each asset.

Significant increase in credit risk (SICR) (stage 2)

As explained above, stage 1 assets have an ECL allowing for losses in the next twelve months, and stage 2 or 3 assets have an ECL allowing
for losses over the remaining lifetime of the contract. An asset moves to stage 2 when its credit risk has increased significantly since initialrecognition. IFRS 9 does not prescribe a definition of significant increase in credit risk but does include a rebuttable presumption that thisdoes occur for loan assets which are 30 days past due (which the Group does not rebut).
The Group has deemed a significant increase in credit risk to have occurred where:• the loan is 1 to 2 loan payments in arrears, or• the behavioural PD has moved outside a specified threshold from the application PD• the customer is identified as being two or more payments in arrears on a product reported to the credit reference agency

Credit impaired (stage 3)

The Group does not rebut the presumption within IFRS 9 that default has occurred when an exposure is greater than 90 days past due,
which is consistent with a customer being three or more payments in arrears. In addition, a loan is deemed to be credit impaired where:• there is an Individual Voluntary Arrangement (IVA) agreement confirmed or proposed, or;• customer has started or progressed bankruptcy action, or;• a repayment plan is in place, or;• a customer is deceased

Admiral Group plc Annual Report and Accounts 2022

Additional Information• Stage 2 – significant increase in credit risk of the financial asset since inception

Financial Statements• Loss Given Default (LGD): The amount of the asset not recovered following a borrower’s default, determined through analysis ofhistoric recovery performance

Corporate Governance

The expected credit loss model is a three-stage model based on forward looking information regarding changes in the credit quality sinceorigination. Credit risk is measured using a Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD) defined
as follows:

Strategic Report

Fair value measurement

264

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

7. Loans and advances to customers continued
Judgments required – Post Model Adjustments (PMAs)

As at 31 December 2022, the expected credit loss allowance included PMAs totalling £11.3 million (2021: £9.1 million).
Post Model Adjustments

Model performance
Inflation
Economic scenarios
Mortgage contagion

31 December
2022£m

31 December
2021
£m

3.9
4.0
0.9
2.5
11.3

2.0
2.5
4.6
–
9.1

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

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. For this reason a Model Performance PMA has been made. It effectively recalibrates the modelled probability ofdefault of the loans to reflect recent monitored performance.

Inflation

This PMA has been updated to reflect the higher inflation outlook which has increased significantly since the end of 2021. Inflation could
adversely impact the ability of some customers to make their loan repayments. A PMA is held to acknowledge this.

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.

Mortgage contagion

Captures the risk that as mortgage rates rise, customers may experience payment shocks when their standard variable or fixed term
mortgages come to an end, and may have to prioritise mortgage payments over other debts.

Write off policy

Loans are written off where there is no reasonable expectation of recovery. The Group’s policy is to write off balances to theirestimated net realisable value. Write offs are actioned on a case-by-case basis taking into account the operational position and thecollections strategy.

Forward-looking information

Under IFRS 9 the provision must reflect an unbiased and probability-weighted amount that is determined by evaluating a range ofpossible outcomes. The means by which the Group has determined this is to run scenario analysis.
Management judgment has been used to define the weighting and severity of the different scenarios based on available data.
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 2022.

Base
UpturnDownturn
Severe31 December
2022
Scenario peak
Unemployment
rate

4.8%
3.5%
6.0%
7.9%

31 December
2022
Weighting

31 December
2021
Scenario peak
Unemployment
rate

31 December
2021
Weighting

40%
10%
40%
10%

4.3%
4.0%
6.3%
6.6%

40%
10%
30%
20%

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.

Admiral Group plc Annual Report and Accounts 2022

265

Company Overview

The key areas of estimation uncertainty identified, as per note 3 to the financial statements, are in the PD and the forwardlooking scenarios.
31 December
2022
Sensitivity£m

31 December
2021
Weighting

31 December
2021
Sensitivity
£m

40%
10%
40%
10%

(1.3)
(6.9)
1.4
5.7

40%
10%
30%
20%

(2.5)
(9.7)
6.9
11.1

Stage 1 assets represent 82% of the total loan assets; 0.1% increase in the stage 1 PD, i.e. from 2.4% to 2.5% would result in a £0.7 million
increase in ECL.

Amounts arising from ECL: loans and advances to customers

The Group is exposed to credit risk from the Admiral Money business.

All probability of default figures included in this paragraph allow for forward-looking information, i.e. the PDs are a weighted average
from the economic scenarios considered. The average probability of default in for stage 1 assets is 2.7% (2021: 2.4%) reflecting the
expectation of defaults within 12 months of the reporting date. The average PD for assets in stage 2 is 36.6% (2021: 30.0%) reflecting
expected losses over the remaining life of the assets. The PD for assets in stage 3 is 100% (2021: 100%) as these assets are deemed tohave defaulted.

Credit Grade*1
HigherMediumLower
Credit impaired
Gross carrying amount
Expected credit loss allowance
Other loss allowance*2
Carrying amountStage 112- month ECL£mStage 2Lifetime ECL£mStage 3
Lifetime ECL£m

31 December
2022
Total
£m

31 December
2021
Total
£m

506.4
176.0
46.0
–
728.4
(13.4)
(0.6)
714.4

94.0
24.0
7.2
–
125.2
(23.5)
–
101.7

–
–
–
34.0
34.0
(26.2)
–
7.8

600.4
200.0
53.2
34.0
887.6
(63.1)
(0.6)
823.9

405.1
141.9
32.0
28.0
607.0
(49.9)(0.3)
556.8*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

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The following table sets out information about the credit quality of the loans and advances to customers measured at amortised cost.
Credit grades are used to segment customers by apparent credit risk at the time of acquisition. Higher grades are the lowest credit risk
with each subsequent grade increasing in expected credit risk. The Group does not have any purchased or originated credit impaired
assets. These tables are inclusive of the finance lease assets which are held by the Group, further analysis of these balances can be foundin note 7c.

Financial Statements

The sensitivities in the above tables show the variance to ECL that would be expected if the given scenario unfolded rather than theweighted position the provision is based on. At 31 December 2022 the implied weighted peak unemployment rate is 5.5%: the tableshows that in a downturn scenario with a 6.0% peak unemployment rate the provision would increase by £1.4 million, whilst the upturnwould reduce the provision by £6.9 million, base case reduce by £1.3 million and severe increase the provision by £5.7 million.

Corporate Governance

Base
UpturnDownturn
Severe31 December
2022
Weighting

Strategic Report

Sensitivities to key areas of estimation uncertainty

266

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

7. Loans and advances to customers continued

The following tables reconcile the opening and closing gross carrying amount and expected credit loss allowance.
2022

Gross carrying amount as at 1 January 2022
Transfers
Transfers from stage 1 to stage 2
Transfers from stage 1 to stage 3
Transfers from stage 2 to stage 1
Transfers from stage 2 to stage 3
Transfers from stage 3 to stage 1
Transfers from stage 3 to stage 2
Principal redemption payments
Write offs
EIR adjustment
New financial assets originated or purchased
Gross carrying amount as at 31 December 2022

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

Total
£m

510.6

68.4

28.0

607.0

(62.6)
(9.4)
25.3
–
0.2
–
(235.3)
–
3.4
496.1
728.3

62.6
–
(25.3)(4.2)–
0.4(39.9)
–
0.4
62.9
125.3

–
9.4
–
4.2
(0.2)
(0.4)
(5.9)
(7.2)
–
6.1
34.0

–
–
–
–
–
–
(281.1)
(7.2)
3.8
565.1
887.6

The EIR adjustment represents incremental acquisition costs incurred when advancing loans. These costs are spread over the expectedeconomic lives of the loans under the effective interest rate method.
2021

Gross carrying amount as at 1 January 2021
Transfers
Transfers from stage 1 to stage 2
Transfers from stage 1 to stage 3
Transfers from stage 2 to stage 1
Transfers from stage 2 to stage 3
Transfers from stage 3 to stage 1
Transfers from stage 3 to stage 2
Principal redemption payments
Write offs
New financial assets originated or purchased
Gross carrying amount as at 31 December 2021

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

Total
£m

343.2

37.5

21.1

401.8

(42.2)
(4.7)
17.6
–
0.4
–
(163.2)
–
359.5
510.6

42.2
–
(17.6)(5.6)–
0.3(22.5)
–
34.1
68.4

–
4.7
–
5.6
(0.4)
(0.3)
(2.9)
(2.4)
2.6
28.0

–
–
–
–
–
–
(188.6)
(2.4)
396.2
607.0

Admiral Group plc Annual Report and Accounts 2022

267

Company Overview

Admiral Group plc Annual Report and Accounts 2022

13.7

12.7

23.5

49.9

(1.5)
(0.4)
1.8
–
(10.1)
9.9
(0.3)
–
13.4

4.4
–
(3.9)
–
(2.4)
12.7
10.8
–
23.5

–
1.0
–
(0.1)
4.4
4.6
9.9
(7.2)
26.2

2.9
0.6
(2.1)
(0.1)
(8.1)
27.2
20.4
(7.2)
63.1

–
–

(1.3)
–

1.3
–

–
–

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

Total
£m

10.9

12.7

17.9

41.5

(1.3)
(0.4)
3.1
0.1
(8.8)
10.1
2.8
–
13.7

2.3
–
(5.1)
–
(4.8)
7.6
–
–
12.7

–
0.6
–
(0.2)
5.6
2.0
8.0
(2.4)
23.5

1.0
0.2
(2.0)
(0.1)
(8.0)
19.7
10.8
(2.4)
49.9

–
–

(4.0)
0.1

4.0
(0.1)

–
–

Additional Information

Expected credit loss allowance as at 1 January 2022
Movements with a profit and loss impact
Transfers
Transfers from stage 1 to stage 2
Transfers from stage 1 to stage 3
Transfers from stage 2 to stage 1
Transfers from stage 3 to stage 1
Changes in PDs/LGDs/EADs
New financial assets originated or purchased
Total net profit and loss charge in the period
Write-offs
Expected credit loss allowance as at 31 December 2022
Other movements with no profit and loss impact
Transfers
Transfers from stage 2 to stage 3
Transfers from stage 3 to stage 2

Total
£m

Financial Statements

2021

Stage 3
Lifetime ECL£mCorporate Governance

Expected credit loss allowance as at 1 January 2022
Movements with a profit and loss impact
Transfers
Transfers from stage 1 to stage 2
Transfers from stage 1 to stage 3
Transfers from stage 2 to stage 1
Transfers from stage 3 to stage 1
Changes in PDs/LGDs/EADs
New financial assets originated or purchased
Total net profit and loss charge in the period
Write-offs
Expected credit loss allowance as at 31 December 2022
Other movements with no profit and loss impact
Transfers
Transfers from stage 2 to stage 3
Transfers from stage 3 to stage 2

Stage 2Lifetime ECL£mStrategic Report2022

Stage 112- month ECL
£m

268

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

7. Loans and advances to customers continued
7c. Finance lease receivables

Loans and advances to customers include the following finance leases. The Group is the lessor for leases of cars.

Gross investment in finance leases, receivable
Less than 1 year
Between 1 to 5 years
More than 5 years
Unearned finance income
Net investment in lease receivables
Less impairment allowance
Net investment in finance leases, receivable
Less than 1 year
Between 1 to 5 years
More than 5 years

31 December
2022£m

31 December
2021
£m

9.8
25.7
–
35.5
(4.0)
31.5
(0.8)
30.7

11.7
33.3
–
45.0
(5.2)
39.8
(1.3)
38.5

7.9
23.7
–
31.6

9.2
30.6
–
39.8

The net investment in finance leases shown above includes an unguaranteed residual value of £0.3 million (2021: The net investment infinance leases shown above is net of the unguaranteed residual value of £0.4 million).

7d. Interest income
Post Model Adjustments

From loans and advances to customers
From finance leases
Total interest income

31 December
2022£m

31 December
2021
£m

56.1
2.6
58.7

34.0
2.6
36.6

Interest income receivable is recognised in the income statement using the effective interest method, which calculates the amortised
cost of the financial asset and allocates the interest income over the expected product life.

7e. Interest expense
Post Model Adjustments

Interest payable on loan backed securities
Interest payable on other credit facilities
Total interest expense*1

31 December
2022£m

31 December
2021
£m

11.7
0.9
12.6

5.5
0.6
6.1

*1 Interest paid in total during the year was £11.9 million (2021: £6.1 million)

8. Other revenue
8a. Accounting policy(i) Contribution from additional products and fees and other revenue

Revenue is credited to the income statement over the period matching the Group’s obligations to provide services. Where the Group has
no remaining obligations, the revenue is recognised immediately. An allowance is made for expected cancellations where the customer
may be entitled to a refund of amounts charged.
Commission from the provision of insurance intermediary services is credited to revenue on the sale of the underlying insurance policy.
There has been no change in revenue recognition from the comparative period.

Admiral Group plc Annual Report and Accounts 2022

269

Company Overview

The following is a description of the principal activities within the scope of IFRS 15 from which the Group generates its other revenue.
Nature, timing of satisfaction of performance obligations and significant payment terms

Fee and commission
revenue: Commission onunderlying products
Fee and commission revenue:
Administration fees

The performance obligation is the provision of insurance intermediary services, at which point theperformance obligation is met. Revenue is therefore recognised at a point in time. Payment of thecommission is due within 30 days of the period close.
The performance obligation is the change requested being made to the underlying policy, at which
point the performance obligation is met.

Revenue from law firm

Revenue is recognised over time because as the Group has an enforceable right to payment for
performance completed to date and the work performed to date has no alternative use to the Group.
A contract asset is recognised equal to the work performed up to the balance sheet date but not yet
billed. Refer to note 6h for further detail of this balance.
Payment is due within 28 days of invoice.
The Group’s profit commission revenue falling within the scope of IFRS 15 Revenue from Contracts
with Customers relates to a contractual arrangement between the Group’s insurance intermediary EUI
Limited, and an external co-insurer (Great Lakes) which underwrites a share of the UK Car Insurance
business generated by EUI Limited.
The variable consideration, being the profit commission recognised in respect of each underwriting
year at the end of each reporting period, is recognised at a point in time, and calculated based on anumber of detailed inputs, the most material of which are as follows:• Premiums, defined as gross premiums ceded including any instalment income, less reinsurance
premium (for excess of loss reinsurance)• Insurance expenses incurred• Claims ratio (more typically referred to as a loss ratio)
Whilst the premiums and insurance expenses related to an underwriting year are typically fixed at theconclusion of each underwriting year and are not subject to judgement, the claims ratio is calculated
from the underwriting year loss ratios that result from the setting of claims reserves in the financial
statements meaning it is subject to inherent uncertainty. As stated in note 5d, Admiral’s reserving
policy is initially to reserve conservatively, above internal and independent projections of actuarial
best estimates. This is designed to create a margin held in reserves to allow for unforeseen adverse
development in open claims.
Admiral’s financial statement loss ratios, used in the calculation of profit commission income, continue
to include a significant margin above projected best estimates of ultimate claims costs. It is this margin
for uncertainty, included in the financial statement loss ratios, which creates the constraint over therecognition of the variable consideration, as using the booked loss ratio rather than the actuarial best
estimate constrains the profit commission income to a level where there is a high probability of no
significant reversal of the revenue recognised.

Comparison

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.
The performance obligation is the provision of insurance intermediary services, at which point theperformance obligation is met. Revenue is therefore recognised at a point in time.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Profit commission fromco-insurers

Financial Statements

Revenue is therefore recognised at a point in time and is collected immediately or in line with direct
debit instalments.
The performance obligation is the pursuit of the compensation from the at fault party’s insurer
on behalf of the customer. Once the case is settled the performance obligation is fully satisfied.
Revenue is therefore recognised over time using the expected value method. This method values
revenue by multiplying hours incurred on open cases by a 12-month realisable rate. The realisablerate is a probability weighted transaction price based on settled cases. The expected value method
therefore results in revenue recognised being constrained to that where there is a high probability ofno significant reversal.

Corporate Governance

Products and services

Strategic Report(ii) Nature of goods and services

270

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

8. Other revenue continued

Instalment income on insurance premium paid via instalments is using the effective interest rate, and as such is not within the scope of
IFRS 15. Profit commission from reinsurers is within the scope of IFRS 4, and not within the scope of IFRS 15 Revenue from Contracts with
Customers due to the nature of the income.

8b. Disaggregation of revenue

In the following tables, other revenue is disaggregated by major products/service lines and timing of revenue recognition. The total
revenue disclosed in the table of £489.7 million (2021: £678.9 million) represents total other revenue and profit commission and isdisaggregated into the segments included in note 4.
Year ended 31 December 2022

Major products/service line
Instalment income
Fee and commission revenue
Revenue from law firm
Comparison*1
Other
Total other revenue
Profit commission
Total other revenue and profit commission
Timing of revenue recognition
Point in time
Over time
Revenue outside the scope of IFRS 15

UK
Insurance£mInternational
Insurance£mAdmiral
Money
£m

Other
£m

Total
£m

93.0
149.9
15.8
–
11.6
270.3
170.5
440.8

5.9
33.8
–
–
–
39.7
0.4
40.1

–
0.3
–
–
–
0.3
–
0.3

–
–
–
8.3
0.2
8.5
–
8.5

98.9
184.0
15.8
8.3
11.8
318.8
170.9
489.7

289.9
17.8
133.1
440.8

33.8
–
6.3
40.1

0.3
–
–
0.3

8.5
–
–
8.5

332.5
17.8
139.4
489.7

Year ended 31 December 2021

Major products/service line
Instalment income
Fee and commission revenue
Revenue from law firms
Comparison*1
Other
Total other revenue
Profit commission
Total other revenue and profit
commission
Timing of revenue recognition
Point in time
Over time
Revenue outside the scope of IFRS 15

UK
Insurance£mInternational
Insurance£mAdmiral
Money
£m

Other
£m

Total
(continuing)£mComparison(discontinued)
£m

Total
£m

101.7
137.2
25.0
–
12.0
275.9
301.9

3.7
28.3
–
–
–
32.0
2.6

–
1.0
–
–
–
1.0
–

–
–
–
5.3
0.6
5.9
–

105.4
166.5
25.0
5.3
12.6
314.8
304.5

–
–
–
59.6
–
59.6
–

105.4
166.5
25.0
64.9
12.6
374.4
304.5

577.8

34.6

1.0

5.9

619.3

59.6

678.9

309.6
27.5
240.7
577.8

28.3
–
6.3
34.6

1.0
–
–
1.0

5.9
–
–
5.9

344.8
27.5
247.0
619.3

59.6
–
–
59.6

404.4
27.5
247.0
678.9

*1 Comparison revenue excludes £0.3 million (31 December 2021: £7.8 million) of income from other Group companies, including £nil million (2021: £7.5 million) from discontinued operations

Admiral Group plc Annual Report and Accounts 2022

271

Company Overview

Acquisition costs incurred in obtaining new and renewal business are charged to the income statement over the period in which thosepremiums are earned. All other operating expenses are charged to the income statement as incurred.

Strategic Report

9. Expenses
9a. Accounting policies(i) Acquisition costs and operating expenses(ii) Employee benefits• Base salaries and pension contributions;• Share based incentive plans;• A discretionary bonus, (the ‘DFSS Bonus’), rather than an annual cash bonus, that is based on the number of DFSS awards held andactual dividends paid out to shareholders
Within note 9b, the charges for base salaries and pension contributions (and the related social security costs) are recognised withininsurance contract expenses or administration and other marketing costs, based on the role of the employee.

The rules of the share schemes ensure that the actual dilution level does not exceed 10% in any rolling ten-year period.

Base salaries and pension contributions

Financial Statements

Charges for the share-based incentive plans (and related social security costs) and discretionary bonus are included within share scheme
charges. These charges are not shown as part of the result for each reportable segment, or within the expense ratio, due to them beingmaterially comprised of an accounting charge in line with IFRS 2 Share-based payments which does not result in a cash payment toemployees but instead results in an issue of new shares (resulting in a dilution of existing shares).

Corporate GovernanceAs detailed in the Remuneration Committee Report, the key elements of employee remuneration are:Base salaries and the related employer social security costs are charged to the income statement in the period that they are incurred.

Share based incentive plans and related social security costs

The Group operates a number of equity and cash settled compensation schemes for its employees, the main ones being:• A Share Incentive Plan (SIP), which is in place for all UK employees encouraging wide share ownership across employees, and• The Discretionary Free Share Scheme (DFSS). DFSS shares are typically awarded to managers, and for the majority of employees 50%of the DFSS shares awarded are subject to three performance conditions being Earnings per Share growth, Return on Equity and Total
Shareholder Return vs. the FTSE 350 (excluding investment companies) over a three-year period. The other 50% are guaranteed with
continued employment
For both schemes, employees must remain in employment three years after the award date (i.e. at the vesting date), otherwise theshares are forfeited.
The majority of these schemes are classed as equity settled under IFRS 2, due to the employees receiving shares (rather than cash) as
consideration for the services provided.
For equity settled schemes, the charge, which reflects the fair value of the employee services received in exchange for the grant of thefree shares, is recognised as an expense, with a corresponding increase in equity, as shown in the consolidated statement of changes inequity (2022: £57.3 million; 2021: £63.1 million).
For the cash settled schemes, the expense recognised for the fair value of services received results in a corresponding increasein liabilities.
The key drivers and assumptions used to calculate the charge for the schemes over the three year vesting period are:
• The number of shares awarded, which is set at the start of each scheme. Details of the number of shares awarded for each scheme
where shares remain unvested is set out in note 9f(iii)• The fair value of the shares;– For the SIP, the fair value of the shares awarded is the share price at the award date. Awards under the SIP are entitled to receive
dividends, and hence no adjustment is made to this fair value– For the DFSS equity settled awards, awards are not eligible for dividends, although a discretionary bonus is currently paid equivalent
to the dividend that would have been paid on the shareholding, hence the fair value of the shares is revised downwards to takeaccount of these expected dividends– For the DFSS cash settled awards, the fair value is based on the share price at the vesting date. The closing share price at the end ofeach reporting period is used as an approximation for the closing price at the end of the vesting period
Admiral Group plc Annual Report and Accounts 2022

Additional Information

The Group contributes to defined contribution personal pension plans for its employees. The contributions payable to these schemes arecharged in the accounting period to which they relate.

272

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

9. Expenses continued• Staff attrition rates, which impact the ultimate number of shares that vest
• In the case of the DFSS, the vesting rates based on the performance conditions, which also impact the ultimate number of sharesthat vest
The number of shares that have ultimately vested compared to those originally awarded is set out in note 9f(iv).
At each balance sheet date, the Group revises its assumptions on the number of shares which will ultimately vest based on the latest
forecast information for attrition rates and, for the DFSS, the extent to which the performance conditions are met.
The financial impact as a result of any change in the assumptions is recognised through the income statement. Any significant changes inassumptions may therefore result in an increased / decreased charge in an accounting period as a result of this true-up of the expectedcumulative charge required.

Social security costs on share-based incentive plans

Social security costs are incurred by the Group in respect of the share-based incentive plans, with the expense recognised over thevesting period for each share scheme. For the SIP, these costs are paid when the employees sell the shares after vesting (typically 3–5
years after the grant date). For the DFSS, the costs are paid immediately upon vesting.
The total social security costs are calculated based on the following:• The taxable value of the shares, being:– For the SIP, the lower of the share price at award date and the share price at the balance sheet date
– For the DFSS, the share price at the balance sheet date
• the number of shares expected to vest for each scheme, driven by the number of shares awarded, attrition rates and, for the DFSS,the vesting rate based on performance conditions• the appropriate social security rate
These assumptions are updated at the end of each reporting period. The financial impact as a result of any change in the assumptions
is recognised through the income statement. Any significant changes in assumptions may therefore result in an increased / decreased
charge in an accounting period as a result of this true-up of the expected cumulative charge required.

Discretionary bonus on shares allocated but unvested

The cost of the DFSS bonus is recognised and paid in each period equivalent to the dividends on shares allocated to employees that are
still entitled to vest but have not yet vested. The cost shown also includes the social security costs on the discretionary bonus. No accrualis made for future discretionary bonus payments due to there being no contractual obligation for such a bonus at the balance sheet date.

Admiral Group plc Annual Report and Accounts 2022

273

Company Overview

Continuing operations

Gross
£m

Recoverablefrom co- andreinsurers
£m

Net
£m

178.8
530.5
709.3
136.2
79.3
18.9
943.7

(98.1)(313.6)(411.7)–(27.6)–(439.3)

80.7
216.9
297.6
136.2
51.7
18.9
504.4

31 December 2021

Net
£m

179.5
540.0
719.5
151.5
99.1
13.3
983.4

(113.0)(343.8)(456.8)–(34.3)–(491.1)

66.5
196.2
262.7
151.5
64.8
13.3
492.3

*1 Acquisition of insurance contracts expense excludes £0.3 million (2021: £0.2 million) of aggregator fees from other Group companies

The £216.9 million (2021: £196.2 million) administration and marketing costs allocated to insurance contracts is principally made up ofsalary costs.
Analysis of other administration and other marketing costs:
Continuing operations

Expenses relating to additional products and fees
Loans expenses (excluding movement on ECL provision)
Other expenses
Total
Refer to note 14 for a reconciliation between insurance contract expenses and the reported expense ratio.

Admiral Group plc Annual Report and Accounts 2022

31 December
2022£m

31 December
2021
£m

74.5
22.2
39.5
136.2

91.9
23.7
35.9
151.5

Additional Information

Acquisition of insurance contracts*1
Administration and other marketing costs (insurance contracts)
Insurance contract expenses
Administration and other marketing costs (other)
Share scheme charges
Movement in expected credit loss provision
Total expenses and share scheme charges – continuing operations

Gross
£m

Financial Statements

Continuing operations

Recoverablefrom co- andreinsurers£mCorporate Governance

Acquisition of insurance contracts *1
Administration and other marketing costs (insurance contracts)
Insurance contract expenses
Administration and other marketing costs (other)
Share scheme charges
Movement in expected credit loss provision
Total expenses and share scheme charges – continuing operations

31 December 2022

Strategic Report

9b. Operating expenses and share scheme charges

274

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

9. Expenses continued
9c. Employee costs and other expenses
Continuing operations

Salaries
Social security charges
Pension costs
Share scheme charges (see note 9f)
Total employee expenses
Depreciation charge:– Owned assets– ROU assets
Amortisation charge:– Software– Deferred acquisition costs
Auditor’s remuneration (including VAT) (total Group):– Fees payable for the audit of the Company’s annual accounts– Fees payable for the audit of the Company’s subsidiary accounts– Fees payable for audit related assurance services pursuant to legislation
or regulation

31 December 2022

31 December 2021

Total
£m

Net
£m

Total
£m

Net
£m

397.0
41.4
14.6
79.3
523.3

127.9
15.1
5.0
51.7
199.7

338.2
35.4
17.7
99.1
490.4

111.9
12.8
6.0
64.8
195.5

10.1
8.1

2.8
2.2

13.4
10.2

3.4
2.7

23.7
179.1

7.2
81.0

19.3
180.6

5.6
68.0

0.1
1.7

0.1
0.9

0.1
1.5

0.1
0.6

1.0

0.5

0.8

0.5

£10,800 (inclusive of VAT) (2021: £34,800) was payable to the auditor for other services in the year.
Total and net expenses are before and after co- and reinsurance arrangements respectively.
Refer to the Corporate Governance Report for details of the Audit Committee’s policy on fees paid to the Company’s auditor for nonaudit services. Audit fees are 65% (2021: 64%) of total fees and 35% (2021: 36%) of total fees are for non-audit services, which are classed
as audit related assurance services under the FRC rules on non-audit services.
The amortisation of software and deferred acquisition cost assets is charged to expenses in the income statement.

9d. Employee numbers (including Directors)

Average for the year

Direct customer contact employees
Support employees
Total

2022
Number

2021
Number

7,490
3,845
11,335

7,271
3,454
10,72531 December
2022£m

31 December
2021
£m

1.1
2.2
–
3.3

1.1
3.0
–
4.1

2022
Number

2021
Number2

2

Total average employees in 2021 relating to comparison entities disposed of during the year were 222.

9e. Directors’ remuneration(i) Directors’ remuneration

Directors’ emoluments
Amounts receivable under SIP and DFSS share schemes
Company contributions to money purchase pension plans
Total*1*1 Directors’ remuneration is stated as that of the executive directors. For information on non-executive directors’ remuneration see the remuneration report(ii) Number of Directors
Retirement benefits are accruing to the following number of Directors under:– Money purchase schemes

Admiral Group plc Annual Report and Accounts 2022

275

Company Overview

Total share scheme costs for the Group excluding discontinued operations are analysed below:
31 December 2022
SIP charge (i)Total charge

Gross
£m

Net
£m

Gross
£m

Net
£m

18.0

12.1

39.3

25.6

57.3

37.7

–
18.0
0.7

–
12.1
0.5

0.2
39.5
0.4

0.2
25.8
0.3

0.2
57.5
1.1

0.2
37.9
0.8

–
18.7

–
12.6

20.7
60.6

13.0
39.1

20.7
79.3

13.0
51.7

31 December 2021
SIP charge (i)Total charge

Net
£m

Gross
£m

Net
£m

Gross
£m

Net
£m

19.9

13.7

41.3

27.0

61.2

40.7

–
19.9
0.8

–
13.7
0.5

5.0
46.3
9.0

2.9
29.9
6.4

5.0
66.2
9.8

2.9
43.6
6.9

–

–

23.1

14.3

23.1

14.3

20.7

14.2

78.4

50.6

99.1

64.8

Total share scheme costs for discontinued operations in 2021 were £0.4 million. The total IFRS 2 charge for equity settled share schemes
for discontinued operations in 2021 were £0.5 million.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

IFRS 2 charge for equity settled
share schemes
IFRS 2 charge for cash settled shareschemes
Total IFRS 2 charge
Social security costs
Discretionary bonus on shares allocatedbut unvested
Total share scheme charges –continuing operations

DFSS charge (ii)

Gross
£m

Financial Statements

Net£mCorporate Governance

IFRS 2 charge for equity settled
share schemes
IFRS 2 charge for cash settled
share schemes
Total IFRS 2 charge
Social security costs on IFRS 2 charge
Discretionary bonus on shares allocatedbut unvested
Total share scheme charges

DFSS charge (ii)

Gross
£m

Strategic Report

9f. Employee share schemes276

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

9. Expenses continued

Net share scheme charges are presented after allocations to co-insurers (in the UK and Italy) and reinsurers (in the International
Insurance businesses). The proportion of net to gross share scheme charges would be expected to be consistent in each period,
at approximately 65%.
Financial year ended 31 December

Analysis of gross cost

Year of share scheme – SIP
2018
2019
2020*12021*12022*1Gross IFRS 2 costs – SIP
Year of share scheme – DFSS
2018
2019
2020*22021*22022*2Gross IFRS 2 costs – DFSS
Total IFRS 2 costs – continuing operations

Total cumulative
charge to date£m

2019 and prior
£m

2020
£m

2021
£m

2022
£m

9.3
3.4
–
–
–

5.9
6.0
3.1
–
–

2.4
6.4
6.7
4.4
–
19.9

–
4.1
5.4
5.4
3.1
18.0

17.6
19.9
15.2
9.8
3.1

18.5
3.4
–
–
–

16.6
10.9
4.7
–
–

12.6
15.8
13.0
4.9
–
46.3
66.2

–
8.0
14.6
13.4
3.5
39.5
57.5

47.7
38.1
32.3
18.3
3.5

*1 Awards are made in March and September of each year, and vest over 36 months from award date. On the 2020 scheme, an average of 5 months’ charge remains outstanding, on the 2021 scheme
an average of 17 months’ charge remains outstanding, and on the 2022 schemes an average of 29 months’ charge remains outstanding*2 The main award is made in September of each year, with smaller awards made at other points through the year. The shares vest over 36 months from award date. On the 2020 main DFSS, 9 months’
charge remains outstanding; on the 2021 main DFSS 21 months’ charge remains outstanding, and on the 2022 main DFSS, 33 months’ charge remains outstanding(i) The Approved Share Incentive Plan (the SIP)

Eligible UK based employees qualify for awards under the SIP based upon the performance of the Group in each half-year period.
The maximum award for each year is £3,600 per employee and the maximum number of shares that can vest relating to the 2022
schemes is 872,728 (2021 schemes: 688,384; 2020 schemes: 982,643).
The awards are made at the discretion of the Remuneration Committee, taking into account the Group’s performance.

(ii) The Discretionary Free Share Scheme (the DFSS)

Under the DFSS, details of which are contained in the remuneration policy section of the Directors’ Remuneration Report, individuals
receive an award of free shares at no charge.
The maximum number of shares that can vest relating to the 2022 schemes is 3,070,323 (2021 scheme: 2,850,114; 2020 scheme:
2,795,261).
The vesting percentage for most employees for the 2019 DFSS scheme which vested during 2022 was 98.9% (2018 DFSS scheme:
99.3%).

(iii) Number of free share awards committed at 31 December 2022
SIP 2020*
SIP 2021*2
SIP 2022*2
DFSS 2020*3
DFSS 2021*3
DFSS 2022*3
Total awards committed
2

Awards outstanding*1

982,643688,384
872,728
2,795,261
2,850,114
3,070,323
11,259,453*1 Being the maximum number of awards committed before accounting for expected staff attrition and vesting conditions*2 Shares are awarded in March and September of each year, and vest three years later*3 The main award is made in September of each year, with smaller awards made at other points through the year

Admiral Group plc Annual Report and Accounts 2022

277

Company Overview

During the year ended 31 December 2022, awards under the SIP H1 19 and H2 19 schemes and the DFSS 2019 schemes vested. The total
number of awards vesting for each scheme is as follows.
SIP 2019 schemes
DFSS 2019 schemes

Original awards

Awards vested

1,113,496
2,637,196

907,466
2,262,590

The weighted average fair value of the shares granted in the year was £19.45 (2021: £31.16).
The weighted average market share price at the date of exercise for shares exercised during the year was £21.51 (2021: £31.92).

10. Taxation
10a. Accounting policy(i) Current tax

Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively
enacted by the balance sheet date, and includes any adjustment to tax payable in respect of previous periods.
Current tax related to items recognised in other comprehensive income is also recognised in other comprehensive income and not in theincome statement.

Financial Statements

Income tax on the profit or loss for the periods presented comprise of current and deferred tax.

Corporate GovernanceThe difference between the original and vested awards reflects employee attrition (SIP schemes) and both employee attrition and thevesting outcomes based on performance conditions noted above (DFSS schemes).

Strategic Report(iv) Number of free share awards vesting during the year ended 31 December 2022(ii) Deferred tax

Deferred tax is calculated at the tax rates that have been enacted or substantially enacted by the balance sheet date and that are
expected to apply in the period when the liability is settled, or the asset is realised.
The principal temporary differences arise from carried forward losses, depreciation of property and equipment and share scheme
charges. The resulting deferred tax is charged or credited in the income statement, except in relation to share scheme charges where
the amount of tax benefit credited to the income statement is limited to an equivalent credit calculated on the accounting charge.
Any excess is recognised directly in equity.
Deferred tax assets relating to carried forward losses are recognised only to the extent that it is probable that future taxable profits
will be available against which the assets can be utilised. The probability of the availability of future taxable profits is determined by a
combination of the classification of the status of the businesses holding cumulative tax losses and the business plan profit projections forthat business, subject to appropriate stress testing.

10b. Taxation
Continuing operations

Current tax
Corporation tax on profits for the year
(Over)/under-provision relating to prior periods
Current tax charge
Deferred tax
Current period deferred taxation movement(Over)/under- provision relating to prior periods
Total tax charge per consolidated income statement

Admiral Group plc Annual Report and Accounts 2022

31 December
2022£m

31 December
2021
£m

107.6
(0.9)
106.7

129.2
4.2
133.4

(10.2)
0.7
97.2

(1.5)
(1.7)
130.2

Additional Information

Deferred tax is provided in full using the balance sheet liability method, providing for temporary differences arising between the carrying
amount of assets and liabilities for accounting purposes and the amounts used for taxation purposes.

278

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

10. Taxation continued

Factors affecting the total tax charge are:Continuing operations

Profit before tax
Corporation tax thereon at effective UK corporation tax rate of 19.0% (2021: 19.0%)
Expenses and provisions not deductible for tax purposes
Non-taxable income
Impact of change in UK tax rate on deferred tax balances
Adjustments relating to prior periods
Impact of different overseas tax rates
Unrecognised deferred tax
Total tax charge for the period as above

31 December
2022£m

31 December
2021
£m

469.0
89.1
2.3
(8.7)
(2.2)
(0.2)
4.5
12.4
97.2

713.5
135.6
2.2
(8.3)
(3.6)
2.5
(1.4)
3.2
130.2

The corporation tax liability as at 31 December 2022 was £5.0 million (2021: £10.6 million recoverable for continuing operations).
In 2021, over 130 countries reached a historic agreement to reform the international tax framework. The main aim of the agreement
was to ensure that large, multinational corporations pay their fair share of tax in the countries in which they operate and this included
the introduction of a new global minimum corporate income tax rate of 15%. In November 2022, the UK Tax Authorities confirmed that,for accounting periods beginning on or after 31 December 2023, it would introduce rules requiring UK headquartered multinationalgroups to pay a top-up tax where their foreign operations had an effective tax rate of less than 15%. These new rules are not expected tohave a material impact on the Admiral Group.

10c. Deferred income tax asset/(liability)
Analysis of deferred tax asset/(liability)

Balance brought forward at
1 January 2021
Tax treatment of share scheme
charges through income or expense
Tax treatment of share scheme
charges through reserves
Capital allowances
Movement in fair value reserve
Other difference
Balance carried forward at
31 December 2021
Tax treatment of share scheme
charges through income or expense
Tax treatment of share scheme
charges through reserves
Capital allowances
Carried forward losses
Movement in fair value reserve
Movement in hedging reserve
Other difference
Balance carried forward at
31 December 2022

Tax treatmentof shareschemes£mCapitalallowances£m

Carriedforward losses£m

Fair value
reserve£m

Hedging
reserve£m

Otherdifferences
£m

Total
£m

8.8

(1.7)

–

(7.2)

–

(0.8)

(0.9)

(6.3)

–

–

–

–

–

(6.3)

6.0
–
–
–

–
9.5
–
–

–
–
–
–

–
–
1.4
–

–
–
–
–

–
–
–
(0.4)

6.0
9.5
1.4
(0.4)

8.5

7.8

–

(5.8)

–

(1.2)

9.3

1.2

–

–

–

–

–

1.2

(6.3)
–
–
–
–
–

–
(0.7)
–
–
–
–

–
–
7.9
–
–
–

–
–
–
13.0
–
(0.3)

–
–
–
–
(7.0)
–

–
–
–
–
–
1.4

(6.3)
(0.7)
7.9
13.0
(7.0)
1.1

3.4

7.1

7.9

6.9

(7.0)

0.2

18.5

Positive amounts presented above relate to a deferred tax asset position.
The average effective rate of tax for 2022 is 19.0% (2021: 19.0%). An increase to the main rate of corporation tax in the UK to 25% wasannounced in the 2021 Budget and is expected to come into effect in 2023. This will increase the Group’s future tax charge accordingly.
Admiral Group plc Annual Report and Accounts 2022

279

Company Overview

The deferred tax asset in relation to carried forward losses in the US remains at £nil at the year-end (2021: £nil) due to uncertainty over
the availability of future taxable profits against which to offset or utilise any deferred tax asset.

11. Other assets and other liabilities
11a. Accounting policy(i) Property and equipment, and depreciation

All property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method
to write off the cost less residual values of the assets over their useful economic lives. These useful economic lives are as follows:– four to ten years– two to four years– four years– four years– four years– two – twenty years, aligned to lease agreement

As set out further in note 6i to the financial statements, a right-of-use asset is established in relation the Group’s lease arrangements.
The right-of-use asset is measured at cost, which comprises the following:• any lease payments made at or before the commencement date less any lease incentives received• any initial direct costs, and• restoration costs
The right-of-use asset is subsequently depreciated over the shorter of the lease term and the asset’s useful life on a straight-line basis.
The Group does not have any significant leases which qualify for the short-term leases or leases of low-value assets exemption.

(ii) Impairment of property and equipment

In the case of property and equipment, carrying values are reviewed at each balance sheet date to determine whether there are
any indicators of impairment. If any such indicators exist, the asset’s recoverable amount is estimated and compared to the carrying
value. The carrying value is the higher of the fair value of the asset less costs to sell and the asset’s value in use. Impairment losses arerecognised through the income statement.

(iii) Intangible assets
Goodwill
All business combinations are accounted for using the acquisition method. Goodwill has been recognised in acquisitions of subsidiaries
and represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.
The classification and accounting treatment of acquisitions occurring before 1 January 2004 have not been reconsidered in preparing
the Group’s opening IFRS balance sheet at 1 January 2004 due to the exemption available in IFRS 1 (First time adoption). In respect ofacquisitions prior to 1 January 2004, goodwill is included at the transition date on the basis of its deemed cost, which represents theamount recorded under UK GAAP, which was tested for impairment at the transition date. On transition, amortisation of goodwill hasceased as required by IAS 38.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units (CGUs) according tobusiness segment and is reviewed annually for impairment.
The goodwill held on the balance sheet at 31 December 2022 and 2021 is allocated solely to the UK Insurance segment.
Impairment of goodwill		
The annual impairment review involves comparing the carrying amount to the estimated recoverable amount (by allocating the goodwill
to CGUs) and recognising an impairment loss if the recoverable amount is lower. Impairment losses are recognised through the income
statement and are not subsequently reversed.

Admiral Group plc Annual Report and Accounts 2022

Additional Information• the amount of the initial measurement of lease liability (note 6i to the financial statements)

Financial Statements

Improvements to short leasehold buildings
Computer equipment
Office equipment
Furniture and fittings
Motor vehicles
Right-of-use assets

Corporate GovernanceAt 31 December 2022, the Group had unused tax losses amounting to £322.0 million (2021: £261.8 million), relating primarily to theGroup’s US businesses Elephant Auto and compare.com, for which no deferred tax asset has been recognised. The earliest expiry date
for any of these tax losses is 2029. The total aggregated unrecognised deferred tax liabilities on temporary differences associated withsubsidiaries is £nil (2021: £nil).

Strategic Report

The deferred tax asset has increased during the year, mainly relating to the movements in the fair value reserve.

280

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

11. Other assets and other liabilities continued

The recoverable amount is the greater of the fair value of the asset less costs to sell and the value in use of the CGU.
The value in use calculations use cash flow projections based on financial budgets approved by management covering a period of up to
three years. Cash flows beyond this period are considered, but not included in the calculation.
The key assumptions used in the value in use calculations are those regarding revenue growth, along with expected changes in pricing
and expenses incurred during the forecast period. Management estimates revenue growth rates and changes in pricing based on pastpractices and expected future changes in the market.
The headroom above the goodwill carrying value is very significant, and there is no foreseeable event that would eliminate this margin.
Deferred acquisition costs
Acquisition costs comprise all direct and indirect costs arising from the conclusion of insurance contracts. Deferred acquisition costs
represent the proportion of acquisition costs incurred that correspond to the unearned premiums provision at the balance sheet date.
This balance is held as an intangible asset. It is amortised over the term of the contract as premium is earned.
SoftwarePurchased software is recognised as an intangible asset and amortised over its expected useful life (generally the licence term).
Internally generated software is recognised as an intangible asset, with directly attributable costs incurred in the development stage
capitalised. The internally generated software assets are amortised over the expected useful life of the systems and amortisationcommences when the software is available for use.
The carrying value of software is reviewed every six months for evidence of impairment, with the value being written down if any
impairment exists. Impairment may be reversed if conditions subsequently improve.

(iv) Provisions, contingent liabilities and contingent assets

Provisions are recognised when a legal or constructive obligation arises as a result of an event that occurred before the balance sheet
date, when a cash-outflow relating to this obligation is probable and when the amount can be estimated reliably.
Where a material obligation exists, but the likelihood of a cash outflow or the amount is uncertain, or where there is a possible obligation
arising from a past event that is contingent on a future event, a contingent liability is disclosed.
Contingent assets are possible assets that arise from past events, whose existence will be confirmed only by the occurrence or
non-occurrence of future events. Where it is probable that a cash inflow will arise from a contingent asset, this is disclosed.

Admiral Group plc Annual Report and Accounts 2022

281

Company Overview

Furnitureand fittings£m

ROU Asset –Leaseholdbuildings
£m

Total
£m

36.0
1.9
(0.2)
(0.3)
(0.4)
37.0

78.6
7.6
–
(17.1)
(0.2)
68.9

22.6
0.4
(0.7)
(0.1)
(0.3)
21.9

10.2
0.7
(0.6)
(0.3)
(0.1)
9.9

124.2
5.6
(17.8)
(8.2)
(0.5)
103.3

271.6
16.2
(19.3)(26.0)
(1.5)
241.0

23.0
3.9
(0.2)
(0.2)
(0.2)
26.3

59.6
8.2
–
(10.4)
(0.1)
57.3

20.0
0.9
(0.7)
(0.1)
(0.2)
19.9

9.1
0.4
(0.6)
(0.3)
(0.1)
8.5

19.5
10.2
–
(3.8)
(0.1)
25.8

131.2
23.6
(1.5)
(14.8)
(0.7)
137.8

13.0

19.0

2.6

1.1

104.7

140.4

10.7

11.6

2.0

1.4

77.5

103.2

37.0
1.7
–
(1.6)
0.4
37.5

68.9
7.0
–
(2.7)
0.7
73.9

21.9
0.6
–
(1.5)
0.4
21.4

9.9
0.7
–
(0.1)
0.2
10.7

103.3
1.3
(1.3)
(9.7)
1.4
95.0

241.0
11.3
(1.3)
(15.6)
3.1
238.5

26.3
3.2
–
(1.6)
0.2
28.1

57.3
5.5
–
(2.4)
0.7
61.1

19.9
0.8
–
(1.5)
0.3
19.5

8.5
0.6
–
–
0.1
9.2

25.8
8.1
(0.7)
(3.2)
0.8
30.8

137.8
18.2
(0.7)
(8.7)
2.1
148.7

9.4

12.8

1.9

1.5

64.2

89.8

Cost
At 1 January 2021
Additions
Impairment
Disposals
Foreign exchange and other movements
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the year
Impairment
Disposals
Foreign exchange and other movements
At 31 December 2021
Net book amountAt 1 January 2021
Net book amountAt 31 December 2021
Cost
At 1 January 2022
Additions
Impairment
Disposals
Foreign exchange and other movements
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the year
Impairment
Disposals
Foreign exchange and other movements
At 31 December 2022
Net book amountAt 31 December 2022

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Officeequipment£mFinancial Statements

Computerequipment£m

Corporate GovernanceImprovements toshort leaseholdbuildings£mStrategic Report

11b. Property and equipment

282

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

11. Other assets and other liabilities continued
11c. Intangible assets
Goodwill£mDeferredacquisition
costs
£m

Software –Internallygenerated*1£mSoftware –Other*1
£m

Total
£m

62.3
–
–
–
–
–
62.3
–
–
–
–
–
62.3

27.3
69.4
(68.0)
–
–
(0.5)
28.2
82.9
(81.0)
–
–
0.6
30.7

72.6
36.8
(18.1)–(25.4)
(1.5)
64.4
83.4
(18.3)
–
–
6.9
136.4

4.5
21.8
(1.2)
–
–
(0.1)
25.0
5.2
(5.4)
–
–
(5.9)
18.9

166.7
128.0
(87.3)–(25.4)
(2.1)
179.9
171.5
(104.9)
–
–
1.6
248.3

At 1 January 2021
Additions
Amortisation charge
Disposals
Impairment
Foreign exchange movement
At 31 December 2021
Additions
Amortisation charge
Disposals
Impairment
Foreign exchange movement and otherAt 31 December 2022

*1 Gross carrying amount and accumulated amortisation of internally generated software as at the end of 2022 are £173.7 million (2021: £119.7 million) and £37.3 million respectively(2021: £55.3 million). Gross carrying amount and accumulated amortisation of other software as at the end of 2022 are £91.5 million (2021: £55.9 million) and £72.6 million respectively(2021: £30.9 million). During the period, there are reclassifications on gross cost and accumulated depreciation between internally generated software and other software

Goodwill relates to the acquisition of Group subsidiary EUI Limited (formerly Admiral Insurance Services Limited) in November 1999.
As described in the accounting policies, the amortisation of this asset ceased on transition to IFRS on 1 January 2004. All annual
impairment reviews since the transition date have indicated that the estimated recoverable value of the asset is greater than the
carrying amount and therefore no impairment losses have been recognised.
Internally generated software includes a new claims system implemented within the UK business during 2022 which has a net carrying
amount of £33.4m as at 31 December 2022 and a remaining amortisation period of 4 years.
Only one year of forecasts is required to support the recoverable value of goodwill above. Given the short time period used to support therecoverable amount, no terminal growth rate or discounting is applied.
Refer to the accounting policy for goodwill for further information.
An analysis of deferred acquisition costs is given in the table below:

At 1 January 2021
Additions
Amortisation
Foreign exchange movement
At 31 December 2021
Additions
Amortisation
Foreign exchange movement
At 31 December 2022

Gross
£m

Reinsurance
£m

Total
£m

77.6
181.4
(180.6)
(1.5)
76.9
174.3
(179.1)
0.6
72.7(50.3)(112.0)112.6
1.0(48.7)(91.4)
98.1–(42.0)

27.3
69.4(68.0)
(0.5)
28.2
82.9
(81.0)
0.6
30.7

Admiral Group plc Annual Report and Accounts 2022

283

Company Overview

31 December
2021
£m

30.0
109.5
1,513.7
90.2
96.2
318.4
2,158.0

39.8
161.9
1,274.9
71.7
112.4
299.3
1,960.0

Of amounts owed to reinsurers (recognised under IFRS 4), £1,389.4 million (2021: £1,169.8 million) is held under funds
withheld arrangements.

Premium received in advance of policy inception
Accrued expenses
Deferred income
Total accruals and deferred income as above

31 December
2022£m

31 December
2021
£m

136.6
114.7
67.1
318.4

117.4
117.5
64.4
299.3

The Group occupies various properties under leasing arrangements that are now recognised as right of use assets and lease liabilities.
A maturity analysis of lease liabilities based on contractual undiscounted cash flows is set out below:

Maturity analysis – contractual undiscounted cash flows
Within one year
Between two to five years
Between five to ten years
Over ten years
Total

31 December
2022£m

31 December
2021
£m

10.2
35.0
26.8
30.9
102.9

12.9
41.8
32.7
35.4
122.8

31 December
2022£m

31 December
2021
£m

8.3
80.2
88.5

10.5
94.8
105.3

Amounts recognised in the statement of financial position are as follows:

Lease liabilities
Current
Non-Current
Total

See note 11b for right of use assets depreciation and the carrying amount of right of use asset at the end of the reporting period.
Only one class of underlying assets is identified as leasehold buildings. Total cash outflows in relation to leases is disclosed under 6i.
The Group has no significant financial commitments other than those accounted for as right of use assets and lease liabilities
under IFRS 16.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

11e. Leases

Financial Statements

Analysis of accruals and deferred income:Corporate GovernanceTrade payables
Amounts owed to co-insurers
Amounts owed to reinsurers
Other taxation and social security liabilities
Other payables
Accruals and deferred income (see below)
Total trade and other payables

31 December
2022£mStrategic Report

11d. Trade and other payables

284

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

11. Other assets and other liabilities continued
11f. Contingent liabilities

The Group’s legal entities operate in numerous tax jurisdictions and on a regular basis are subject to review and enquiry by the relevant
tax authority.
One of the Group’s previously owned subsidiaries was subject to a Spanish Tax Audit which concluded with the Tax Authority denying theapplication of the VAT exemption relating to insurance intermediary services. The Company has appealed this decision via the Spanish
Courts and is confident in defending its position which is, in its view, in line with the EU Directive and is also consistent with the way
similar supplies are treated throughout Europe. Whilst the Company is no longer part of the Admiral Group, the contingent liability which
the Company is exposed to has been indemnified by the Admiral Group up to a cap of £22 million.
The Group is also in discussions with some of the tax authorities in the other countries in which it operates. To date these discussions
have focused primarily on the transfer pricing and cross-border arrangements in place between the Group’s intermediaries and insurers.
No material provision has been made in these financial statements in relation to the matters noted above.
The Group is, from time to time, subject to threatened or actual litigation and/or legal and/or regulatory disputes, investigations orsimilar actions both in the UK and overseas. All potentially material 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 is established
to reflect the best estimate of the liability. In some cases it will not be possible to form a view, for example if the facts are unclear or
because further time is needed to properly assess the merits of the case. No provisions are held in relation to such matters. In thesecircumstances, specific disclosure of a contingent liability will be made where material.
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 cash flows, and 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 torecover losses incurred to date. The overall impact of such scenarios would not lead to an overall net economic outflow from the Group.

12. Share capital

The Group’s capital includes share capital and the share premium account, other reserves which are comprised of the fair value reserve,
hedging reserve and foreign exchange reserve, and retained earnings.

12a. Accounting policies(i) Share capital

Shares are classified as equity when there is no obligation to transfer cash or other assets.

(ii) Dividends

Dividends are recorded in the period in which they are declared and paid.

(iii) Earnings per share

Basic earnings per share is calculated by dividing profit or loss attributable to equity holders of the Group parent company, Admiral Groupplc by the weighted average number of ordinary shares during the period.
Diluted earnings per share is calculated by dividing profit or loss attributable to equity holders of the Group parent company by theweighted average number of ordinary shares outstanding, adjusted for the effects of all dilutive potential ordinary shares.

12b. Dividends

Dividends were proposed, approved and paid as follows.

Proposed March 2021 (86.0 pence per share approved April 2021 and paid June 2021)
Declared August 2021 (161.0 pence per share paid October 2021)
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)
Total dividends

31 December
2022£m

31 December
2021
£m

–
–
348.1
310.2
658.3

250.8
470.1
–
–
720.9

The dividends proposed in March (approved in April) represent the final dividends paid in respect of the 2020 and 2021 financial years.
The dividends declared in August are interim distributions in respect of 2021 and 2022.
A 2022 final dividend of 52.0 pence per share (approximately £155.0 million) has been proposed. Refer to the Chair’s Statement andfinancial narrative for further detail.

Admiral Group plc Annual Report and Accounts 2022

285

Company Overview

373.0
–

585.0
412.9

373.0
300,207,330
124.3p–124.3p301,543,390
123.7p–123.7p997.9
297,480,041
196.7p138.8p335.5p298,351,248
196.1p138.4p334.5pThe difference between the basic and diluted number of shares at the end of 2022 (being 1,336,060 2021: 871,207) relates to awardscommitted, but not yet issued under the Group’s share schemes. Refer to note 9 for further detail.

12d. Share capital

31 December
2021
£m

0.5

0.5

0.3
–
0.3

–
0.3
0.3

During 2022, 3,283,006 (2021: 2,862,657) new ordinary shares of 0.1 pence were issued to the trusts administering the Group’s
share schemes.
675,927 (2021: 632,657) of these were issued to the Admiral Group Share Incentive Plan Trust for the purposes of this share scheme
resulting in cumulative shares issued to the Trust at 31 December 2022 of 13,693,299 (31 December 2021: 13,017,372). Of the sharesissued, 3,851,967 remain in the Trust at 31 December 2022 (2021: 4,078,496). These shares are entitled to receive dividends.
2,607,079 (2021: 2,230,000) shares were issued to the Admiral Group Employee Benefit Trust for the purposes of the Discretionary
Free Share Scheme resulting in cumulative shares issued to the Trust of 30,549,027 (31 December 2021: 27,941,948). Of the sharesissued 5,111,601 remain in the Trust at 31 December 2022 (2021: 4,767,112) to be used for future vesting, the remaining issued shares
having vested.
The balance of awards made to employees under the Discretionary Free Share Scheme that have not either vested or lapsed is 8,302,363(2021: 7,981,132).
The Trustees have waived the right to dividend payments, other than to the extent of 0.001 pence per share, unless and to the extent
otherwise directed by the Company from time to time.
There is one class of share with no unusual restrictions.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Authorised
500,000,000 ordinary shares of 0.1 pence
Issued, called up and fully paid
302,837,726 ordinary shares of 0.1 pence
299,554,720 ordinary shares of 0.1 pence

31 December
2022£mFinancial Statements

31 December
2021£m

Corporate Governance

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

31 December
2022£mStrategic Report

12c. Earnings per share286

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

12. Share capital continued
12e. Objectives, policies and procedures for managing capital

The Group’s capital management policy defines the Board oversight, risk appetite and tier structure of the Group’s capital in addition to
management actions that may be taken in respect of capital, such as dividend payments.
The Group aims to operate a capital-efficient business model by transferring a significant proportion of underwriting risk to co-insurance
and reinsurance partners. This in turn reduces the amount of capital the Group needs to retain to operate and grow and allows the Groupto distribute the majority of its earnings as dividends.
The Board has determined that it will hold capital as follows:• Sufficient Solvency II Own Funds to meet all of the Group’s Solvency II capital requirements (over a 1 year and ultimate time horizon)• An additional contingency to cover unforeseen events and losses that could realistically arise. This risk appetite buffer is assessed via
stress testing performed on an annual basis and is calibrated in relation to the one-year regulatory SCR
The Group’s current risk appetite buffer is 30% above the regulatory SCR. This forms the lower bound of the longer-term solvency target
operating range of 130% to 150%.
The Group’s dividend policy is to:• Pay a normal dividend equal to 65% of post-tax profits for the period• Pay a special dividend calculated with reference to distributable reserves and surplus capital held above the risk appetite bufferThis policy gives the Directors flexibility in managing the Group’s capital.
As noted above, the Group’s regulatory capital position is calculated under the Solvency II Framework. The Solvency Capital Requirement(SCR) is based on the Solvency II Standard Formula, with a capital-add-on to reflect limitations in the Standard Formula with respect toAdmiral’s risk profile (predominately in respect of profit commission arrangements in co-and reinsurance agreements and risks relating to
Periodic Payment Order (PPO) claims).

Solvency ratio (unaudited)

At the date of this report, the Group’s regulatory solvency ratio, calculated using a capital add-on that has not been subject to regulatory
approval, is 180% (2021: 195%). This includes the recognition of the 2022 final dividend of 52 pence per share (2021: 118 pence
per share).
The Group’s 2022 Solvency and Financial Condition Report (SFCR) will, when published, disclose a solvency ratio that is calculated at
the balance sheet date rather than annual report date, using the capital add-on that was most recently subject to regulatory approval.
The estimated and unaudited SFCR solvency ratio is 150%, with the reconciliation between this ratio and the 180% noted above being
as follows:

Regulatory Solvency ratio (Unaudited)
Solvency Ratio reported in the Annual Report
Change in valuation date
Other (including impact of updated, unapproved capital add-on)
Solvency Ratio to be reported in the SFCR

31 December
2022£m

31 December
2021
£m

180%
(11%)
(19%)
150%

195%
(5%)
(9%)
181%

The Group has complied with its regulatory capital requirements throughout the period.

Subsidiaries

The Group manages the capital of its subsidiaries to ensure that all entities within the Group are able to continue as going concerns andalso to ensure that regulated entities meet regulatory requirements with an appropriate risk appetite buffer. Excess capital above theselevels within subsidiaries is paid up to the Group holding company in the form of dividends on a regular basis.

Admiral Group plc Annual Report and Accounts 2022

287

Company Overview

The parent company’s subsidiaries are as follows:
Subsidiary

Principal Activity

Ordinary95

Legal company

Ordinary

100

Insurance Intermediary

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

100
Insurance Intermediary
100
Insurance company
100
Dormant*1
100
Dormant*1
100
Dormant*1
100
Dormant*1
100
Dormant*1
100
Dormant*1
100 Financial services company

100

Insurance company

100 (indirect)

Insurance intermediary

Incorporated in France
Registered office: 4 Rue Marceau 92300 Levallois Perret
Pioneer Intermediary Europe Services

Ordinary

Incorporated in Italy
Registered office: Via Della Bufalotta 374, Romat
Admiral Financial Services Italia S.P.A.

Ordinary

100 Financial services company

Ordinary

100

Insurance company

Ordinary

100

Insurance Intermediary

100 (indirect)
100 (indirect)
100 (indirect)

Insurance company
Insurance intermediary
Insurance intermediary

100 (indirect)
100

Insurance intermediary
Holding company

70.98 (indirect)

Internet-based
Comparison Site
Holding company

Incorporated in Spain
Registered office: Calle Rodríguez Marín 61 1ª Planta, 28016 Madrid
Admiral Europe Compañía de Seguros, S.A.
Registered office: Calle Albert Einstein, 10 41092 Sevilla
Admiral Intermediary Services S.A.*3

Incorporated in the United States of America
Registered office: Deep Run 1; Suite 400, 9950 Mayland Drive, Henrico, VA 23233
Elephant Insurance Company
Ordinary
Grove General Agency Inc
Ordinary
Platinum General Agency Inc
Ordinary
Registered office: Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801
Elephant Insurance Services LLC
Ordinary
Elephant Holding Company LLC
Ordinary
Registered office: 6802 Paragon Place Suite 410 Richmond, VA 23230
compare.com Insurance Agency LLC
Ordinary
Inspop USA LLC
Admiral Group plc Annual Report and Accounts 2022

Ordinary

70.98

Additional Information

Incorporated in Gibraltar
Registered office: 2Aa 2nd Floor, Leisure Island Business Centre, 23 Ocean Village
Promenade, Gibraltar, GX11 1AA
Admiral Insurance (Gibraltar) Limited
Ordinary

Financial Statements% ownership

Corporate Governance

Incorporated in England and Wales
Registered office: Ty Admiral, David Street, Cardiff, United Kingdom, CF10 2EH
Admiral Law Limited
Registered office: Ty Admiral, David Street, Cardiff, United Kingdom, CF10 2EH
Able Insurance Services Limited
Registered office: Ty Admiral, David Street, Cardiff, United Kingdom, CF10 2EH
EUI Limited*2
Admiral Insurance Company Limited
Admiral Life Limited
Admiral Syndicate Limited
Admiral Syndicate Management Limited
Bell Direct Limited
Diamond Motor Insurance Services Limited
Elephant Insurance Services Limited
Admiral Financial Services Limited

Class ofshares held

Strategic Report

12f. Group related undertakings

288

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

12. Share capital continued
Subsidiary

Class ofshares held

Subsidiaries by virtue of control
The related undertakings below are subsidiaries in accordance with IFRS 10,
as Admiral can exercise dominant influence or control over them:
Registered office: 10th Floor, 5 Churchill Place, London E14 5HU
Seren One Limited
Seren Two Limited

n/a
n/a

Associates
Registered office: Tramshed Tech, Pendyris Street, Cardiff, Wales, CF11 6BH
Wagonex Limited

Ordinary% ownership

Principal Activity

00Special purpose entity
Special purpose entity

23.56(indirect)

Internet-based
Subscription Platform*1 Exempt from audit under S480 of Companies Act 2006
*2 EUI Limited has branches in India and Canada*3 Admiral Intermediary Services S.A. has branches in Italy and France

For further information on how the Group conducts its business across the UK, Europe and the US, refer to the Strategic Report.

12g. Related party transactions

The Board considers that only the Executive and Non-Executive Directors of Admiral Group plc are key management personnel.
A summary of the remuneration of key management personnel is as follows, with further detail relating to the remuneration andshareholdings of key management personnel set out in the Directors’ Remuneration Report.
Key management personnel received short term employee benefits in the year of £3,058,170 (2021: £3,077,686), post-employment benefitsof £30,000 (2021: £30,643) and share based payments of £1,561,768 (2021: £2,149,734). Key management personnel are able to obtain
discounted motor insurance at the same rates as all other Group staff, typically at a reduction of 15%.

12h. Post balance sheet events

No events have occurred since the reporting date that materially impact these financial statements.
On 4 March 2023, the Group reached an agreement with Insurify, Inc. (“Insurify”) whereby, Insurify will purchase 100% of the shares of
Inspop USA, LLC (“Compare”) from the Group and Compare’s minority shareholders, in return for a minority shareholding in Insurify.
The total transaction value, including amounts attributable to minority shareholders is immaterial based on an assessment of the fairvalue of shares in Insurify and related options to be received as consideration, as at the date of the agreement. The Group will not receive
any cash consideration. As at 31 December 2022, the net assets of Compare and the carrying value of the Group parent company’s
investment in Compare net of impairment provisions, were both £nil.
The transaction is expected to complete during the first half of 2023 and is subject to regulatory approval.

Admiral Group plc Annual Report and Accounts 2022

289

Company Overview

Disposal groups are classified as held for sale in accordance with IFRS 5 if their carrying amount will be recovered principally through asale transaction rather than through continuing use and a sale is considered highly probable. A discontinued operation is a component of
the business that has been disposed of or is classified as held for sale and represents a separate major line of business or is part of a single
co-ordinated plan to dispose of such a line of business.

13b. Description

Management considered these entities to meet the definition of a disposal group as set out under IFRS 5 above. The disposal group isincluded within the “Discontinued (comparison)” operating segment as stated in note 4.
On the 30 April 2021, the Group announced that, following regulatory and competition authority approvals, RVU had completed thepurchase of the Penguin Portals Group and acquired Admiral’s 50% share of Preminen. MAPFRE also sold its 25% holding in Rastreatorand 50% holding in Preminen to RVU. The total transaction value was settled in cash on completion.
Financial information relating to the discontinued operations for the financial year ending 31 December 2021 are presented below.
The results for the financial year ending 31 December 2021 relates to the profit earned prior to completion on 30 April 2021, and thegain recognised on disposal.

Revenue (Other Revenue)
Interest Income
Net Revenue
Operating expenses and share scheme charges
Operating profit
Finance costs
Gain on disposal sale of Comparison entities held for sale
Profit before tax from discontinued operations
Taxation expense
Profit after tax from discontinued operations

Gross
£m

Eliminations
£m

Net
£m

67.2
–
67.2
(55.8)
11.4
(0.1)
404.4
415.7
(2.3)
413.4

(7.6)
–
(7.6)
7.6
–
–
–
–
–
–

59.6
–
59.6
(48.2)
11.4
(0.1)
404.4
415.7
(2.3)
413.4

Due to the availability of certain tax reliefs on the gain of the comparison businesses sold, the effective tax rate for 2021 for discontinued
operations is lower than the current standard corporate tax rate.
Operating expenses and share scheme charges include £0.5 million of share scheme expenses that are not included in the segmental
result in note 4. The net cash flows incurred by the disposal group are as follows:
31 December
2021£m

Net cash inflow from operating activities
Net cash (outflow) from investing activities
Net cash (outflow) from financing activities
Net cash (outflow)/inflow from discontinued operations

Admiral Group plc Annual Report and Accounts 2022

10.6
(0.2)
(22.6)(12.2)

Additional Information

13c. Financial performance and cash flow information

Financial Statements

On the 29 December 2020, the Group announced that it had reached an agreement with ZPG Comparison Services Holdings UK Limited(“RVU”) that RVU would purchase the Penguin Portals Group (“Penguin Portals”, comprising online comparison portals Confused.
com, Rastreator.com and LeLynx.fr and the Group’s technology operation Admiral Technologies) and its 50% share of Preminen Price
Comparison Holdings Limited (“Preminen”). MAPFRE would also sell its 25% holding in Rastreator and 50% holding in Preminen as part of
the transaction.

Corporate Governance

The assets and liabilities of a disposal group classified as held for sale are presented separately from the other assets and liabilities in theStatement of Financial Position. The results of discontinued operations are presented separately in the Statement of Comprehensive
Income. The result comprises the profit or loss after tax from discontinued operations and other comprehensive income attributable todiscontinued operations.

Strategic Report

13. Discontinued Operations
13a. Accounting policy

290

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

13. Discontinued Operations continued
13d. Assets disposed ofConsideration received consisted of cash only and was received at the point of completion. The total consideration received by theGroup in cash was £471.8 million. This excludes any costs incurred by the Group in relation to the sale. The total gain on disposal was£404.4 million.
The carrying amount of assets and liabilities as at the date of sale (30 April 2021) are outlined below. All assets previously held for sale
have been disposed of as at 31 December 2021 and as at 31 December 2022.
Note

AssetsProperty and equipment
Intangible assets
Deferred tax asset
Trade and other receivables
Corporation tax asset
Cash and cash equivalents
Assets associated with disposal group held for sale

11b
11c
10c

Liabilities
Trade and other payables
Lease liabilities
Corporation tax liability
Liabilities directly associated with disposal group held for sale

30 April 2021
£m

5.4
1.1
4.2
41.9
0.2
41.3
94.1

33.3
3.6
–
36.9

13e. Gain on disposal
31 December
2021£mGross sales proceeds
Accrued sale proceeds less dividends received prior to disposal and costs to sell recharged from purchaser
Non-controlling interest share of sales proceeds
Total Admiral Group cash received (note 13c)
Costs to sell incurred by seller, out of proceeds
Proceeds to Admiral, net of minority interests and transaction costs
Assets held for sale (note 13d)
Non-controlling interest share of assets held for sale
Other adjustments
Gain on disposal of comparison entities held for sale

508.1
(7.4)
(28.9)
471.8(17.6)
454.2(57.2)
6.6
0.8
404.4

Admiral Group plc Annual Report and Accounts 2022

291

Company Overview

The following tables reconcile significant key performance indicators and non-GAAP measures included in the Strategic Report to items
included in the financial statements.

14a. Reconciliation of continuing operations turnover to reported gross premiums written and other revenue as per
the financial statements

2,849.7393.4
3,243.1
318.8
58.7
3,620.6
60.0
3,680.6
0.3
3,680.9

2,513.6
585.1
3,098.7314.8
36.6
3,450.1
57.2
3,507.3
0.2
3,507.5*1 Continuing operations*2 Other reconciling items represent co-insurer and reinsurer shares of Other Revenue in the Group’s Insurance businesses outside of UK Car Insurance*3 Intra-group income elimination relates to comparison income earned in the Group from other Group companies

UK Motor£m

UK Home£mInt. Ins
£m

Other
£m

Group
£m

Net insurance claims (note 5)
Deduct claims handling costs
Prior year release/strengthening – net original share
Prior year release/strengthening – commuted share
Impact of reinsurer caps
Impact of weather events
Attritional current period claims

159.8(12.0)
124.0
189.1
–
–
460.9

51.8
(1.7)
1.1
0.5
–
(17.8)
33.9

220.3(14.3)
15.8–(10.5)
–
211.3

74.2
(1.2)
3.7
–
–
–
76.7

506.1
(29.2)
144.6
189.6(10.5)(17.8)
782.8

Net insurance premium revenue

471.0

55.6

241.8

142.6

911.0

Loss ratio – current period attritional
Loss ratio – current period weather events
Loss ratio – prior year release/strengthening(net original share)

97.8%
–

61.1%
32.0%

87.4%
–

–
–

85.9%
2.0%

(26.3%)(1.9%)(6.5%)–(15.9%)

Loss ratio – reported

71.5%

91.2%

80.9%

–

72.0%

December 2022

Admiral Group plc Annual Report and Accounts 2022

Additional Information

14b. Reconciliation of claims incurred to reported loss ratios, excluding releases on commuted reinsurance

Financial Statements

Other*2
Turnover as per note 4b of financial statements*1
Intra-group income elimination*3
Total turnover – continuing operations *1

31 December
2021£m

Corporate Governance

Gross premiums written after co-insurance per note 5b of financial statements
Premiums underwritten through co-insurance arrangements
Total premiums written
Other Revenue *1
Admiral Loans interest income

31 December
2022£mStrategic Report

14. Reconciliations

292

Financial Statements

Notes to the Financial Statements
continued
For the year ended 31 December 2022

14. Reconciliations continued

UK Motor£m

UK Home£mInt. Ins
£m

Other
£m

Group
£m

Net insurance claims (note 5)
Deduct claims handling costs
Prior year release/strengthening – net original share
Prior year release/strengthening – commuted share
Impact of reinsurer caps
Impact of weather events
Attritional current period claims

86.1(12.1)
128.1
189.2
–
–
391.3

31.8
(1.4)
1.8
0.7
–
(1.1)
31.8

170.8
(8.9)
16.4
–
1.0
–
179.3

43.6
(0.5)
2.2
–
–
–
45.3

332.3
(22.9)
148.5
189.9
1.0
(1.1)
647.7

Net insurance premium revenue

496.5

49.1

221.0

88.4

855.0

Loss ratio – current period attritional
Loss ratio – current period weather events
Loss ratio – prior year release/strengthening (net original
share)

78.8%
–

64.8%
2.2%

81.1%
–

–
–

75.8%
0.1%

(25.8%)(3.7%)(7.4%)–(17.4%)

Loss ratio – reported

53.0%

63.3%

73.7%

–

58.5%

December 2021

14c. Reconciliation of expenses related to insurance contracts to reported expense ratios
UK Motor£m

UK Home£mInt. Ins
£m

Other
£m

Group
£m

Net insurance expenses (note 9)
Claims handling costs
Intra-group expenses elimination*1
Impact of co- and reinsurers recoveries*2
Net IFRS 16 finance costs
Adjusted net insurance expenses

125.7
12.0
–
(35.6)
0.4
102.5

17.0
1.7
–
–
–
18.7

114.8
14.3
0.3
(21.7)
–
107.7

40.1
1.2
–
–
–
41.3

297.6
29.2
0.3
(57.3)
0.4
270.2

Net insurance premium revenue

471.0

55.6

241.8

142.6

911.0

Expense ratio – reported

21.8%

33.5%

44.5%

–

29.7%

December 2021

UK Motor£m

UK Home£mInt. Ins
£m

Other
£m

Group
£m

Net insurance expenses (note 9)
Restructure Costs*3
Claims handling costs
Intra-group expenses elimination*1
Impact of reinsurer caps
Net IFRS 16 finance costs
Adjusted net insurance expenses

136.7(41.6)
12.1–(10.1)
0.5
97.6

17.9
(4.4)
1.4
–
–
–
14.9

91.3
–
8.9
0.3
(1.7)
0.1
98.9

16.8
–
0.5
–
–
–
17.3

262.7
(46.0)
22.9
0.3(11.8)
0.6
228.7

Net insurance premium revenue

496.5

49.1

221.0

88.4

855.0

Expense ratio – reported

19.7%

30.3%

44.8%

–

26.7%

December 2022

*1 The intra-group expenses elimination amount relates to aggregator fees charges by the Group’s comparison business, Compare.com to other Group companies: given the re-presentation of othercomparison businesses to discontinued operations, those expenses are now included in net insurance expenses in note 9, as acquisition costs*2 Impact of co- and reinsurers recoveries relates to the impact of reinsurer caps and ceding commissions*3 For the year ended 31 December 2021, restructure costs of £8.0 million relate to ancillary costs. Total restructure costs incurred for the year ended 31 December 2021 within UK insurance are£54.0 million

Admiral Group plc Annual Report and Accounts 2022

293

Company Overview

Parent Company Financial Statements

Year ended

Note

2
3
4
6
7

31 December
2021£m(26.3)(26.3)
320.1(37.0)–(12.0)
244.8
5.7
250.5

(19.7)(19.7)
630.4(16.0)
445.2(11.3)
1,028.6
3.3
1,031.9

Year ended

Admiral Group plc Annual Report and Accounts 2022

7

31 December
2021
£m

250.5

1,031.9(20.9)
5.2(15.7)
234.8(10.1)
0.8(9.3)
1,022.6

Additional Information

Profit for the period
Other comprehensive income
Items that are or may be reclassified to profit or loss
Movements in fair value reserve
Deferred tax in relation to movement in fair value reserve
Other comprehensive income for the period, net of income tax
Total comprehensive income for the period

31 December
2022£mFinancial Statements

Parent Company Statement of Comprehensive Income

Corporate Governance

Administrative expenses
Operating loss
Investment and interest income
Impairment expense
Gain on disposal of subsidiaries
Interest payable
Profit before tax
Taxation credit
Profit after tax

31 December
2022£mStrategic Report

Parent Company Income Statement

294

Financial Statements

Parent company financial statements
continued
Parent Company Statement of Financial Position
As at
31 December
2022£m

31 December
2021
£m

4
5
6
7
7
8
6

421.6
0.4
167.5
4.6
0.9
184.5
3.5
783.0

315.1
0.4
557.0
3.5
–
187.1
11.2
1,074.3

10

0.3
13.1
(1.6)
96.7
108.5

0.3
13.1
14.1
447.3
474.8

224.4
–
450.1
674.5
783.0

224.3
4.3
370.9
599.5
1,074.3

Note

ASSETS
Investments in group undertakings
Intangible assets
Financial investments
Corporation tax asset
Deferred tax asset
Trade and other receivables
Cash and cash equivalents
Total assets
EQUITY
Share capital
Share premium accountFair value reserve
Retained earnings
Total equity
LIABILITIES
Subordinated and other financial liabilities
Deferred tax
Trade and other payables
Total liabilities
Total equity and total liabilities

10

6
7
9

The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of Directors on 7 March 2023 and were signed on its behalf by:

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

Admiral Group plc Annual Report and Accounts 2022

295

Company Overview

Note

10
10

10
10

Retainedearnings£m

Total
equity
£m

0.3
–

13.1
–

23.4
–

73.0
1,031.9

109.8
1,031.9––(10.1)–(10.1)

–

–

0.8

–

0.8

–

–

(9.3)

1,031.9

1,022.6

–
–
–
–
–
0.3
0.3
–

–
–
–
–
–
13.1
13.1
–

–
–
–
–
–
14.1
14.1
–

(720.9)–63.1
0.2(657.6)
447.3
447.3
250.5

(720.9)–63.1
0.2(657.6)
474.8
474.8
250.5

–

–

(20.9)–(20.9)

–

–

5.2

–

5.2

–

–

(15.7)

250.5

234.8

–
–
–
–
–
0.3

–
–
–
–
–
13.1

–
–
–
–
–
(1.6)

(658.3)
–
57.3
(0.1)
(601.1)96.7(658.3)
–
57.3
(0.1)
(601.1)108.5

Additional Information

7

Fair value
reserve£m

Financial Statements

Admiral Group plc Annual Report and Accounts 2022

7

Share premium
account£m

Corporate GovernanceAt 1 January 2021
Profit for the period
Other comprehensive income
Movements in fair value reserve
Deferred tax charge in relation to
movements in fair value reserve
Total comprehensive income/(expense)
for the period
Transactions with equity holders
Dividends
Issues of share capital
Share scheme credit
Deferred tax on share scheme credit
Total transactions with equity holders
As at 31 December 2021
At 1 January 2022
Profit for the period
Other comprehensive income
Movements in fair value reserve
Deferred tax charge in relation to
movements in fair value reserve
Total comprehensive income
for the period
Transactions with equity holders
Dividends
Issues of share capital
Share scheme credit
Deferred tax on share scheme credit
Total transactions with equity holders
As at 31 December 2022

Sharecapital£mStrategic Report

Parent Company Statement of Changes in Equity

296

Financial Statements

Notes to the Parent Company Financial Statements
For the year ended 31 December 2022

1. Accounting policies
1.1 Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
The financial statements are prepared on the historical cost basis except for the revaluation of financial assets classified as fair value throughthe profit or loss or as fair value through other comprehensive income. The parent company financial statements are presented alongside
the consolidated financial statements which can be found on page 293.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International
Financial Reporting Standards as adopted by the EU (“Adopted IFRSs”) but makes amendments where necessary in order to comply with
Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
Admiral Group plc is considered to be the parent entity and the ultimate parent company of the Group.

1.2 Changes to accounting policies

No changes to accounting policies have been made in the period which have a material impact.

1.3 Disclosure exemptions applied under FRS 101

The Company has taken advantage of the following disclosure exemptions under FRS 101:
• FRS 101.8 (a): the requirements of paragraph 45(b) and 46 to 52 of IFRS 2 Share-based payment• FRS 101.8 (d): the requirement of IFRS 7 Financial Instruments: Disclosure to make disclosures about financial instruments• FRS 101.8 (f): the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in
respect of:– paragraph 118(3) of IAS 38 Intangible Assets• FRS 101.8 (g): the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of
Financial Statements to produce a cash flow statement, a third balance sheet and to make an explicit and unreserved statement ofcompliance with IFRSs• FRS 101.8 (h): the requirements of IAS 7 Statements of Cash Flows to produce a cash flow statement• FRS 101.8 (i): the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors toinclude a list of new IFRSs that have been issued but that have yet to be applied• FRS 101.8 (k): the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or
more members of a group, provided that any subsidiary which is a party to transaction is wholly owned by such a member
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in thesefinancial statements.

1.4 Going concern

The financial statements have been prepared on a going concern basis. In considering the appropriateness of this assumption, the Board
have reviewed the Company’s projections for the next twelve months and beyond, including cash flow forecasts and regulatory
capital surpluses.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for theforeseeable future. Thus, they continue to adopt the going concern basis in preparing the annual financial statements.

1.5 Critical accounting judgements and key source of estimation uncertainty

In applying the Company’s accounting policies as described below, management consider there to be a key source of estimation
uncertainty within the impairment testing of the Company’s investments in group undertakings. Management recognises the estimation
involved in determining whether the carrying value of the investment may be supported by the recoverable amount calculation based onthe ‘value in use’ of the asset (the net present value of future cash-flows arising from the asset).
In calculating the net present value of future cash-flows, Management has made assumptions over the timing and amount of underlying
profit projections of the relevant undertakings, long term growth rates in those projections and the discount rate applied to theseprojections that is appropriate to reflect the market’s view of the risk of the relevant investment. Sensitivity of these assumptions is also
considered in calculating the net present value and suitably incorporated in Management’s valuations.
No key accounting judgements have been made in the process of applying the Company’s accounting policies.

Admiral Group plc Annual Report and Accounts 2022

297

Company Overview

Shares in Group undertakings are valued at cost less any provision for impairment in value.

1.7 Employee share schemes

The Company operates a number of share schemes for employees of the Group’s subsidiaries. For equity settled schemes, the fair valueof the employee services received in exchange for the grant of free shares under the schemes is recognised as an increase in equity in the
Company. A corresponding intercompany charge is made to the subsidiaries whose employees receive the free shares. For further detail,see note 9 in the consolidated financial statements.
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences
between the treatment of certain items for taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as recoverable. They are regarded as recoverable to the extent
that, on the basis of all available evidence, it can be regarded as more likely than not that there will be sufficient taxable profits fromwhich the future reversal of the underlying timing differences can be deducted.

1.9 Financial assets and financial liabilities

Financial Statements

1.8 Taxation

Corporate Governance

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to theCompany’s investments in subsidiaries. When necessary, the entire carrying amount of the investment is tested for impairment inaccordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair valueless costs of disposal) with it’s carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment.
Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment
subsequently increases. See note 4 to these financial statements for further detail.

Strategic Report

1.6 Shares in Group undertakings

Under IFRS 9, classification and subsequent measurement of financial assets depend on:• The cash flow characteristics of the asset
Based on these factors, the Company classifies its financial assets into one of the three categories below:• Amortised cost: assets held for collection of contractual cash flows where the cash flows represent solely payments of principal andinterest, that are not designated as FVTPL• Fair value through other comprehensive income (FVOCI): Financial assets that are held for collection of contractual cash flows andselling the assets, where the assets’ cash flows represent solely payments of principal and interest, and that are not designatedat FVTPL• Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVOCI, or which are designated as
FVTPL at initial recognition
In line with the above:• Gilts and other debt securities are measured at FVOCI. Unrealised changes in the fair value of these assets are recognised in Other
Comprehensive Income (OCI). The recognition of impairment gains or losses and interest revenue are recognised in the profit or loss
• Investments measured at FVTPL are primarily money market funds. Interest income is recognised in the Income statement
The expected credit loss model is used to calculate any impairment to be recognised for all assets measured at amortised cost, as well as
financial investments measured at FVOCI. Impairment is measured using the simplified approach. Most of the investments held at AICL atamortised costs and FVOCI are of investment grade.
Cash and cash equivalents include cash in hand and deposits held at call with banks. All cash and cash equivalents are measured atamortised cost.
The Company’s financial liabilities comprise of subordinated notes which are held at amortised cost using the effective interest method.

1.10 Intangible Assets

Purchased software licences are classified as an intangible asset and stated in the balance sheet at a cost less accumulated amortisation.
Software is amortised from the point at which the asset is operational and is amortised over the licence period.

1.11 Trade and other receivables

Trade and other receivables are measured at amortised cost, less any impairment.

1.12 Trade and other payables

Trade and other payables are measured at amortised cost.

Admiral Group plc Annual Report and Accounts 2022

Additional Information• The Company’s business model for managing the asset; and298

Financial Statements

Notes to the Parent Company Financial Statements
continued
For the year ended 31 December 2022

2. Administrative expenses

Included within administrative expenses are re-charges of £6.1 million (2021: £4.2 million) relating to employees within the Group who
perform services on behalf of the Company. No staff are directly employed by the Company.

3. Investment and interest income

Dividend income from subsidiary undertakings
Interest income – other
Interest income at effective interest rate
Total investment and interest income

31 December
2022£m

31 December
2021
£m

310.0
1.3
8.8
320.1

626.0
0.3
4.1
630.4

4. Investments in Group undertakings£m

Investments in subsidiary undertakings:
At 1 January 2021
Additions
Disposals
Impairment
At 31 December 2021
Additions
Disposals
Impairment
At 31 December 2022

327.31
13.0(9.2)(16.0)
315.1
143.5
–
(37.0)
421.6

1 Of this amount, £9.2 million relates to Assets held for sale. See note 11 for further detailA full list of the Company’s subsidiaries is disclosed in note 12 of the consolidated financial statements.
The additions to investments in the period of £143.5 million relate to the following:• Further investment in Elephant Insurance Company (‘Elephant’) (£65.7 million);• Further investment in Admiral Europe Compañía de Seguros (‘AECS’) (£34.3 million);• Further investment in Able Insurance Services Limited (‘Able’) (£5.0 million);• Further investment in Admiral Insurance (Gibraltar) Limited (‘AIGL’) (£30.0 million);• Initial investment in and a further capital contribution in Admiral Financial Services Italia S.P.A (‘AFSI’) (£5.0m and £3.5m respectively)
An annual impairment review is performed over the carrying value of the investments in subsidiary undertakings, which involves
comparing the carrying amount to the estimated recoverable amount. The recoverable amount is the greater of the fair value of theasset less costs to sell, and the value in use of the subsidiary, calculated using cash flow projections based on financial budgets approvedby the Group Board.

Elephant

In 2022 a non-cash impairment loss of £35.2 million (2021: £14.1 million) has been recognised by the parent company in respect of its
investment in the Group’s US Insurance business Elephant. The impairment charge is to reflect the loss incurred during 2022 to bring thevalue of the investment to its recoverable amount, being its fair value less costs to sell (equivalent to net asset value), of £56.3 million(2021: £25.8 million). The impairment charge is presented within the “impairment losses” line of the parent company Income Statement.
The carrying value is based on fair value less costs of disposal, for which the net assets has been used as a reasonable approximation,using tier 3 of the fair value hierarchy. Due to limitations on evidential market information and restrictions in readily available information,
net assets have been used to estimate fair value less costs to sell.
As the valuation is based on net assets, any movement in future profits will impact the investment held. The Board continues to support
Elephant in the achievement of its goals.

Admiral Group plc Annual Report and Accounts 2022

299

Company Overview
Strategic ReportCompare.com

In 2022 a non-cash impairment loss of £1.8 million (2021: £1.9 million) has been recognised by the parent company in respect of its
investment in the Group’s US comparison business compare.com. The impairment charge is to reflect the loss incurred during 2022 tobring the value of the investment to its recoverable amount, being its fair value less costs to sell (equivalent to the Group’s share of net
asset value), of £nil (2021: £1.8 million). The impairment charge is presented within the “impairment losses” line of the parent company
Income Statement.

5. Intangible Assets
Cost
At 1 January 2022
Additions
Disposal
At 31 December 2022

0.4
–
–
0.4

0.4
–
–
0.4

Amortisation
At 1 January 2022
Charge for the year
Disposal
At 31 December 2022

–
–
–
–

–
–
–
–

Net Book ValueAt 31 December 2021
At 31 December 2022

0.4
0.4

0.4
0.4

Admiral Group plc Annual Report and Accounts 2022

Additional Information

Total
£m

Financial Statements

Software£m

Corporate GovernanceThe carrying value is based on fair value less costs of disposal, for which the Group’s share of net assets has been used as a reasonableapproximation following a review of the carrying value of those assets compared to fair value, using tier 3 of the fair value hierarchy.

300

Financial Statements

Notes to the Parent Company Financial Statements
continued
For the year ended 31 December 2022

6. Financial assets and liabilities

The Company’s financial instruments can be analysed as follows:
31 December
2022£m

31 December
2021
£m

143.6
–
143.6

166.4
242.0
408.4

23.9
23.9

148.6
148.6

Total financial investments

167.5

557.0

Financial assets held at amortised cost
Trade and other receivables (Note 8)
Cash and cash equivalents
Total financial assets

184.5
3.5
355.5

187.1
11.2
755.3

Financial liabilities
Subordinated notes
Other borrowings
Trade and other payables (Note 9)
Total financial liabilities

204.4
20.0
450.1
674.5

204.3
20.0
370.9
595.2

Investments classified as FVOCIGilts (level 1 of the IFRS 13 hierarchy)
Debt securities (level 1 of the IFRS 13 hierarchy)
Investments classified as FVTPL
Money market and other similar funds (level 1 of the IFRS 13 hierarchy)

The amortised cost carrying amount of deposits and receivables is a reasonable approximation of fair value.
The table below compares the carrying value of subordinated notes (as per the Statement of Financial Position) with the fair value of thesubordinated notes using a level one valuation:
31 December 2022

Financial liabilities
Subordinated notes

31 December 2021

Carrying
amount
£m

Fair
value
£m

Carrying
Amount
£m

Fair
Value
£m

204.4

196.4

204.3

217.1

The subordinated notes were issued on 25 July 2014 at a fixed rate of 5.5%, with a redemption date of 25 July 2024.
Total interest payable of £12.0 million (2021: £11.4 million) was recognised, of which £11.1 million (2021: £11.1 million) was in relation to
the subordinated loan notes.

Admiral Group plc Annual Report and Accounts 2022

301

Company Overview

31 December
2021
£m

4.6
1.0
5.6

(3.5)
0.1
(3.4)

0.1
–
5.7

0.1
–
(3.3)

31 December
2022£m

31 December
2021
£m

244.8
46.5
6.2
(58.4)(5.7)

1,028.6
195.4
4.8(203.5)
(3.3)

Other
differences
£m

Total
£m

Corporate Governance

Current tax
Corporation tax credit on profits for the year
Change in provision relating to prior periods
Current tax credit
Deferred tax
Current period deferred taxation movement
Change in provision relating to prior periods
Total tax credit per income statement

31 December
2022£mStrategic Report

7. Taxation
7a. Taxation credit

Factors affecting the total tax credit are:7b. Deferred income tax (asset)/ liability
Analysis of deferred tax (asset)/liability

Tax treatmentof shareschemes£mCapitalallowances
£m

(0.2)

–

–

5.4

–

5.2

0.1

–

–

–

–

0.1

(0.2)
–

–
–

–
–

–
(0.8)

–
–

(0.2)
(0.8)

(0.3)

–

–

4.6

–

4.3

(0.1)

–

–

–

–

(0.1)

0.1
–

–
–

–
–

–
(5.2)

–
–

0.1
(5.2)

(0.3)

–

–

(0.6)

–

(0.9)

Balance brought forward at
1 January 2021
Tax treatment of share scheme charges
through income or expense
Tax treatment of share scheme charges
through reserves
Movement in fair value reserve
Balance carried forward at
31 December 2021
Tax treatment of share scheme charges
through income or expense
Tax treatment of share scheme charges
through reserves
Movement in fair value reserve
Balance carried forward at
31 December 2022

Carriedforward losses Fair value reserve£m£m

The average effective rate of tax for 2022 is 19.0% (2021: 19.0%). An increase to the main rate of corporation tax in the UK to 25% wasannounced in the 2021 Budget and is expected to come into effect in the year ending 2023. This will increase the Company’s future tax
charge accordingly.
The deferred tax liability at 31 December 2022 has been calculated based on the rate at which each timing difference is most likely
to reverse.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

At the year end, the corporation tax asset was £4.6 million (2021: £3.5 million).

Financial Statements

Profit before tax
Corporation tax thereon at effective UK corporation tax rate of 19.0% (2021: 19.0%)
Expenses and provisions not deductible for tax purposes
Non-taxable income
Total tax credit for the period as above

302

Financial Statements

Notes to the Parent Company Financial Statements
continued
For the year ended 31 December 2022

8. Trade and other receivables

Trade and other receivables
Amounts owed by subsidiary undertakings
Total trade and other receivables

31 December
2022£m

31 December
2021
£m

1.2
183.3
184.5

1.6
185.5
187.1

Held within amounts owed by subsidiary undertakings is £182.2 million (2021: £184.5 million) which relate to loans with formal
agreements in place between the parent and the subsidiary. The estimated credit losses of these loans has been considered and any
expected credit loss is considered to immaterial due to the assessment of credit risk being low due to the positive net value of assetsof the subsidiaries and future trading projections.
The exception to the above is the intercompany receivable from compare.com where future trading forecast indicate the intercompany
balance will not be repaid which has resulted in a provision of 50% being booked against this loan (£2.7 million).
Of the above amount, £155.1 million is due in greater than one year (2021: £151.0 million).

9. Trade and other payables

Trade and other receivables
Amounts owed by subsidiary undertakings
Total trade and other receivables

31 December
2022£m

31 December
2021
£m

7.2
442.9
450.1

9.5
361.4
370.9

Held within amounts owed to subsidiary undertakings is £198.2 million (2021: £0.5 million) which relate to loans with formal agreements
in place between the parent and the subsidiary.

10. Share capital and reserves

Capital within the Company is comprised of share capital and the share premium account, the fair value reserve (which reflects movementsin the fair value of assets classified as FVOCI) and retained earnings. Further information can be found within note 12 of the consolidated
financial statements.

10a. Share capital

Authorised
500,000,000 ordinary shares of 0.1 pence
Issued, called up and fully paid
302,837,726 (2021: 299,554,720) ordinary shares of 0.1 pence

31 December
2022£m

31 December
2021
£m

0.5

0.5

0.3
0.3

0.3
0.3

31 December
2022£m

31 December
2021
£m

–
–
348.1
310.2
658.3

250.8
470.1
–
–
720.9

10b. Dividends

Dividends were proposed, approved and paid as follows:

Proposed March 2021 (86.0 pence per share, approved April 2021 and paid June 2021)
Declared August 2021 (161.0 pence per share, paid October 2021)
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)
Total dividends

The dividends proposed in March (approved in April) represent the final dividends paid in respect of the 2020 and 2021 financial years.
The dividends declared in August are interim distributions in respect of 2021 and 2022.
A final dividend of 52.0 pence per share (£155.0 million) has been proposed in respect of the 2022 financial year. Refer to the Chair’s
Statement and Strategic Report for further detail.
The profit and loss account of the Parent Company does not include any unrealised profits, therefore the amount available for
distribution by reference to these accounts is £96.7 million. Interim accounts will be laid before Companies House prior to payment of the2022 Final Dividend in order to demonstrate that profits are available for distribution.
Admiral Group plc Annual Report and Accounts 2022

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Company Overview

11. Assets held for sale

These entities are determined to be the disposal group. Further information can be found within the consolidated accounts.
On 30 April 2021, the Group announced that, following regulatory and competition authority approvals, RVU had completed the purchase of
the Penguin Portals Group and acquired the Group’s 50% share of Preminen. MAPFRE also sold its 25% holding in Rastreator and 50% holdingin Preminen to RVU. The transaction was settled in cash on completion.

Corporate GovernanceOn 29 December 2020, Admiral Group plc (“the Group”) announced that it had reached an agreement with ZPG Comparison Services
Holdings UK Limited (“RVU”) that RVU will purchase the Penguin Portals Group (“Penguin Portals”, comprising online comparison portals
Confused.com, Rastreator.com and LeLynx.fr and the Group’s technology operation Admiral Technologies) and its 50% share of Preminen
Price Comparison Holdings Limited (“Preminen”). MAPFRE would also sell its 25% holding in Rastreator and 50% holding in Preminen as
part of the transaction.

Strategic Report

The Group also has substantial retained profits in its subsidiary companies which are expected to flow up to the Parent Company in due
course, such that surplus cash generated can continue to be returned to shareholders.

12. Related party transactions

compare.com Insurance Agency LLC (Subsidiary undertaking)Transaction
Value
2022
£m

Balance at 31
December 2022
due/(to) related
party
£m

Transaction
Value
2021
£m

Balance at
31 December
2021 due/(to)related party
£m

0.3

2.6

0.2

4.5

13. Guarantees and contingent liabilities

During 2018, a Special Purpose Entity (SPE) was set up in order to secure additional funding for the Admiral Money business, with asecond such SPE set up in October 2021. The Company acts as guarantor for certain operational performance conditions of its subsidiary,
AFSL, as seller and servicer for the SPEs, and indemnifies AFSL in respect of any amount that would have been payable by AFSL for noncompliance with such performance conditions.
One of the Groups’ previously owned subsidiaries was subject to a Spanish Tax Audit which concluded with the Tax Authority denying theapplication of the VAT exemption relating to insurance intermediary services. The Company has appealed this decision via the Spanish
Courts and is confident in defending its position which is, in its view, in line with the EU Directive and is also consistent with the way
similar supplies are treated throughout Europe. Whilst the Company is no longer part of the Admiral Group, the contingent liability which
the Company is exposed to has been indemnified by the Admiral Group up to a cap of £22 million.
A number of the Group’s contractual arrangements with reinsurers include features that, in certain scenarios, allow for reinsurers torecover losses incurred to date. The overall impact of such scenarios would not lead to an overall net economic outflow from AdmiralGroup plc.

14. Post balance sheet events

No events have occurred since the reporting date that materially impact these financial statements.
On 4 March 2023, the Group reached an agreement with Insurify, Inc. (“Insurify”) whereby, Insurify will purchase 100% of the shares of
Inspop USA, LLC (“Compare”) from the Group and Compare’s minority shareholders, in return for a minority shareholding in Insurify.
The total transaction value, including amounts attributable to minority shareholders is immaterial based on an assessment of the fairvalue of shares in Insurify and related options to be received as consideration, as at the date of the agreement. The Group will not receive
any cash consideration. As at 31 December 2022, the net assets of Compare and the carrying value of the Group parent company’s
investment in Compare net of impairment provisions, were both £nil.
The transaction is expected to complete during the first half of 2023 and is subject to regulatory approval.

15. Continued application of Financial Reporting Standard (FRS) 101 – Reduced Disclosure Framework

Following the first time application of FRS 101 Reduced Disclosure Framework in 2015, the Board considers that it is in the best interestsof the Group for Admiral Group plc to continue to apply the FRS 101 Reduced Disclosure Framework in future periods. A shareholder orshareholders holding in aggregate 5% or more of the total allotted shares in Admiral Group plc may serve objections to the use of thedisclosure exemptions on Admiral Group plc, in writing, to its registered office (Tŷ Admiral, David Street, Cardiff CF10 2EH) no later than
30 June 2022.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

The balance owed from compare.com relates to a convertible loan issued for which interest is being accrued.

Financial Statements

The Company has taken advantage of the exemptions permitted by Financial Reporting Standard 101.8 (k) and not disclosed details oftransactions with other wholly owned group undertakings. Transactions with group undertakings that are not wholly owned by AdmiralGroup plc are disclosed below.

304

Financial Statements

Consolidated Financial Summary (unaudited)

Basis of preparation

The figures below are as stated in the Group financial statements preceding this financial summary and issued previously. Only selectedlines from the income statement and balance sheet have been included.

Income statement
Total premiums
Net insurance premium revenue
Other Revenue
Profit commission
Investment and interest income
Net revenue
Net insurance claims
Net expenses
Operating profit
Net finance costs
Profit before tax from continuing operations
Profit before tax from discontinued operations
Profit before tax from continuing and discontinued
operations

2022
£m

2021
£m

2020
£m

2019*1£m

2018£m

3243.1
911.0
364.9
170.9
44.6
1491.4(506.1)(504.4)480.9(11.9)
469.0–

3,098.7
855.0
345.3
304.5
45.2
1,550.0(332.3)(492.3)725.4(11.9)
713.5
415.7

2,957.2
751.6
359.0
134.0
60.7
1,305.3(293.2)(391.6)620.5(12.3)
608.2
29.4

2,938.6
709.4
348.8
114.9
35.7
1,208.8(359.3)(331.9)517.6(12.5)
505.1
17.5

2,766.4
671.8
460.6
93.2
36.0
1,261.6(350.1)(424.0)487.5(11.3)––

469.0

1,129.2

637.6

522.6

476.2

2022
£m

2021
£m

2020*1
£m

2019
£m

2018
£m

89.8
248.3
18.5
–
2714.01335.8823.93411.2297.0
8938.5955.44792.5939.1
2158.088.5–
5.0
8938.5

103.2
179.9
9.3
10.6
2,176.1
1,208.5
556.8
3,742.6
372.7
8,359.7
1,408.5
4,215.0670.9
1,960.0
105.3––
8,359.7

146.3
167.9
3.3
17.9
2,083.2
1,200.2
359.8
3,506.0
351.7
7,836.3
1,123.4
4,081.3
488.6
2,016.1
126.9––
7,836.3

154.4
160.3
–
–
2,071.7
1,227.7455.1
3,234.5
281.7
7,585.4
918.6
3,975.0
530.1
1,975.9
137.1
0.4
48.3
7,585.4

28.1
162.0
0.2
–
1,883.5
1,082.0
300.2
2,969.7376.8
6,802.5
771.1
3,736.4444.2
1,801.5––
49.3
6,802.5*1 Re-presented from financial year 2019 to reflect discontinued operations

Balance sheet
Property and equipment
Intangible assets
Deferred income tax
Corporation tax asset
Reinsurance assets
Insurance and other receivables
Loans and advances to customers
Financial investments
Cash and cash equivalents
Total assets
EquityInsurance contracts
Subordinated and other financial liabilities
Trade and other payables
Lease liabilities
Deferred income tax
Current tax liabilities
Total equity and total liabilities*1 Balance sheet is shown on a total group basis (including discontinued operations)

Admiral Group plc Annual Report and Accounts 2022

305

306

Glossary

Strategic Report

Contents

Company Overview

Additional
Information

Corporate Governance
Additional Information

Admiral Group plc Annual Report and Accounts 2022

Financial Statements

Adding value.
Delivering
difference.
For ourshareholders

306

Additional Information

Glossary

Alternative Performance Measures

Throughout this report, the Group uses a number of Alternative Performance Measures (APMs); measures that are not required orcommonly reported under International Financial Reporting Standards or the Generally Accepted Accounting Principles (GAAP) underwhich 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 andother users of the Annual Report and financial statements to better understand the Group’s performance in the period in comparison toprevious periods and the Group’s competitors.
The table below defines and explains the primary APMs used in this report. Financial APMs are usually derived from financial statement
items and are calculated using consistent accounting policies to those applied in the financial statements subject to certain adjustments
as explained in this glossary. Non-financial KPIs incorporate information that cannot be derived from the financial statements but provide
further insight into the performance and financial position of the Group.
APMs may not necessarily be defined in a consistent manner to similar APMs used by the Group’s competitors. They should be considered
as a supplement rather than a substitute for GAAP measures.
TurnoverTurnover is defined as total premiums written (as below), other revenue and income from Admiral Money. It isreconciled to financial statement line items in note 14a to the financial statements.
This measure has been presented by the Group in every Annual Report since it became a listed Group in 2004.
It reflects the total value of the revenue generated by the Group and analysis of this measure over time provides
a clear indication of the size and growth of the Group.

Total
Premiums Written

The measure was developed as a result of the Group’s business model. The UK Car insurance business has
historically shared a significant proportion of the risks with Munich Re, a third-party reinsurance Group, througha co-insurance arrangement, with the arrangement subsequently being replicated in some of the Group’s
international insurance operations. Premiums and claims accruing to the external co-insurer are not reflectedin the Group’s income statement and therefore presentation of this metric enables users of the Annual Report
to see the scale of the Group’s insurance operations in a way not possible from taking the income statement
in isolation.
Total premiums written are the total forecast premiums, net of forecast cancellations written in the underwriting
year within the Group, including co-insurance. It is reconciled to financial statement line items in note 14a 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 premiums written by the Group’s insurance intermediaries and analysis of this measure overtime provides a clear indication of the growth in premiums, irrespective of how co-insurance agreements havechanged over time.
The reasons for presenting this measure are consistent with that for the Turnover APM noted above.
Group profit before tax represents profit before tax from continuing operations.

Group profit
before tax
Earnings per share,
Earnings per share from continuing operations before restructure costs represents the profit after tax
continuing operations attributable to equity shareholders excluding restructure costs, divided by the weighted average number ofbasic shares.
Underwriting result
For each insurance business an underwriting result is presented showing the segment result prior to the(profit or loss)
inclusion of profit commission, other income contribution and instalment income. It demonstrates theinsurance result, i.e. premium revenue and investment income on insurance assets less claims incurred andinsurance expenses.

Admiral Group plc Annual Report and Accounts 2022

307

Company Overview

Reported loss ratios are expressed as a percentage of claims incurred divided by net earned premiums.
There are a number of instances within the Annual Report where adjustments are made to this calculation inorder to more clearly present the underlying performance of the Group and operating segments within theGroup. The calculations of these are presented within note 14b to the accounts and explanation is as follows.

International insurance loss ratio: As for the UK Motor loss ratio, the international insurance loss ratios presented
exclude the underwriting of other products that supplement the car insurance policy. The motor ratio is adjusted
to exclude the claims element of the impact of reinsurer caps as inclusion of the impact of the capping of reinsurer
claims costs would distort the underlying performance of the business.

There are a number of instances within the Annual Report where adjustments are made to this calculation inorder to more clearly present the underlying performance of the Group and operating segments within theGroup. The calculations of these are presented within note 14c to the accounts and explanation is as follows.

International insurance expense ratio: As for the UK Motor loss ratio, the international insurance expense
ratios presented exclude the underwriting of other products that supplement the car insurance policy.
The motor ratio is adjusted to i) exclude the expense element of the impact of reinsurer caps as inclusion of
the impact of the capping of reinsurer expenses would distort the underlying performance of the business andii) include intra-group aggregator fees charged by the overseas comparison businesses to the international
insurance businesses.

Combined Ratio
Return on Equity

Group Customers

Group expense ratios: Group expense ratios are reported on a consistent basis as the UK and international ratios
noted above. Adjustments are made to i) include claims handling costs that are reported within claims costs in
the income statement, ii) include intra-group aggregator fees charged by the Group’s comparison businesses to
the Group’s insurance businesses and iii) exclude the expense element of the impact of reinsurer caps.
Reported 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 notes 14b and 14c.
Return on equity is calculated as profit after tax from continuing operations, before restructure costs, for theperiod attributable to equity holders of the Group divided by the average total equity attributable to equity
holders of the Group in the year excluding any net assets related to discontinued operations, including theexclusion of the net proceeds from sale still to be distributed. This average is determined by dividing the
opening and closing positions for the year by two. It has been redefined in the prior period to exclude theimpact of discontinued operations.
Group customer numbers reflect the total number of cars, households and vans on cover at the end of the year,
across the Group, and the total number of travel insurance and loans customers.
This measure has been presented by the Group in every Annual Report since it became a listed Group in
2004. It reflects the size of the Group’s customer base and analysis of this measure over time provides a clear
indication of the growth. It is also a useful indicator of the growing significance to the Group of the different
lines of business and geographic regions.

Admiral Group plc Annual Report and Accounts 2022

Additional Information

UK reported motor expense ratio: Within the UK insurance segment the Group separately presents motor ratios,
i.e. excluding the underwriting of other products that supplement the car insurance policy. The motor ratio isadjusted to i) include claims handling costs that are reported within claims costs in the income statement, ii)
include intra-group aggregator fees charged by the UK comparison business to the UK insurance business andiii) exclude the expense element of the impact of reinsurer caps as inclusion of the impact of the capping ofreinsurer expenses would distort the underlying performance of the business, and iv) exclude restructure costs.

Financial Statements

Expense Ratio

Group loss ratios: Group loss ratios are reported on a consistent basis as the UK and international ratios noted
above. Adjustments are made to i) exclude the impact of reserve releases on commuted reinsurance contracts,ii) exclude claims handling costs that are reported within claims costs in the income statement and iii) exclude
the claims element of the impact of international reinsurer caps.
Reported expense ratios are expressed as a percentage of net operating expenses divided by net
earned premiums.

Corporate Governance

UK reported motor loss ratio: Within the UK insurance segment the Group separately presents motor ratios,
i.e. excluding the underwriting of other products that supplement the car insurance policy. The motor ratio isadjusted to i) exclude the impact of reserve releases on commuted reinsurance contracts and ii) exclude claims
handling costs that are reported within claims costs in the income statement.

Strategic Report

Loss Ratio

308

Additional information
Information

Glossary
continued
Effective Tax Rate

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

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
Actuarial best
estimate
ASHE
Claims reserves
Co-insurance

Commutation

The year in which an accident occurs, also referred to as the earned basis.
The probability-weighted average of all future claims and cost scenarios calculated using historical data,
actuarial methods and judgement.
‘Annual Survey of Hours and Earnings’ – a statistical index that is typically used for calculating inflation of annual
payment amounts under Periodic Payment Order (PPO) claims settlements.
A monetary amount set aside for the future payment of incurred claims that have not yet been settled,thus representing a balance sheet liability.
An arrangement in which two or more insurance companies agree to underwrite insurance business on a
specified portfolio in specified proportions. Each co-insurer is directly liable to the policyholder for their
proportional share.
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 36 months from the start ofan 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 the reinsurance contracts. This loss oncommutation unwinds in future periods as the financial statement loss ratios develop to ultimate.
Coverage period
The period during which the entity provides coverage for insured events. This period includes the coverage that
relates to all premiums within the boundary of the insurance contract.
Liability for incurred The risk of a possible future change in one or more of a specified interest rate, financial instrument price,claims (“LIC”)
commodity price, currency exchange rate, index of prices or rates, credit rating or credit index or other variable,
provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
Liability for remaining An entity’s obligation to investigate and pay valid claims under existing insurance contracts for insured events
coverage (“LRC”)
that have not yet occurred (i.e. the obligation that relates to the unexpired portion of the coverage period).
The tendency for the insurance market to swing between highs and lows of profitability over time, with theInsurance market
cycle
potential to influence premium rates (also known as the “underwriting cycle”).
Net claims
The cost of claims incurred in the period, less any claims costs recovered via salvage and subrogation
arrangements or under reinsurance contracts. It includes both claims payments and movements inclaims reserves.
Net insurance
Also referred to as net earned premium. The element of premium, less reinsurance premium, earned in
premium revenue
the period.
Net promotor score
NPS is currently measured based on a subset of customer responding to a single question: On a scale of 0–10
(10 being the best score), how likely would you recommend our company to a friend, family or colleague
through phone, online or email. Answers are then placed in 3 groups; Detractors: scores ranging from 0 to 6;
Passives/neutrals: scores ranging from 7 to 8; Promoters: scores ranging from 9 to 10 and the final NPS score is :% of promoters - % of detractors
Ogden discount rate
The discount rate used in calculation of personal injury claims settlements in the UK.
Periodic Payment
A compensation award as part of a claims settlement that involves making a series of annual payments to a
Order (PPO)
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 theduration of the contract. Written premium refers to the total amount the policyholder has contracted for,whereas earned premium refers to the recognition of this premium over the life of the contract.
Premium Allocation
Under the PAA, the general measurement model may be simplified for certain contracts to measure the liability
Approach (“PAA”)
for remaining coverage.

Profit commission

Generally, the PAA measures the liability for remaining coverage as the amount of premiums received net ofacquisition cash flows paid, less the amount of premiums and acquisition cash flows that have been recognisedin the profit and loss over the expired portion of the coverage period based on the passage of time.
A clause found in some reinsurance and coinsurance agreements that provides for profit sharing.
Admiral Group plc Annual Report and Accounts 2022

309

Company Overview

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Additional Information

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Financial Statements

The compensation an entity requires for bearing the uncertainty about the amount and timing of the cash
flows that arises from non-financial risk as the entity fulfils insurance contracts.
Scaled Agile is a framework that uses a set of organisational and workflow patterns for implementing agile
practices at an enterprise scale. Scaled agile at Admiral represents the ability to drive agile at the team level
whilst applying the same sustainable principles of the group.
Securitisation
A process by which a group of assets, usually loans, is aggregated into a pool, which is used to back the issuanceof new securities. A company transfer assets to a special purpose entity (SPE) which then issues securities
backed by the assets.
Special Purpose Entity An entity that is created to accomplish a narrow and well-defined objective. There are specific restrictions or(SPE)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
Also referred to as the written basis. Claims incurred are allocated to the calendar year in which the policy was
basis
underwritten. Underwriting year basis results are calculated on the whole account (including co-insurance
and reinsurance shares) and include all premiums, claims, expenses incurred and other revenue (for example
instalment income and commission income relating to the sale of products that are ancillary to the main
insurance policy) relating to policies incepting in the relevant underwriting year.
Written/Earned basis An insurance policy can be written in one calendar year but earned over a subsequent calendar year.

Corporate Governance

Retrospective
approach (full –IFRS 17)
Risk adjustment for
non-financial risk
Scaled Agile

Contractual arrangements whereby the Group transfers part or all of the insurance risk accepted to anotherinsurer. This can be on a quota share basis (a percentage share of premiums, claims and expenses) or an excess ofloss basis (full reinsurance for claims over an agreed value).
The method of transition to IFRS 17 meaning an entity shall at the transition date: identify, recognise andmeasure each group of insurance contracts as if IFRS 17 had always applied.

Strategic Report

Reinsurance

Registered OfficeTŷ AdmiralDavid Street
Cardiff
CF10 2EH
www.admiralgroup.co.uk