Admiral’s 20 Years of Growth, 1993-2012 1998 Gladiator launches as a commercial vehicle insurance intermediary selling van insurance on behalf of a panel of insurers.
Admiral enters into co- and re-insurance arrangements with Munich Re and Swiss Re. Both remain partners of Admiral today.
Admiral is named the UK’s best large workplace by the Great Place to Work® Institute. Details of our other awards are available in the Corporate Responsibility report.
The Admiral Group celebrates its 20th birthday with 13 brands, 3.6 million insured vehicles and over 6,500 members of staff in eight countries.
• The Group’s core business is UK private car insurance – it accounts for 87% of turnover and 85% of customers.
3. Low risk No debt, cash balances conservatively managed and loss protection through the use of co- and reinsurance.
Our claims ratio has also bettered industry averages, at least since the millennium. Our rapid rise up the league tables to be the UK’s second largest car insurer, by vehicles covered, is all down to this sustained superior underwriting performance over many years.
The higher level of releases compared to 2011 reflected the positive development during the year in projected ultimate outcomes on prior underwriting years (notably 2011 and 2010). Claims development in general during 2012 was encouraging; with no repeat of the spike in large bodily injury claims that occurred during H2 2011.
Price Comparison Strategy • A key part of the Group’s overall strategy is to exploit UK expertise in insurance and price comparison and export this overseas.
Gladiator operating profit 2.7 2.8 2.5 Group net interest income 1.1 2.9 1.9 Share scheme charges (15.0) (18.6) (20.6)
The van insurance broking market remained competitive during 2012, and although Gladiator increased revenue to £12.5 million (2011: £11.7 million), operating margin was lower at 20% and resulting operating profit fell to £2.5 million from £2.8 million.
Net cash movement 34.9 (22.1) (8.0) Net increase in cash and financial investments 276.9 473.8 434.5
The table below sets out the principal risks currently faced by the Group, with further significant risks noted below. The report on Corporate Governance later in the Annual Report describes the risk management framework in place throughout the Group.
The impact on the Group would be the need to raise additional capital to support underwriting. This could be in the form of equity or debt. Return on capital would likely be lower than current levels.
We reward and recognise our employees for the overall success of the Group through the share ownership scheme, a key feature of the remuneration of employees.
The objective of the scheme is to help reduce the death toll amongst young, inexperienced, drivers. In 2010, we found that 17 and 18-year-old motorists are twice as likely to have a road accident as someone in their 30s, three times as likely as someone in their 40s and six times as likely as someone aged over 50. However, Swedish research shows that young driver accident rates can be reduced by learning to drive over a longer time period and at a younger age (OECD and the European Conference of Ministers of Transport, 2006).
Henry was part of the management team that led the MBO in 1999.
Annette Court, (50) Non-Executive Director, appointed in March 2012 Group Risk Committee member Audit Committee member
Kevin Chidwick participates in the DFSS (the other Executive Directors have declined to participate given their significant shareholdings). Grants are made at the discretion of the Committee
Alastair Lyons 3 years 1 July 2010 Three months’ written notice
Percentage Change from Financial Year ended 2011 to 2012 m (+
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 31 December 2007 up to 31 December 2012. TSR is defined as the percentage change over the period, assuming reinvestment of income.
Profit for the period 258.4 221.3 Other comprehensive income Exchange differences on translation of foreign operations (2.7) (1.0)
• Co-insurance The Group has entered into certain co-insurance contracts under which insurance risks are shared on a proportional basis, with the co-insurer taking a specific percentage of premium written and being responsible for the same proportion of each claim. As the contractual liability is several and not joint, neither the premiums nor claims relating to the co-insurance are included in the income statement. Under the terms of these agreements the co-insurers reimburse the Group for the same proportionate share of the costs of acquiring and administering the business.
The maturity profile of gross insurance liabilities at the end of 2011 was as follows: < 1 Year £m £m > 3 years £m
Analysis of fees paid to the auditor for other services: Tax compliance services 0.1 0.1 Tax advisory services 0.2 0.2 Other services – – Total as above 0.3 0.3
(i) Current tax: Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively enacted by the balance sheet date, and includes any adjustment to tax payable in respect of previous periods.
Current tax Corporation tax on profits for the year 88.4 80.3 Under/(over) provision relating to prior periods 1.2 (3.2) Current tax charge 89.6 77.1
Premium receivable in advance of policy inception 115.4 110.1 Accrued expenses 41.4 55.8 Deferred income 18.0 25.4 Total accruals and deferred income as above 174.8 191.3
Authorised: Issued, called up and fully paid: 273,523,594 ordinary shares of 0.1p 0.3 – 270,726,075 ordinary shares of 0.1p – 0.3
For further information on how the Group conducts its business across UK, Europe and the USA, refer to the business review.
Trade payables and other liabilities 0.4 0.1 Corporation tax payable 63.1 49.3 Amounts owed to subsidiaries – 14.4 7. Reconciliation of movements in shareholders’ funds