Fast growing Five-year compound growth in turnover increased to 23% in 2010; year-on-year growth of 47%. We have increased customer numbers and revenue every year since launch.
• The Group has four car insurers outside the UK • Balumba (now part of Admiral Seguros along with Globalty), based in Spain made its fi rst full year profi t in 2010
Big Weekend Admiral has sponsored the Cardiff Big Weekend since 2004. Last year 260,000 people enjoyed the three day event.
For the seventh consecutive year, every year since we became a public company, Admiral Group has reported record profi ts and record turnover.
• Expense ratio advantage partly a factor of higher average premium portfolio, also effi cient acquisition and a focus on cost control
• Risk mitigation – The co-insurer and reinsurers bear their proportional shares of claims expenses and hence provide protection should results worsen substantially
As profi t commission income is recognised in the income statement in line with loss ratios accounted for on our own claims reserves, the reserving policy means that profi t commission income is also deferred and released over time.
• ConTe (Rome, Italy) launched in May 2008 and fi nished 2010 with nearly 87,000 customers
Christmas carols The team at Admiral Seguros celebrate Christmas with some carol-singing ‘Feliz Navidad!’
There should be no material impact to the Group’s income statement relating to the AdmiralDirekt business in the future.
Towards the end of the year it appeared that Confused’s share of car insurance sales was holding steady. It is not rising, but it has at least stopped falling. But price comparison customers are demanding and can switch between price comparison sites easily, so it is a hard battle to hold on to or to win customers. The quality and appeal of our advertising is important, but in the long term it is more important that we consistently deliver a product which gives customers a compelling reason to use Confused. That comes from providing a comparison service that gives customers a comprehensive range of very competitive prices for the products they want to compare. And it is also about providing a customer experience that is straightforward, quick, and easy to use.
Safaricom Marathon A group of eight Admiral employees took part in the Safaricom Marathon in Kenya. The run through a Kenyan wildlife reserve is organised by Tusk, the wildlife charity sponsored by elephant.co.uk
The Directors believe Confused is a fundamentally strong business and is well positioned to rebuild its position in the UK price comparison market.
The survey results are analysed by department and each department manager is expected to share the survey results with their team, explore issues and concerns, and then make recommendations to address them. This is a real exercise, and during 2010 management changes have been instigated after following up survey results.
The Group’s carbon emission, electricity/gas consumption, waste recycling and water consumption are all reported in the full Corporate Responsibility report available on the Group’s corporate website – admiralgroup.co.uk
There are no agreements between the Company and its Directors or employees providing for compensation for loss of offi ce or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.
• Effectiveness of the Group’s system of internal control including within its overseas operations, particularly gaining assurance that the compliance, internal control and risk management processes were operating effectively
The Committee continues to review the current size, structure, and composition of the Board, to assess whether further appointments are necessary to maintain an appropriate balance of skills and experience within the Board, thereby ensuring that it can continue to provide effective leadership of the Company to support its successful operation within the various marketplaces in which it operates.
The Committee’s terms of reference, which are reviewed at least annually and approved by the Board, are available on the Group’s corporate website and are summarised in the Corporate Governance Report. The Committee reviewed them on 14 December 2010.
For staff below Group Board level, awards will be split: 50% of the award will be subject to the above performance criteria. The other 50% will have no performance criteria attaching other than the requirement that the recipient is an employee of the Group at the date of vesting. The change was made in order to assist the Group in attracting high calibre staff by providing more certainty over the outcome of vesting awards.
• Approved Free Share Incentive Plan (SIP). The SIP is available to all UK staff (Henry Engelhardt and David Stevens have declined to be included in the Plan). The maximum annual award under the SIP is £3,000 per employee. Shares awarded under the SIP are forfeited if the employee leaves within three years of the award. Awards are made twice a year, based on the results of each half-year. Overseas staff receive an award under the Discretionary Free Share Scheme equivalent to the SIP award made to UK employees
Total Shareholder Return (TSR) The following graph sets out a comparison of Total Shareholder Return for Admiral Group plc shares with that of the FTSE 100 Index, of which the Company is a constituent. The graph measures the period from 1 January 2006 up to 31 December 2010. TSR is defi ned as the percentage change over the period, assuming reinvestment of income.
The fi nancial statements comprise the results and balances of the Company and its subsidiaries (together referred to as the Group) for the year ended 31 December 2010 and comparative fi gures for the year ended 31 December 2009. The fi nancial statements of the Company’s subsidiaries are consolidated in the Group fi nancial statements. The Company controls 100% of the voting share capital of all its principal subsidiaries. The Parent Company fi nancial statements present information about the Company as a separate entity and not about its Group. In accordance with International Accounting Standard (IAS) 24, transactions or balances between Group companies that have been eliminated on consolidation are not reported as related party transactions in the consolidated fi nancial statements.
2. Critical accounting judgements and estimates Judgements: In applying the Group’s accounting policies as described in note 3, management has primarily applied judgement in the classifi cation of the Group’s contracts with reinsurers as quota share reinsurance contracts. A contract is required to transfer signifi cant insurance risk in order to be classifi ed as such. Management reviews all terms and conditions of the contract, and if necessary obtains the opinion of an independent expert at the negotiation stage in order to be able to make these judgements.
De-recognition of fi nancial assets A fi nancial asset is de-recognised when the rights to receive cash fl ows from that asset have expired or when the Group transfers the asset and all the attaching substantial risks and rewards relating to the asset, to a third party.
Deposits with fi xed maturities, classifi ed as held to maturity investments are measured at amortised cost less impairment using the effective interest method. Impairment losses are recognised through the income statement, as are any impairment losses.
The segment assets and liabilities at 31 December 2009 are as follows: Non-UK UK Car Car Price Segment Insurance Insurance Comparison Other Eliminations total £m £m £m £m £m £m
Interest received during the year was £1.1 million (2009: £1.1 million)
Factors affecting the total tax charge are: 31 December 31 December £m £m
Refer to note 21 for details of assets classifi ed as held for sale.
The approximate fair value of held to maturity deposits is £285.2 million (2009: £183.5 million) based on a calculation to discount expected cash fl ows arising at the Group’s WACC. The amortised cost carrying amount of receivables is a reasonable approximation of fair value. Between 1 and < 1 Year 2 years > 2 Years £m £m £m
ii) Data driven pricing: The Group’s underwriting philosophy is focused on a sophisticated data-driven approach to pricing and underwriting and on exploiting the competitive advantages direct insurers enjoy over traditional insurers through: • Collating and analysing more comprehensive data from customers • Tight control over the pricing guidelines in order to target profi table business sectors; and • Fast and fl exible responsiveness to data analysis and market trends
Gross: Claims outstanding 434.2 323.5 Unearned premium provision 372.4 209.4 Total gross insurance liabilities 806.6 532.9 Recoverable from reinsurers: Claims outstanding 165.2 114.1 Unearned premium provision 191.8 98.8 Total reinsurers’ share of insurance liabilities 357.0 212.9 Net: Claims outstanding 269.0 209.4 Unearned premium provision 180.6 110.6 Total insurance liabilities – net 449.6 320.0
1,500,000 (2009: 1,183,948) were issued to the Admiral Group Employee Benefi t Trust for the purposes of the Discretionary Free Share Scheme. The Trustees have waived the right to dividend payments, other than to the extent of 0.001p per share, unless and to the extent otherwise directed by the Company from time to time.
7. Reconciliation of movements in shareholders’ funds Share Retained Share premium profi t and capital account loss Total equity £m £m £m £m
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