Dividends Shareholders are encouraged to have their dividends paid directly into their bank account. It is a more secure and faster way to receive the dividend payment with cleared funds available to shareholders on the dividend payment date. Shareholders who have their dividends paid directly into their bank account, receive annual dividend confirmations once a year, showing payments received in the respective tax year. Alternatively, individual dividend confirmations are available upon request. To take advantage of this convenient method of payment visit www.shareview.co.uk or contact Equiniti. Details of 2018 dividend dates are detailed overleaf.
Additionally, if you wish to register for the Company’s investor news service to receive the latest news and press releases by email, visit www.rsagroup.com/investornewsalert.
Share register fraud: protecting your investment UK law requires that our shareholder register is available for public inspection. We are unable to control the use of information obtained by persons inspecting the register. Details of any share dealing facilities that the Company endorses will be included in Company mailings or on our website.
• Consider holding your shares electronically in a CREST account via a nominee account or in the Corporate Sponsored Nominee.
Sharegift Shareholders with a small number of shares, the value of which makes it uneconomic to sell them, may wish to consider donating them to charity through ShareGift, a registered charity (number 1052686). The relevant share transfer form can be obtained from Equiniti. Further details can be obtained from www.sharegift.org or by calling +44(0) 20 7930 3737.
Ex-dividend date for the ordinary final dividend for 2017 and the first preference dividend for 2018
Record date for the ordinary final dividend for 2017 and the first preference dividend for 2018
JARGON BUSTER & ALTERNATIVE PERFORMANCE MEASURES Set out below are explanations of the key technical terms and alternative performance measures (APMs) used within this report. APMs are complementary to measures defined within International Financial Reporting Standards (IFRS) and are used by management to explain the Group’s business performance and financial position. They include common insurance industry metrics, as well as measures management and the Board consider are more representative of its underlying trading performance and that provide more meaningful comparisons between periods and business segments. APMs are identifiable within Group tables by the symbol , and those used to determine management and executive remuneration are identified below with *. A reconciliation of APMs to their nearest IFRS Income Statement equivalents, detailing the adjustments made, can be found below.
Affinity Selling insurance through a partner’s distribution network, usually to a group of similar customers, e.g. store-card holders, alumni groups, unions and utility company customers.
The administrative cost of processing a claim (such as salary costs, costs of running claims centres, allocated share of the costs of head office units) which are separate to the cost of settling the claim itself with the policyholder.
Commission An amount paid to an intermediary such as a broker for introducing business to the Group.
The profit or loss earned from business for which insurance cover has been provided during the current financial period.
Total revenue generated through sale of insurance products. This is before taking into account reinsurance and is stated irrespective of whether payment has been received.
An estimated reserve for amounts owed to all valid claimants who have had a covered loss but have not yet reported it and for claims that have been reported but the cost is not yet known.
Investment Result Investment result is the money we make from our investments on a management basis. It comprises the major component of net investment return, investment income, in addition to unwind of discount and investment expenses.
Large Losses Single claim or all claims arising from a single loss event with a net cost of £500k or higher.
Premium written or processed in the period, irrespective of whether it has been paid, less the amount shared with reinsurers.
Non-operating charges represent items that are excluded to arrive at the underlying profit after tax measure.
Amortisation of intangible assets To allow meaningful assessment of segmental performance where similar internally generated assets are not capitalised
Impairment of intangible assets Where the impairment arises from restructuring activities
Reorganisation costs To allow assessment of the performance of ongoing business activities
Realised and unrealised gains and losses on investments / foreign exchange gains and losses
Payout Ratio Ordinary dividends expressed as a percentage of underlying profit after tax attributable to ordinary shareholders.
Updates to premium, claims, commission and expense estimates relating to prior years. 1 P
Pull to par The movement of a bond’s price toward its face value as it approaches its maturity date.
Reinsurance The practice whereby part or all of the risk accepted is transferred to another insurer (the reinsurer).
Prior period comparative translated at exchange rates applicable at that time.
Return on Equity Profit attributable to ordinary shareholders (profit after tax excluding non-controlling interests, coupon on tier 1 notes and preference dividend) expressed in relation to opening ordinary shareholders’ funds (opening ordinary shareholders funds less preference share capital).
Tangible net asset value comprises shareholders’ equity, less preference share capital and goodwill and intangible assets.
This provides a key measure of shareholder value and one that informs overall valuation in the insurance sector.
A key measure of the underlying earnings power of the Group as it excludes shorterterm and temporary changes, such as restructuring costs.
Underlying earnings per share is calculated as underlying profit after tax, divided by the weighted average number of shares in issue during the period.
Weather Losses Weather claims incurred with a net cost of £500k or higher.
Weather Loss Ratio The weather loss ratio is an expression of weather losses in the period with a net cost of £500k or higher as a percentage of earned premium.
The dividend payable on a share expressed as a percentage of the market price.
Current year B 6,590 Prior year C 15 6,605 Investment income 331 331 D 331 Realised gains on investments 19 19 19 Gains/(losses) on exchange derivatives (5) (5) (5) Unrealised gains/(losses) 1 1 1 Impairments 4 4 4 Net investment return 350 – 350 Other insurance income 146 146 E 146 Other non-insurance income 4 4 4 Foreign exchange gain – – – Other operating income 150 – 150 Total income 7,105 – 7,105 Expenses Gross claims incurred (5,136) – (5,136) (5,136) Less: claims recoveries from reinsurers 786 – 786 786 Net claims, analysed as (4,350) – (4,350) F (4,350)
C+J+L+N P 157 PY Underwriting Z – P Q 237 CY Underwriting
Attritional loss ratio G / B R 55.3% Weather loss ratio H / B S 2.6% Large loss ratio I / B T 10.8% Prior year loss ratio V–R–S–T U (2.8%) Loss ratio F/A V 65.9% Commission ratio (K+L) / A W 13.7% Expense ratio (E+M+N) / A X 14.4% Combined operating ratio V + W + X Y 94.0%
Less: claims recoveries from reinsurers 707 208 915 915 Net claims, analysed as (4,119) (96) (4,215) F (4,215)
Earned PY commission (12) (12) L (12) Earned CY operating expenses (1,088) (33) (1,121) M (1,121) Earned PY operating expenses (4) (4) N (4) Underwriting and policy acquisition costs (1,977) (89) (2,066) (2,066)
Amortisation of intangible assets (16) (16) (16) Pension net interest and administration costs (4) (4) (4)
Net share of profit after tax of associates – – – – Profit/(loss) before tax 101 (10) 91 380 298 (23) 655 (564) 91 Income tax expense (54) (17) (71) Z AA AB AC AD Profit/(loss) for the year 47 (27) 20
Notes: * £5m of discount unwind reported as economic assumption changes
Note 21 Less: coupon on 2017 issued restricted tier 1 instrument (11) –
Important disclaimer This document contains ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial condition, performance, results, strategic initiatives and objectives. Generally, words such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘aim’, ‘outlook’, ‘believe’, ‘plan’, ‘seek’, ‘continue’, ‘potential’, ‘target’, ‘reasonably possible’ or similar expressions, are intended to identify forward-looking statements.
By their nature, all forward-looking statements involve risk and uncertainty because they relate to, and may be impacted by, future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic, European and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governments, central banks and regulatory authorities (including changes related to capital and solvency requirements whether in the UK, Europe or globally), the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group and its affiliates operate.
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