Admiral Group plc
Group Solvency and Financial Condition
Report31 December 2019

1|PageCONTENTS
Summary ................................................................................................................................................. 5
Statement of Directors’ Responsibilities............................................................................................... 12
Audit Opinion ........................................................................................................................................ 13
A.

Business and Performance............................................................................................................ 16
A.1. Business ................................................................................................................................. 16
A.2. Underwriting performance .................................................................................................... 21
A.3. Investment performance ....................................................................................................... 24
A.4. Performance of other activities ............................................................................................. 24
A.5. Any other information ........................................................................................................... 26

B.

System of Governance .................................................................................................................. 27
B.1. General information on the system of governance ............................................................... 27
B.2. Fit and proper requirements ................................................................................................. 29
B.3. Risk management system including the own risk and solvency assessment (ORSA) ............ 30
B.4. Internal control system .......................................................................................................... 32
B.5. Compliance function .............................................................................................................. 33
B.6. Internal audit function ........................................................................................................... 33
B.7. Actuarial function .................................................................................................................. 34
B.8. Outsourcing............................................................................................................................ 35
B.9. Any other information ........................................................................................................... 35

C.

Risk Profile..................................................................................................................................... 36
C.1. Underwriting risk ................................................................................................................... 39
C.2. Market risk ............................................................................................................................. 41
C.3. Counterparty Default risk ...................................................................................................... 43
C.4. Liquidity risk ........................................................................................................................... 43
C.5. Operational risk...................................................................................................................... 44
C.6. Other material risks ............................................................................................................... 44
C.7. Any other information ........................................................................................................... 44

D.

Valuation for Solvency Purposes (Audited) .................................................................................. 46
D.1. Assets ..................................................................................................................................... 47
D.2. Liabilities ................................................................................................................................ 48
D.3. Technical provisions .............................................................................................................. 49
D.4. Alternative methods of valuation .......................................................................................... 52
D.5. Any other information ........................................................................................................... 52

E.

Capital Management (Audited) .................................................................................................... 53
E.1. Own funds .............................................................................................................................. 53
E.2. Solvency capital requirement and Minimum Capital Requirement ...................................... 57

2|PageE.3. Use of the duration-based equity sub-module in the calculation of the Solvency Capital
Requirement ................................................................................................................................. 59
E.4. Differences between the standard formula and any internal model used............................ 59
E.5. Non compliance with the Minimum Capital Requirement and non-compliance with theSolvency Capital Requirement ...................................................................................................... 59
E.6. Any other information ........................................................................................................... 60
Appendix 1 – Additional information on the COVID-19 global pandemic (unaudited) ........................ 62
Appendix 2 – Glossary........................................................................................................................... 67
Appendix 3 – Quantitative Reporting Templates ................................................................................. 68

3|PageINTRODUCTION
This Admiral Group plc Solvency and Financial Condition Report (SFCR) has been prepared incompliance with Solvency II regulatory requirements. It contains a range of regulatory disclosures that
support the information presented in the Quantitative Reporting Templates (QRTs) shown in Appendix
3.
The report is not intended to provide a comprehensive review of the Group’s businesses and themarkets in which they operate, how these businesses are managed, or performance of thesebusinesses during the year. This information is detailed in the Group’s 2019 Annual Report. Where
relevant, specific references to the Annual Report are made throughout this SFCR. It can be found at:https://admiralgroup.co.uk/sites/default/files_public/annual-report/2020/03/2019-full-year-resultsannual-report.pdf

STRUCTURE AND CONTENTS
This Group SFCR has been prepared in accordance with Article 359 and Articles 290 to 298 of theSolvency II delegated acts. The structure of the report is in accordance with Annex XX of the delegatedacts.
The Group has obtained supervisory waivers from the Prudential Regulatory Authority (PRA) and theGibraltar Financial Services Commission (GFSC) to include solvency information relating to Solvency II
regulated solo entities Admiral Insurance Company Limited (AICL) and Admiral Insurance (Gibraltar)
Limited (AIGL) in this Group SFCR. The waiver was obtained as the nature of the Group’s governancestructure, with the Group Board and its Committees leading the Group’s management and control
framework, means that there is significant overlap in the disclosures for the Group and the solo
entities. The Group SFCR waiver therefore allows stakeholders to access concise disclosures for all
relevant entities in one report.
As part of the Group restructuring following the Brexit vote, the Group has established an insurance
entity in Spain; Admiral Europe Compañía de Seguros, S.A. (AECS), to underwrite the Group’s European
business. AECS is subject to the supervision of the Dirección General de Seguros y Fondos de Pensiones(DGSFP) in Spain. AECS is excluded from the qualitative and quantitative disclosures in Sections A to E
as it has prepared a separate 2019 SFCR in line with the requirements of the DGSFP. This report may
be found at:https://www.admiraleurope.com/wp-content/uploads/2020/05/Informe-AECS-SCFR-DGS-2019.pdf
All amounts in this report are presented in pounds sterling, rounded to the nearest £0.1 million, whichis the Group’s presentation currency. Unless otherwise stated, information in this report is unaudited.

4|Page

SUMMARYSECTION A – BUSINESS PERFORMANCE
Admiral Group plc (‘the Group’) is one of the UK’s largest car insurance providers. In addition tooffering car insurance in the UK, the Group also writes household, van and travel insurance businessin the UK, and car insurance in four countries outside of the UK: Italy, Spain, France and the USA. Other
Group businesses outside of insurance include Price Comparison businesses, a legal company and apersonal lending and car finance business in the UK.
The Group and its Solvency II regulated solo entities in the UK and Gibraltar, AICL and AIGL, recorded
statutory post-tax profits of £428.4 million, £31.1 million and £122.3 million respectively in 2019.
Portfolio transfers of liabilities and associated assets of the Group’s European businesses from AICL
and AIGL to AECS were enacted on 1 January 2019, and all new European insurance business isunderwritten in AECS with effect from this date.
The table below splits the statutory results between underwriting (as reported in the premiums,
claims and expenses QRTs in Appendix 3 to this report), investment and other activities:
GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

A.2 Net Underwriting Results

224.7

196.7

28.2

27.0

196.5

182.4

A.3 Net Investment
A.4 Net Result Arising from
Other Activities (Including
Profit Commissions)

35.3

36.6

4.9

3.9

25.3

28.5

262.6

242.9

5.3

6.2

(88.7)(85.8)

Statutory Profit Before Tax

522.6

476.2

38.4

37.1

133.1

125.1

Taxation expense(94.2)(85.7)

(7.3)

(7.3)

(10.8)(9.6)

Statutory Profit After Tax

428.4

390.5

31.1

29.8

122.3

115.5

Change in UK personal injury discount rate assumption (‘Ogden discount rate’)During 2019, following the announcement by the UK Government, the Ogden discount rate which isused in setting personal injury compensation, was changed to minus 0.25% from the existing minus
0.75% rate that had been in place since February 2017. The change came into effect on 5 August 2019
and the minus 0.25% rate is likely to remain in place for up to five years.
Admiral assumed a 0% rate in setting best estimate claims reserves at 31 December 2018 and 2018’s
pre-tax profit was positively impacted by £66 million as a result of the move from minus 0.75%. As aresult of the actual rate being 25 basis points lower than the assumed 0%, 2019’s profit before tax isadversely impacted by around £33 million. That means that the underlying profit before tax move isbigger than the £47 million in the table above, though the changes in the Ogden rate during the period
make meaningful comparison difficult.

5|PageSECTION B – SYSTEM OF GOVERNANCE
Section B to this report focuses on the Group’s system of Governance. The Group Board is the principal
decision-making forum for the Group providing entrepreneurial leadership, both directly through its
Committees, and delegating authority to the Executive team. The solo entities AICL and AIGL haverespective individual Board meetings that act in the same manner as the Group Board. The Group
Board and its Committees also have oversight of AICL and AIGL.
The Board has delegated authority to a number of permanent Committees to deal with matters inaccordance with written Terms of Reference. The principal Committees of the Group Board - Audit,
Remuneration, Risk and Nomination all comply fully with the requirements of the Corporate
Governance Code.
Governance has been a key area of focus for the Board during 2019, given the changes to thecorporate governance landscape brought about by the introduction in July 2018 of the revised UK
Corporate Governance Code which applies to the Group with effect from 1 January 2019. In order toensure that the Board was fully prepared for the changes set out in the revised Code, a project was
initiated, led by the Company Secretary, which included scheduling presentations, updates andtraining for the Board throughout the year to ensure that the Group’s governance framework andstandards of good corporate governance were aligned with the requirements set out in the Code
Section B reports in detail as to how the system of governance works in practice, including a focus on
the Group’s remuneration policy, the system of internal control and the Solvency II key functions of
Risk Management, Compliance, Internal Audit and Actuarial.

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

6|Page31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

Market Risk

135.3

86.7

14.6

23.3

72.1

60.6

Counterparty Risk

50.6

37.6

15.0

3.2

17.0

21.1

Life Underwriting Risk

5.0

3.1

0.7

0.5

4.3

2.7

Non-Life Underwriting Risk

397.3

378.3

74.0

81.8

246.9

243.3

Diversification(109.0)(76.2)(16.6)(16.6)(56.8)(50.9)

Basic SCR

479.2

429.5

87.7

92.2

283.5

276.8

Operational Risk

90.0

85.0

7.5

12.4

66.7

69.4

Loss absorbing capacity ofdeferred taxes(19.9)(24.3)(11.5)(13.5)(8.4)(10.6)SCR excluding Capital Add-On
and Other Financial Sectors

549.3

490.2

83.7

91.1

341.8

335.6

Capital Add-On
SCR for Other Financial Sectors(unaudited)

81.0

81.0

-

-

-

-

29.6

20.6

-

-

-

-

SCR

659.9

591.8

83.7

91.1

341.8

335.6

As can be noted from the table, the material risk category for the Group, AICL and AIGL is non-life
insurance risk which (before diversification with other risk types) represents 61%, 89% and 73% of the
SCRs of the Group and its solo entities, AICL and AIGL respectively.

SECTION D – VALUATION FOR SOLVENCY PURPOSES
Section D focuses on the Solvency II balance sheet and the valuation of assets and liabilities. In linewith Solvency II rules, assets and liabilities on the Solvency II balance sheet are held at fair value, i.e.
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the valuation date.
Summary Solvency II balance sheets for the Group and its regulated solo entities are shown in thetable below. Section D sets out the recognition and valuation basis for each material balance sheet
class alongside a comparison to the IFRS valuation basis, in addition to further detail on the bases,
methods and assumptions used in the calculation of the Solvency II technical provisions.

7|PageSolvency II Balance Sheet,
31-Dec-19

GROUP

AICL

AIGL

Property, plant and equipment
Investments excl.
Participations

147.1

-

-

3,222.4309.6

2,333.1

Investment in Participations

72.7

-

-

Loans and Mortgages

185.2

-

150.6

Reinsurance recoverables

1,653.3

28.6

1,285.3--

0.6

Receivables and other assets

414.9

88.5

84.1

Cash

189.2

10.2

13.0

Total Assets

5,884.8436.9

3,866.7

Technical Provisions - best
estimate

3,056.2

258.5

2,272.3

Technical Provisions - risk
margin

86.1

14.4

68.2

Deposits from reinsurers

793.6

2.1

831.5

Deferred tax liabilities

63.2

6.0

0.0

Other payables and liabilities

539.6

24.0

177.6

Subordinated liabilities

225.1

-

-

Total Liabilities

4,763.8305.0

3,349.6

Excess of Assets overLiabilities

1,121.0

131.9

517.1

Deferred tax assets

SECTION E – CAPITAL MANAGEMENTThe Group manages its capital to ensure that all entities within the Group are able to continue as going
concerns and also to ensure that regulated entities meet regulatory requirements with an appropriate
margin. Excess capital above these levels within subsidiaries is paid up to the Group holding company
in the form of dividends on a regular basis.
The Group and its regulated solo entities report strong solvency positions at 31 December 2019. The
solvency positions reported in the Annual QRTs for 2019 and 2018 are summarised in the table below:
31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

SCR

659.9

591.8

83.7

91.1

341.8

335.6

Eligible Own Funds

1,119.5

1,008.8

111.9

155.3

527.1

477.6

Surplus

459.6

417.0

28.2

64.2

185.3

142.0

Solvency Ratio

170%

170%

134%

170%

154%

142%

8|PageA reconciliation of excess of assets over liabilities to Own Funds is provided below:
31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

1,121.0

997.5

131.9

155.3

517.1

417.6

(221.5)(187.9)(20.0)-(50.0)-(7.3)(12.3)

-

-

-

-

2.2

0.2

-

-

-

-

894.4

797.5

111.9

155.3

467.1

417.6

225.1

211.3

-

-

-

-

Ancillary Own Funds

-

-

-

-

60.0

60.0

Eligible Own Funds

1,119.5

1,008.8

111.9

155.3

527.1

477.6

Excess of Assets overLiabilities
Foreseeable Dividends
Other Non-Available Own
Funds
Own Funds from Other
Financial Sectors
Excess of Assets overLiabilities (Tier 1)
Subordinated Liabilities (Tier2)

SCR for Other Financial Sectors (unaudited)
The SCR for Other Financial Sectors relates to the loans business carried out by Admiral Financial
Services Limited (AFSL).
AFSL is recognised at net asset value, as a non-regulated undertaking carrying out financial activities
within Other Financial Sectors. This forms part of the reconciliation from Excess of Assets overLiabilities to Own Funds.
Article 1(52) of the Delegated Regulation defines a ‘non-regulated undertaking carrying out financial
activities’ as a non-regulated undertaking which carries out one or more of the activities referred toin Annex I of Directive 2013/36/EU. The contribution to the Group capital requirement is based on
relevant sectoral rules and the Group has included a notional capital requirement of £29.6 million at
31 December 2019 to reflect the risks associated with the loans business.
Reconciliation to previously reported Solvency Ratio
The Group solvency ratio presented in this report is different to the solvency ratio reported in theGroup’s 2019 Annual Report for the following reasons:••

Change in valuation date: The solvency ratio in the Annual Report is prepared at a different
valuation date, taking into consideration the additional own funds generated post year end, up to
the approved dividend payment date;
Other (including impact of proposed Capital Add-On, ‘CAO’): A different CAO is used, with theproposed add-on reported in the 2019 Annual Report remaining subject to regulatory approval
and therefore excluded from the SFCR solvency calculations. The Annual Report solvency ratio
also excludes the impact of changes made arising from the reporting finalisation process.

9|Page

The chart below shows the impact of these moves:
250%

10%

10%

200%
150%
100%

190%

170%

50%
0%
YE'19 SFCR

Change in Valuation Date

Other (including impact ofproposed CAO)

YE'19 Annual Report

ADDITIONAL INFORMATION ON THE COVID-19 GLOBAL PANDEMIC
The outbreak of the COVID-19 global pandemic has resulted in significant global uncertainty andmarket volatility. Appendix 1 to this report sets out the potential impacts on the Group’s businesses,
system of governance, risk profile, valuation for solvency purposes and capital management.
As the pandemic continues to evolve , the Group continues to closely monitor the impacts on, amongst
other areas, its operations, underwriting, risk profile, and solvency and liquidity positions. Ongoingassessments on a range of potential scenarios are being performed across the Group’s businesses,
including the impact of severe downside scenarios that assume prolonged periods of lockdown andthe impact of severe economic and trading stresses.
Whilst the Group has to date experienced some impacts from the pandemic and associated market
volatility, it maintains a strong solvency position that is able to withstand a range of severe but
plausible stresses. Section C to this report includes solvency ratio sensitivities to risks, as reported in
the 2019 Group Annual Report, and the Group considers these sensitivities to be a reasonable guideto the impacts of the market volatility observed to date.
In April 2020, the Group announced that, despite maintaining a strong solvency and liquidity position,
given the current economic uncertainty and the call for heightened prudence from regulators, it had
amended its recommendation to shareholders with respect to the Group’s final dividend for the year
ended 31 December 2019. The normal dividend of 56.3 pence was unchanged (and subsequently
approved by shareholders at the Group’s AGM on 30 April 2020 and paid on 1 June 2020) but the
special dividend of 20.7 pence per share was suspended. The Board currently intends to pay this partof the final dividend later in the year unless there is a significant deterioration in the Group’s financial
position, trading or outlook. The full final dividend of 77.0 pence per share (£221.5 million) is
recognised as foreseeable at 31 December 2019 and is deducted from the Group’s Own Funds.
Excluding the special dividend of 20.7 pence per share (£60 million), the Group’s solvency ratio at 31
December 2019 would have been 9pts higher at 179% as follows.

10 | P a g e

31-Dec-19

Group

SCR

659.9

Eligible Own Funds adjusted for exclusion of
H2’19 special dividend

1,179.5

Surplus519.6

Adjusted Solvency Ratio

179%

The figures in this report and the associated Quantitative Reporting Templates (QRTs) reflect
conditions and best estimate assumptions as at the 31 December 2019 reporting date and have notbeen adjusted for the impacts of COVID-19, which is considered to be a non-adjusting post balance
sheet event. This approach includes the technical provisions, meaning that there are no material
differences listed between solvency II and the financial statements prepared as at 31 December 2019.

11 | P a g e

STATEMENT OF DIRECTORS’ RESPONSIBILITIESThe Directors are responsible for ensuring that the SFCR is properly prepared in all material respects
in accordance with the Prudential Regulatory Authority (PRA) rules and SII Regulations.
The PRA Rulebook for SII firms in Rule 6.1(2) and Rule 6.2(1) of the Reporting Part requires that theGroup must have in place a written policy ensuring the ongoing appropriateness of any information
disclosed and that the Group must ensure that its SFCR is subject to approval by the Directors.
The Board of Directors confirm that, to the best of their knowledge:(a) Throughout the financial year in question, the Group and its solo insurance undertakings havecomplied in all material respects with the requirements of the PRA rules and SII Regulations asapplicable; and(b) It is reasonable to believe that, at the date of the publication of the SFCR, the Group and its solo
insurance undertakings continue to comply, and will continue so to comply in future.
By Order of the Board

Geraint Jones
Chief Financial Officer
24 June 2020

12 | P a g e

AUDIT OPINIONREPORT OF THE EXTERNAL INDEPENDENT AUDITOR TO THE DIRECTORS OF ADMIRALGROUP PLC (‘THE GROUP’) PURSUANT TO RULE 4.1 (2) OF THE EXTERNAL AUDIT CHAPTER
OF THE PRA RULEBOOK APPLICABLE TO SOLVENCY II FIRMS
Report on the Audit of the relevant elements of the Solvency and Financial Condition
Report (“SFCR”)
OpinionExcept as stated below, we have audited the following documents prepared by the Group as at 31
December 2019:

The ‘Valuation for Solvency Purposes’ and ‘Capital Management’ sections of the Group SFCR
of the Group as at 31 December 2019, (‘the Narrative Disclosures subject to audit’);Group templates S.02.01.02, S.22.01.22, S.23.01.22, S.25.01.22 and S.32.01.22 (‘theGroup Templates subject to audit’);
Solo templates S.02.01.02, S.12.01.02, S.17.01.02, S.22.01.21, S.23.01.01, S.25.01.21
and S.28.01.01 in respect of Admiral Insurance (Gibraltar) Limited (‘the Solo Templates
subject to audit’); andSolo templates S.02.01.02, S.12.01.02, S.17.01.02, S.22.01.21, S.23.01.01, S.25.01.21
and S.28.01.01 in respect of Admiral Insurance Company Limited (‘the Solo Templates
subject to audit’).

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



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

To the extent the information subject to audit in the relevant elements of the Group SFCR includes
amounts that are totals, sub-totals or calculations derived from the Other Information, we haverelied without verification on the Other Information.
In our opinion, the information subject to audit in the relevant elements of the Group SFCR as at 31
December 2019 is prepared, in all material respects, in accordance with the financial reporting
provisions of the PRA Rules and Solvency II regulations on which they are based, as modified byrelevant supervisory modifications, and as supplemented by supervisory approvals anddeterminations.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK),including ISA (UK) 800 and ISA (UK) 805, and applicable law. Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the relevant elementsof the Group Solvency and Financial Condition Report section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of the GroupSFCR in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied
to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

13 | P a g ethese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matter – Basis of Accounting
We draw attention to the ‘Valuation for Solvency Purposes’ section of the Group SFCR, which
describes the basis of accounting. The Group SFCR is prepared in compliance with the financial
reporting provisions of the PRA Rules and Solvency II regulations, and therefore in accordance witha special purpose financial reporting framework. The Group SFCR is required to be published, andintended users include, but are not limited to, the PRA. As a result, the Group SFCR may not besuitable for another purpose. Our opinion is not modified in respect of these matters.
Conclusions relating to going concern
We are required by ISAs (UK) to report in respect of the following matters where:

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

We have nothing to report in relation to these matters.
Other Information
The Directors are responsible for the Other Information.
Our opinion on the relevant elements of the Group SFCR does not cover the Other Information and
we do not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the Group SFCR, our responsibility is to read the Other Information
and, in doing so, consider whether the Other Information is materially inconsistent with the relevant
elements of the Group SFCR, or our knowledge obtained in the audit, or otherwise appears to bematerially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in therelevant elements of the Group SFCR or a material misstatement of the Other Information. If, basedon the work we have performed, we conclude that there is a material misstatement of this Other
Information, we are required to report that fact.
We have nothing to report in relation to these matters.
Responsibilities of Directors for the Group Solvency and Financial Condition Report
The Directors are responsible for the preparation of the Group SFCR in accordance with the financial
reporting provisions of the PRA rules and Solvency II regulations which have been modified by themodifications, and supplemented by the approvals and determinations made by the PRA under
section 138A of FSMA, the PRA Rules and Solvency II regulations on which they are based.
The Directors are also responsible for such internal control as they determine is necessary to enable
the preparation of a Group SFCR that is free from material misstatement, whether due to fraud or
error.

Auditor’s Responsibilities for the Audit of the relevant elements of the Group Solvency
and Financial Condition Report
It is our responsibility to form an independent opinion as to whether the relevant elements of theGroup SFCR are prepared, in all material respects, with financial reporting provisions of the PRA
Rules and Solvency II regulations on which they are based.
Our objectives are to obtain reasonable assurance about whether the relevant elements of the GroupSFCR are free from material misstatement, whether due to fraud or error, and to issue an auditor’s

14 | P a g e

report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not aguarantee 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 consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence thedecision making or the judgement of the users taken on the basis of the Group SFCR.
A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at https://www.frc.org.uk/auditorsresponsibilities. The same responsibilities apply tothe audit of the Group SFCR.

Report on Other Legal and Regulatory Requirements
Sectoral Information
In our opinion, in accordance with Rule 4.2 of the External Audit Chapter of the PRA Rulebook, thesectoral information has been properly compiled in accordance with the PRA rules and EU
instruments relating to that undertaking from information provided by members of the group andthe relevant insurance group undertaking.
Other Information
In accordance with Rule 4.1 (3) of the External Audit Chapter of the PRA Rulebook for Solvency IIfirms we are also required to consider whether the Other Information is materially inconsistent with
our knowledge obtained in the audit of Admiral Group Plc’s statutory financial statements. If, basedon the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in relation to this matter.
Use of our Report
This report is made solely to the Directors of Admiral Group Plc in accordance with Rule 4.1 (2) ofthe External Audit Chapter of the PRA Rulebook for Solvency II firms. We acknowledge that ourreport will be provided to the PRA for the use of the PRA solely for the purposes set down by statuteand the PRA’s rules. Our audit work has been undertaken so that we might state to the insurer’s
Directors those matters we are required to state to them in an auditor’s report on the relevant
elements of the Group SFCR 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 PRA, for our audit
work, for this report or for the opinions we have formed.

Mark McQueen (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
24 June 202015 | P a g e

A. BUSINESS AND PERFORMANCE
A.1. BUSINESSGENERAL INFORMATION
Admiral Group plc (‘the Group’) is one of the UK’s largest car insurance providers. In addition tooffering car insurance in the UK, the Group also writes household, van and travel business in the UK,
and car insurance in four countries outside of the UK: Italy, Spain, France and the USA.
Outside of insurance, the Group has price comparison businesses in the UK, Spain, France and theUSA, with the UK price comparison business, Confused.com, being one of the UK’s leading comparison
websites for the last 17 years. The Group also has a law firm, Admiral Law Limited and provides
unsecured personal loans and car finance in the UK through Admiral Financial Services Limited.
The Group is a company incorporated in the United Kingdom. Its registered office is at Tŷ Admiral,
David Street, Cardiff CF10 2EH and its shares are listed on the London Stock Exchange.
The Group and its UK regulated insurance entity, Admiral Insurance Company Limited is subject tosupervision by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) in
the UK. The contact details for these supervisory authorities are as follows:
PRA

FCA

Name

Prudential Regulation Authority

Financial Conduct Authority

Address

Bank of England
20 Moorgate
LondonEC2R 6DA

12 Endeavour Square
LondonE20 1JN

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

Gibraltar Financial Services Commission

Address

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

During 2019 the Group established and received regulatory permissions for an insurance entity in
Spain; Admiral Europe Compañía de Seguros, S.A. (AECS) to underwrite the Group’s European businessafter Brexit. Portfolio transfers of liabilities and associated assets of the Group’s European businesses
from AICL and AIGL to AECS were enacted on 1 January 2019, and all new European insurance business
was underwritten in AECS with effect from this date.
16 | P a g e

AECS is subject to the supervision of the Dirección General de Seguros y Fondos de Pensiones (DGSFP)in Spain. It has prepared a separate 2019 Solvency and Financial Condition Report in line with therequirements of the DGSFP.
The contact details for this supervisory authority are as follows:
DGSFP
Name

Dirección General de Seguros y Fondos
de Pensiones

Address

Paseo de la Castellana, 44. 28046 Madrid

The Group’s US insurer, Elephant Insurance Company, is not subject to Solvency II regulation. The
contact details for its supervisory authority are as follows:
VA BOI
Name
Address

Virginia State Corporation Commission
Bureau of Insurance
1300 E. Main Street
Richmond
Virginia 23219

Details of the Group’s auditor are as follows:
Deloitte
Name

Deloitte LLP

Address

1 New Street Square
LondonEC4A 3HQ

As noted above, the Group is listed on the London Stock Exchange. At 31 December 2019, theCompany's issued share capital comprised a single class of shares referred to as ordinary shares.
Details of the share capital and shares issued during the year can be found in the Group’s 2019 Annual
Report (note 12d to the Group financial statements). Major shareholders as at 31 December 2019were as follows:
Major shareholders% Shareholding at 31-Dec-19

Munich Re

10.2%

Henry Engelhardt & Diane
Briere de l'Isle

9.6%

17 | P a g e

GROUP STRUCTURE
The chart below shows the major subsidiaries of the Group’s Parent Company, grouped by Solvency IIclassification. For further details of the subsidiary undertakings, country of incorporation and class ofshares held by the parent company refer to the Group’s 2019 Annual Report (note 12f to the Groupfinancial statements).

Admiral Group plc

SII Insurance Undertakings•Admiral Insurance Company Limited (EEA insurer)•Admiral Insurance (Gibraltar) Limited (EEA insurer)•Admiral Europe Compañia de Seguros S.A. (EEA insurer)

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

Ancillary Service Undertakings•EUI Limited•Elephant Insurance Services LLC•Admiral Intermediary Services S.A.

Other Financial Sectors•Admiral Financial Services Limited•Seren One Limited

Strategic Participations•Able Insurance Services Limited•Admiral Law Limited•Inspop.com Limited•Inspop USA LLC•LeLynx SAS•Penguin Portals Limited•Preminen Price Comparison Holdings Limited•Rastreator Comparador Correduria de Seguros S.L.U

The Group’s major activities are summarised in the following sections:
Insurance Undertakings (SII and Third Country undertakings)
At 31 December 2019, the Group had insurance businesses in five geographical locations: the UK, Italy,
Spain, France and the USA. As noted above, three of the Group’s insurance undertakings (AICL, AIGL

18 | P a g eand AECS) are SII insurers whilst the fourth, Elephant Insurance Company (EIC), is registered in the
USA and therefore classified as a Third Country undertaking.
The table below summarises the Group’s material Solvency II lines of business:

Motor Vehicle Liability

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

Motor Vehicle Other

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

Fire and damage to otherproperty

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

General Liability

Household insurance capturing public liability risks.

Assistance and Miscellaneous
Financial Loss

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

Annuities stemming from nonlife insurance contracts andrelating to insurance
obligations other than healthinsurance obligations

Private motor insurance liabilities arising through claims settled as Periodic Payment
Orders. The Group has no non-life insurance contracts relating to health insurance
obligations.

Ancillary Services Undertakings
The Group’s insurance intermediaries are classified as Ancillary Services Undertakings for Solvency II
purposes. These entities are non‐regulated (as per the definition in Article 2(4) of Directive 2002) withprincipal activities that are deemed to be ancillary to the Group’s insurance undertakings. The mostmaterial entity is EUI Limited which provides intermediary services for insurance underwriting in the
UK.
Other Financial Sectors
The Group’s loans business, Admiral Financial Services Limited (AFSL) is classified as a non-regulated
entity carrying out financial activities within Own Funds of Other Financial Sectors. It provides
unsecured personal loans and car finance in the UK.
Seren One Limited is a Special Purpose Entity (SPE) set up by the Group in relation to the Admiral Loansbusiness, whereby the Group has securitised certain loans by the transfer of the loans to the SPE. The
securitisation enables a subsequent issuance of debt by the SPE to investors who gain the security of
the underlying assets as collateral.
Strategic Participations
All other entities in the Group are classified as Strategic Participations. The principal activity is Price
Comparison, where Admiral’s strategy is to develop websites that allow consumers to compare arange of general insurance, financial services and other products. During the year the Groupestablished Penguin Portals Limited as the holding company for all its price comparison businesses.
The Group’s UK price comparison site, branded as Confused.com (Inspop.com Limited) was launchedin 2002 and is one of the UK’s leading comparison websites. International price comparison operations
in Europe (Rastreator.com in Spain and Lelynx.fr in France) and in the USA (compare.com) havesubsequently been launched in 2009, 2010 and 2013 respectively. More recently, the Group has

19 | P a g e

established Preminen, a Price Comparison incubator that looks to establish price comparison
businesses in a number of new markets around the world.
The Group’s UK based law firm, Admiral Law, provides a range of legal services, with the company’s
legal experts primarily specialising in road traffic accident claims. Able Insurance Services Limited is a
public liability insurance broker.

SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
Change in UK discount rate (‘Ogden discount rate’)On 15th July 2019, the Lord Chancellor announced that the new Personal Injury Discount Rate was tobe set at minus 0.25%, following a consultation process and as set out within the Civil Liability Act
2018. The change came into effect on 5th August 2019 and the minus 0.25% rate is likely to remain inplace for the next five years. The minus 0.25% rate is applicable in England and Wales, whilst the minus
0.75% rate remains in effect in Scotland.
The Ogden discount rate is used for adjusting the value of lump sum personal injury compensation,according to the amount the victims of serious personal injury can expect to earn by investing it. The
lower the rate, the higher the compensation awarded and the greater the cost to compensators.
Following the announcement by the UK Government, the Ogden discount rate which is used in setting
personal injury compensation, was changed to minus 0.25% from the existing minus 0.75% rate that
had been in place since February 2017.
The minus 0.25% rate is 25 basis points lower than the assumed rate of 0% that was used in setting
best estimate claims reserves at 31 December 2018.
UK Exit from the European Union (‘Brexit’)
Admiral has adopted a prudent approach in relation to Brexit, designed to mitigate the risks to our
European businesses of a potential ‘hard Brexit’, which could have prevented those operations fromcontinuing to trade due to reliance on passporting rights.
The businesses that potentially would have been impacted, being the European insurers and European
price comparison businesses, have been restructured so as to fully mitigate a ‘no deal’ outcome.
This has been achieved for the European insurance intermediaries through Admiral receiving approvalto establish an intermediary company in Spain, Admiral Intermediary Services, S.A. (AIS). All of the
trade and assets of the Spanish and Italian branches of UK-based EUI Limited have been transferred
to AIS from 1 January 2019. The assets and liabilities of EUI France, EUI Limited’s subsidiary, have beentransferred to AIS via a cross border merger process such that, as of 1 January 2019, EUI France is fullyliquidated.
Admiral also received approval for an application to establish an insurance company in Spain and from
1 January 2019 all of the Group’s European insurance business is underwritten by a regulated entity
in Spain, Admiral Europe Compañía de Seguros, S.A. (AECS). All existing liabilities, assets and contracts
relating to these businesses have been transferred through portfolio transfer processes under Part VIIof the Financial Services and Markets Act 2000, also effective from 1 January 2019.

20 | P a g e

In addition, the Group’s European price comparison businesses Rastreator and LeLynx havesuccessfully been merged into price comparison companies established in Spain (Comparaseguros
Corredia de Seguros) and France (LeLynx SAS) respectively.
AIGL, the Group’s Gibraltar insurance entity, will be able to continue to carry on trading in an
uninterrupted manner after Brexit as a result of the passing of relevant legislation by the UK and
Gibraltar governments. In March 2018, at the Joint Ministerial Council with the government of
Gibraltar, the UK government announced that Gibraltar’s authorised financial services firms willcontinue to be able to access the UK as they currently do until 31 December 2020 in a no-deal scenario,
with the UK and Gibraltar working together to agree a longer term relationship to access to eachother’s markets.
In addition, to support market access between the UK and Gibraltar, HM Treasury has published two
Statutory Instruments (SIs): The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019and The Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019. The first relates to thecontinuation of the deemed passport rights of Gibraltar-based firms into the UK. The second preserves
the overall pre-Brexit regulatory position, notwithstanding the legislative changes made under the
EUWA.
COVID-19 global pandemic
The outbreak of the COVID-19 global pandemic has resulted in significant global uncertainty andmarket volatility. Appendix 1 to this report sets out the potential impacts on the Group’s businesses,
system of governance, risk profile, valuation for solvency purposes and capital management.
The figures in this report and the associated QRTs reflect conditions and best estimate assumptionsas at the 31 December 2019 reporting date and have not been adjusted for the impacts of COVID-19,
which is considered to be a non-adjusting post balance sheet event.

A.2. UNDERWRITING PERFORMANCEThe tables below show the Group’s underwriting performance (premiums, claims and expenses in linewith QRTs S.05.01 and S.05.02) summarised by Solvency II line of business and by geographicallocation. The tables are prepared on a financial statement basis and are reconciled to the Groupstatutory profit in Section A.4 below. Total Group net premiums earned of £709.4 million (which does
not form part of the profit reconciliation in Section A.4) can be agreed to note 5 of the Group Financial
statements within the 2019 Annual Report.

21 | P a g e

31-Dec-19

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

Motor Vehicle Liability

486.5

472.6

(226.2)(115.7)130.7

Motor Vehicle Other
Fire and damage to otherproperty

159.5

156.1

(61.0)(31.7)

63.4

40.3

36.5

(25.2)(10.6)

0.7

General Liability
Assistance and Miscellaneous
Financial Loss
Annuities stemming from nonlife insurance contracts (Life)

0.8

0.7

(0.5)

(0.2)

0.0

45.2

43.5

(24.3)

(6.2)

13.0

-

-

(1.6)

(0.9)

(2.5)

Total 2019

732.3

709.4

(338.8)(165.3)

Other
Expenses*1

19.4

Total

224.7

*1 Other expenses represent intra-group price comparison expenses that are eliminated for the purposes of the Group financial statements.

The following table shows the comparative underwriting performance for 2018:
31-Dec-18

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

Motor Vehicle Liability

437.4

420.5

(200.1)(96.5)

123.9

Motor Vehicle Other
Fire and damage to otherproperty

179.3

173.8

(79.5)(41.7)

52.6

34.5

30.9

(28.5)

(4.9)

(2.5)

General Liability
Assistance and Miscellaneous
Financial Loss
Annuities stemming from nonlife insurance contracts (Life)

0.4

0.3

(0.2)

(0.1)

-

51.2

46.3

(27.6)

(8.2)

10.5

-

-

(6.8)

(0.3)

(7.1)

Total 2018

702.4

671.8

(342.7)(151.7)

Other
Expenses*1

19.3

Total

196.7

Analysis by Line of Business
The first table above shows that the Group achieved an underwriting profit of £224.7 million in 2019,an increase of £28.0 million from 2018 (£196.7 million). The tables provide a split of underwriting
profit by Solvency II line of business.
As noted on the QRTs in Appendix 3 it should be noted that premiums, claims and expenses withinGroup insurance businesses are not typically allocated to these individual lines of business for the
purposes of internal or external reporting and so therefore simplifications have been utilised to makethis allocation for the purposes of QRT disclosure. One such assumption is that the ‘Annuities
stemming from non-life insurance contracts’ (Periodic Payment Orders ‘PPOs’) line of business does
not attract premiums and therefore a loss totalling allocated claims and expenses is reported.
The split of underwriting profit by line of business shows that the motor insurance lines of business(motor vehicle liability, motor vehicle other and Life (relating to PPOs)) report a combined profit of£191.6 million.
The Fire and Damage to Property and General Liability lines can be attributed to the UK Householdbusiness. A total underwriting profit of £0.7 million is reported.

22 | P a g e

Finally, the Assistance and Miscellaneous Financial Loss lines of business primarily relate to theancillary products underwritten by the Group, and contribute an underwriting profit of £13.0 million.
Analysis by Geographical Location
31-Dec-19

Net
Premiums
Written

Net
Premiums
EarnedNet
ClaimsIncurredNet
Expenses
Incurred

UK

548.4

533.2

(202.9)(103.4)

226.9

USA

73.5

73.4

(60.4)(29.3)(16.3)

Italy

69.6

65.2

(45.2)(16.4)

3.6

Spain

17.2

16.3

(12.7)

(8.1)

(4.5)

France23.6

21.3(17.6)

(8.1)

(4.4)

Total

732.3

709.4

(338.8)(165.3)

Other
Expenses*1

19.4

Total

224.7

*1 Other expenses represent intra-group price comparison expenses that are eliminated for the purposes of the Group financial statements.

The table above analyses the Group underwriting performance by geographical location. The UK
Insurance business generates over 100% of the Group underwriting profit (£226.9 million), with theGroup’s International businesses in total contributing an underwriting loss of £21.6 million (all before
elimination of intra-group price comparison expenses).
The underwriting performance analysis excludes other revenue generated from the sale of additional
products alongside the core motor insurance policy. Therefore, the combined international
underwriting loss is different to the International Car Insurance segment loss of £0.9 million reported
in note 4 to the Group financial statements in the Group’s 2019 Annual Report.
Other revenue generated by the UK and International businesses is reported within Section A.4 below(Performance of Other Activities).
Solo Entity Premiums, Claims and Expenses
31-Dec-19

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

AICL

148.1

145.7

(88.0)(29.5)

28.2

AIGL

400.3

387.6

(114.9)(76.2)

196.5

Net
Premiums
Written

Net
Premiums
EarnedNet Claims
IncurredNet
Expenses
Incurred

AICL

190.7

186.6

(125.7)(33.9)

27.0

AIGL

442.0

424.1

(169.6)(72.1)

182.4

31-Dec-18

Other
Expenses

Other
Expenses

Total 2019

Total 2018

As detailed in the QRTs in Appendix 3 to this report, total non-life and life premiums, claims for theGroup’s two SII solo entities AICL and AIGL are shown in the table above. Both entities report anunderwriting profit, with the more material underwriting profits in AIGL reflecting its higher net shareof UK motor insurance and profits generated by the motor policy upgrade products.

23 | P a g e

A.3. INVESTMENT PERFORMANCEThe tables below show a breakdown of investment income by type for both 2019 and 2018:
31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

Investment return on assets
classified as FVTPL

11.4

6.5

0.8

1.4

9.2

4.9

Unrealised losses on forward
contracts

(0.1)

(2.3)

-

-

-

-

Investment return on debt
securities classified as FVOCI

34.5

28.0

3.7

2.2

25.4

20.8

Investment return on deposits
with credit institutions
Notional accrual for reinsurer's
share of investment accrual

1.6

3.1

0.4

0.5

1.0

2.2

(12.9)---(12.9)-

Interest receivable on cash
and cash equivalents

0.8

1.3

-

(0.2)

2.6

0.6

Total

35.3

36.6

4.9

3.9

25.3

28.5

Group Investment and interest income in 2019 was £35.3 million. The underlying rate of return forthe year (excluding accruals related to reinsurance contract funds withheld) on the Group’s cash andinvestments was 1.4% (2018: 1.2%).
The notional investment accrual relates to the majority of AIGL’s quota share reinsurance contracts,
which operate on a funds withheld basis. Investment income earned on the funds withheld is accruedand only released once the ultimate outcome for the relevant underwriting year is profitable. The
accrual made in 2019 relates to the 2019 underwriting year.
In addition to the investment income recognised in the IFRS income statement, the Group also
recorded a gain of £33.1 million (2018: gain of £22.9 million) in the Fair Value reserve within Equity asa result of unrealised gains arising on the valuation of ‘Available for Sale’ financial assets.
Investment income in the solo entities was £4.9 million and £25.3 million for AICL and AIGL
respectively.

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

24 | P a g e

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

224.7

196.7

28.2

27.0

196.5

182.4

35.3

36.6

4.9

3.9

25.3

28.5

Other Revenue

489.2

479.3

6.3

6.2

62.9

53.1

Profit Commission

114.9

93.2

-

-

(147.9)(137.9)Other Net Costs(328.9)(318.3)

(1.0)

-

(3.7)

(0.9)

Finance Costs(12.6)(11.3)----

Statutory Profit Before Tax

522.6

476.2

38.4

37.1

133.1

125.1

Taxation expense(94.2)(85.7)

(7.3)

(7.3)

(10.8)(9.6)

Statutory Profit After Tax

428.4

390.5

31.1

29.8

122.3

115.5

Net Underwriting Results as
per Section A.2
Net Investment Result as per
Section A.3
Other Activities:

Outside of underwriting and investment activities, the Group’s other activities performed strongly
during 2019 with strong growth in net contribution from other revenue and associated costs. The
material financial statement line items are discussed individually below:
Other revenue
The two primary sources are:i. Contribution from additional products and fees, including revenues earned on the sale of products
supplementing the core insurance policies, administration and other charges paid bypolicyholders, referral fees, revenues from policies paid by instalments and vehicle commission
charges paid by reinsurers and co-insurers. This increased in 2019 primarily as a result of growthin the policy base of the UK motor insurance business.
ii. Price comparison revenue from the Group’s UK and overseas price comparison businesses, with
Confused.com in the UK being the main contributor.
Profit Commission
Profit commission receivable from co-insurers and reinsurers in 2019 was £114.9 million at Grouplevel. AIGL reports negative profit commission of £147.9 million as intra-group profit commission
payable more than offsets profit commission receivable from quota share reinsurers.
Other Net Costs
Other costs primarily relate to the other revenue noted above, being internal costs allocated to thegeneration of contribution from other products and fees, and also price comparison expenses. These
costs increased with the growth in the revenue lines noted above.
This category also includes central group costs that are not allocated to individual businesses – net
share scheme charges being the most significant.

25 | P a g e

Operating Lease Commitments
The Group is committed to total minimum obligations under operating leases on land and buildings asfollows:
2019

2018

Within one year

12.9

14.8

Within two to five years

47.9

54.3

Over five years

102.0

116.8

Total commitments

162.8

185.9

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

A.5. ANY OTHER INFORMATION
None.

26 | P a g e

B. SYSTEM OF GOVERNANCE
B.1. GENERAL INFORMATION ON THE SYSTEM OF GOVERNANCESTRUCTURE OF THE ADMINISTRATIVE, MANAGEMENT OR SUPERVISORY BODY
The Board is responsible for promoting the long term, sustainable success of the Group and its
shareholders and 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 solo entities AICL and AIGL have respective individual Board meetings that act in the same manneras the Group Board. The Group Board and its Committees also have oversight of AICL and AIGL
activities and for AICL, the Group Audit Committee provides a review of the key accounting
judgements in respect of the annual accounts, SFCR and QRTs.
The Group’s 2019 Annual report (Governance section) provides further detail of the role of the Boardand other information such as Board activity during the period.
The Board has delegated authority to a number of permanent Committees to deal with matters inaccordance with written Terms of Reference. The principal Committees of the Group Board - Audit,
Remuneration, Risk and Nomination and Governance (as shown in the diagram below) - all comply
fully with the requirements of the Corporate Governance Code.

Group Board of Directors

Group Audit
Committee

Group Risk
Committee

Group
Nomination
andGovernanceCommitteeGroup
Remuneration
Committee

All Group Committees are chaired by an independent Non-Executive Director, except the Group
Nomination and Governance Committee which is chaired by the Chair of the Board, and comprise amajority of independent Non-Executive Directors. Appointments to the Committees are made on therecommendation of the Group Nomination and Governance Committee and are for a period of up to
three years, which may be extended for two further three-year periods, provided the Director remains
independent.
The Committees are constituted with written Terms of Reference that are reviewed annually to ensurethat they remain appropriate and reflect any changes in good practice and governance. These Termsof Reference are available on request from the Company Secretary and can also be found on the
Company’s website: www.admiralgroup.co.uk. Directors are fully informed of all Committee mattersby the Committee Chairs reporting on the proceedings of their Committee at the subsequent Board
meeting. Copies of Committee minutes are also distributed to the Board.
The AICL and AIGL subsidiary Boards are chaired by Non-Executive Directors.
27 | P a g e

MATERIAL CHANGES IN THE SYSTEM OF GOVERNANCE
There were no material changes in the system of governance during the year and no changes inmembership of the Group Board and its Committees.
The following changes were made in respect of the AICL solo entity Board during the year:••

Mark R Waters stepped down as Company Secretary with effect from 11 March 2019
Daniel J Caunt was appointed as Company Secretary with effect from 11 March 2019.

The following changes were made in respect of the AIGL solo entity Board during the year:••

Mark J Churchlow joined the AIGL Board with effect from 3 December 2019
Keith G Davies joined the AIGL Board with effect from 3 December 2019

REMUNERATION POLICYKey Principles of Admiral Remuneration Arrangements
Admiral is committed to the primary objective of maximising shareholder value over time in a waythat also promotes effective risk management and excellent customer outcomes, and ensuring that
there is a strong link between performance and reward. This is reflected in the Group’s Remuneration
Policy of paying competitive, performance-linked and shareholder-aligned total remuneration
packages comprising basic salaries coupled with participation in performance-based share schemes togenerate competitive total reward packages for superior performance.
Fixed remuneration at Admiral comprises base salaries, benefits and pension. In line with theprinciples outlined above, base salaries are fixed and reflect the individual’s responsibilities, role, job
size and performance. Market and economic conditions and developments in governance are also
considered when setting base salaries and determining the appropriate benefits and pension
provisions.
Longer-term performance-based reward is provided through the Discretionary Free Share Scheme
which is outlined below. The balance between fixed and variable remuneration ensures that anelement of overall reward is linked to longer-term Group Strategy and risk management as well as toshareholder and customer value.
Two share schemes are operated within the Group, as follows:(i) The Approved Share Incentive Plan (the SIP)
Eligible UK based employees who have served a minimum tenure at Admiral qualify for awards under
the SIP based upon the performance of the Group in each half-year period. The maximum award foreach year is £3,600 per employee. The awards are made with reference to the Group’s performanceagainst prior year profit before tax. Employees must remain in employment for the holding period(three years from the date of award) otherwise the shares are forfeited.
(ii) The Discretionary Free Share Scheme (the DFSS)
Employees across the Group receive DFSS awards based upon role and individual performance. Under
the DFSS, individuals receive an award of free shares at no charge. The majority of employees receive

28 | P a g e

DFSS awards subject to the below criteria, although some business units and a small number of senior
management receive DFSS awards subject to alternative vesting criteria.
One third to 50% of the shares awarded at the start of the three-year vesting period are guaranteed
to vest subject to continued employment until the vesting date.
The remaining percentage are subject to the Group performance criteria which are the threemeasures below with equal weighting.
Performance Measure

Earnings per Share (EPS)
growth vs. LIBOR

ThresholdMaximum

Vesting Schedule

Growth in line with
LIBOR

Growth of 10% p.a.
in excess of LIBOR

10% for achieving threshold withstraight line relationship to 100% formaximum performanceMedianUpper quartile

25% for median, with straight line
relationship to 100% for upper quartile

55%

25% for achieving threshold withstraight line relationship to 100% formaximum performance

Total Shareholder Return (TSR)
for Admiral vs. FTSE 350

Return on Equity (ROE)

25%

DFSS bonus
The Company does not pay annual cash bonuses in the traditional sense and instead has in place a
simple cash award that is directly linked to the number of DFSS awards which have yet to vest andactual dividends paid out to shareholders. This structure contributes to a culture of focussing oncollective, rather than individual, and long-term, rather than short-term, success, and is aligned with
the Company’s philosophy around the efficient use of capital and distribution of surplus profits. The
DFSS bonus is also subject to a ±25% adjustment based on performance against a set of risk metrics.
Pension Provisions
The Group operates a Defined Contribution Scheme which is available to all employees following
completion of their probationary period. In the UK, the Group matches employee contributions to a
maximum of 6% of base salary subject to a maximum employer contribution of £15,000.
The Remuneration Report within the Group’s 2019 Annual Report contains further information about
the DFSS scheme and the Remuneration Policy for Executive Directors of the Group.

MATERIAL RELATED PARTY TRANSACTIONS
Details relating to the remuneration and shareholdings of key management personnel are set out in
the Directors’ Remuneration Report within the Group’s 2019 Annual Report. Key management
personnel are able to obtain discounted motor insurance at the same rates as all other Group staff,
typically at a reduction of 15%.
The Board considers that only the Executive Directors of Admiral Group plc are key management
personnel. Aggregate compensation for the Executive Directors is disclosed in the Directors’
Remuneration Report within the Group’s 2019 Annual Report.

B.2. FIT AND PROPER REQUIREMENTS
The Admiral Group Nominations and Governance Committee owns and approves the Admiral Groupplc Fit and Proper Policy. The policy aims to ensure that all senior individuals who represent the
29 | P a g e

organisation meet the fit and proper requirements in terms of qualifications, capability, honesty andintegrity. As per the Policy, all prospective senior management appointments shall fill out a checklist
prior to an offer being made. The checklist includes details of the candidate’s knowledge, competence
and experience to perform the role, and a declaration from the senior manager responsible for the
recruitment to confirm the assessment of the candidate’s fitness and propriety was carried out in linewith this Policy. In addition, the candidate will be subject to interviews with appropriate members ofstaff, who will help complete the assessment of the candidate’s fitness and propriety in relation tothat role.
In order to ensure that the individuals running the organisation are fit and proper a number of checks
are undertaken including;
•
•
•
•
•
•
•
•
•
•

Previous employment history
Educational background check*1
Professional qualifications and membership check*1
Notification of appointment to regulator
Information on potential conflicts of interest
Criminal history checks
Credit checks
Identity checks
Directorship check
Financial sanctions checks*1 Where deemed necessary

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

B.3. RISK MANAGEMENT SYSTEM INCLUDING THE OWN RISK AND SOLVENCY ASSESSMENT (ORSA)The Group has a ‘three lines of defence’ approach to Risk Management, the scope of which also applies
to the solo entities AICL and AIGL. The ‘first line of defence’ describes the controls the Group has inplace to deal with the day-to-day business. Controls, which are designed to appropriately mitigate
risk, are managed by the business unit and overseen by the business unit Risk Management
Committees who ensure compliance and review control breakdowns, inadequacy of process andunexpected events.
The ‘second line of defence’ describes the Committees (primarily the Group Risk Committee) andfunctions that are in place to provide an oversight of the effective operation of the internal control
framework. These committees review the management of risk in relation to the particular risk appetiteof the business, as determined by the Board. The ‘second line’ is reinforced by the advisory andmonitoring functions of Risk and Compliance. Risk defines and prescribes risk assessment processes
for the business, maintains risk registers and undertakes regular reviews of these risks and controls in
conjunction with line management. Compliance provides advice on all areas of regulatory principles,rules and guidance, including reviewing any regulatory changes, and undertakes monitoring activity
on key areas of regulatory risk and policy adherence.
30 | P a g e

The ‘third line of defence’ describes the independent assurance provided by the Group Audit
Committee and the Group Internal Audit function that reports to that Committee. Internal Audit
undertakes a programme of risk based audits covering all aspects of both the first and second lines ofdefence. The findings from these audits are reported to all three lines, i.e. line management, theexecutive and oversight committees and the Audit Committee.
The Group’s Enterprise Risk Management Framework (ERMF) is described in Section C (Risk Profile)
below.
ORSA
Admiral Group plc’s Risk Strategy is directly linked to its business plan and model. The approach isembedded in the ORSA and links to the business planning process.
The Group Risk Function defines and prescribes the financial and operational risk assessment
processes for the business; performs second line reviews, including reserving and capital modelling
processes; maintains the risk registers; undertakes regular reviews of these risks in conjunction withline management; delivers the Own Risk and Solvency Assessment (ORSA); and records any actual
losses or near misses that occur as a consequence of the realisation of risk.
The Chief Risk Officer has responsibility for ensuring that managers are aware of their risk
management obligations, providing them with support and advice, and ensuring that the risk
management strategy is properly communicated. Reports are produced showing the most significant
risks identified and the controls in place. Internal Audit uses the risk registers to plan and inform theirprogramme of audits around the most significant risks to the Group to ensure that the prescribed
controls are in place and are operating effectively.
ORSA Approval Process
On an annual basis, or following significant changes in the risk profile of the business, the Group Risk
Function will produce an Own Risk and Solvency Assessment (ORSA) Report, in line with the ORSA
Policy and Solvency II regulations. Covid-19 represents a material event that has a significant impact
on the risk profile of the business and Group Risk will prepare an ad hoc ORSA Report in line with theaforementioned regulations.
The annual and any ad hoc ORSA reports are reviewed and challenged by the Group Risk Committee
prior to submission to the Group and subsidiary Board Committees for approval.
The Board approved report is also submitted to the PRA and GFSC for information purposes, and toreceive feedback on the quality and suitability of the report.
Group Determination of Solvency Requirements
Within the ORSA, the Solvency Capital Requirement is calculated on two bases; Regulatory (one year)
and Economic (ultimate). The ORSA considers both bases in order to provide a quantification of thedifferences between the two viewpoints. In addition, analyses of the key drivers of economic(ultimate) capital needs and regulatory capital requirements are also considered.
Admiral is currently developing an internal model and intends to seek approval from the PRA and the
GFSC to calculate the regulatory SCR using a Partial Internal Model (PIM) for Group and AIGL. Whilst

31 | P a g e

Admiral completes this development, the Group’s regulatory capital requirement is based on the
Solvency II standard formula with a Capital Add-On to reflect recognised limitations in the standard
formula, (predominantly in respect of profit commission arrangements within co- and reinsurance
contracts and risks arising from Periodic Payment Order (PPOs) claims).
Refer to Section C for a review of the Group’s basis for calculating Regulatory capital requirements.

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

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

Internal control consists of five interrelated components:
•
•
•
•

•

Control environment – sets the tone of an organisation through the business plan, risk
appetite and risk profile.
Risk assessment – understanding the assessment of the risks which exist which would impact
on the ability of the entity to achieve the business’ objectives
Control activities – policies and procedures that help ensure necessary actions are taken toaddress risks to achieve the business’ objectives.
Information and Communication – Pertinent information must be identified, captured andcommunicated in a form and timeframe that allows relevant individuals to carry out their
responsibilities.
Monitoring – Internal control systems need to be monitored to assess the quality of theinternal control system over time. This is accomplished through ongoing monitoring activities,
with deficiencies in the internal control framework reported to senior management and theBoard.

These components work to establish the foundation for sound internal control within the Groupthrough directed leadership, shared values and a culture that emphasizes accountability for control.
The Group’s control environment is determined by the Admiral Group Board of Directors, supported
by a number of Committees who have set the tone of the organisation through the Admiral culture,
principles, business plan and risk appetite.
Key control activities are mapped to primary risks held within the Group’s risk universe.
Line 1 (operational functions) are responsible for monitoring all the risks facing their operation,
whether this be through call monitoring, file reviews or audit reviews. Results on monitoring activities
32 | P a g eare provided to operation managers, and subsequently reported on through the Admiral Group
Governance structure.
Line 2 (Risk & Data Protection, Compliance and Actuarial functions) are responsible for the oversightof the Line 1 monitoring. This is done through:•••Risk reviews – business unit risk and controls discussed at RMCs with material risks and KRIs
presented to Group Risk Committee in the Consolidated Risk ReportCompliance Advice and Compliance Monitoring Reviews presented to Group Risk Committee
Actuarial and validation reviews

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

B.5. COMPLIANCE FUNCTION
The Group Compliance Function sets the strategic direction for the business on Compliance mattersand provides oversight and assurance to the Board over the effectiveness of the first line areas indelivering its regulatory responsibilities and adherence to the rules and guidelines set by the FCA and
PRA, along with other regulatory bodies as applicable.
The Group Compliance Function is responsible for the design, implementation, monitoring, and reviewof the Group’s Conduct Risk Management Framework as well as the identification and communicationof any new requirements arising from changes in regulation. The Function, alongside Group Risk,
oversees the Line 1 processes for identifying, owning and ongoing management of Conduct Risk,
including the implementation of new regulatory requirements. The Head of Group Complianceprovides regular reports to the Group Risk Committee who monitor Conduct risk in relation to the
Conduct Risk appetite approved by the Group Board. Regular Compliance reporting is also provided
to the subsidiary boards including the EUI, AIGL, AICL and AECS Boards.
The Group Compliance Function works with the Group Risk Function to provide advice and resolution
to risk events as they arise. Management of customer outcome risk events is completed in line with
the Group Risk Management Policy.

B.6. INTERNAL AUDIT FUNCTION
The Group Internal Audit function is responsible for conducting an objective and independent
appraisal of the Group's activities, financial and otherwise, through a risk-based plan, approved
annually by the Group Audit Committee. It is responsible for evaluating and reporting to the Group
Board and the Group Audit Committee, and thereby providing them with assurance on the operating
effectiveness of controls that management has put in place.
Internal Audit is also responsible for providing assurance over the arrangements for risk management,
control and governance, compliance with internal policies, procedures and controls, and value formoney, where relevant to each audit assignment. The Group Internal Audit department shall reportto the relevant Board/Committee the findings and recommendations from their review, including the

33 | P a g e

time period envisaged to remedy any shortcomings, and follow up on any recommendations made ona timely basis. It remains the duty of management to operate these arrangements, to determine
whether or not to accept audit recommendations and to recognise and accept the risks of not taking
action. Management need to provide an appropriate level of justification and where applicable
supporting documentation to justify their reasoning, when choosing to accept the given risk, or decline
a recommendation.
The Annual Audit Plan is based on a methodical risk analysis, taking into account all activities and thecomplete system of governance, as well as expected developments of activities andinnovations. Significant areas of risk, per the Risk Registers, are considered for inclusion in the Annual
Audit Plan each year. Any audits graded red in colour are considered for review within a twelve month
period until they are in a non-red status.
Independence and Objectivity of the Internal Audit Function
The Group’s internal audit policy states that the Internal Audit department and all of its employees
must be functionally and organisationally independent of the business processes, events andtransactions of the company. The Internal Audit department will carry out its assignments with
impartiality and is free to express its opinions in their reports. Amongst many matters, the Internal
Audit department must have direct access to the Board of Directors, Group Audit Committee and theChief Executive Officer and be able to report directly to these levels when they deem this necessary.
Such independent structure should enable the internal auditor to render impartial and unbiased
judgement, essential to the proper conduct of their work.
Internal Audit activity must be free from interference in determining the scope of internal auditing,performing work and communicating results.
Unless permission is granted by the Group Audit Committee Chair, an Internal Auditor will not perform
an audit review in an area where they had a consultancy / operational role in the previous twelve
months.
Where practical, areas under review are rotated amongst the staff in Internal Audit to avoid any
potential conflict of interest.

B.7. ACTUARIAL FUNCTION
The Actuarial Function has a number of responsibilities in the area of technical provisions and also inproviding an opinion on the adequacy of re-insurance and underwriting.
Solvency II requirements state that the Actuarial Function shall be carried out by persons who haveknowledge of actuarial and financial mathematics, commensurate with the nature, scale andcomplexity of the risks inherent in the business, and who are able to demonstrate their relevant
experience with applicable professional and other standards. The Actuarial Function should be freefrom influences that may compromise its ability to undertake its duties in an objective, fair andindependent manner.
The Actuarial Function produces a written report (“The Actuarial Function Report”) which is submitted
to the Board, at least annually, documenting all tasks undertaken, identifying deficiencies and making
recommendations to remedy these deficiencies. The report is designed to include the calculation of

34 | P a g etechnical provisions, an opinion on overall underwriting policy and an opinion on the adequacy ofreinsurance arrangements.
The responsibilities that fall under the remit of the Actuarial Function are segregated from otherbusiness activities to allow independent review and challenge, allowing the Actuarial Function toprovide an independent opinion of the areas of Technical Provisions, Reinsurance and Underwriting.
The validation, review and challenge is carried out by the second line Group Risk Function whichenables clearer separation of activities and strengthens the independence. The Actuarial Function iscomprised of suitably qualified individuals who have the skills and knowledge to make the decisions
without the influence of others.

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

B.9. ANY OTHER INFORMATION
Assessment of the adequacy of the system of governance
The Board is ultimately responsible for the Group’s system of governance, including the system of risk
management and internal control.
As noted in the Group’s 2019 Annual Report, the Board confirms the Group’s compliance with theprinciples and provisions of the UK Corporate Governance Code 2018 (the code) which is applicableto the year under review, and is considered to represent best practice for UK listed companies. This
covers both the Group as a whole, and also the solo entities AIGL and AICL.

35 | P a g e

C. RISK PROFILERISK ASSESSMENT AND RISK MANAGEMENT
The Admiral Group Board is responsible for determining risk strategy and risk appetite across theGroup, and for the Group’s system of risk management and internal control. The Board has delegatedthe development, implementation and maintenance of the Group’s risk management framework to
the Group Risk Committee, which reports its activities to both the Board and also to the Group Audit
Committee, for the purposes of reviewing and reporting on the overall effectiveness of this system.
The Group’s 2019 Annual Report (pages 94-98) contains detailed information on the activities of theGroup Risk Committee during the year along with the Committee’s duties and responsibilities and theGroup’s Risk Management and Internal Control statement.
Risk is an essential part of the Group’s business operations and successful risk taking is required toachieve the Group’s business objectives, forming a core consideration when setting strategy,
formulating business plans, managing performance and rewarding management success.
The ERMF at Admiral Group has been designed, implemented and embedded to provide the Board
with oversight of the risks and the management of those risks throughout the Group. The framework
operates to provide first, second and third lines of defence for all risks whether accepted within therisk appetite process or not.
The structure of the Admiral Group Risk Appetite is as follows:
i.

ii.
iii.
iv.
v.
vi.

The Key Risks to the business are identified based on the Level 1 Risks from the Admiral Risk
Universe, with a further split to highlight other key risks on the grounds of materiality. All Key
Risks are assigned an owner at a Group and Business Unit level.
Risk Classifications are assigned to each key risk on a materiality basis.
Risk Drivers are identified for each key risk.
Risk Appetite Statements are then assigned to define the approach to managing each of therisk drivers within appetite for the key risk category.
Key Risk Indicators (KRIs) are monitored for each risk driver to act as early warning indicators
for the Board and Management Risk Appetite Statements.
Triggers and Limits are defined to reflect early warning indicators such that a break of a triggerof limit is not defined as a break of the Board’s risk appetite.

The Group Risk Appetite is owned and approved by the Admiral Group Board. The responsibility for
the Group Risk Appetite is delegated to the Group Risk Committee who reviews all components prior
to Board approval and monitors the performance of the business against the approved Group Risk
Appetite through the Consolidated Risk Report.

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

36 | P a g e

Key Risk

Risk Overview

Insurance, or Underwriting
Risk

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

Market Risk

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

Counterparty, or Credit Risk

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

Operational Risk

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

Group Risk

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

Each of these risk categories is discussed in further detail in sections C1 – C7 below, along with detailsof risk mitigating actions taken by the Group Board in respect of each risk. Pages 66-73 of the Group’s
2019 Annual Report also provide further information on the Group’s ‘Principal Risks andUncertainties’, their impacts and the associated mitigating actions.
The Group’s Solvency II SCR reflects the profile of these material risks. The chart below evidences that
insurance, or underwriting risk is the Group’s material risk concentration, comprising 61% of the YE
2019 SCR. There has not been a material change to this risk profile over the course of 2019 and there
is not expected to be a material change during 2020.
2019 Group Solvency Capital Requirement – by risk type
£700m

29.6

£600m

50.6

£500m
5.0

£400m

90.0

(19.9)

659.9

£300m
£200m

135.3

81.0
(109.0)

397.3

£100m
£0m

The Group’s core and dominant line of business is UK motor and therefore the insurance, or
underwriting risk is concentrated on the applicable SII lines of business for UK motor (primarily, nonlife ‘liability’ and ‘other’ risks). The composition of the SCR for the solo entities AICL and AIGL is shownin the charts below:

37 | P a g e

2019 AICL Solvency Capital Requirement – by risk type
£120m
£100m

15.0
0.7

£80m

7.5

(16.6)(11.5)

14.6

£60m
£40m

83.7

74.0

£20m
£0m

2019 AIGL Solvency Capital Requirement – by risk type
£400m
£350m

17.0

£300m

72.1

£250m

66.7

(56.8)

(8.4)

4.3

£200m
341.8

£150m
£100m

246.9

£50m
£0m

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

GROUP

AIGL



SF
SF plus Undertaking SpecificParameters (USP)SF plus CAO

AICL




All entities applied the Volatility Adjustment (VA), an adjustment to the risk-free rate used in the
discounting technical provisions to dampen the effect of widening bond spreads, at 31 December
2019.

38 | P a g e

As previously disclosed, the Group is preparing to make a Partial Internal Model submission to the UK
and Gibraltar regulators. Ahead of the start of the Solvency II regime, the Group applied for a CAO to
the standard formula to reflect recognised limitations in the standard formula with respect toAdmiral’s risk profile. These predominately relate to profit commission arrangements in co-insurance
and reinsurance contracts and risks arising from claims including PPO claims.
The Group continues to develop its partial internal model to form the basis of future capitalrequirements and expects to enter the PRA’s pre-application process during 2020. Formal application
for regulatory approval to use the model is expected to follow in 2021. In the interim period before
submission, the current capital add-on basis will continue to be used to calculate the regulatory capitalrequirement. For further detail, please refer to Sections C6 and E2 below.
The Regulatory SCRs for the Group’s Solvency II regulated subsidiaries AICL and AIGL, are calculated
on a standard formula basis. For the UK regulated subsidiary, AICL, the Group considers the standard
formula to appropriately reflect the Company’s risk profile.
For AIGL, the interaction of profit commission arrangements with external reinsurers and intra-groupprofit commission arrangements means limitations of the standard formula with respect to these risks
cannot be addressed with a CAO as the add-on would reflect a deduction to the standard formula,which is not permitted within Solvency II regulation. AIGL has obtained approval from the Gibraltar
regulator (Gibraltar Financial Services Commission) to use Undertaking Specific Parameters (USPs) in
its calculation of underwriting risk.

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

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

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

The valuation of Non-life underwriting risk is driven by the premium and reserve risk component, withsmall contributions made by lapse and catastrophe risk.
The majority of Non-life underwriting risk is accepted by the Group’s Solvency II regulated subsidiaries
AICL, AIGL and AECS. As a result, there is little difference between the sum of the components of Nonlife insurance for AICL, AIGL and AECS and the Group valuation. The key exception to this is catastrophe
risk; the difference here is driven by exposure to natural weather catastrophes (primarily throughhailstorms and flood events) in the USA due to risks underwritten by EIC.

39 | P a g e

Non-life Reserve risk is driven by adverse development in the valuation of the liabilities which is mainly
related to longer tailed bodily injury claims, particularly from the Group’s UK motor business, whichhave greater uncertainty associated with the ultimate cost of claims than, for example, property
damage claims (across both Motor and Household businesses). These claims can develop over anumber of years so the reserve risk figure relates to several underwriting years.
The Group’s retention of risk across underwriting years for the core UK motor business varies
depending on the co-insurance and quota share reinsurance contracts in place for each year. The
Group has historically used reinsurance (in the form of both co-insurance and quota share reinsurance,
as well as excess of loss reinsurance) as a risk mitigation tool across all lines of business - refer to therisk mitigation section below for further detail. In addition, the Group’s Annual Report contains further
information about the co-insurance and reinsurance arrangements in place for businesses across theGroup (page 47 for UK Insurance and page 53 for International Insurance).
Premium risk is the risk that the Group incurs losses on risks arising in the twelve months after thevaluation date. Premium risk consists of a lower proportion of bodily injury exposure, and therefore
has a higher proportion of property damage in future claims experience which increases thediversification between claim types compared to reserve risk. This is due to premium risk considering
the future occurrence and severity of claims, rather than the development of existing claims, of which
property damage claims generally settle quickly.

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

RISK MITIGATION
Underwriting risk is the Group’s material risk and as noted above, a key part of the Group’s risk
mitigation strategy with respect to underwriting risk is the use of co-insurance and reinsurance (bothproportional quota share reinsurance and non-proportional excess of loss reinsurance). In the core UK
motor business, both co-insurance and quota share reinsurance contracts are utilised to mitigate risk.
In respect to proportional risk sharing agreements, the Group’s net retained share of business after
proportional co-insurance and reinsurance arrangements, for material businesses in the 2020
underwriting year, and at 31 December 2019 in relation to 2019, 2018 and 2017 underwriting years,
is as follows:

40 | P a g e

Business

Net Retained
Share2020 UW Year

Net Retained
Share2019 UW Year

Net Retained
Share2018 UW Year

Net Retained
Share2017 UW Year

UK Car

22%

22%

22%

53.5%*

UK Household

30%

30%

30%

30%

UK Van

25%

25%

25%

25%

UK Other

100%

100%

100%

100%

Italian Motor

35%

35%

35%

35%

Spanish Motor

30%

30%

30%

30%

French Motor

30%

30%

30%

30%

US Motor

50%

33%

33%

33%

*The UK Car retained share for 2017 includes quota share commutations completed in H1’19. The original net retained share for this year
was 22%.

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

C.2. MARKET RISKThe Group’s investment strategy is primarily focused on capital preservation with additional priorities
being low volatility of returns and high levels of liquidity. The strategy and resulting portfolio wasmaterially unchanged during 2019, with money market funds, and fixed income debt securities
comprising the majority of the total portfolio.
Further information on the IFRS classification of the Group’s cash and investments is included in theGroup’s 2019 Annual Report.

PRUDENT PERSONS PRINCIPLE
Solvency II has introduced the Prudent Person Principle for managing investments.
The Prudent Person Principle seeks to ensure that the industry understands and is capable ofmanaging its investment risks. Specifically, insurers must be able to demonstrate that they canproperly identify measure, monitor, manage, control and report on their investment risks and notplace reliance upon information provided by third parties.
Admiral’s risk management and strategic decision making process in respect of asset investment iscentred on the Group’s Investment Committee. The Investment Committee is a Management
committee that includes Non-Executive representation. The governance process for material asset
investment decisions can be summarised as follows:

41 | P a g e

Review

Proposal•Management review of asset classes, asset managers and proposed assets•Factors considered include: yield, capital, asset and liability duration,
diversification, credit quality, liquidity, currency, cost, tax, accounting andenvironment, social and governance factors.
•Proposals discussed at Group Investment Committee•Senior Management review including Chief Financial Officer and Chief Risk Officer•Investment Policy approved by Group Board
Approval •Relevant subsidiary Boards also approve

Implementation•Management implement Policy

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

MARKET RISK COMPONENTS
Market risk comprises 21% of the Group’s 2019 regulatory SCR. The largest contribution at YE’19 isfrom Spread Risk, primarily reflecting the risk of valuation changes in the Group’s fixed income debt
securities resulting from credit spread changes. Property risk, Interest rate risk, Equity risk (in relation
to the valuation of the parent company’s holdings in Strategic Participations), Currency risk andConcentration risk also contribute as noted in the table below. Market risk comprises 17% and 21% of
the SCRs for AICL and AIGL respectively.

42 | P a g e

Risk

Description

Property Risk

The risk of a fall in valuation of property assets arising from the sensitivity ofassets to the level or volatility of market prices, rental yields and occupancy
rates. This risk is not applicable to AICL and AIGL who do not lease or own
any properties.

Interest Rate Risk

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

Strategic Participation Risk

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

Spread Risk

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

Currency Risk

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

Concentration Risk

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

C.3. COUNTERPARTY DEFAULT RISK
Credit or Counterparty risk represents the risk of default by reinsurance partners and investment
counterparties holding the Group’s cash balances, in line with the standard formula approach. It
reflects 8% of the Group SCR and is mainly comprised of Type 1 counterparty risk – the risk relating todefault by reinsurance partners combined with a trivial amount of Type 2 counterparty risk – the risk
relating to past due debtors.
It is a relatively small component of risk because the Group only enters into reinsurance arrangementswith counterparties of appropriate credit ratings (A- or higher), and because the Group has ‘funds
withheld’ arrangements in place with its largest UK motor quota share reinsurance partners which
mitigates a significant proportion of the risk faced.

C.4. LIQUIDITY RISK
Liquidity risk is not a key risk for the Group as both the UK Motor and Household Insurance havesignificant cash in-flows of income in advance of claims and expenses being paid, which are expected
to be less than the total premiums received. This reduces the risk of a liquidity strain.
The total amount of expected profit included in future premiums (EPIFP) as calculated in accordancewith Article 260 of the Delegated Acts is £39.5 million for the Consolidated Group and £5.7 million and£38.0 million for AICL and AIGL respectively. EPIFP is not a measure of the profit for the Group and is
not to be interpreted as a profit forecast or to set a floor to the profits of the Group.
As noted in section C2 above, one of the Group’s strategic considerations when determining
investment strategy is liquidity and a significant proportion of the funds invested sit in instant accessmoney market funds.

43 | P a g e

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

C.6. OTHER MATERIAL RISKSCAPITAL ADD-ON
As noted earlier in this section, the Group has applied for a Capital Add-On as a result of limitations inthe standard formula with respect to the Group’s risk profile. The CAO reported in the 2019 Groupannual QRT is £81.0 million, following approval in August 2017.
The CAO primarily reflects the following risks:
Risk

Description

Profit Commission

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

PPO (Potential and Settled)

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

C.7. ANY OTHER INFORMATIONLOSS ABSORBING CAPACITY OF DEFERRED TAXES (LACDT)At YE’19, the Group’s regulatory SCR is reduced by £19.9 million to reflect the tax losses arising as aresult of the 1 in 200 year event, that may be utilised against current or deferred tax liabilities. The
resulting LACDT can primarily be attributed to the Group’s regulated insurance entities in the UK and
Gibraltar. No LACDT benefit has been recognised on the basis of the potential to offset tax losses
against profits on business that will be written in the future.

TREATMENT OF ADMIRAL LOANSAt YE’19, the Group’s regulatory SCR includes £29.6 million to reflect the risks inherent within theAdmiral Loans business. This primarily reflects credit risk on the net loans portfolio, together with anelement of operational risk.

RISK SENSITIVITY
The Group has established processes to undertake stress and scenario testing on an ongoing basis,
with testing undertaken at least annually. The stress testing processes operate in collaboration with
the Corporate Governance Committees and involve a number of members of senior and operational
management. The results of the tests undertaken improve the Boards understanding of risk, influencebusiness decisions and form a key part of the Enterprise Risk Management Framework.
44 | P a g e

In addition, solvency ratio sensitivities are reported to the Group Board and its Committees on aregular basis. The following Group solvency ratio sensitivities (as reported in the 2019 Annual Report)
were reviewed for YE’19.
Solvency Ratio Sensitivities 2019

Movement in Solvency Ratio (percentage pts)

UK Motor – incurred loss ratio +5%(23%)

UK Motor – 1 in 200 catastrophe event(1%)

UK Household – 1 in 200 catastrophe event(2%)

Interest rate – yield curve down 50 bps(5%)

Credit spreads widen 100 bps(8%)

Currency – 25% movement in euro and US dollar(3%)

ASHE – long term inflation assumption up 50 bps(3%)

Loans – 100% worsening in experience(3%)

45 | P a g e

D. VALUATION FOR SOLVENCY PURPOSES (AUDITED)
Section D focuses on the Solvency II balance sheet and the valuation of assets and liabilities. For eachmaterial class of assets, technical provisions and other liabilities, the following information is provided:••

A description of the bases, methods and main assumptions used in arriving at the valuation
for solvency purposes;
Quantitative and qualitative explanations of material differences between the bases, methods
and main assumptions used for the valuation for solvency and financial statement purposes.

The material classes in the Group and solo entity Solvency II balance sheets are shown in the tablebelow.
Summary Solvency II Balance Sheets – Consolidated Group, AICL and AIGL
Solvency II Balance Sheet, 31-Dec-19

GROUP

AICL

AIGL

Property, plant and equipment

147.1

-

-

Investments excl Participations

3,222.4309.6

2,333.1

Investment in Participations

72.7

-

-

Loans and Mortgages

185.2

-

150.6

Reinsurance recoverables

1,653.3

28.6

1,285.3--

0.6

Receivables and other assets

414.9

88.5

84.1

Cash

189.2

10.2

13.0

Total Assets

5,884.8436.9

3,866.7

Technical Provisions - best estimate

3,056.2

258.5

2,272.3

Technical Provisions - risk margin

86.1

14.4

68.2

Deposits from reinsurers

793.6

2.1

831.5

Deferred tax liabilities

63.2

6.0

-

Other payables and liabilities

539.6

24.0

177.6

Subordinated liabilities

225.1

-

-

Total Liabilities

4,763.8305.0

3,349.6

Excess of Assets over Liabilities

1,121.0

131.9

517.1

Deferred tax assets

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

46 | P a g e

D.1. ASSETS
Material Class

1. Goodwill, DAC andIntangible Assets

Goodwill, deferred acquisition costs and intangible assets (primarily internallygenerated software assets) have no economic value and are therefore eliminated in
the transition from IFRS to Solvency II. This has a total impact of £116.9 million forGroup, and £2.8 million and £9.6 million for AICL and AIGL respectively.

2. Property, plant andequipment

Property plant and equipment includes both right-of-use assets arising from property
leases following the implementation of IFRS 16 on January 1 2019 and other PPE(primarily and leasehold improvements). These assets are held at the IFRS value of
cost less depreciation. This valuation is not considered to differ materially from its
economic market value.
Financial assets and liabilities are held at Fair Value where level 1 inputs can beobtained. Level 1 refers to the first level of the Fair Value hierarchy which categorises
valuation inputs into three levels. The hierarchy gives the highest priority (Level 1) toquoted prices in an active market, and the lowest priority to unobservable inputs(Level 3). Level 3 financial assets and liabilities are immaterial to the Group, AICL andAIGL.
Level 1 inputs
Level 1 inputs are quoted prices in active markets for identical assets or liabilities
that the entity can access at the measurement date.
A quoted market price in an active market provides the most reliable evidence of fairvalue and is used without adjustment to measure fair value whenever available, withlimited exceptions.
Level 2 inputs
Level 2 inputs are inputs other than quoted market prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 2 inputs include:

3. Investments and 8. Cash

•
•
•

•

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

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

Participations are valued and accounted for using the adjusted net equity method for
Solvency II purposes. This is different to the IFRS valuation which is based on an
unadjusted IFRS net asset valuation – the differences therefore relate to the47 | P a g e

adjustments noted in these valuation policies. The impact of revaluation to theadjusted net equity method is a reduction of £13.3 million.

5. Loans and Mortgages

Loans and advances are measured at amortised cost. This is because the assets areheld in order to collect contractual cash flows, and the contractual terms of thefinancial asset give rise to cash flows which are solely payments of principal andinterest on the principal amount outstanding. The amortised cost of loans andadvances is a reasonable approximation of fair value. A provision for expected credit
losses in line with IFRS 9 requirements is recognised in relation to the amortised costbalance.

12. Deferred tax assets

Refer to Deferred Tax Liabilities section (D.2).

6. Reinsurance Recoverables

Refer to Technical Provisions section (D.3).

7. Receivables and otherassets

The fair value of receivables is based on the amortised cost valuation, in line with
Level 2 of the Fair Value hierarchy noted above. Due to the short-term nature of thereceivables this amortised cost valuation approximates to fair value and therefore
there are no valuation differences between IFRS and SII valuation.

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

12. Deferred tax liabilities

Refer to Technical Provisions section (D.3).
Refer to Technical Provisions section (D.3).
Deposits from reinsurers reflect amounts held in relation to reinsurance contracts.
The balances are valued on a historic cost basis which is materially in line with theirfair value due to the short term nature of the liabilities.
The deferred tax liability in the Group Solvency II balance sheet reflects the net
deferred tax liability on a Solvency II basis using the valuation rules within IAS 12.
The total Group revaluation of (£61.1) million reflects the deferred tax impact of therevaluations made between IFRS and Solvency II in the other balance sheet line
items, primarily the release of margin in the Technical Provisions and Profit
Commission balances. The corresponding revaluation for AICL and AIGL is (£5.2)
million and £0.6 million respectively.
The IFRS deferred tax balance is a net deferred tax asset.

13. Other payables andliabilities

14. Subordinated liabilities

Other payables and liabilities primarily reflect other balances with co-insurers andreinsurers, not classified elsewhere and balances between the entities within thescope of the Solvency II Group and related participations.
The balances are valued on an amortised cost basis which, due to the short term
nature of other payables, is materially consistent with fair value; this valuation is thesame as the IFRS valuation.
Subordinated liabilities reflects the Group’s 10 year subordinated bonds. For
Solvency II purposes it is included at fair value (excluding the impact of changes in
Admiral’s own credit quality). On an IFRS basis, it is held at amortised cost.

48 | P a g e

D.3. TECHNICAL PROVISIONSTECHNICAL PROVISIONS – BEST ESTIMATEBest estimate technical provisions for Group and solo entity material lines of business are as follows:2019 Best estimate technical provisions - Group
31-Dec-19

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
DamagetoProperty

GeneralLiability

Life

Other

Total

Gross - Best Estimate

2,740.8

132.7

96.2

6.9

64.2

15.4

3,056.2

Recoverable from reinsurers

1,468.5

96.5

66.8

4.7

16.8

-

1,653.3

Net - Best Estimate

1,272.3

36.2

29.4

2.2

47.4

15.4

1,402.92019 Best estimate technical provisions – AICL
31-Dec-19

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
DamagetoProperty

GeneralLiability

Life

Other

Total

Gross - Best Estimate

244.3

5.1

-

-

9.1

-

258.5

Recoverable from reinsurers

26.3

(0.2)

-

-

2.5

-

28.6

Net - Best Estimate

218.0

5.3

-

-

6.6

-

229.9

2019 Best estimate technical provisions - AIGL
31-Dec-19

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
DamagetoProperty

GeneralLiability

Life

Other

Total

Gross - Best Estimate

2,053.4

45.3

96.2

6.9

55.1

15.4

2,272.3

Recoverable from reinsurers

1,150.1

49.3

66.8

4.7

14.4

-

1,285.3

Net - Best Estimate

903.3

(4.0)

29.4

2.2

40.7

15.4

987.0

Bases, Methods and Main Assumptions
Best estimate technical provisions are comprised of a claims provision and premium provision. The
claims and premium provision combined give the expected cost of settling all future claims arisingfrom business that the Group is contractually obliged to cover. This includes an allowance for the
expenses of both running the company and of servicing claims such as claims handling staff costs. The
allowance for future income is based on business already written, as well as business that has not yet
incepted, but where the Group is obliged to offer cover i.e. renewals already offered or quoted (Bound
But Not Incepted – BBNI).
The claims provision is the discounted best estimate of all future cash-flows relating to claim events
which occurred prior to the valuation date. These cash-flows are made up of:

49 | P a g e

Outgoing cash-flows:•

Claim paymentsoSettling reported claimsoSettling claims not yet reported•

Expenses•

ENID (Events not in Data) allowance

Minus Incoming cash-flows•

Future premiums, such as uncollected/overdue premium•

Reinsurance recoveries on all claimsowith an allowance for reinsurance bad debt

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

Claim payments, including BBNI policies•

Expenses•

ENID (events not in data) allowance•

Reinsurance premium

Minus incoming cash-flows:•

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

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

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

Recoveries from future salvage and subrogation•

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

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

Excess of loss reinsurance
Quota share reinsurance

50 | P a g e

TECHNICAL PROVISIONS – RISK MARGIN
31-Dec-19

Motor
VehicleLiability

Motor
VehicleOther

Fire and
Other
DamagetoProperty

GeneralLiability

Life

Other

Total

Net Risk Margin - Group

79.1

2.3

1.8

0.1

1.8

1.0

86.1

Net Risk Margin - AICL

13.6

0.3

-

-

0.5

-

14.4

Net Risk Margin - AIGL

63.0

0.3

2.0

0.2

1.6

1.1

68.2

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

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

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

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

51 | P a g e

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

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

The above disclosure is relevant for all lines of business as there are no specific transition adjustments
recognised for individual lines. The overall impact of moving from an IFRS to a Solvency II basis isaround £288.1 million excluding risk margin. The corresponding impacts for AICL and AIGL are £30.3
million and £4.0 million respectively.
The introduction of the SII risk margin reduces the net impact of the reduction in provisions ontranslation from IFRS to SII by £86.1 million. The corresponding SII risk margin for AICL and AIGL is£14.4 million and £68.2 million.

ADJUSTMENTS AND SIMPLIFICATIONSThe Matching Adjustment has not been applied in the calculation of Technical Provisions at 31
December 2019.
In February 2017, the Group obtained approval to use the Volatility Adjustment (‘VA’) in thecalculation of technical provisions for the Group and its regulated subsidiaries from the UK and
Gibraltar regulators. The impact of applying the VA adjustment to the calculation of Group Technical
Provisions (net of reinsurance recoverables) is a reduction in Own Funds of around £8.8 million (£20.9
million in 2018). The corresponding impact for AIGL is £7.7 million (2018: £17.8 million) and for AICLis £1.2 million. The VA adjustment was not applied for AICL at 31 December 2018, due to investment
returns falling below the risk-free rate plus VA at this date.
The transitional risk-free interest rate term structure as per Article 308c of the Directive has not been
applied in the calculation of Technical Provisions at 31 December 2019.
The transitional deduction as per Article 308d of the Directive has not been applied in the calculationof Technical Provisions at 31 December 2019.

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

D.5. ANY OTHER INFORMATION
None.

52 | P a g e

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

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

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

Admiral Group plc (Parent)

Insurance holding company

Admiral Insurance Company Limited

UK regulated insurance entity

Admiral Insurance (Gibraltar) Limited

Gibraltar regulated insurance entity

Admiral Europe Compañía de Seguros, S.A.

Spanish regulated insurance entity

Elephant Insurance Company

Third country insurance entity

EUI Limited

Ancillary services undertaking

Elephant Insurance Services Limited

Ancillary services undertaking

Admiral Intermediary Services, S.A.

Ancillary services undertaking

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

E.1. OWN FUNDSCAPITAL MANAGEMENT OBJECTIVESThe Group manages its capital to ensure that all entities within the Group are able to continue as going
concerns and also to ensure that regulated entities meet regulatory requirements with an appropriate
margin. Excess capital above these levels within subsidiaries is paid up to the Group holding company
in the form of dividends on a regular basis. Forward looking assessments of Capital are performed
over a three-year planning horizon and are reported with the Group’s annual ORSA process.
The Group’s dividend policy is to pay 65% of post-tax profits as a normal dividend and to pay a further
special dividend comprising earnings not required to be held in the Group for solvency or buffers. The
strength of the Group’s capital position at YE’19 allowed the Board to propose, and shareholders
approve, a 2019 final dividend of 66.0 pence per share (£221.5 million), as follows:••

56.3 pence per share representing a normal element, based on the dividend policy of
distributing 65% of post-tax profits; andA special element of 20.7 pence per share.

This dividend has been deducted from Tier 1 Own Funds as noted in the following section. The
payment date for the normal element of the dividend was 1 June 2020.
53 | P a g e

In April 2020, the Group announced that, despite maintaining a strong solvency and liquidity position,
given the current economic uncertainty and the call for heightened prudence from regulators, it had
amended its recommendation to shareholders with respect to the Group’s final dividend for the year
ended 31 December 2019. The normal dividend of 56.3 pence was unchanged (and subsequently
approved by shareholders at the Group’s AGM on 30 April 2020 and paid on 1 June 2020) but the
special dividend of 20.7 pence per share was suspended.
The Board currently intends to pay this part of the final dividend in the second half of 2020, unlessthere is a significant deterioration in the Group’s financial position, trading or outlook. Excluding thespecial dividend of 20.7 pence per share (£60 million), the Group’s solvency ratio at 31 December 2019
would have been 9pts higher at 179% as follows.
31-Dec-19

Group

SCR

659.9

Eligible Own Funds adjusted for exclusion of
H2’19 special dividend

1,179.5

Surplus519.6

Adjusted Solvency Ratio

179%

Post year end dividends of £20.0 million for AICL and £50.0 million for AIGL were proposed andapproved for payment to the group holding company. These dividends have been deducted from Tier
1 Own Funds as noted in the following section.

CLASSIFICATION OF OWN FUNDS BY TIER
The classification of Own Funds for the Group and solo entities at 31 December 2019 is as follows:
GROUP
31-Dec-19

AICL

AIGL

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVER
MCR

Ordinary Share Capital

0.3

0.3

37.3

37.3

0.1

0.1

Share Premium Account

13.1

13.1

-

-

14.9

14.9

Reconciliation Reserve
Own Funds from Other
Financial Sectors

878.8

878.8

74.6

74.6

451.5

451.5

2.2

2.2

-

-

-

-

Tier 1 Own Funds

894.4

894.4

111.9

111.9

466.5

466.5

Subordinated Liabilities

225.1

225.1

-

-

-

-

Tier 2 Own Funds

225.1

225.1

-

-

-

-

Deferred tax assets

-

-

-

-

0.6

-

Tier 3 Own Funds

-

-

-

-

0.6

-

Total Basic Own Funds

1,119.5

1,119.5

111.9

111.9

467.1

466.5

Ancillary Own Funds

-

-

-

-

60.0

-

1,119.5

1,119.5

111.9

111.9

527.1

466.5

Total Available Own Funds

54 | P a g e

Total Eligible Own Funds

1,119.5

931.5

111.9

111.9

527.1

466.5

The equivalent classification at 31 December 2018 was as follows:
GROUP
31-Dec-18

AICL

AIGL

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVERMCR

TO COVERSCRTO COVER
MCR

Ordinary Share Capital

0.3

0.3

37.3

37.3

0.1

0.1

Share Premium Account

13.1

13.1

-

-

14.9

14.9

Reconciliation Reserve
Own Funds from Other
Financial Sectors

783.9

783.9

118.0

118.0

402.6

402.6

0.2

0.2

-

-

-

-

Tier 1 Own Funds

797.5

797.5

155.3

155.3

417.6

417.6

Subordinated Liabilities

211.3

211.3

-

-

-

-

Tier 2 Own Funds

211.3

211.3

-

-

-

-

Total Basic Own Funds

1,008.8

1,008.8

155.3

155.3

417.6

417.6

Ancillary Own Funds

-

-

-

-

60.0

-

Total Available Own Funds

1,008.8

1,008.8

155.3

155.3

477.6

417.6

Total Eligible Own Funds

1,008.8

835.6

155.3

155.3

477.6

417.6

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

AICL

AIGL

Own Funds as at 31-Dec-2018

1,008.8

155.3

477.6

Capital generation

498.2

26.6

129.5

Dividends
Valuation Movement –Subordinated Liabilities(401.3)(70.0)(80.0)

13.8--

Own Funds as at 31-Dec-2019

1,119.5

111.9

527.1

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

55 | P a g e£1,400m£1,200m(61.1)£1,000m(116.9)

£800m

2.6
(7.3)

(13.3)(20.9)

1,120.6

£600m
£400m

(221.5)

414.6

918.6

894.4

£200m
£0m
IFRS Net
AssetsIntangible Investments Financial Revaluation Deferred Tax Exess of Foreseeable Other Non
Other
Asset
- holdings in Assets and of TPs andAssets over Dividends
Available
Financial
Elimination participation Liabilities
ProfitLiabilities
Own Funds Sector Own
revaluation Commission
Funds

Tier 1 Own
Funds

As noted in Section D, the primary valuation difference (£414.6 million) arises on the transition fromnet IFRS insurance liabilities and amounts due to and from co-insurers and reinsurers in relation to
profit commission, to Solvency II technical provisions and profit commission balances. The majority of
the change in deferred tax (-£61.1 million) relates to the additional liability that arises from the releaseof profit on the transfer to SII best estimate technical provisions and profit commissions.
The other material adjustment is the elimination of the Group’s intangible assets (goodwill, softwareand deferred acquisition costs) which, net of deferred instalment income, totals £116.9 million.
For both AICL and AIGL, the ‘excess of assets over liabilities’ is equivalent to Tier 1 Own Funds with the
exception of the foreseeable dividends of £20.0 million and £50.0 million respectively. The
reconciliations of IFRS Net Assets to the Solvency II excess of assets over liabilities are as follows:2019 Reconciliation of IFRS Net Assets to Excess of assets over liabilities and Tier 1 Own Funds –
AICL
£160m
£140m
30.3

£120m
£100m

(5.2)

(20.0)

(2.8)

£80m
£60m

131.9

111.9

109.6

£40m
£20m
£0m
IFRS Net Assets

Intangible Asset
Elimination

Revaluation of TPs

Deferred Tax

Exess of Assets overLiabilities

Foreseeable
Dividends

Tier 1 Own Funds

56 | P a g e

2019 Reconciliation of IFRS Net Assets to Excess of assets over liabilities and Tier 1 Own Funds –
AIGL
£600m
4.0
£500m

0.6
(50.0)

(9.6)

£400m
£300m
522.1

517.1

467.1

£200m
£100m
£0m
IFRS Net Assets

Intangible Asset
Elimination

Revaluation of TPs
and Profit
Commission

Deferred Tax

Exess of Assets overLiabilities

Foreseeable
Dividends

Tier 1 Own Funds

FUNGIBILITY AND TRANSFERABILITY OF GROUP OWN FUNDSThe Group has not identified any material restrictions to the fungibility and transferability of GroupOwn Funds.
Tier 2 Own Funds
Tier 2 Own Funds consist of subordinated liabilities in the form of the Group’s 10 year dated, listed
subordinated debt with a market value at the end of the current period of £225.1 million, an increaseof £13.8 million compared with the previous reporting period. The debt was issued in July 2014 andmatures in July 2024 and pays a fixed rate of interest of 5.5%. On issuance, the Group obtained
confirmation from the UK regulator, the PRA that the debt qualifies as Solvency II Tier 2 Own Funds.
Tier 2 Own Funds for AIGL are Ancillary Own Funds and represent a £60.0 million Equity Commitment
from the Group’s parent company, Admiral Group plc. The commitment allows AIGL to call a capital
contribution (up to a maximum of £60.0 million) from the Group parent, Admiral Group plc, during
the term of the agreement without encumbrance.
The arrangement has no impact at Group level – there is no contingent liability in the parent company
as the possibility of the commitment being called is considered to be remote. Furthermore, the Tier 2
intra-group capital that is created is eliminated on consolidation of the SII Group.

E.2. SOLVENCY CAPITAL REQUIREMENT AND MINIMUM CAPITAL REQUIREMENTCALCULATION OF THE GROUP CONSOLIDATED SOLVENCY CAPITAL REQUIREMENTThe Group Solvency Capital Requirement is calculated on the basis of consolidated data. The reported
Solvency Capital Requirement as at 31 December 2019 and 31 December 2018 for Group, AICL and
AIGL is as follows:

57 | P a g e

31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

Market Risk

135.3

86.7

14.6

23.3

72.1

60.6

Counterparty Risk

50.6

37.6

15.0

3.2

17.0

21.1

Life Underwriting Risk

5.0

3.1

0.7

0.5

4.3

2.7

Non-Life Underwriting Risk

397.3

378.3

74.0

81.8

246.9

243.3

Diversification(109.0)(76.2)(16.6)(16.6)(56.8)(50.9)

Basic SCR

479.2

429.5

87.7

92.2

283.5

276.8

Operational Risk

90.0

85.0

7.5

12.4

66.7

69.4

Loss absorbing capacity ofdeferred taxes(19.9)(24.3)(11.5)(13.5)(8.4)(10.6)SCR excluding Capital Add-On
and Other Financial Sectors

549.3

490.2

83.7

91.1

341.8

335.6

Capital Add-On
SCR for Other Financial Sectors(unaudited)

81.0

81.0

-

-

-

-

29.6

20.6

-

-

-

-

SCR

659.9

591.8

83.7

91.1

341.8

335.6

The calculation of SCR for AIGL applies Undertaking Specific Parameters (USPs) for both Non-Life
Premium Risk and Non-Life Reserve Risk in respect of the Motor Vehicle Liability and Other Motorlines of business. The approval for the use of USPs was received from the Gibraltar Financial Services
Commission in December 2015. The parameters are updated on an annual basis.
The Group Capital Add-On of £81.0 million was approved by the PRA in August 2017.
Movement in SCR
The solvency capital requirements for Group, AICL and AIGL have increased over the period. The
increases are primarily related to growth of all the Group’s insurance businesses, with non-life
insurance risk reflecting the largest increases.

58 | P a g e

Solvency Ratio
When combined with the Eligible Own Funds, the resulting reported solvency positions are as follows:
31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

SCR

659.9

591.8

83.7

91.1

341.8

335.6

Eligible Own Funds

1,119.5

1,008.8

111.9

155.3

527.1

477.6

Surplus

459.6

417.0

28.2

64.2

185.3

142.0

Solvency Ratio

170%

170%

134%

170%

154%

142%

CALCULATION OF THE MINIMUM CAPITAL REQUIREMENTThe Group Minimum Capital Requirement at 31 December 2019 is £196.6 million. It is calculated inline with Article 230 of the Directive as the minimum of:••

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

The Minimum Capital Requirement for the solo entities is calculated as per Article 129 of the Directive.
The coverage of Eligible Own Funds to MCR at 31 December 2019 is as follows:
31-Dec-19

GROUP

AICL

AIGL

2019

2018

2019

2018

2019

2018

MCR

196.6

191.4

32.4

41.0

119.8

130.2

Eligible Own Funds

931.5

835.6

111.9

155.3

466.5

417.6

Surplus

734.9

644.2

79.5

114.3

346.7

287.4

Ratio

474%

437%

345%

379%

390%

321%

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

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

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

59 | P a g e

E.6. ANY OTHER INFORMATION
Treatment of Admiral Loans (unaudited)
Admiral’s lending business (Admiral Loans) was in 2017 conducted out of the legal entity EUI Limited(EUI) which, through its primary function as insurance intermediary, was treated as an Ancillary
Services Undertaking (ASU) within the Group Solvency II calculation. In 2018 the loans business wastransferred to a separate legal entity known as Admiral Financial Services Limited (AFSL). Additionally,
Seren One Limited (an SPE) was set up by the Group in relation to the Admiral loans business, whereby
the Group has securitised certain loans by the transfer of the loans to the SPE. AFSL and Seren One
are not Solvency II regulated entities and so are not consolidated in the Solvency II balance sheet but
recognised as non-regulated undertakings carrying out financial activities within Own Funds of Other
Financial Sectors. This forms part of the reconciliation from Excess of Assets over Liabilities to Eligible
Own Funds.
Article 1(52) of the Delegated Regulation defines a ‘non-regulated undertaking carrying out financial
activities’ as a non-regulated undertaking which carries out one or more of the activities referred toin Annex I of Directive 2013/36/EU. The contribution to the Group capital requirement is based on
relevant sectoral rules and the Group has included a notional capital requirement of £29.6 million toreflect the risks associated with the loans business.
Reconciliation to previously reported Solvency Ratio (unaudited)
The Group solvency ratio presented in this report is different to the solvency ratio reported in theGroup’s annual report as it is prepared at a different valuation date and it excludes the impact ofchanges made arising from the reporting finalisation process. The chart below shows the impact ofthese moves:
250%

10%

200%

10%

150%
100%

190%

170%

50%
0%
YE'19 SFCR

Change in Valuation Date

Other (including impact ofproposed CAO)

YE'19 Annual Report60 | P a g e

Description
Change in Valuation Date

The solvency ratio in this report excludes the projected growth in economic
capital between the year end and the date of the Annual Report (which waspreviously reported).

Other (Including the impact ofproposed CAO)

Other changes to both SCR and Own Funds calculations arising from thereporting finalisation process.
This includes the impact of the proposed Capital Add-On (CAO). The solvency
ratio reported in the Group’s Annual Report reflected the draft revision to theGroup CAO. This was reported as ‘subject to regulatory approval’ and‘unaudited’. The ratio reported in this SFCR reflects the previous CAO forwhich regulatory approval was in place at the valuation date.
The proposed revision to the CAO has been approved through internal
governance and requires formal notification from the PRA. This process is
expected to be completed prior to the Group HY’20 interim results
announcement and an update will be provided at this time.

61 | P a g e

APPENDIX 1 – ADDITIONAL INFORMATION ON THE COVID-19 GLOBAL PANDEMIC (UNAUDITED)
Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus.
The outbreak was declared a Public Health Emergency of International Concern by the World HealthOrganisation on 30 January 2020. It was subsequently declared a global pandemic on 11 March 2020.
In response to the pandemic, Governments across the world have imposed lockdown measures inorder to contain the spread of the outbreak – these measures include travel restrictions, businessclosures, cancellations of events and mass gatherings and the introduction of ‘stay at home’regulations. At the date of this report, different countries are at varying stages of relaxation of
lockdown restrictions, however it is expected that some element of restriction will be required forsome time, with no imminent prospect of a vaccine.
The economic impacts of COVID-19 are expected to be severe, with economic downturns experienced
by many countries, including those in which the Group has operations. Volatility in financial markets
was significant early in the outbreak with the potential for further uncertainty despite relatively calm
conditions during May and June 2020.
Both EIOPA and the Group’s regulator, the PRA, consider COVID-19 to be a ‘major development’ thatsignificantly affects the relevance of the information in the SFCR. The impacts of COVID-19 on theGroup’s businesses, systems of governance, risk profile, valuation for solvency purposes and capitalmanagement are set out in the following sections.
The figures presented in this report and the Quantitative Reporting Templates have been preparedbased on conditions in existence at the 31 December 2019 reporting date, with COVID-19 treated asa non-adjusting event that arose after the end of the reporting period. This includes the Technical
Provisions, where best estimate assumptions have not been updated for the subsequent impact of
COVID-19, and as such are not listed as a material difference between Solvency II and financial
statements prepared as at 31 December 2019. The PRA reported on 16 April 2020, that is has no
objection to firms taking this approach.
Business and Performance
Information presented in Section A to this report reflects the performance of the Group’s businesses
in the year to 31 December 2019. The following paragraphs set out the most material expected
impacts of COVID-19 on the Group’s businesses through 2020 and beyond.
The Group’s insurance businesses do not have direct exposure to COVID-19 related insurance claims,
other than an immaterial exposure to travel insurance claims in the UK. The impact of travel claims,
primarily arising as a result of cancelled trips is not expected to be significant to the insurer, AIGL or
to the Group as a whole.
All of the Group’s insurance businesses have remained operational during this period following
significant operational efforts to ensure that employees are able to work remotely. Potential impacts
arising from the pandemic are being assessed through regular updates to business planning scenarios,that consider varying levels of severity of lockdown restrictions and associated economic downturns.
Robust stress testing has been performed and the Group and its insurers maintain strong solvency andliquidity positions above target levels and regulatory thresholds.

62 | P a g e

Outside of the Group’s insurance businesses, the primary impacts on the Group’s financial services
business, Admiral Loans, are through its exposure to an elevated level of credit losses associated withthe economic downturn and in particular increasing levels of unemployment. The Board of Admiral
Financial Services Limited have considered the potential impacts of a range of potential economic
scenarios, including stress tests arising from a more adverse or prolonged down-turn, on the net assets
and liquidity position of the company, with the most severe scenarios having a material impact on theGroup’s balance sheet.
The impact of COVID-19 on the Group’s price comparison businesses is not expected to be material to
the Group’s financial position or future performance.
System of Governance
The Group’s system of governance continues to be operational following the implementation ofbusiness continuity plans, and the shift to remote working. Boards and Committees are receiving an
increased level of reporting covering the operational and financial impacts of COVID-19 andoperational changes have been subject to appropriate governance.
At the date of this report, a number of reviews are in progress that will provide assurance over theoperational effectiveness of the Group’s internal control system following the implementation ofcontinuity plans.
Risk Profile
The impact of COVID-19 on the key risk types for the Group and solo entities AICL and AIGL, as well as
the process for monitoring risks and the implementation of risk mitigation techniques is set out below.
Risk sensitivities as reported in the Group’s 2019 Annual Report, are set out in Section C to this report.
Underwriting risk
The Group and solo entity exposures to COVID-19, together with risk mitigations are as follows:
Non-life, motor:
The lockdown restrictions in all of the jurisdictions in which the Group writes motor insurance businesshave led to a reduction in the frequency of road accidents and claims. In the UK, in April 2020, theGroup announced a premium rebate of £25 to all customers to reflect the period where customers
were asked to stay at home and were therefore driving less. Other impacts include reductions inpremium volumes during the lockdown period. Future premium volumes may also be impacted by the
economic downturn, as well as the average settlement cost of claims.
The Group is taking appropriate mitigating steps with respect to these risks, including ensuring that
there is sufficient capacity in the relevant operational areas in order to both sell, renew and service
motor insurance policies and settle claims, and through relevant pricing actions.
Life, motor:
The Group and its solo entities are exposed to life insurance (annuities stemming from non-life
insurance contracts) risks through the potential for large bodily injury claims to be settled by a periodic
payment order (PPO). The economic downturn may result in future changes to the propensity for

63 | P a g e

bodily injury claims to settle as a PPO, and also impact future assumptions in relation to the annuity
inflation and discounting.
Non-life, other:
The Group and solo entity, AIGL, is exposed to an increased level of travel insurance claims due totravel cancellation, disruption or medical events arising from COVID-19. The Group utilises excess ofloss reinsurance as risk mitigation and expects to make recoveries through this cover to partially offset
the gross losses incurred. At the date of this report, travel insurance claims incurred is not material toGroup or AIGL’s financial performance or position. Other actions have been taken to limit exposure
arising from new and renewed business through pricing actions, changes to policy coverage andwithdrawal of products.
Other lines of business written by the Group include property risks and other less material classes.
Whilst risks relating to future premium volumes and the cost of claims are similar to those noted above
for motor, any impacts are not expected to be material to the Group or the solo entities.
Market risk
The initial impact of financial market volatility through the COVID-19 crisis to date was significant, withthe main impacts on Admiral arising from widening credit spreads on the valuation of the Group’s
fixed-income portfolio. A reduction in risk free yields has also reduced the level of discounting benefit
in the Group and solo entity technical provisions, though the impact is partially mitigated by theoffsetting movements in asset values and the use of the volatility adjusted yield curve, which reflects
the widening in credit spreads noted above. The sensitivity of the Group’s solvency ratio to bothspread and interest rate movements is shown in Section C.
The Group is monitoring market movements and the resulting impact on balance sheets on a regularbasis, with regular review by the Group’s Investment Committee. The Group’s Asset Managers
monitor underlying exposures on a daily basis and if necessary recommend changes to the portfolio
to manage and mitigate risk.
Counterparty Default risk
The Group continues to monitor the credit quality of counterparties including banks, reinsurers andpolicyholders in order to identify increases in default risk. No significant changes in the level of default
risk for the Group or solo entities have been identified to date.
Liquidity Risk
The Group is closely monitoring liquidity at both the parent company and individual entity level. The
consideration of liquidity at the parent company level ensures that the Group has sufficient liquid
resources to support all underlying operations, and consideration at the entity level ensures that it
has sufficient liquid resources to meet requirements.
The Group has significant liquidity at both the parent company and solo entity levels, and robust
scenario testing demonstrates that liquidity at the parent company level remains above target levels
even in severe scenarios.

64 | P a g e

In April 2020, the Group announced that, given the current economic uncertainty and the call forheightened prudence from regulators, it had amended its recommendation to shareholders withrespect to the Group’s final dividend for the year ended 31 December 2019. The normal dividend of
56.3 pence was unchanged (and subsequently approved by shareholders at the Group’s AGM on 30
April 2020 and paid on 1 June 2020) but the special dividend of 20.7 pence per share was suspended.
The Board currently intends to pay this part of the final dividend in the second half of 2020 unlessthere is a significant deterioration in the Group’s financial position, trading or outlook.
Operational risk
The Group is exposed to an increased level of operational risk through the implementation of business
continuity plans, including the shift to remote working, the impact on employees of COVID-19,
including childcare responsibilities and possible sickness absence, and through outsourcing
arrangements.
Notables impacts include:••••

Increased IT, information security, data protection and privacy risks as a result of rollout of
new and enhanced hard and software in order to support remote working capacity
Increased people risks, including physical and mental health risks during the pandemic andthrough returning to work
Regulatory risks, including those related to customers, and in particular the increase invulnerable customers that is likely to arise during the pandemic
Strategic risks, including the impact on Group projects, and product developments andenhancements

The Group is adjusting processes and controls in order to manage the increased level of operationalrisk and is regularly reporting these changes through its Risk Management Committees.
Valuation for Solvency Purposes
At the date of this report, the primary impacts of COVID-19 on the Group’s and solo entity Solvency IIbalance sheets are as follows:••

Investments – the global financial market volatility noted above results in impacts on thevaluation of financial assets, primarily the Group’s fixed-income portfolio, which arerecognised at fair value in the SII balance sheet. In particular, widening credit spreads haveresulted in reductions in asset values, partially offset by the impact of the reduction in riskfree yields.
Technical Provisions – as noted above, the technical provisions included in this report are
prepared based on conditions and best estimate assumptions in place at the 31 December
2019 reporting date. Post-year end technical provisions are impacted by:o Changes in discounting benefit arising from changes in the volatility-adjusted yieldcurve
o Changes arising from the reduction in motor insurance claims during the lockdown
periodso Changes arising from the increase in frequency of travel insurance claims
o Changes arising to the premium provision both in relation to the projection of futurepremium volumes and where relevant motor premium rebates offered to customers
65 | P a g e

oChanges in the assumptions relating the cost of incurred claims

The Group and solo entities continue to review and refine best estimate assumptions used in thecalculation of technical provisions in 2020.
Capital management
The Own Funds, Solvency Capital Requirement and solvency ratio of the Group and solo entities aremonitored on an on-going basis using proxy models and simplified calculations. The Group and solo
entities continue to maintain strong solvency positions, with solvency ratios above target levels.
The Group’s Risk Committee has reviewed robust solvency stress testing and has discussed a range ofmanagement actions available to the Group should it need to improve its solvency position or thesolvency position of one of the Group’s subsidiaries.

66 | P a g e

APPENDIX 2 – GLOSSARY
Term

Definition

Accident year

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

Actuarial best estimate

The probability-weighted average of all future claims and cost scenarios calculated using historical
data, actuarial methods and judgement.

ASHE‘Annual Survey of Hours and Earnings’ – a statistical index that is typically used for calculationinflation of annual payment amounts under Periodic Payment Order (PPO) claims settlements.

Claims reserves

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

Co-insurance

An arrangement in which two or more insurance companies agree to underwrite insurance businesson 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 tendency for the insurance market to swing between highs and lows of profitability over time,with the potential to influence premium rates (also known as the “underwriting cycle”).

Commutation

Insurance market cycle
Net claims

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

Net insurance premium
revenue

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

Ogden discount rate

The discount rate used in calculation of personal injury claims settlements. The rate is set by the
Lord Chancellor, the most recent rate of minus 0.25% being announced in 2019.

Periodic Payment Order(PPO)

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

Premium

A series of payments are made by the policyholder, typically monthly or annually, for part of or allof the duration of the contract. Written premium refers to the total amount the policyholder has
contracted for, whereas earned premium refers to the recognition of this premium over the life of
the contract.
A clause found in some reinsurance and coinsurance agreements that provides for profit sharing.

Profit commission
Reinsurance

Securitisation

Special Purpose Entity(SPE)
Ultimate loss ratio

Contractual arrangements whereby the Group transfers part or all of the insurance risk accepted toanother insurer. This can be on a quota share basis (a percentage share of premiums, claims andexpenses) or an excess of loss basis (full reinsurance for claims over an agreed value).
The process by which a group of assets, usually loans, is aggregated into a pool, which is used toback the issuance of new securities. A company transfer assets to a special purpose entity (SPE)
which then issues securities backed by the assets.
An entity that is created to accomplish a narrow and well-defined objective. There are specificrestrictions or limitations around ongoing activities. The Group uses an SPE set up under asecuritisation programme.
The projected ratio for a particular accident year or underwriting year, often used in the calculationof underwriting profit and profit commission.

Underwriting year

The year in which the policy was incepted.

Underwriting year basis

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

Written/Earned basis

67 | P a g e

APPENDIX 3 – QUANTITATIVE REPORTING TEMPLATESThe Group and its subsidiaries are required to disclose the following templates as set out in theCommission Implementing Regulation (EU) 2015/2452 of 2 December 2015 laying down implementing
technical standards with regard to the procedures, formats and templates of the solvency andfinancial condition report in accordance with Directive 2009/138/EC of the European Parliament andof the Council:
Group
Template Code
S.02.01.02
S.05.01.02
S.05.02.01
S.22.01.22
S.23.01.22
S.25.01.22
S.32.01.22

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

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

68 | P a g e

Admiral Group Plc
Solvency and Financial
Condition Report
Disclosures

31 December

2019(Monetary amounts in GBP thousands)

General information
Participating undertaking name

Admiral Group Plc

Group identification code

213800FGVM7Z9EJB2685

Type of code of group

LEI

Country of the group supervisor

GB

Language of reportingen

Reporting reference date

31 December 2019

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the group SCR

Standard formula

Method of group solvency calculation

Method 1 is used exclusively

Matching adjustment

No use of matching adjustment

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

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

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

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

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

Property (other than for own use)

R0090

Holdings in related undertakings, including participations

R0100

Equities

R0110
R0120
R0130

147,118
3,295,079
072,6830Equities - listed
Equities - unlisted
Bonds

1,896,491

R0140

Government Bonds

293,741

R0150

Corporate Bonds

1,450,133

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

152,616
1,207,563
0
118,3420R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages

185,221

R0240

Loans on policies

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

183,756

R0270 Reinsurance recoverables from:1,653,277

R0280

1,636,433

Non-life and health similar to non-life

R0290

Non-life excluding health

R0300

Health similar to non-life

R0310
R0320
R0330
R0340

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

0
1,465

1,636,433
16,845

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

16,845

Life index-linked and unit-linked

R0350 Deposits to cedants

0

R0360 Insurance and intermediaries receivables

299,845

R0370 Reinsurance receivables

51,268R0380 Receivables (trade, not insurance)

63,847R0390 Own shares (held directly)
R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in
R0410 Cash and cash equivalents

0
189,160

R0420 Any other assets, not elsewhere shown
R0500 Total assets

5,884,816

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

3,076,339

R0520

3,076,339

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

R0550

Risk margin

R0560

Technical provisions - health (similar to non-life)

R0570

TP calculated as a whole

R0580

Best Estimate

R0590

Risk margin

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

Technical provisions - health (similar to life)

R0620

TP calculated as a whole

R0630

Best Estimate

R0640
R0650

2,992,033
84,306
0

66,0220

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

66,022R0660

TP calculated as a whole

R0670

Best Estimate

64,213

R0680

Risk margin

1,809

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

TP calculated as a whole

R0710

Best Estimate

R0720

Risk margin

R0740 Contingent liabilities

00R0750 Provisions other than technical provisions
R0760 Pension benefit obligations
R0770 Deposits from reinsurers

793,635

R0780 Deferred tax liabilities

63,246

R0790 Derivatives
R0800 Debts owed to credit institutions
R0810 Financial liabilities other than debts owed to credit institutions

167
0
20,000R0820 Insurance & intermediaries payables

0R0830 Reinsurance payables

0

R0840 Payables (trade, not insurance)

519,308

R0850 Subordinated liabilities

225,100

R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

225,100

R0880 Any other liabilities, not elsewhere shown
R0900 Total liabilities

4,763,818

R1000 Excess of assets over liabilities

1,120,998

S.05.01.02

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

Total

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

Marine,aviation andtransport
insurance

Fire andother damage
to property
insurance

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

Assistance

Misc. financial
loss

HealthCasualty

Marine,aviation andtransport

Property

C0010

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

C0100

C0110

C0120

C0130

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct Business

1,572,329

506,041

147,131

2,746

18,53026,992

R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net2,273,769
0

1,085,712

346,575

106,813

1,993

0

336

1,541,431

486,616

159,466

40,317752

18,53026,656732,338

1,524,130

493,783

134,224

2,505

17,832

25,957

2,198,431

Premiums earned
R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted
R0240 Reinsurers' share
R0300 Net0
1,051,434

337,712

97,693

1,823

0

336

1,489,000

472,696

156,070

36,531

682

17,832

25,621

709,431

1,102,449

286,097

86,057

1,606

8,257

16,0331,500,500

Claims incurred
R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

876,236

225,11260,827

1,135

0

0

1,163,311

R0400 Net

226,21360,98525,230471

8,257

16,033

337,189

Changes in other technical provisions
R0410 Gross - Direct Business0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share
R0500 Net
R0550 Expenses incurred

0
0

0

0

0

0

0

0

115,687

31,63910,570

197

0

6,193

164,287

R1200 Other expenses

0

R1300 Total expenses

164,287

S.05.01.02

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

Healthinsurance

C0210

Insurance with Index-linked
profitand unit-linked
participation
insurance

C0220

C0230

Other life
insurance

C0240

Life reinsurance obligations

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

C0260

HealthreinsuranceLife
reinsurance

C0270

C0280

Total

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share0

R1600 Net000

Claims incurred
R1610 Gross

3,121

R1620 Reinsurers' share

1,559

R1700 Net

1,561

3,121
1,559
0

1,561

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share
R1800 NetR1900 Expenses incurred

0
0

0

0

864

0

864

R2500 Other expenses
R2600 Total expenses

864

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

C0050

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

Home Country
R0010
C0080

C0060

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

US

IT

ES

FR

C0090

C0100

C0110

C0120

C0130

C0070

Total Top 5 andhome country

C0140

Premiums written
R0110 Gross - Direct Business

1,725,231

223,386

171,457

61,02992,666

R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net2,273,769
01,176,879

149,799

101,868

43,86969,017

1,541,431

548,352

73,58869,58917,16023,649732,338

1,678,092

222,809

159,343

57,39580,792

2,198,431

Premiums earned
R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share
R0300 Net

1,144,817

149,414

94,176

41,13959,455

1,489,000

533,276

73,39565,167

16,256

21,337

709,4311,064,323

181,841

146,41742,86158,5601,494,001

Claims incurred
R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

862,983

121,499

101,240

30,13640,922

1,156,779

R0400 Net

201,340

60,34245,177

12,725

17,637337,222

0

0

0

0

0

0

Changes in other technical provisions
R0410 Gross - Direct BusinessR0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share

0

0

0

0

0

0

R0500 Net

0

0

0

0

0

0

102,461

29,302

16,400

8,035

8,089

164,287

R0550 Expenses incurred
R1200 Other expenses
R1300 Total expenses

164,287

S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

C0190

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

Home Country
R1400
C0220

C0200

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

US

IT

ES

FR

C0230

C0240

C0250

C0260

C0270

C0210
Total Top 5 andhome country
C0280

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net

0
0

0

0

0

0

0

R1610 Gross

3,121

0

0

0

0

3,121

R1620 Reinsurers' share

1,559

0

0

0

0

1,559

R1700 Net

1,561

0

0

0

0

1,561

Claims incurred

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0
864

0

0

0

0

0
864

R2500 Other expenses
R2600 Total expenses864

S.22.01.22

Impact of long term guarantees measures and transitionals

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

Impact oftransitional oninterest rate

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0010

C0030

C0050

C0070

C0090

R0010 Technical provisions

3,142,361

0016,8660R0020 Basic own funds

1,117,295

00-8,8460R0050 Eligible own funds to meet Solvency Capital Requirement

1,119,545

00-8,846

0659,8890014,5150R0090 Solvency Capital Requirement

S.23.01.22

Own Funds

Basic own funds before deduction for participations in other financial sector

R0010 Ordinary share capital (gross of own shares)

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

C0050

294

0

13,145

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

00R0050 Subordinated mutual member accounts

0

R0060

0

R0020

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

Non-available subordinated mutual member accounts at group level

294

Tier 30R0070 Surplus funds

0

0

R0080

0

0

Non-available surplus funds at group levelR0090 Preference shares

0

R0100

0

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

0

R0120

0

Non-available share premium account related to preference shares at group levelR0130 Reconciliation reserve878,756

R0140 Subordinated liabilities

225,100

R0150

Non-available subordinated liabilities at group level0R0160 An amount equal to the value of net deferred tax assets

0

R0170

0

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

0

R0190

0

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

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

0

R0210

0

Non-available minority interests at group level

0
0

0

0

0

0

0

0

0

0

0

225,100

0878,756

0
0
0

0

0

0

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

0

R0240

0

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

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

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

0R0270 Total of non-available own fund items

0

0

0

0

0

R0280 Total deductions

0

0

0

0

0

1,117,295

892,1950225,100

0

0

0

0

0

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

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

0

R0320 Unpaid and uncalled preference shares callable on demand

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

0

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

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

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

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

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

0R0400 Total ancillary own funds

0

Own funds of other financial sectors
R0410 Credit Institutions, investment firms, financial institutions, alternative investment fund managers, UCITS management companies
R0420 Institutions for occupational retirement provision

00R0430 Non regulated entities carrying out financial activities

2,250

2,250

R0440 Total own funds of other financial sectors

2,250

2,250

0

S.23.01.22

Own Funds

Basic own funds before deduction for participations in other financial sector

Tier 1
unrestricted
C0020

Total
C0010

Tier 1
restricted
C0030

Tier 2Tier 3

C0040

C0050

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

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

0

R0520 Total available own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the undertakings included via D&A )1,117,295

892,1950225,100

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

1,117,295

892,1950225,100

R0560 Total eligible own funds to meet the consolidated group SCR (excluding own funds from other financial sector and from the undertakings included via D&A )1,117,295

892,1950225,100

931,514892,195

039,319894,4450225,100

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

196,597

R0650 Ratio of Eligible own funds to Minimum Consolidated Group SCR

473.82%

R0660 Total eligible own funds to meet the group SCR (including own funds from other financial sector and from the undertakings included via D&A )1,119,545

R0680 Group SCR

659,889

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

169.66%

Reconcilliation reserve
R0700 Excess of assets over liabilities

C0060
1,120,998

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

221,500

R0730 Other basic own fund items

13,439R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds
R0750 Other non available own funds
R0760 Reconciliation reserve

07,303
878,756

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

39,542

R0790 Total Expected profits included in future premiums (EPIFP)

39,542000S.25.01.22

Solvency Capital Requirement - for groups on Standard Formula

Gross solvency
capitalrequirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

135,298

R0020 Counterparty default risk

50,609R0030 Life underwriting risk

4,990

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

397,290

R0060 Diversification-109,020
USP Key

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

0479,167
C0100
90,0500-19,9420549,276

R0210 Capital add-ons already set

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

630,276

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

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

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

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

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304

0

R0470 Minimum consolidated group solvency capital requirement

196,597

Information on other entities
R0500 Capital requirement for other financial sectors (Non-insurance capital requirements)
R0510

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

R0520

Institutions for occupational retirement provisions

R0530

Capital requirement for non- regulated entities carrying out financial activities

29,6140029,614

R0540 Capital requirement for non-controlled participation requirements

0R0550 Capital requirement for residual undertakings

0Overall SCR
R0560 SCR for undertakings included via D&A
R0570 Solvency capital requirement

0659,889

For life underwriting risk:
1 - Increase in the amount of annuity
benefits
9 - None
For health underwriting risk:
1 - Increase in the amount of annuity
benefits
2 - Standard deviation for NSLT healthpremium risk
3 - Standard deviation for NSLT healthgross
premium risk
4 - Adjustment factor for nonproportional
reinsurance
5 - Standard deviation for NSLT healthreserve risk
9 - None
For non-life underwriting risk:
4 - Adjustment factor for nonproportional
reinsurance
6 - Standard deviation for non-life
premium risk
7 - Standard deviation for non-life grosspremium risk
8 - Standard deviation for non-lifereserve risk
9 - None

S.32.01.22

Undertakings in the scope of the groupCountry

Identification code of theundertaking

Type of code of
the ID of theundertaking

C0020

C0030

Legal Name of the undertaking

Type of undertaking

C0040

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

Row

C0010

1

GB

213800FGVM7Z9EJB2685

LEI

Admiral Group plc (Group)2

GB213800QUKWO9N6CT2J31

LEI

Admiral Insurance Company Limited

3

GI

2138003FZ569I9YPG680

LEI

Admiral Insurance (Gibraltar Limited)

4US

2138001MLQW5AEJISF95

LEI

Elephant Insurance Company LLC

5

ES

959800M6LM4PWZTSFZ59

LEI

Admiral Europe Compania de Seguros, S.A.

6

GB

213800ALB9B7LCZLU632

LEI

EUI Limited

7ES

959800CFNDUR8GYTHA39

LEI

Admiral Intermediary Services S.A.

8

US

213800FGVM7Z9EJB2685US00006 Specific code

Elephant Insurance Services LLC

Legal form

C0060

Category(mutual/non
mutual)C0070

Supervisory Authority

C0080

Company limited by shares or by guarantee or unlimited

Non-mutual

Prudential Regulation Authority

Non life insurance undertaking

Company limited by shares or by guarantee or unlimited

Non-mutual

Prudential Regulation Authority

Non life insurance undertaking

Company limited by shares or by guarantee or unlimited

Non-mutual

Financial Services Comission

Non life insurance undertaking

Company limited by shares or by guarantee or unlimited

Non-mutual

Va Bureau of Insurance and NAIC

Non life insurance undertaking

Company limited by shares or by guarantee or unlimited

Non-mutual

Dirección General de Seguros y Fondos de Pesiones

Non-mutual

Financial Conduct Authority

Non-mutual

Dirección General de Seguros y Fondos de Pesiones

Ancillary services undertaking as defined in Article 1 (53) of DelegatedCompany limited by shares or by guarantee or unlimited
Regulation (EU) 2015/35
Ancillary services undertaking as defined in Article 1 (53) of DelegatedCompany limited by shares or by guarantee or unlimited
Regulation (EU) 2015/35
Ancillary services undertaking as defined in Article 1 (53) of DelegatedCompany limited by shares or by guarantee or unlimited
Regulation (EU) 2015/35
Non-regulated undertaking carrying out financial activities as defined inCompany limited by shares or by guarantee or unlimited
Article 1 (52) of Delegated Regulation (EU) 2015/35
Non-regulated undertaking carrying out financial activities as defined inCompany limited by shares or by guarantee or unlimited
Article 1 (52) of Delegated Regulation (EU) 2015/35

9GB

213800YFYGNSP6U1EB10

LEI

Admiral Financial Services Limited

10GB

635400MLJ3ANUPJFSN18

LEI

Seren One Limited

11GB

213800FGVM7Z9EJB2685GB00001 Specific code

Able Insurance Services Limited

Other

12

GB

213800FGVM7Z9EJB2685GB00002 Specific code

Admiral Law Limited

13

GB

213800FGVM7Z9EJB2685GB00003 Specific code

BDE Law Limited

14

US

213800FGVM7Z9EJB2685US00004 Specific code

15

ES

16

GB

17
18

Non-mutual
Non-mutual

Financial Conduct Authority

Non-mutual

Financial Conduct Authority

Company limited by shares or by guarantee or unlimited

Non-mutual

Financial Conduct Authority

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

Other

Company limited by shares or by guarantee or unlimited

Non-mutualCompare.com Insurance Agency LLC

OtherCompany limited by shares or by guarantee or unlimited

Non-mutual

213800FGVM7Z9EJB2685ES00005 Specific code

Rastreator Comparador Correduria De Seguros S.L.U

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

213800FGVM7Z9EJB2685UK00007 Specific code

Penguin Portals Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutualUS213800FGVM7Z9EJB2685US00008 Specific code

Grove General Agency Inc

Other

Company limited by shares or by guarantee or unlimited

Non-mutualUS213800FGVM7Z9EJB2685US00009 Specific code

Inspop USA LLC

OtherCompany limited by shares or by guarantee or unlimited

Non-mutual

19US213800FGVM7Z9EJB2685US00010 Specific code

Platinum General Agency Inc

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

20GB213800FGVM7Z9EJB2685GB00011 Specific code

Inspop.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

21GB213800FGVM7Z9EJB2685GB00012 Specific code

Rastreator.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

22GB213800FGVM7Z9EJB2685GB00013 Specific code

Admiral Life Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

23GB213800FGVM7Z9EJB2685GB00014 Specific code

Admiral Syndicate Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

24GB213800FGVM7Z9EJB2685GB00015 Specific code

Admiral Syndicate Management Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

25

GB213800FGVM7Z9EJB2685GB00016 Specific code

Bell Direct Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

26GB213800FGVM7Z9EJB2685GB00017 Specific code

Confused.com Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual27

GB213800FGVM7Z9EJB2685GB00018 Specific code

Diamond Motor Insurance Services Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual28

GB213800FGVM7Z9EJB2685GB00019 Specific code

Elephant Insurance Services Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

S.32.01.22

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

Criteria of influence

Country

Identification code of theundertaking

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

Other criteria

Level of influence

Proportional share used
for group solvency
calculation

C0020

C0030

C0180

C0190

C0200

C0210

C0220

C0230

Row

C0010

1

GB

213800FGVM7Z9EJB2685

LEI

100.00%100.00%100.00%2GB213800QUKWO9N6CT2J31

LEI

100.00%100.00%100.00%3

GI2138003FZ569I9YPG680

LEI100.00%100.00%100.00%4US2138001MLQW5AEJISF95

LEI

100.00%100.00%5ES959800M6LM4PWZTSFZ59

LEI

100.00%6GB213800ALB9B7LCZLU632

LEI

100.00%7ES959800CFNDUR8GYTHA39

LEI

8

US

YES/NO

Date of decision if
art. 214 is applied

C0240

C0250

Group solvency calculation

Method used and under method 1, treatment of theundertaking

C0260

Included in the scope

Method 1: Full consolidation

Dominant

Included in the scope

Method 1: Full consolidation

Dominant

Included in the scope

Method 1: Full consolidation

100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

213800FGVM7Z9EJB2685US00006 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Full consolidation

9GB

213800YFYGNSP6U1EB10

LEI

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

10GB635400MLJ3ANUPJFSN18

LEI

0.00%

100.00%0.00%

Dominant

Included in the scope

Method 1: Adjusted equity method11GB213800FGVM7Z9EJB2685GB00001 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method12GB213800FGVM7Z9EJB2685GB00002 Specific code

95.00%

95.00%

95.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

13

GB213800FGVM7Z9EJB2685GB00003 Specific code

95.00%

95.00%

95.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

14

US213800FGVM7Z9EJB2685US00004 Specific code

59.25%

59.25%

59.25%

Dominant

Included in the scope

Method 1: Adjusted equity method

15

ES213800FGVM7Z9EJB2685ES00005 Specific code

75.00%

75.00%

75.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

16

GB213800FGVM7Z9EJB2685UK00007 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

17

US213800FGVM7Z9EJB2685US00008 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method18US213800FGVM7Z9EJB2685US00009 Specific code

59.25%

59.25%

59.25%

Dominant

Included in the scope

Method 1: Adjusted equity method

19US213800FGVM7Z9EJB2685US00010 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method20

GB213800FGVM7Z9EJB2685GB00011 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method21

GB213800FGVM7Z9EJB2685GB00012 Specific code

75.00%

75.00%

75.00%

Dominant

Included in the scope

Method 1: Adjusted equity method22GB213800FGVM7Z9EJB2685GB00013 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method23

GB213800FGVM7Z9EJB2685GB00014 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method24

GB213800FGVM7Z9EJB2685GB00015 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method25

GB213800FGVM7Z9EJB2685GB00016 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method26

GB213800FGVM7Z9EJB2685GB00017 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method27

GB213800FGVM7Z9EJB2685GB00018 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method28

GB213800FGVM7Z9EJB2685GB00019 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

S.32.01.22

Undertakings in the scope of the groupCountry

Identification code of theundertaking

Type of code of
the ID of theundertaking

C0020

C0030

Legal Name of the undertaking

Type of undertaking

C0040

C0050

Legal form

C0060

Category(mutual/non
mutual)Supervisory Authority

C0070

C0080

Row

C0010

29

GB

213800FGVM7Z9EJB2685GB00020 Specific code

Preminen Price Comparison Holdings Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

30

GB213800FGVM7Z9EJB2685GB00021 Specific code

Preminen Dragon Price Comparison Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

31

MX

213800FGVM7Z9EJB2685MX00022Specific code

Preminen Mexico Sociedad Anonima de Capital Variable

Other

Company limited by shares or by guarantee or unlimited

Non-mutual32

TR213800FGVM7Z9EJB2685TR00023 Specific code

Preminen Online Fiyat Karsilastirma Hizmetleri Anonim Sirketi

Other

Company limited by shares or by guarantee or unlimited

Non-mutual33

TR213800FGVM7Z9EJB2685TR00024 Specific code

Preminen Sigorta Brokerlik Anonim Sirketi

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

34

FR213800FGVM7Z9EJB2685FR00025 Specific code

LeLynx SAS

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

35IN

213800FGVM7Z9EJB2685IN00026 Specific code

Preminen Price Comparison India Private Limited

Other

Company limited by shares or by guarantee or unlimited

Non-mutual36CH

213800FGVM7Z9EJB2685CH00027 Specific code

Long Yu Science and Technology (Beijing) Co., Ltd

Other

Company limited by shares or by guarantee or unlimited

Non-mutual

S.32.01.22

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

Criteria of influence

Country

Identification code of theundertaking

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

Other criteria

C0020

C0030

C0180

C0190

C0200

C0210

Level of influence

Proportional share used
for group solvency
calculation

C0220

C0230

YES/NO

Date of decision if
art. 214 is applied

C0240

C0250

Group solvency calculation

Method used and under method 1, treatment of theundertaking

Row

C0010

29

GB

213800FGVM7Z9EJB2685GB00020 Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

C0260

30

GB

213800FGVM7Z9EJB2685GB00021 Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

31

MX213800FGVM7Z9EJB2685MX00022Specific code

51.25%

51.25%

51.25%

Dominant

Included in the scope

Method 1: Adjusted equity method

32

TR213800FGVM7Z9EJB2685TR00023 Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

33

TR213800FGVM7Z9EJB2685TR00024 Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

34

FR

213800FGVM7Z9EJB2685FR00025 Specific code

100.00%100.00%100.00%Dominant

Included in the scope

Method 1: Adjusted equity method

35

IN

213800FGVM7Z9EJB2685IN00026 Specific code

50.00%

50.00%

50.00%

Dominant

Included in the scope

Method 1: Adjusted equity method

36

CH

213800FGVM7Z9EJB2685CH00027 Specific code

20.25%

20.25%

20.25%

Dominant

Included in the scope

Method 1: Adjusted equity methodAdmiral Insurance
Company Limited
Solvency and Financial
Condition Report
Disclosures

31 December

2019(Monetary amounts in GBP thousands)

General information
Undertaking name

Admiral Insurance Company Limited

Undertaking identification code

213800QUKWO9N6CT2J31

Type of code of undertaking

LEI

Type of undertaking

Non-life undertakings

Country of authorisation

GB

Language of reportingen

Reporting reference date

31 December 2019

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the SCR

Standard formula

Matching adjustment

No use of matching adjustment

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

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

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

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

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

0309,644

R0080

Property (other than for own use)

0

R0090

Holdings in related undertakings, including participations

0

R0100

Equities

0

R0110
R0120
R0130

Equities - listed
Equities - unlisted
Bonds

210,383

R0140

Government Bonds

35,246

R0150

Corporate Bonds

173,931

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

1,206
69,261
30,0000R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages

0

R0240

Loans on policies

0

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

R0270 Reinsurance recoverables from:28,587R0280

26,094Non-life and health similar to non-life

R0290

Non-life excluding health

26,094

R0300

Health similar to non-life

0

R0310
R0320
R0330
R0340

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

2,493
0
2,493
0

R0350 Deposits to cedants

0

R0360 Insurance and intermediaries receivables

0

R0370 Reinsurance receivables
R0380 Receivables (trade, not insurance)

88,438R0390 Own shares (held directly)
R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in
R0410 Cash and cash equivalents
R0420 Any other assets, not elsewhere shown
R0500 Total assets

0
10,2150436,885

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

263,322R0520

263,322

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

249,414

R0550

Risk margin

13,907

R0560

Technical provisions - health (similar to non-life)

0

0

R0570

TP calculated as a whole

0

R0580

Best Estimate

0

R0590

Risk margin

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

Technical provisions - health (similar to life)

0
9,578
0

R0620

TP calculated as a whole

0

R0630

Best Estimate

0

R0640
R0650

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

0
9,578

R0660

TP calculated as a whole

0

R0670

Best Estimate

9,072

R0680

Risk margin506

R0690 Technical provisions - index-linked and unit-linked

0

R0700

TP calculated as a whole

0

R0710

Best Estimate

0

R0720

Risk margin

0

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

5,976

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

3,653

R0830 Reinsurance payables

2,120

R0840 Payables (trade, not insurance)

20,328R0850 Subordinated liabilities
R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

R0880 Any other liabilities, not elsewhere shown

00
0R0900 Total liabilities

304,976

R1000 Excess of assets over liabilities

131,908

S.05.01.02

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

Total

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

Marine,aviation andtransport
insurance

Fire andother damage
to property
insurance

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

Assistance

Misc. financial
loss

HealthCasualty

Marine,aviation andtransport

Property

C0010

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

C0100

C0110

C0120

C0130

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct Business

121,039

30,227

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

151,266
0

2,532

632

3,164

118,507

29,595

148,102

118,723

30,080148,803

Premiums earned
R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted
R0240 Reinsurers' share
R0300 Net

0
2,507

635

3,142

116,217

29,445

145,661

66,82019,27386,094Claims incurred
R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

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

0
-240

-69

-310

67,061

19,34286,403

Changes in other technical provisions
R0410 Gross - Direct Business0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share
R0500 Net
R0550 Expenses incurred

0
0

0

0

23,525

5,875

29,400R1200 Other expenses
R1300 Total expenses

29,400S.05.01.02

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

Healthinsurance

C0210

Insurance with Index-linked
profitand unit-linked
participation
insurance

C0220

C0230

Other life
insurance

C0240

Life reinsurance obligations

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

C0260

HealthreinsuranceLife
reinsurance

C0270

C0280

Total

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share0

R1600 Net000

Claims incurred
R1610 Gross

2,932

R1620 Reinsurers' share

1,308

R1700 Net

1,625

2,932
1,308
0

1,625

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 Net00

0

R1900 Expenses incurred

38

0

38

R2500 Other expenses
R2600 Total expenses

38

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

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

Home Country

C0050

C0060

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

C0070

Total Top 5 andhome country

R0010
C0080

C0090

C0100

C0110

C0120

C0130

C0140

Premiums written
R0110 Gross - Direct Business

151,266

151,266

R0120 Gross - Proportional reinsurance accepted00R0130 Gross - Non-proportional reinsurance accepted

0

0

3,164

3,164

148,102148,102

R0140 Reinsurers' share
R0200 Net
Premiums earned
R0210 Gross - Direct Business

148,803148,803

R0220 Gross - Proportional reinsurance accepted00R0230 Gross - Non-proportional reinsurance accepted00R0240 Reinsurers' share
R0300 Net

3,142

3,142

145,661

145,661

Claims incurred
R0310 Gross - Direct Business

86,09486,094

R0320 Gross - Proportional reinsurance accepted00R0330 Gross - Non-proportional reinsurance accepted

0

0

-310

-310

86,40386,403

R0410 Gross - Direct Business00R0420 Gross - Proportional reinsurance accepted00R0430 Gross - Non-proportional reinsurance accepted00R0440 Reinsurers' share00R0500 Net0029,40029,400R0340 Reinsurers' share
R0400 Net
Changes in other technical provisions

R0550 Expenses incurred
R1200 Other expenses
R1300 Total expenses

29,400S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

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

Home Country

C0190

C0200

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

R1400
C0220

C0230

C0240

C0250

C0260

C0270

C0210
Total Top 5 andhome country
C0280

Premiums written
R1410 Gross

00R1420 Reinsurers' share00R1500 Net0

0

R1510 Gross

00R1520 Reinsurers' share00R1600 Net0

0

R1610 Gross

2,932

2,932

R1620 Reinsurers' share

1,308

1,308

R1700 Net

1,625

1,625

R1710 Gross

00R1720 Reinsurers' share00R1800 Net0

0

R1900 Expenses incurred

38

38

Premiums earned

Claims incurred

Changes in other technical provisions

R2500 Other expenses
R2600 Total expenses

38

S.12.01.02

Life and Health SLT Technical Provisions

Index-linked and unit-linked insurance

Insurancewith profit
participation

C0020

C0030

Contracts
without
options andguarantees

Contracts with
options orguarantees

C0040

C0050

Annuities
stemming from
non-life
Total
insurance(Life othercontracts andAcceptedthan healthrelating toContracts withreinsurance insurance,
insurance
options or
includingguarantees obligation other
Unit-Linked)
than healthinsurance
obligations

Other life insurance

Contracts
without
options andguarantees

C0060

C0070

C0080

C0090

C0100

C0150
0

Total Recoverables from reinsurance/SPV and Finite Re after
the adjustment for expected losses due to counterparty default
R0020 associated to TP calculated as a whole0Technical provisions calculated as a sum of BE and RM
Best estimate
R0030 Gross Best Estimate

9,072

9,072

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

2,493

2,493

6,579

6,579

506

506

Best estimate minus recoverables from reinsurance/SPVand Finite Re

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

0R0130 Risk margin
R0200 Technical provisions - total

0
9,578

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

C0160

R0010 Technical provisions calculated as a whole

R0090

Health insurance (direct business)

9,578

C0170

C0180

C0190

Healthreinsurance(reinsurance
accepted)

Total (Healthsimilar to life
insurance)

C0200

C0210

S.17.01.02

Non-Life Technical Provisions

Direct business and accepted proportional reinsurance

R0010 Technical provisions calculated as a whole

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

C0020

C0030

C0040

C0050

C0060
0

0

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

Accepted non-proportional reinsurance

Marine,aviation andtransport
insurance

Fire and otherdamage toproperty
insurance

Generalliability
insurance

Credit andsuretyshipinsurance

Legal expenses
insurance

C0070

C0080

C0090

C0100

C0110

Assistance

Miscellaneous
financial loss

Nonproportional
healthreinsurance

Nonproportional
casualty
reinsurance

Nonproportional
marine,aviation andtransport
reinsurance

Nonproportional
property
reinsurance

Total Non-Life
obligation

C0120

C0130

C0140

C0150

C0160

C0170

C0180
0
0

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

Gross

R0140

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

R0150

Net Best Estimate of Premium Provisions

33,442

10,37543,818

504

-248

255

32,93910,62443,562

210,892-5,295205,597

Claims provisions
R0160
R0240

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

25,839025,838185,053-5,295

179,758

R0260 Total best estimate - gross244,334

5,080

249,414

R0270 Total best estimate - net

217,992

5,329

223,320

R0280 Risk margin

13,576332

13,907

R0250

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

0R0310 Risk margin

0

R0320 Technical provisions - total

257,910

5,412

263,322

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

26,342-248

26,094

231,567

5,660

237,228

R0340

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

S.19.01.21

Non-Life insurance claims
Total Non-life business

Z0020

Underwriting Year

Accident year / underwriting year

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

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

C0100

0

1

2010

12,392

25,888

6,191

4,725

2,858

1,487

558

515

274

R0170

2011

16,62929,949

7,643

4,672

2,919

3,406

1,195

743

73

R0180

2012

16,39628,082

8,254

4,393

3,664

1,852

1,828

971

R0190

2013

13,66427,934

9,669

6,354

3,548

2,924

5,591

R0200

2014

15,02830,441

10,851

6,151

6,802

4,211

R0210

2015

15,08530,715

8,235

4,995

4,847

R0220

2016

18,55933,236

7,860

5,494

R0230

2017

18,77238,370

8,502

R0240

2018

23,06942,048

R0250

2019

25,163

R0100

Prior

R0160

C0110

C0170

C0180

10 & +In Currentyear

Sum of years(cumulative)

Development year

Year
2

3

4

5

6

7

8

9

338
602

R0260

Total

338

338

602

55,49073

67,230971

65,4405,591

69,684

4,211

73,484

4,847

63,877

5,494

65,1498,502

65,64342,04865,11625,16325,163

97,840616,616Gross Undiscounted Best Estimate Claims Provisions(absolute amount)
C0360
C0200

C0210

C0220

C0230

0

1

2

3

C0240

C0250

C0260

C0270

C0280

C0290

C0300

6

7

8

9

10 & +Development year

Year

4

5

R0100

Prior

R0160

2010

0

0

0

0

0

0

4,608

3,934

3,816

R0170

2011

0

0

0

0

0

11,230

8,189

5,430

5,357

R0180

2012

0

0

0

0

15,498

11,101

9,138

2,385

R0190

2013

0

0

0

20,477

18,432

12,144

8,564

R0200

2014

0

0

34,17331,41618,99814,032

R0210

2015

0

46,07335,721

27,663

16,936

R0220

2016

35,34453,55540,201

26,996

R0230

2017

40,35662,75738,373

R0240

2018

47,55354,511

R0250

2019

45,139

R0260

Year end(discounted
data)

3,599
2,107

3,426
2,053
5,217
2,579
8,186
13,397
15,95925,44236,36752,092
43,622

Total

208,339

S.22.01.21

Impact of long term guarantees measures and transitionals

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

Impact oftransitional oninterest rate

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0010

C0030

C0050

C0070

C0090

R0010 Technical provisions

272,900

0

0

1,954

0

R0020 Basic own funds

111,90800-1,1720R0050 Eligible own funds to meet Solvency Capital Requirement

111,90800-1,1720R0090 Solvency Capital Requirement

83,658

0

0

1,431

0

R0100 Eligible own funds to meet Minimum Capital Requirement

111,90800-1,1720R0110 Minimum Capital Requirement

32,426

0

0

106

0

S.23.01.01

Own Funds

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

R0010 Ordinary share capital (gross of own shares)

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

Tier 3C0050

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

0

0

0

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

00R0050 Subordinated mutual member accounts

0R0070 Surplus funds

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

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

111,908

0

0

0

0

0

0

R0130 Reconciliation reserve

74,608R0140 Subordinated liabilities

0

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

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

0

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

0R0230 Deductions for participations in financial and credit institutions
R0290 Total basic own funds after deductions

00

074,6080

0111,908

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

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

0

R0320 Unpaid and uncalled preference shares callable on demand

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

0

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

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

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

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

0R0390 Other ancillary own funds

0R0400 Total ancillary own funds

0

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

111,908

111,90800R0510 Total available own funds to meet the MCR

111,908

111,90800R0540 Total eligible own funds to meet the SCR

111,908

111,90800R0550 Total eligible own funds to meet the MCR

111,908

111,90800R0580 SCR

83,658R0600 MCR

32,426

R0620 Ratio of Eligible own funds to SCR

133.77%

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

345.11%
C0060
131,9080R0720 Foreseeable dividends, distributions and charges

20,000R0730 Other basic own fund items

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

074,608

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

5,653

R0790 Total Expected profits included in future premiums (EPIFP)

5,653

0

S.25.01.21

Solvency Capital Requirement - for undertakings on Standard Formula

Gross solvency
capital requirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

14,617R0020 Counterparty default risk

14,978R0030 Life underwriting risk

694

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

73,980R0060 Diversification-16,633
USP Key

R0070 Intangible asset risk

087,636

R0100 Basic Solvency Capital Requirement
Calculation of Solvency Capital Requirement

C0100

R0130 Operational risk

7,523

R0140 Loss-absorbing capacity of technical provisions

0

R0150 Loss-absorbing capacity of deferred taxes-11,501

R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC

0R0200 Solvency Capital Requirement excluding capital add-on

83,658R0210 Capital add-ons already set

0

R0220 Solvency capital requirement

83,658Other information on SCR
R0400 Capital requirement for duration-based equity risk sub-module0

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

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

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

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304

0

Approach to tax rate
R0590 Approach based on average tax rate

Calculation of loss absorbing capacity of deferred taxes

C0109
0

LAC DT
C0130

R0640 LAC DT

0

R0650 LAC DT justified by reversion of deferred tax liabilities

0

R0660 LAC DT justified by reference to probable future taxable economic profit

0R0670 LAC DT justified by carry back, current year

0R0680 LAC DT justified by carry back, future years

0

R0690 Maximum LAC DT

0

For life underwriting risk:
1 - Increase in the amount of annuity
benefits
9 - None
For health underwriting risk:
1 - Increase in the amount of annuity
benefits
2 - Standard deviation for NSLT healthpremium risk
3 - Standard deviation for NSLT health grosspremium risk
4 - Adjustment factor for non-proportional
reinsurance
5 - Standard deviation for NSLT healthreserve risk
9 - None
For non-life underwriting risk:
4 - Adjustment factor for non-proportional
reinsurance
6 - Standard deviation for non-life
premium risk
7 - Standard deviation for non-life grosspremium risk
8 - Standard deviation for non-lifereserve risk
9 - None

S.28.01.01

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

Linear formula component for non-life insurance and reinsurance obligations

C0010

R0010 MCRNL Result

32,288Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

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

C0020

C0030

R0020 Medical expense insurance and proportional reinsurance

0R0030 Income protection insurance and proportional reinsurance

0R0040 Workers' compensation insurance and proportional reinsurance

0R0050 Motor vehicle liability insurance and proportional reinsurance

217,992

118,507

5,329

29,595

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

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

0

R0090 General liability insurance and proportional reinsurance

0

R0100 Credit and suretyship insurance and proportional reinsurance

0

R0110 Legal expenses insurance and proportional reinsurance

0

R0120 Assistance and proportional reinsurance

0R0130 Miscellaneous financial loss insurance and proportional reinsurance

0

R0140 Non-proportional health reinsurance

0

R0150 Non-proportional casualty reinsurance

0

R0160 Non-proportional marine, aviation and transport reinsurance

0

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

C0040

R0200 MCRL Result138
Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (ofreinsurance/SPV) total
capital at risk

C0050

C0060

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

6,579

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

C0070

R0300 Linear MCR

32,426

R0310 SCR

83,658R0320 MCR cap

37,646

R0330 MCR floor

20,915

R0340 Combined MCR

32,426

R0350 Absolute floor of the MCR

2,153

R0400 Minimum Capital Requirement

32,426

Admiral Insurance
Gibraltar Limited
Solvency and Financial
Condition Report
Disclosures

31 December

2019(Monetary amounts in GBP thousands)

General information
Undertaking name

Admiral Insurance Gibraltar Limited

Undertaking identification code

2138003FZ569I9YPG680

Type of code of undertaking

LEI

Type of undertaking

Non-life undertakings

Country of authorisation

GI

Language of reportingen

Reporting reference date

31 December 2019

Currency used for reporting

GBP

Accounting standards

IFRS

Method of Calculation of the SCR

Standard formula

Matching adjustment

No use of matching adjustment

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

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

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

S.02.01.02

Balance sheet
Solvency II
value
Assets

C0010

R0030 Intangible assets
R0040 Deferred tax assets

558

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

02,333,081

R0080

Property (other than for own use)

0

R0090

Holdings in related undertakings, including participations

0

R0100

Equities

0

R0110
R0120
R0130

Equities - listed
Equities - unlisted
Bonds

1,345,159

R0140

Government Bonds

R0150

Corporate Bonds

1,113,798

R0160

Structured notes

0

R0170

Collateralised securities

R0180

Collective Investments Undertakings

R0190

Derivatives

R0200

Deposits other than cash equivalents

R0210

Other investments

83,852

147,509902,92285,0000R0220 Assets held for index-linked and unit-linked contracts
R0230 Loans and mortgages

150,597

R0240

Loans on policies

R0250

Loans and mortgages to individuals

R0260

Other loans and mortgages

150,597

R0270 Reinsurance recoverables from:1,285,266

R0280

1,270,914

Non-life and health similar to non-life

0

R0290

Non-life excluding health

1,270,914

R0300

Health similar to non-life

0

R0310
R0320
R0330
R0340

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

R0350 Deposits to cedants
R0360 Insurance and intermediaries receivables
R0370 Reinsurance receivables
R0380 Receivables (trade, not insurance)

14,3510
14,3510062,1530
22,048R0390 Own shares (held directly)
R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in
R0410 Cash and cash equivalents
R0420 Any other assets, not elsewhere shown
R0500 Total assets

0
13,0330
3,866,735

S.02.01.02

Balance sheet
Solvency II
value
Liabilities

C0010

R0510 Technical provisions - non-life

2,283,737

R0520

2,283,737

Technical provisions - non-life (excluding health)

R0530

TP calculated as a whole

R0540

Best Estimate

R0550

Risk margin

R0560

Technical provisions - health (similar to non-life)02,217,150
66,5870R0570

TP calculated as a whole

0

R0580

Best Estimate

0

R0590

Risk margin

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

Technical provisions - health (similar to life)

056,7970R0620

TP calculated as a whole

0

R0630

Best Estimate

0

R0640
R0650

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

056,797R0660

TP calculated as a whole

0

R0670

Best Estimate

55,141

R0680

Risk margin

1,656

R0690 Technical provisions - index-linked and unit-linked

0

R0700

TP calculated as a whole

0

R0710

Best Estimate

0

R0720

Risk margin

0

R0740 Contingent liabilities

0

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

831,474
0R0790 Derivatives
R0800 Debts owed to credit institutions
R0810 Financial liabilities other than debts owed to credit institutions
R0820 Insurance & intermediaries payables
R0830 Reinsurance payables
R0840 Payables (trade, not insurance)
R0850 Subordinated liabilities
R0860

Subordinated liabilities not in BOF

R0870

Subordinated liabilities in BOF

104,460
073,15600R0880 Any other liabilities, not elsewhere shown
R0900 Total liabilities
R1000 Excess of assets over liabilities

3,349,624
517,111

S.05.01.02

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

Total

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

Marine,aviation andtransport
insurance

Fire andother damage
to property
insurance

Generalliability
insurance

Credit andsuretyshipinsurance

Legal
expensesinsurance

Assistance

Misc. financial
loss

HealthCasualty

Marine,aviation andtransport

Property

C0010

C0020

C0030

C0040

C0050

C0060

C0070

C0080

C0090

C0100

C0110

C0120

C0130

C0140

C0150

C0160

C0200

Premiums written
R0110 Gross - Direct Business

1,103,092

275,474

147,131

2,746

18,53026,992

R0120 Gross - Proportional reinsurance accepted

1,573,965
0R0130 Gross - Non-proportional reinsurance accepted

0

R0140 Reinsurers' share

851,842

212,729

106,813

1,993

0

336

1,173,715

R0200 Net

251,250

62,74440,317752

18,53026,656400,250

1,076,122

272,649

134,224

2,505

17,832

25,957

1,529,289

Premiums earned
R0210 Gross - Direct BusinessR0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share

831,222

210,600

97,693

1,823

0

336

1,141,675

R0300 Net

244,900

62,04836,531

682

17,832

25,621

387,614682,265

170,381

86,057

1,606

8,257

16,033

964,599

Claims incurred
R0310 Gross - Direct BusinessR0320 Gross - Proportional reinsurance accepted

0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

639,308

159,653

60,827

1,135

0

0

860,923

R0400 Net

42,957

10,72825,230471

8,257

16,033

103,676

0

0

0

0

0

0

0

Changes in other technical provisions
R0410 Gross - Direct BusinessR0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share

0

0

0

0

0

0

R0500 Net

0

0

0

0

0

0

0

46,524

11,618

11,386

212

0

6,193

75,933

R0550 Expenses incurred

0

R1200 Other expenses
R1300 Total expenses

75,933

S.05.01.02

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

Healthinsurance

C0210

Insurance with Index-linked
profitand unit-linked
participation
insurance

C0220

C0230

Other life
insurance

C0240

Life reinsurance obligations

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

C0260

HealthreinsuranceLife
reinsurance

C0270

C0280

Total

C0300

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net

0
0

0

0

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share0

R1600 Net000

Claims incurred
R1610 Gross

20,318R1620 Reinsurers' share

9,153

R1700 Net

11,165

20,3189,153
0

11,165

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share
R1800 NetR1900 Expenses incurred

0
0

0

0

307

0

307

R2500 Other expenses
R2600 Total expenses

307

S.05.02.01

Premiums, claims and expenses by country
Non-life
C0010

C0020

C0030

C0040

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

Home Country

C0050

C0060

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

C0070

Total Top 5 andhome country

R0010
C0080

C0090

C0100

C0110

C0120

C0130

C0140

Premiums written
R0110 Gross - Direct Business

1,573,96500R0120 Gross - Proportional reinsurance accepted0R0130 Gross - Non-proportional reinsurance accepted
R0140 Reinsurers' share
R0200 Net

1,573,965
01,173,71500400,250

1,173,715
400,250Premiums earned
R0210 Gross - Direct Business

1,529,289

001,529,289

R0220 Gross - Proportional reinsurance accepted

0R0230 Gross - Non-proportional reinsurance accepted

0

R0240 Reinsurers' share
R0300 Net

1,141,675

00387,614

1,141,675
387,614Claims incurred
R0310 Gross - Direct Business

964,59900R0320 Gross - Proportional reinsurance accepted

964,599
0R0330 Gross - Non-proportional reinsurance accepted

0

R0340 Reinsurers' share

860,923

R0400 Net103,67600860,923
103,676

Changes in other technical provisions
R0410 Gross - Direct Business

0

0

0

R0420 Gross - Proportional reinsurance accepted0

R0430 Gross - Non-proportional reinsurance accepted0

R0440 Reinsurers' share

0

R0500 Net0

R0550 Expenses incurred

75,933

0

0
0

0

0

75,933

R1200 Other expenses
R1300 Total expenses

75,933

S.05.02.01

Premiums, claims and expenses by country
Life
C0150

C0160

C0170

C0180

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

Home Country

C0190

C0200

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

R1400
C0220

C0230

C0240

C0250

C0260

C0270

C0210
Total Top 5 andhome country
C0280

Premiums written
R1410 Gross

0

R1420 Reinsurers' share
R1500 Net000

Premiums earned
R1510 Gross

0

R1520 Reinsurers' share
R1600 Net0
0

0

R1610 Gross

20,31820,318R1620 Reinsurers' share

9,153

9,153

R1700 Net

11,165

11,165

Claims incurred

Changes in other technical provisions
R1710 Gross

0

R1720 Reinsurers' share0

R1800 NetR1900 Expenses incurred

0

0

307

307

R2500 Other expenses
R2600 Total expenses

307

S.12.01.02

Life and Health SLT Technical Provisions

Index-linked and unit-linked insurance

Insurancewith profit
participation

C0020

C0030

Contracts
without
options andguarantees

Contracts with
options orguarantees

C0040

C0050

Annuities
stemming from
non-life
Total
insurance(Life othercontracts andAcceptedthan healthrelating toContracts withreinsurance insurance,
insurance
options or
includingguarantees obligation other
Unit-Linked)
than healthinsurance
obligations

Other life insurance

Contracts
without
options andguarantees

C0060

C0070

C0080

C0090

C0100

C0150
0

Total Recoverables from reinsurance/SPV and Finite Re after
the adjustment for expected losses due to counterparty default
R0020 associated to TP calculated as a whole0Technical provisions calculated as a sum of BE and RM
Best estimate
R0030 Gross Best Estimate

55,141

55,141

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

14,351

14,35140,78940,789

1,656

1,656

Best estimate minus recoverables from reinsurance/SPVand Finite Re

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

0R0130 Risk margin
R0200 Technical provisions - total

056,797

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

C0160

R0010 Technical provisions calculated as a whole

R0090

Health insurance (direct business)

56,797

C0170

C0180

C0190

Healthreinsurance(reinsurance
accepted)

Total (Healthsimilar to life
insurance)

C0200

C0210

S.17.01.02

Non-Life Technical Provisions

Direct business and accepted proportional reinsurance

R0010 Technical provisions calculated as a whole

Medicalexpenseinsurance

Incomeprotection
insurance

Workers'
compensation
insurance

Motor vehicle
liability
insurance

Other motor
insurance

C0020

C0030

C0040

C0050

C0060
0

0

Accepted non-proportional reinsurance

Marine,aviation andtransport
insurance

Fire and otherdamage toproperty
insurance

Generalliability
insurance

C0070

C0080

C0090
0

0

Credit andsuretyshipinsurance

Legal expenses
insurance

Assistance

C0100

C0110

C0120
0

Miscellaneous
financial loss

Nonproportional
healthreinsurance

Nonproportional
casualty
reinsurance

Nonproportional
marine,aviation andtransport
reinsurance

Nonproportional
property
reinsurance

Total Non-Life
obligation

C0130

C0140

C0150

C0160

C0170

C0180

0

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

Gross

294,51786,46236,475

2,054

3,560

1,186

424,254

R0140

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

228,72165,922

24,972

1,276

0

0

320,891

65,797

20,54011,503

778

3,560

1,186

103,363

1,758,845-41,188

59,771

4,854

4,158

6,457

1,792,896

921,407-16,624

41,843

3,398

0

0

950,024

837,438-24,564

17,928

1,456

4,158

6,457

842,873

R0260 Total best estimate - gross

2,053,362

45,27396,246

6,908

7,718

7,643

2,217,150

R0270 Total best estimate - net

903,234-4,02429,431

2,234

7,718

7,643

946,236

R0280 Risk margin

63,025

281

2,054

156

539

533

66,587R0290 Technical Provisions calculated as a whole

0

0

0

0

0

0

0

R0300 Best estimate

0

0

0

0

0

0

0

R0310 Risk margin

0

0

0

0

0

0

0

R0320 Technical provisions - total

2,116,387

45,55498,300

7,064

8,256

8,176

2,283,737

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

1,150,128

49,297

66,815

4,674

0

0

1,270,914

966,259-3,74331,485

2,390

8,256

8,176

1,012,823

R0150

Net Best Estimate of Premium Provisions
Claims provisions

R0160
R0240
R0250

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

Amount of the transitional on Technical Provisions

R0340

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

S.19.01.21

Non-Life insurance claims
Total Non-life business

Z0020

Underwriting Year

Accident year / underwriting year

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

C0020

C0030

C0040

C0050

C0060

C0070

0

1

2

3

4

2010

78,482

163,955

39,211

29,928

18,103

9,416

R0170

2011

116,401

209,645

53,50232,703

20,436

R0180

2012

114,961

196,579

57,77930,75125,647

R0190

2013

100,830

187,424

59,78539,872

R0200

2014

111,782

208,133

66,993

R0210

2015

117,515

235,089

R0220

2016

149,520

R0230

2017

R0240
R0250

R0100

Prior

R0160

C0080

C0090

C0100

C0110

C0170

C0180

10 & +In Currentyear

Sum of years(cumulative)

Development year

Year

5

6

7

8

9

2,004
3,533

3,264

1,735

23,842

8,366

5,203

510

12,964

12,793

7,017

21,747

20,197

19,27737,39343,75627,434

61,174

34,69232,874

265,983

61,63839,847

183,420

385,584

86,7472018

245,299435,8142019

264,430

3,814

R0260

Total

2,004

2,004

3,814

351,439510

470,608

7,017

458,491

19,277449,133

27,434495,492

32,874

481,344

39,847516,987

86,747655,752

435,814681,113

264,430

264,430

919,766

4,826,792

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

C0210

C0220

C0230

0

1

2

3

C0240

C0250

C0260

C0270

C0280

C0290

C0300

6

7

8

9

10 & +

13,346Development year

Year

4

5

R0100

Prior

R0160

2010

0

0

0

0

0

0

-65

22,75624,170

R0170

2011

0

0

0

0

0

-139

58,99538,32537,501

R0180

2012

0

0

0

0

-238

77,394

63,966

18,698

R0190

2013

0

0

0

1,192

131,608

91,47659,045

R0200

2014

0

0

2,615

213,375

127,00293,650

R0210

2015

0

7,905

254,757

191,243

120,499

R0220

2016

12,744

388,122

288,174

191,959

R0230

2017

369,037

571,158

342,030

R0240

2018

469,564

526,504

R0250

2019

456,982

R0260

Year end(discounted
data)

17,715

16,755
12,94436,36017,964
55,14888,629112,803179,716
323,118
503,432
442,286

Total

1,789,154

S.22.01.21

Impact of long term guarantees measures and transitionals

R0010 Technical provisions

Amount withLong Term
Guarantee
measures andtransitionals

Impact oftransitional on
technical
provisions

Impact oftransitional oninterest rate

Impact ofvolatility
adjustment
set to zero

Impact ofmatching
adjustment
set to zero

C0010

C0030

C0050

C0070

C0090

2,340,534

00

14,9120R0020 Basic own funds

467,1110

0-7,6740R0050 Eligible own funds to meet Solvency Capital Requirement

527,1110

0-7,6740R0090 Solvency Capital Requirement341,80300

13,0840R0100 Eligible own funds to meet Minimum Capital Requirement466,55300-7,1160R0110 Minimum Capital Requirement

119,758

0

0

563

0

S.23.01.01

Own Funds

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

Total

Tier 1
unrestricted

Tier 1
restricted

Tier 2

C0010

C0020

C0030

C0040

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

58

0
0

14,944

14,94400R0050 Subordinated mutual member accounts

0R0070 Surplus funds

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

0

0

0

0

0

0

0

0

0

0

0

0

451,551

558

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

0

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

0R0230 Deductions for participations in financial and credit institutions
R0290 Total basic own funds after deductions

00

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

00451,551

R0140 Subordinated liabilities

C0050

58

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

R0130 Reconciliation reserve

Tier 3

0
558

0

0

0

0

466,553

0

0

558

0
467,111

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

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

0

R0320 Unpaid and uncalled preference shares callable on demand

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

0

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

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

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

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

0R0390 Other ancillary own funds

60,00060,000R0400 Total ancillary own funds

60,00060,0000558

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

527,111466,553060,000R0510 Total available own funds to meet the MCR

466,553

466,55300R0540 Total eligible own funds to meet the SCR

527,111466,553060,000R0550 Total eligible own funds to meet the MCR

466,553

466,55300R0580 SCR

341,803

R0600 MCR

119,758

R0620 Ratio of Eligible own funds to SCR

154.21%

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

389.58%
C0060
517,1110R0720 Foreseeable dividends, distributions and charges

50,000R0730 Other basic own fund items

15,560R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds
R0760 Reconciliation reserve

0451,551

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

37,996

R0790 Total Expected profits included in future premiums (EPIFP)

37,996558

S.25.01.21

Solvency Capital Requirement - for undertakings on Standard Formula

Gross solvency
capital requirement

USP

Simplifications

C0110

C0090

C0120

R0010 Market risk

72,055R0020 Counterparty default risk

16,988R0030 Life underwriting risk

4,296

R0040 Health underwriting risk

0R0050 Non-life underwriting risk

246,928

R0060 Diversification-56,776
USP Key

R0070 Intangible asset risk

0283,490

R0100 Basic Solvency Capital Requirement
Calculation of Solvency Capital Requirement

C0100

R0130 Operational risk

66,763

R0140 Loss-absorbing capacity of technical provisions

0

R0150 Loss-absorbing capacity of deferred taxes-8,450R0160 Capital requirement for business operated in accordance with Art. 4 of Directive 2003/41/EC

0R0200 Solvency Capital Requirement excluding capital add-on

341,803

R0210 Capital add-ons already set

0

R0220 Solvency capital requirement341,803

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

R0410 Total amount of Notional Solvency Capital Requirements for remaining part

0

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

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

0

R0440 Diversification effects due to RFF nSCR aggregation for article 304

0

Approach to tax rate
R0590 Approach based on average tax rate

Calculation of loss absorbing capacity of deferred taxes

C0109
0

LAC DT
C0130

R0640 LAC DT

0

R0650 LAC DT justified by reversion of deferred tax liabilities

0

R0660 LAC DT justified by reference to probable future taxable economic profit

0R0670 LAC DT justified by carry back, current year

0R0680 LAC DT justified by carry back, future years

0

R0690 Maximum LAC DT

0

For life underwriting risk:
1 - Increase in the amount of annuity
benefits
9 - None
For health underwriting risk:
1 - Increase in the amount of annuity
benefits
2 - Standard deviation for NSLT healthpremium risk
3 - Standard deviation for NSLT health grosspremium risk
4 - Adjustment factor for non-proportional
reinsurance
5 - Standard deviation for NSLT healthreserve risk
9 - None
For non-life underwriting risk:
4 - Adjustment factor for non-proportional
reinsurance
6 - Standard deviation for non-life
premium risk
7 - Standard deviation for non-life grosspremium risk
8 - Standard deviation for non-lifereserve risk
9 - None

S.28.01.01

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

Linear formula component for non-life insurance and reinsurance obligations

C0010

R0010 MCRNL Result

118,901

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

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

C0020

C0030

R0020 Medical expense insurance and proportional reinsurance

0R0030 Income protection insurance and proportional reinsurance

0R0040 Workers' compensation insurance and proportional reinsurance

0R0050 Motor vehicle liability insurance and proportional reinsurance

903,234

251,250

R0060 Other motor insurance and proportional reinsurance

062,744

R0070 Marine, aviation and transport insurance and proportional reinsurance

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

29,431

40,317R0090 General liability insurance and proportional reinsurance

2,234

752

R0100 Credit and suretyship insurance and proportional reinsurance

0

R0110 Legal expenses insurance and proportional reinsurance

0

R0120 Assistance and proportional reinsurance

7,718

18,530R0130 Miscellaneous financial loss insurance and proportional reinsurance

7,643

26,656

R0140 Non-proportional health reinsurance

0

R0150 Non-proportional casualty reinsurance

0

R0160 Non-proportional marine, aviation and transport reinsurance

0

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

C0040

R0200 MCRL Result

857
Net (ofreinsurance/SPV) best
estimate and TP
calculated as a whole

Net (ofreinsurance/SPV) total
capital at risk

C0050

C0060

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

40,789R0250 Total capital at risk for all life (re)insurance obligations
Overall MCR calculation

C0070

R0300 Linear MCR

119,758

R0310 SCR

341,803

R0320 MCR cap

153,811R0330 MCR floor

85,451

R0340 Combined MCR

119,758

R0350 Absolute floor of the MCR
R0400 Minimum Capital Requirement

2,153
119,758