The Group’s core market is the UK, with a 10% share of private car insurance through four brands; Admiral, Elephant, Diamond, and Bell. The Group also has car insurance businesses in Spain, Italy, France and the USA.
We also own Confused.com, one of the leading UK price comparison websites, and have similar businesses in Spain, France and Italy.
• Strong growth in turnover, customer numbers, profi ts and dividend in 2010
Italy ConTe, our Italian car insurer launched in May 2008. It ended 2010 with over 86,000 customers, making it the largest Group business outside the UK
• 2010 was a year of very strong growth in customers, premiums and profi t
• Elephant Auto in the USA completed its fi rst full year of operation
• Confused.com endured a tough year in 2010, seeing revenue and profi ts fall
• Gladiator grew revenue and profi t despite high levels of competition in UK van insurance
• The Group is highly cash generative and has a cautious approach to investments
12 months ending dividendup 18% on 2009 68.1p 04 Admiral Group plc | Annual Report 2010
• Extend this low risk philosophy to our investment strategy, only employing cash deposits or money market funds
In the UK, Admiral’s strength in price comparison and signifi cantly better than market average combined ratio again gave us the fl exibility to achieve material growth in both market share and average premium. With a 32% growth in vehicle count during 2010 to some 2.5 million vehicles covered by Admiral brands we estimate that we are now one of the top three UK private motor insurers, holding around 10% of the UK market. UK Car Insurance profi ts rose 33% to £276 million.
Our expansion overseas also made considerable progress during 2010. Two days before Christmas saw the launch of L’Olivier, Admiral’s new car insurance brand in France, following that of LeLynx.fr, our French price comparison business, early in 2010. We now have this complementary dual presence of motor insurer and price comparison website in 4 out of our 5 chosen markets. We have found that the price comparison launch helps stimulate growth in what are often immature price comparison markets to the benefi t of the direct operation, while the direct operation provides a willing partner in markets where some players are resistant to the, in our view inevitable, emergence of price comparison.
The strength of our advance in UK Car Insurance drove our Group result for 2010, pre-tax profi ts at £266 million being 23% ahead of the previous year. Admiral’s capital-light business model, transferring a signifi cant proportion of our underwriting risk to reinsurance partners, allows the majority of our earnings to be distributed as dividends. This year we will distribute 94% of post-tax earnings, our full year dividends amounting to 68.1 pence per share, 18% up on our declaration for 2009. Our normal dividend, growing in line with our growth in profi ts based on a 45% pay-out ratio, amounted to 32.4 pence per share, whilst our available surplus, after taking into account our required solvency, provision for our overseas expansion plans, and a margin for contingencies, made possible a special dividend of 35.7 pence per share. We have paid such a special dividend as part of every distribution we have made since becoming a public company – in total £398 million, 52% of overall dividends.
Swansea Bay 10k Admiral has sponsored the Swansea Bay 10k road race for four years. 235 members of staff have taken part in the race, raising money for a variety of charities.
For the seventh consecutive year, every year since we became a public company, Admiral Group has reported record profi ts and record turnover. On the face of it I think most CEOs would be pleased with such results. Does it make sense to say that I am pleased, but far from satisfi ed? In my view, 2010 was a mixed year for the Group. There were some big triumphs but also some quite sobering moments and, in a lot of areas, it’s too early to judge the quality of the work completed.
The big success was the UK motor insurance business. It’s a snowball going like a freight train. Downhill. Wow!
Admiral Group has a core business that is fantastic and appears to be getting better. Trading conditions in the UK were more favourable than any time since 2000. And I’m pleased to say we were able to take full advantage. Big price hikes in the market pushed consumers to shop. We raised our rates some, but also took advantage of our combined ratio advantage in the market to gobble up market share.
However, there were also important businesses in the Group that underperformed or that ran into substantial challenges, including: • AdmiralDirekt, our insurance operation in Germany, which we sold at the end of the year
Our other operations are all young and immature businesses that need to mature and improve.
Launches in 2010 www.lolivier.fr – car insurance. www.chiarezza.it – price comparison. www.lelynx.fr – price comparison.
Children’s party Admiral staff enjoy dressing up to help entertain employee’s children at the Christmas Party in Swansea.
In sum, this is a good business and a good organisation. It will be better.
Time to say ‘Thanks’. In particular I’d like to highlight the contribution of Andrew Probert, our former Finance Director, who, instead of being retired, was instrumental in achieving the sale of AdmiralDirekt. Finally, as one does, I’ve saved the best for last. Let me say ‘Thanks!’ to staff, partners and signifi cant others, as those record profi ts and record turnover numbers didn’t happen by themselves.
• 41% growth in customers, from 50,300 to 70,700 • First annual profi t of £0.8 million, a change of £2.1 million from 2009
• Gained licence and now trading in Maryland, as well as Virginia
Business review In fi nancial terms the Group enjoyed a very positive 2010, producing substantial top line growth, a signifi cant rise in the number of customers and strong increases in pre-tax profi t and dividends.
In fi nancial terms the Group enjoyed a very positive 2010, producing substantial top line growth, a signifi cant rise in the number of customers and strong increases in pre-tax profi t and dividends. Three new businesses were launched in the year (two price comparison businesses – in France and Italy – plus a car insurer in France), while the decision was taken to exit the German car insurance market, with a deal to sell the AdmiralDirekt business concluded in early 2011.
The Group’s investment in young and new overseas businesses continued in 2010; total losses outside the UK (excluding pre-launch costs) amounting
Group fi nancial review to £12.9 million, up from £10.3 million last year. Encouragingly, Balumba in Spain made its fi rst full year profi t (£0.8 million, after making a loss of £1.3 million in 2009). The Group operates seven businesses outside the UK – four car insurers (Balumba in Spain, ConTe in Italy, Elephant Auto in the USA and L’Olivier in France) and three price comparison websites (Rastreator in Spain, LeLynx in France and Chiarezza in Italy).
Confused had a tough year in the UK price comparison market, and saw revenue fall by 10% to £71.8 million and profi t decline by 34% to £16.9 million.
Other Group highlights include: • Group combined ratio at 89%, improved from 92% in 2009
Total dividends for the 2010 fi nancial year will amount to 68.1 pence per share (£183 million in total), up 18% on the previous year (57.5 pence; £153 million).
The Group’s results are presented in three key segments – UK Car Insurance, Non-UK Car Insurance and Price Comparison. We summarise other Group items in a fourth section.
• We estimate that we account for around 10% of the UK market in value terms, insuring 2.5 million cars at the end of 2010. Total UK premium in 2010 was over £1.2 billion
• Our main operations are in Cardiff, Swansea and Newport in South Wales, and we also service our customers from call centres in Halifax, Nova Scotia, Canada and Bangalore, India
• At the same time, we endeavour always to give excellent service to our customers, whilst providing a positive environment in which our staff can work and develop
• Strong growth is a result of concentration on the price comparison distribution channel, effective pricing discipline and innovative products
• Signifi cant profi t generated from nonunderwriting activities – 36% increase in 2010 results from signifi cant increase in vehicles and modest increase in income per vehicle
• Track record of maintaining ancillary income per vehicle – ancillary profi ts generally increase in line with vehicle growth
In 2010, Admiral underwrote a net 27.5% of UK premiums (in line with 2009 and 2008). 45% of the 2010 UK total is underwritten by the Munich Re Group (specifi cally Great Lakes Reinsurance (UK) Plc) through a long-term co-insurance agreement, with a further 27.5% being proportionally reinsured to Hannover Re (10.0%), New Re (10.0%) and Swiss Re (7.5%).
The nature of the co-insurance is such that 45% of all motor premium and claims for the 2010 year accrues directly to Great Lakes and does not appear in the Group’s income statement. Similarly, Great Lakes reimburses the Group for its proportional share of expenses incurred in acquiring and administering the motor business.
Net insurance claims (105.1) (138.7) (192.6) Net insurance expenses (26.0) (30.3) (32.4)
Reported loss ratio 62.0% 66.9% 68.3% Reported expense ratio 19.0% 18.0% 15.2% Reported combined ratio 81.0% 84.9% 83.5% Written basis expense ratio 17.0% 16.9% 14.4% Claims reserve releases £38.0m £31.3m £23.5m Releases as % of
Vehicles insured at year-end 1.59m 1.86m 2.46m Ancillary income per vehicle £70.7 £72.0 £77.0
New arrangements for 2011 and beyond During 2010, the Group signed new contracts to come into force in 2011 with two new quota share partners. Mapfre Re and XL Re will both underwrite 2.5% of the UK business in 2011. The remainder is split: Admiral’s net share at 27.5%; Great Lakes (co-insurance) 40.0%; New Re 11.25%; Hannover Re 8.75% and Swiss Re 7.5%.
The Great Lakes co-insurance contract will run until at least the end of 2016, and will see Great Lakes co-insurance 40% of the UK business for the remaining period. Admiral has committed to retain at least 25% for the duration, whilst the allocation of the balance is at Admiral’s discretion.
UK Car Insurance Financial Performance Commentary on UK market conditions is included in David Stevens’ Review (see page 15).
Admiral’s premium rates rose, on average, by just over 25% during the year, whilst the average premium for transacted business increased by around 16% year-on-year (the difference in percentages refl ecting the timing of rate rises over the course of the year). Our estimation is that our price rises lagged those in the market, the resultant increase in our competitiveness, combined with the continued growth of price comparison contributing to the signifi cant growth in vehicles insured in 2010.
In determining the quantum of releases from prior years, we seek to maintain a consistent level of prudence in reserves (taken together with ’reserves’ of profi t commission) based on actuarial projections of ultimate loss ratios. In recent periods the contribution to the total margin deriving from profi t commission has increased signifi cantly.
The combined ratio in 2010 was 83.5%, marginally better than the 84.9% for 2009. The improvement in expense ratio was in part offset by the slight worsening in the reported loss ratio. The latest market information available for 2009 shows a total combined ratio of 123% (Admiral’s advantage over this fi gure being spread relatively evenly between the loss and expense ratio elements).
Dress up Swansea Renewals staff enjoy dressing up as part of a competition to win a trip to New York.
Including investment income of £8.3 million (2009: £7.5 million), underwriting profi t in 2010 rose signifi cantly to £52.7 million from £37.6 million in 2009. Of this increase, around £10 million relates to higher net insurance premium revenue, with the majority of the remaining £5 million derived from the improved combined ratio. Investment income is discussed further below.
Profi t commission income from co-insurance and reinsurance partners grew strongly in 2010, to £67.0 million from £54.2 million in 2009 (an increase of 24%). This equated to around 25% of net insurance premium revenue, largely in line with 2009.
All three companies are required to maintain capital to levels prescribed by the home regulator, and all three maintained surpluses above those required levels throughout the year.
• Developing and documenting the risk management and governance framework across the Group
Our challenge throughout the year was to handle the resulting fl ood of new business that came our way, despite our own rapid, if slightly lagging, price increases. Our own rates rose by just over 25% across new business and renewals during the year.
The number of vehicles insured by Admiral rose by 32% during 2010. That sort of growth carries risks in any business, but particularly in an insurance business. Admiral employed 800 more people at the end of the year than at the beginning (itself a joy in these diffi cult economic times). By year end, over a third of our staff had been with us for less than a year. It is a tribute to the quality and enthusiasm of our managers, from team managers upwards, and of those new recruits, that the business has coped so well with this very substantial increase in its size. An increase in our customer retention ratios, despite the substantial year-on-year rate increases, and a further reduction in the average time taken to settle a claim are two examples of the measures that reassure us that these new staff are reinforcing, and not diluting, our success. Another source of reassurance is that we gained our highest ever rank in the Sunday Times Best Companies to Work For 2011 survey. We came ninth, up from sixteenth in 2010.
The rapid growth of the business in 2010 fed through to the bottom line. There’s a strong link between customer numbers and ancillary revenues, so a record number of policyholders led to our highest ever level of ancillary income (£142 million). Higher volumes and higher average premium per policy (+8% on an earned basis, +16% on a written basis) helped us to our lowest ever expense ratio, and to a record underwriting profi t of £53 million. The time lag between our increases in average written premiums translating into higher average earned premiums, and our conservative approach to early year reserving means that the profi t impact of an improving claims ratio is yet to impact fully our reported profi ts.
• Elephant Auto (Richmond, Virginia, USA) started trading in October 2009
• L’Olivier (Paris, France) is the Group’s newest business, having launched in December 2010
We expect new operations to be relatively small, and loss making in their early years (how long will depend on the market), until the business is established and scale is achieved. Use of proportional reinsurance across all markets (see below) helps reduce the fi nancial impact in the early years.
Whilst there was good news in 2010 as Balumba recorded its fi rst full year profi t, the decision was also made to exit the German car insurance market. AdmiralDirekt, our German insurer which had been writing business since the start of 2008, was sold to a German mutual in early 2011. Further information is contained below.
Objective Progress 1) Establish new, direct car insurance businesses in fi ve selected countries outside the UK (Spain, Germany, Italy, USA and France)
• 65% reinsurance support in place in Europe (except France, 70%)
• The Directors will not persevere in markets where there is no strong probability of success
Non-UK locations Admiral’s Non-UK insurance businesses are based in Seville, Rome, Richmond and Paris.
Net ancillary income 2.8 3.3 5.3 Other revenue and charges 0.2 0.2 0.3
Key Performance Indicators Admiral Elephant 2010 Balumba Direkt ConTe Auto Total
Following the sale of AdmiralDirekt in early 2011, all premium written and earned in 2011 in Germany is 100% reinsured to the acquiring company, Itzehoer. The only risk retained by the Group relates to the development of open claims on accidents prior to 1 January 2011. The total exposure is not material.
In the USA, Admiral’s insurer retains one third of the underwriting, with the remaining two thirds shared between two reinsurers. Both bear their proportional share of expenses and underwriting, subject to certain caps on the reinsurers’ total exposures.
In performance terms, 2010 was a mixed year outside the UK. Balumba, the Group’s most mature operation completed its fourth full year of trading and recorded its fi rst full year profi t of £0.8 million. Whilst the headline result is positive, the combined ratio for 2010 remained around 150%, meaning Balumba still has work to do.
Elephant Auto in the US, which completed its fi rst full year of operation in 2010, generated a lower than anticipated level of quote volumes at reasonable cost, and ended the year with only 5,700 vehicles insured. The low level of premium that followed resulted in a very high expense ratio (though the loss ratio is encouraging, albeit on small volumes).
Balumba’s focus on improving the loss ratio continues to yield positive results, with much more satisfactory loss ratio experience in the most recent periods. See Fig. 1.
Taking the loss and expense ratios together, the combined ratio on a reported basis improved to 148% from 163% last year. Despite the better outcome, the combined ratio is still materially ahead of where it needs to be and Balumba management continue to focus on its improvement.
The transaction involved a sale of the trade and certain assets of the business; the consideration for which was not materially different to the carrying value of the assets in the balance sheet at the year-end.
AdmiralDirekt’s result for 2010 was a loss of around £3 million, notably better than the £5 million loss in 2009. The combined ratio was over 50 percentage points better in 2010 (183% v 238%), with the improvement being spread over the loss and expense ratios. Earned premium was broadly fl at at £4 million across 2009 and 2010.
ConTe Market conditions in Italy were positive for ConTe in 2010, with signifi cant increases in premium rates in the market being a catalyst for strong growth. ConTe’s customer base increased from 35,500 at the start of the year to over 86,500 at the end. Total premiums (excluding currency impacts) increased by over 150% to £30 million. ConTe’s base premium rates increased relatively signifi cantly during the year, by around 16% on average across new business and renewals.
This strong growth was accompanied by a positive loss ratio outcome on the 2010 underwriting year, which was at 70% after 12 months, compared to 98% for the 2009 year. The 2010 ratio includes a signifi cant allowance for incurred but not reported (IBNR) claims. See Fig. 2.
On an earned basis, the 2010 loss ratio improved to 84% from 98% in 2009.
Operating costs were a key area of focus in ConTe, and expense ratios are developing positively as the business grows. On a written basis, the expense ratio in 2010 improved to 45% (from 80%) whilst on an earned basis the improvement was to 70% from 145%.
After net ancillary contribution of around £1 million, ConTe made a loss of £2.6 million in 2010, broadly in line with 2009, but on substantially higher earned premium (£6.7 million v £1.9 million).
Elephant Auto Elephant completed its fi rst full year of operation in 2010, having launched in October 2009. Although still early days for the business, volumes (in quote and sales terms) were below expectation and full year premium only totalled around £4 million. Elephant insured around 5,700 cars at the end of the year.
One of the key positive features of the fi rst year’s performance was the loss ratio, which (excluding loss adjustment costs) despite being on gross earned premium of only around £2.4 million, fi nished the year at around 60% including IBNR.
Success in delivering against the strategy is measured against a large number of key performance indicators which are common across the UK and international businesses. These include quote volumes, conversion rates, sales volumes, income per sale, revenue per customer and cost per sale.
UK • Confused’s strategy is to become the comparison website of choice in the UK for fi nancial products, and to maximise the value to the business of each customer relationship
In Europe We have three price comparison businesses operating outside the UK: • In Spain, Rastreator (launched in 2009) offers comparison on motor, home, motorcycle and life insurance
• LeLynx in France (launched January 2010) offers comparison on a similar range of products
• Chiarezza in Italy (launched February 2010) currently offers comparison on motor insurance only
Regulatory environment: Confused is regulated by the UK FSA as an insurance intermediary and is subject to all relevant mediation rules, including those on solvency capital.
Revenue at Confused fell by around 10% to £71.8 million (2009: £80.1 million). The key cause was a disappointing media campaign during the year which led to falls in market share in motor and home insurance comparison. Revenue from products other than motor insurance totalled £15.9 million (2009: £18.3 million), 22% of the total (2009: 23%).
Launch in France Admiral’s second Non-UK Price Comparison site LeLynx launches in France on 18 January 2010.
Confused had a tough time in 2010. The main story of the year was the success of our competitors’ TV campaigns and the disappointing results from our own. The meerkat (Compare the Market) and the opera singer (Go Compare) both delivered well for their respective companies, whilst at the same time we rolled out arguably our least successful TV campaign since Confused began. We pulled the campaign in the middle of the year once the results became apparent, but by then the damage had been done. Towards the end of the year a new advertising campaign was working better and we enter 2011 in better shape than we were at this time last year.
Less than 10 years ago, Confused pretty much created the car insurance price comparison market and so it was inevitable that its very high market share (and margins) would be reduced as new players came in. And indeed, this is what has happened in the last couple of years. But it is a source of disappointment that we lost as much share as we did and we have to hold our hands up and concede that at least some of that was of our own making.
Profi ts fell from £25.7 million in 2009 to £16.9 million in 2010. Margins declined as it became more expensive to get customers and we saw our market share of car insurance price comparison drop from 27% to 23% during the course of the year.
We are very focused on the quality of the customer experience with the Confused website. We have a number of initiatives in place to improve that process and we hope our customers will notice the difference. We are also actively working on improving the competitiveness of the prices our customers see when they get their quotes and also the breadth of providers on the panels.
The revenue from products other than car insurance is typically around 20-25% of Confused’s total income, and they remain pretty stable at this level. The main contributors are home insurance, other insurance lines and energy products.
It is early days, but so far so good. We are encouraged by the results since the new Confused advertising campaign launched at the end of last year, but it is still too early to say whether it will be truly successful or not.
Gladiator’s customer base remained broadly fl at over the course of 2010 as the van insurance market remained very competitive. The business was, however, able to increase the amount of revenue earned from each relationship.
Operating profi t consequently increased to £2.7 million from £2.4 million, whilst the operating margin percentage was fl at at 23%.
• Higher number of shares awarded: In 2010, a total of 2.4 million shares were awarded under the Group’s schemes – 10% higher than in 2009, refl ecting growth in Group headcount
Investments and Cash Investment strategy Once again, there was no change in investment strategy, and the Group’s funds were held either in money market funds, term deposits or as cash at bank.
The key focus of the Group’s investment strategy is capital preservation, with additional priorities being focus on low volatility of investment return and high levels of liquidity.
The allocation of funds between the two main investment types (money market funds and term deposits) has remained relatively stable over the year and all investment objectives continue to be met.
Strong cash generation continues to be a feature of the Group’s businesses, enabling the distribution of the majority of post-tax profi ts.
Net increase in cash and fi nancial investments 63.8 77.8 276.9
The signifi cant increase in total cash plus investments refl ects the substantial growth of the UK business in 2010.
The main items contributing to the signifi cant operating cash infl ow are as follows: Profi t after tax 144.9 156.9 193.6 Change in net
Net change in trade receivables and liabilities (5.8) (4.6) 101.4 Non-cash income
Tax and net interest expense 57.6 58.9 71.9 Operating cash fl ow, before transfers to investments 251.5 286.4 522.0
The key features to note are: • Profi t after tax increased by 23%, whilst operating cash infl ow (before movements into investments) increased by 82%
• Operating cash fl ow is signifi cantly higher than prior years due to the signifi cant increase in the size of the UK Car Insurance business, coupled with the fact that quota share arrangements are now largely on a funds withheld basis, meaning the majority of reinsured premium cash remains within the Group
Winter Wonderland Admiral sponsors the open air ice rinks in both Cardiff and Swansea city centres. As part of the sponsorship, employees enjoy a free skating session.
Other fi nancial items Taxation The taxation charge reported in the income statement is £71.9 million (2009: £58.9 million), which equates to 27.1% (2009: 27.3%) of profi t before tax.
Dividends The Directors have proposed a fi nal dividend for 2010 of 35.5 pence per share. This payment is 19% higher than the second interim dividend for 2009 (29.8 pence) and brings the total dividend for 2010 to 68.1 pence (18% higher than the 57.5 pence paid out in relation to 2009).
The payment date is 10 June 2011, ex-dividend date 18 May 2011 and record date 20 May 2011.
Capital structure, fi nancial position The 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 comfortably meet regulatory requirements. Excess capital above these levels within subsidiaries is paid up to the Group holding company in the form of dividends on a regular basis.
Other than as stated below, as far as the Company is aware, there are no persons with signifi cant direct or indirect holdings in the Company. Information provided to the Company pursuant to the Financial Services Authority’s (FSA) Disclosure and Transparency Rules (DTRs) is published on a Regulatory Information Service and on the Company’s website.
The interests of Directors and Offi cers and their connected persons in the issued share capital of the Company are given in the Remuneration Report.
Admiral has typically been able to produce an advantage over the UK market in combined ratio terms of around 30 percentage points. There is a risk that this advantage and/or the level of underwriting profi t generated by Admiral could erode.
c) A deterioration in ability to price effectively (for example due to legislation on gender discrimination)
d) Adverse changes in claims costs or ability to handle claims
Admiral’s UK business has grown every year since the business was launched in the early 1990s, and has enjoyed regular outperformance against the market throughout that time. We now insure 10% of the UK market and our combined ratio advantage is at one of its highest levels.
The Group is mindful that many insurers have recently reported increases in bodily injury claims costs, potentially due to fraud. Whilst this has not been a marked feature of our portfolio, claims and other senior management track a wide range of key performance indicators to assess changes in trends, and resource continues to be strengthened in the claims fraud function.
Risk Description and Impact Mitigation 3. International expansion – risk of failure
The Group’s approach to expansion is cautious. Our insurance businesses start small and are all backed by proportional reinsurance support which provides substantial mitigation against start-up losses in the early years.
The Directors are mindful of management stretch and monitor this risk on a regular basis. At present the Board is confi dent there is a suitable management structure in place for the Group’s international operations.
As demonstrated by the sale of AdmiralDirekt, the Directors are not prepared to let unprofi table businesses continue to generate losses where there is limited foreseeable chance of success.
The impact on the Group would be less profi t earned on the car insurance portfolios and a lower return on capital employed.
The Group’s risk management framework leads to potential risks to ancillaries being identifi ed and monitored, providing management time to respond appropriately to any such regulatory changes and minimise fi nancial impacts where possible.
Confused management continually analyse the success or otherwise of all media activity and will withdraw non-performing campaigns as soon as practicable.
The impact on the Group would be the need to raise additional capital to support underwriting. This could be in the form of equity (either reduced dividends or new equity) or debt. Return on capital would potentially be lower than current levels.
In the UK, co- and reinsurance arrangements have been agreed up to the end of 2013, including deals with new partners to the Group. Pricing on these deals was in line with existing arrangements. The long-term co-insurance agreement with Munich Re will remain in place (at 40% of the business) until at least the end of 2016.
The Board also considers the following risks to be signifi cant: • Credit risk – default of reinsurer (discussed in note 17 to the fi nancial statements) • Credit risk – failure of banking or investment counterparty (also discussed in note 17) • Operational risk – major fraud (considered to be relatively low impact and mitigated by a wide range of internal controls)
The survey results in the key areas measuring morale, association with Admiral and how employees feel Admiral treats its customers have stayed at very high levels for 2010. During 2010, the number of vehicles insured in the UK increased by 32% to 2.46 million. This led to some resource shortfalls in a number of areas during March, April and May 2010 with signifi cant recruitment of staff taking place during the second half of the year. This led to scores on the whole being lower than the 2009 survey and something that remains high on the agenda of the senior management team for 2011.
Introduction Throughout 2010 we continued to ensure that Corporate Responsibility (CR) is a part of everyone’s role at Admiral.
The CR report outlines what we do in the key areas of corporate responsibility: • Employees • Customers • Charitable giving and Community • Environment
Employees The people working at Admiral are our key asset. It is not something we just say but something we truly believe. We have a simple philosophy – if people like what they do, they will do it better. So we go out of our way to ensure a good working environment. During 2010, as with every year since 1996 our UK employees have completed an anonymous survey to collect views on what it is like working for Admiral. The survey includes questions relating to a wide range of topics including morale,
Morale is high within Admiral 76% 89% 90% 93% 89% Morale is high in my department 87% 82% 90% 86% 84% Taking everything into account I am happy at Admiral 92% 87% 90% 91% 88% Every effort is made to understand the opinions
Admiral is truly customer oriented 90% 88% 90% 90% 86% Admiral treats its customers fairly 86% 84% 87% 88% 86%
Charity cycle ride Staff from Gladiator ride from Swansea to Paris to support Charity MNDA.
In the 2011 list we were extremely pleased to be placed in ninth position – an excellent result for Admiral and everyone who works within the Group. See Fig. 2.
The organisers of the event have identifi ed the eight key factors that defi ne the best companies to work for in Britain.
Leadership: how people feel about the head of the company and its most senior managers. My company: feelings about the company people work for as opposed to the people they work with. My manager: people’s feelings towards their day-to-day managers. Personal growth: to what extent people feel stretched by their job. My team: people’s feelings about their colleagues. Fair deal: how happy employees are with their pay and benefi ts. Giving something back: how much companies are thought to put back into society and the community. Wellbeing: how people feel about stress, pressure and the balance between their work and home life.
The fi nal results were announced on 25 February 2011 and are based on questionnaires completed by UK employees, randomly selected by the organisers. For the 2011 results, surveyed during November 2010, 1,237 (2010: 1,100) employees provided responses – a response rate of 77% (2010: 75%) of those receiving the questionnaires.
Admiral Group continued its fantastic run in The Sunday Times 100 Best Companies to Work For list with our highest ranking – ninth!
2010 saw the MDs of our four international car insurance brands take to the stage providing an overview of our overseas operations.
The table below provides details of awards given to employees that have matured and are now available to staff to sell. An employee who was working at Admiral before 1 January 2005 would have access to 1,346 shares – of which 638 could be sold free of income tax and national insurance. If none of the shares had been sold, these shares would be worth £22,141 (based on the share price of £16.45 on 3 March 2010). See Fig. 4.
The Board fi rmly believes that share ownership motivates employees, decreases attrition and improves the Group’s recruitment prospects in the regions where its offi ces are located. Indeed, 78% (2009: 79%) of employees say they are more likely to stay employed with Admiral because of the share schemes.
Customers Ensuring that we give a great service to our customers is essential to the future growth of the business, both in the UK and our overseas businesses. As at 31 December 2010 the Group had 2.75 million customers, up 32% from 2.08 million the year before.
There are many initiatives in place to ensure that customers are treated fairly, effi ciently and with respect: • Measures programme • Monitoring programme • Comment form analysis • Treating customers fairly reporting • Complaints analysis • Issuing shares to ‘star performing’ employees
Every department has its own set of quality measures to gauge performance. The measures are updated each year to challenge departments to make continual improvements. The programme is reported every month in the internal Company magazine and awards are presented each year to the best departments.
The Group works within the regulatory framework of the Financial Services Authority (FSA) in the UK. One of the FSA’s statutory objectives is to help customers get a fair deal. The Compliance
Corporate Responsibility continued department in the UK completes a monthly Treating Customers Fairly (TCF) Management Information pack, pulling together specifi c measures that demonstrate we are consistently treating our customers fairly. This is now being adopted in the developing overseas motor insurance businesses.
During 2010 the average red grades for the measures amounted to 2.58% (2009: 1.23%).
The average red grades increased during 2010 mainly as a result of increased volumes of new business early in 2010 causing call answer rates to fall below 90% in March, April and May. Increased recruitment during this period and for the rest of 2010 resulted in improved call answer rates such that an average of over 90% was achieved for the year. In addition Financial Ombudsman Service (FOS) complaints found in the Group’s favour continued to be below 75%. The Risk Management Committee monitors the FOS complaints that are found in favour of the customer and reviews each one to understand the type of complaints that are escalated to FOS. During 2010 a total of 241 complaints were received by FOS (2009: 265).
Each quarter the Central Complaints Department produce a report analysing the complaints received and of the causes. The report provides a summary of the root causes of the complaints and actions taken to reduce the risk of complaints due to specifi c procedures or behaviour.
The role of the Complaint Prevention Coordinator is to investigate whether a suggestion can be successfully incorporated into or used to change business processes that may be the cause of complaints.
Another aspect of complaint analysis is identifying training needs and general standards of customer service. Using complaints, we can identify human errors and gaps in knowledge. In addition to ensuring individual feedback is given, we analyse this information and identify trends or patterns which require improvement on a wider scale.
Our charity and community programme focuses on serving the communities near our offi ce locations in Cardiff, Swansea and Newport and since 2007 our overseas locations. The Admiral Community Chest is a fund set up by the Company to provide fi nancial support to employees and their families directly involved with local charities and organisations.
• Reporting key environmental performance indicators, taking into account the ABI’s Guidelines on Responsible Investment Disclosure and guidance provided by the Department for Environment, Food and Rural Affairs (Defra)
The Facilities Department continues to discuss methods of reducing energy consumption within the UK locations with the Carbon Trust. A number of initiatives taken in 2010 have resulted in the lower energy consumption per square metre of offi ce space during 2010. In addition more sites will be purchasing ‘Green electricity’ in 2011.
We continued to encourage recycling where possible and each fl oor has an environmental representative tasked with increasing the levels of recycling and awareness.
The Admiral Group Board 1. Alastair Lyons, CBE (57) Chairman ■ Alastair was appointed Chairman of the Company in July 2000. He is also Non-Executive Chairman of Serco, Deputy Chairman of Bovis Homes, Senior Independent Director at the Phoenix Group, and a Non-Executive Director of the Towergate Insurance Group. He has previously been Chief Executive of the National Provident Institution and of the National & Provincial Building Society, Managing Director of the Insurance Division of Abbey National plc, and Director of Corporate Projects at National Westminster Bank plc. Alastair was also a NonExecutive Director for the Department for Transport and the Department for Work and Pensions. A Fellow of the Institute of Chartered Accountants, he was awarded a CBE in the 2001 Birthday Honours for services to social security.
2. Henry Engelhardt, CBE (53) Chief Executive Offi cer Henry is a founder Director of Admiral and was recruited by the Brockbank Group in 1991 to set up the Admiral business. He was part of the management team that led the MBO in 1999. Prior to joining Admiral, he was Marketing and Sales Manager for Churchill Insurance. He has substantial experience in direct response fi nancial services in the United Kingdom, United States and France. He has an MBA from INSEAD. Henry was awarded an honorary CBE in April 2008 for services to business in Wales.
4. David Stevens, CBE (49) Chief Operating Offi cer David is a founder Director of Admiral. Initially the Marketing Director, he was appointed Director responsible for pricing in 1995 and claims and pricing in 1999. He was appointed as Chief Operating Offi cer in 2004. He joined Admiral in 1991 from McKinsey & Co. where he worked in the Financial Interest Group, London offi ce. Prior to working for McKinsey & Co, he worked for Cadbury Schweppes in the United Kingdom and the United States. David has an MBA from INSEAD. David was awarded a CBE in 2010 for services to business and the community in Wales.
6. Manfred Aldag (60) Non-Executive Director Manfred was appointed a Non-Executive Director of the Company in 2003 as a representative of Munich Re. He graduated from the University of Essen and has a degree in Economics/Business Management (Diplom-Kaufmann). He has worked for Munich Re since September 1981 and is currently the Chief Executive Manager responsible for United Kingdom/Ireland.
Margaret was appointed Non-Executive Director of the Company in September 2006. She is currently Group CEO of the international advertising agency Leagas Delaney and has been with that Company for the past 14 years. Margaret joined the Group’s Audit and Remuneration Committees on appointment to the Board.
Keith was appointed a Non-Executive Director in December 2002. He is Chairman of the Nominations Committee and is also the independent Chairman of Admiral Insurance Company Limited and Inspop.com Limited. He is also a Non-Executive Director of Julian Hodge Bank Limited and Hodge Life Assurance Company Limited and is Non-Executive Chairman of International Greetings plc. He is a solicitor and was the Chairman of Eversheds LLP from June 1995 to April 2004. He was a Non-Executive Director of Bank of Wales plc between 1988 and 2001 and AXA Insurance Company Limited between 1992 and 2000. Keith was awarded an OBE in 2005 for services to business and the community in Wales.
Employee policies Detailed information on the Group’s employment practices is set out in the business review. The Group purchases appropriate liability insurance for all staff and Directors.
Contractual arrangements The Group considers its co-insurance and reinsurance contracts, as described in the Business review section on page 12, to be essential to the running of the Group’s business. No other contractual arrangements are considered to be essential.
At 31 December 2010, the Company’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 note 26.
On a show of hands at a general meeting of the Company every holder of shares present in person and entitled to vote shall have one vote and on a poll, every member present in person or by proxy and entitled to vote shall have one vote for every ordinary share held. The notice of the general
Group results and dividends The profi t for the year, after tax but before dividends, amounted to £193.6 million (2009: £156.9 million).
There are a number of agreements that alter or terminate upon a change of control of the Company following a takeover bid, such as commercial contracts. None is considered to be signifi cant in terms of their impact on the business of the Group as a whole except for the long-term co-insurance agreement in place with Great Lakes Resinsurance (UK) Plc. Details relating to this agreement are contained in the business review.
A further special resolution passed at that meeting granted authority to the Directors to allot equity securities in the Company (up to a maximum of 5% of the issued share capital of the Company) for cash, without regard to the pre-emption provisions of the Companies Act 2006. This authority also expires on the date of the AGM to be held on 6 May 2011 and the Directors will seek to renew this authority for the following year.
Under company law the Directors must not approve the fi nancial statements unless they are satisfi ed that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profi t or loss for that period.
• for the Parent Company fi nancial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Parent Company fi nancial statements; and
The Directors are responsible for the maintenance and integrity of the corporate and fi nancial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of fi nancial statements may differ from legislation in other jurisdictions.
Responsibility statement The Directors confi rm that to the best of their knowledge: • The fi nancial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities and fi nancial position and profi t or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• The Directors’ report includes a fair view of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face
Auditor The Company’s auditor, KPMG Audit Plc, has indicated willingness to continue in offi ce and resolutions to reappoint it and to authorise the Directors to fi x its remuneration will be proposed at the AGM.
The Board complied with the Combined Code in all respects during 2010 except for Code D.1.1, which requires that the Senior Independent Director should attend meetings with a range of shareholders. The Company has a comprehensive programme of meetings and dialogue with institutional investors, and the Chairman had individual meetings with the majority of the largest 10 such investors. The views of investors expressed through this dialogue are communicated to the Board as a whole on a regular basis through the investor relations report. All Directors can, therefore, develop an understanding of issues or concerns of major shareholders should any be raised. Feedback from shareholders suggests that these arrangements for communication between the Company and its shareholders continue to be viewed by them as effective. The Senior Independent Director is always available to meet with individual shareholders on request to ensure the Board is aware of any shareholder concerns that cannot be resolved through the routine mechanisms for investor communications.
The Admiral Group Board The Board is the principal decision-making forum for the Group both providing leadership, either directly or through its Committees of Directors, and delegating authority to the Executive team in a manner that will promote the success of the Group and is consistent with good corporate governance practice. The Board is accountable to shareholders for setting and achieving the Group’s strategic objectives, for the creation and delivery of strong sustainable fi nancial and operational performance for ensuring that in carrying out its duties the Group’s legal and regulatory obligations are being met and for ensuring that it operates within appropriately established risk parameters. The Group is responsible to the Financial Services Authority (FSA) for ensuring compliance with the Group’s UK regulatory obligations and for ensuring that dealings with the FSA are handled in a constructive, cooperative and transparent manner.
• Operating and capital budgets, fi nancial results, and any signifi cant changes to accounting practices or policies
The Company Secretary All the Directors have access to the advice and services of the Company Secretary. He has responsibility for ensuring that Board procedures are followed and for advising the Board, through the Chairman, on governance matters. The Company Secretary provides updates to the Board on regulatory and corporate governance issues, new legislation, and Directors’ duties and obligations. The appointment and removal of the Company Secretary is one of the matters reserved for the Board.
• Maintenance of Non-Executive knowledge and understanding of an increasingly broad and complex business
• Moving still further the balance of Board consideration towards the strategic and away from the operational
Directors are expected to attend all meetings of the Board and the Committees on which they serve and to devote suffi cient time to the Group to perform their duties. The number of full Board meetings and Committee meetings of which they are a member attended by each Director during 2010 is provided in the table opposite.
has determined that Colin Holmes remains independent in character and judgement and that his holding of a cross-directorship will not affect his ability to present an objective, rigorous and constructive challenge to the assumptions and viewpoints presented by management and the Board nor will it affect his time commitment to the role. Colin Holmes will be subject to election by shareholders at the forthcoming Annual General Meeting (AGM).
The roles of the Chairman and Chief Executive The Board has approved a statement that sets out the clear division of responsibilities between the Chairman and the Chief Executive. The Chairman is primarily responsible for the leadership and workings of the Board, setting its agenda, and monitoring its effectiveness. The Chairman is not involved in the day-to-day management of the business. Save for matters reserved for decision by the Board, the Chief Executive, with the support of the other Executive Directors, is responsible for proposing the strategy to be adopted by the Group; the running of the business in accordance with the strategy agreed by the Board; and implementing specifi c Board decisions relating to the operation of the Group. The statement of division of responsibilities and matters reserved for decision by the Board were reviewed in December 2010.
Board balance and independence The Board currently comprises eleven Directors, the Chairman (who was independent on appointment), three Executive Directors, six independent NonExecutive Directors, and one Non-Executive Director, Manfred Aldag, who is employed by a signifi cant shareholder and is not, therefore, considered independent. There is no requirement that the signifi cant shareholder has representation on the Board and, accordingly, Mr Aldag’s appointment is subject to the same appointment and removal process as the other Board Directors.
Lucy Kellaway 7 3 John Sussens 6 7 * Colin Holmes was appointed to the Board on 3 December 2010.
The Board receives presentations from senior managers within the various Group companies on a regular basis and opportunity is also created for Non-Executive Directors to make informal visits to different parts of the Group and to meet with local management.
This is supplemented by feedback to the Board on meetings between management and investors. External analysts’ reports are circulated to all Directors. In addition, the Investor Relations team produces a monthly Investor Relations Report that is circulated to the Board. The Report contains an analysis of share price performance; a summary of analyst reports received during the month and of meetings that have been held with investors and analysts; together with details of any signifi cant changes to the shareholders’ register.
In accordance with the requirement under the Governance Code for annual election of Directors and the best practice guidance that has been issued, all Directors will be submitting themselves for re-election by shareholders at the forthcoming AGM. The Board is satisfi ed that all of the Directors that are seeking election or re-election by shareholders are properly qualifi ed for their appointment or reappointment by virtue of their skills and experience and their contribution to the Board and its Committees.
This induction is supplemented by visits to the Group’s head offi ce in Cardiff, overseas offi ces, and meetings with members of the senior management team and their departments. Development and training of directors is an ongoing process. Throughout their period in offi ce the Directors are regularly updated on the Group’s business; legal matters concerning their role and duties; the competitive environments in which the Group
The Board considers that the members of the Committee have the appropriate competence and experience to carry out their duties and further considers that Martin Jackson (Committee Chairman) has the appropriate recent and relevant fi nancial experience having held the position of Group Finance Director of Friends Provident Plc between 2001 and 2003 and being a fellow of the Institute of Chartered Accountants, which imposes requirements for Continuing Professional Development. In addition, Colin Holmes is a Chartered Management Accountant and has considerable recent and relevant fi nancial experience having previously been the UK Finance Director for Tesco PLC and until 2010 a member of its Group Executive Committee.
Shareholders are also invited to ask questions during the meeting and have an opportunity to meet with Directors after the formal business of the meeting has been concluded. Details of proxy voting by shareholders, including votes withheld, are made available on request and are placed on the Company’s website following the meeting.
Board Committees The Board has delegated authority to a number of permanent Committees to deal with matters in accordance with written terms of reference. The principal Committees of the Board – Audit, Remuneration, and Nominations – all comply fully with the requirements of the Combined Code. They are all chaired by an Independent Director and exclusively comprise, or, in the case of the Nominations Committee (where the Chairman of the Board is a member), have a majority of, Independent Directors. The Committees are constituted with appropriate written terms of reference that are reviewed annually to ensure that they remain appropriate and refl ect any changes in good practice and governance. These terms of reference are available on request from the Company Secretary and can also be found on the Company’s website: www.admiralgroup.co.uk. The minutes of the Committee meetings are also circulated to the Board. Committees are authorised to obtain outside legal or other independent professional advice if they consider it necessary.
The Audit Committee has unrestricted access to Company documents and information, as well as to employees of the Company and external professional advisers.
During the year, the Committee received presentations from senior managers on the risk management procedures that are in place in their key departments in order that the Committee could consider and evaluate the nature of the risks that each key department faces and gain assurance as to the appropriateness and effi cacy of the Group’s risk management and risk mitigation procedures.
During 2010, the Committee continued to discuss with the Executive team the succession planning across the Group to identify and develop those individuals within the organisation who have the potential and necessary skills to succeed the current members of the Executive team and senior management. The Committee, at the meeting in October 2010 considered the Group’s current Succession Plan together with a Training and Development Plan that had also been produced. The Succession Plan considered the senior roles within the Group and identifi ed whether there was emergency short-term cover in place in the event that the individual left the organisation, whether there was a permanent replacement available within the organisation, or whether the position would need to be fi lled externally. It also identifi ed where there were individuals who would be capable of moving into particular senior management roles following the gaining of further experience. In addition, the Training and Development Plan identifi ed those individuals within the Group who it was felt could become permanent replacements for senior roles on receipt of the necessary training and development.
The Committee remained satisfi ed that succession plans for Directors and senior management are in place to ensure the continued ability of the Group to implement strategy and compete effectively in the markets in which it operates.
In addition to the evaluation of the Committee’s effectiveness undertaken by the Board, the Committee also carried out a more detailed review of its own performance. As part of the review process, each Committee member completed a comprehensive online questionnaire designed to produce objective assessment of the Committee’s performance, including its effectiveness in monitoring internal and external audit. The Committee discussed the results of the review and it was concluded that the Committee and the audit process was effective; that the Committee had appropriate terms of reference; and that it had achieved its remit.
The Committee has formal terms of reference, which were reviewed during the year and were approved by the Board in December 2010. The Committee met on three occasions during 2010.
There are several key elements to the risk management environment throughout the Group. These include the setting of risk management policy at Board level; enforcement of that policy by the Chief Executive; delivery of the policy by the RMC and the Group’s other UK and overseas entities via the Group’s systems of internal control and risk management; and the overall assurance provided by the Audit Committee that the systems operate effectively. The Board recognises that the day-to-day responsibility for implementing these policies must lie with the Executive team whose operational decisions must take into account risk and how this can be controlled effectively. The Head of Compliance and the Risk Offi cer take responsibility for ensuring management are aware of their risk management obligations; providing them with support and advice; and ensuring that the risk management strategy is properly communicated. The head of each business unit or business area is required, with the support of the Risk Offi cer, to undertake a full process of
Remuneration Committee The membership at the year-end was John Sussens (Chairman), Martin Jackson, Margaret Johnson and Colin Holmes (appointed 3 December 2010). The Company Secretary acts as Secretary to the Committee. The Committee invites the Chief Executive and Chairman to attend meetings where it deems appropriate.
A separate remuneration report is included within the Report and Accounts.
During the year the Committee purchased consultancy services from Kepler Associates. In addition, the Company Secretary circulates market survey results as appropriate to enable the Committee to make judgements on the levels of remuneration appropriate for the Directors and to review the remuneration of the Group’s senior executives. PwC also provided advice on the structure of the Group’s share plans during the year.
The Committee’s principal responsibilities are to: • Consider risk management best practice and recommend its inclusion within the risk management strategy and policy adopted by the Board
• Identify and monitor any UK regulatory issues and ensure that their resolution and action is appropriately recorded; and
The relevant UK and overseas management Committees discharge similar responsibilities for the Group’s other UK and overseas operations.
The Committee develops policies to ensure compliance with regulation and determines that appropriate action is taken by the management team to implement compliant systems and procedures.
Internal Audit The Internal Audit functions assist management by providing them with timely, independent assurance that the controls established are operating effectively. This includes regular reviews of internal control systems and business processes, including compliance systems and procedures, and identifi cation of control weaknesses and recommendations to management on improvements.
Going concern The fi nancial statements have been prepared on a going concern basis. In considering the appropriateness of this assumption, the Board has reviewed the Group’s projections for the next twelve months and beyond, including cash fl ow forecasts and regulatory capital surpluses. The Group has no debt.
As a result of this review the Directors have satisfi ed themselves that it is appropriate to prepare the fi nancial statements on a going concern basis.
The Risk Management Committee (UK Car Insurance) The Committee’s members include the three Executive Directors, the Head of Compliance (who chairs the meetings), the Risk Offi cer, and senior management representatives.
The members of the Committee do not have any personal fi nancial interests, or any confl icts from cross-directorships, that relate to the business of the Committee. The members do not have any day-to-day involvement in the running of the Group.
During the year, in order to enable the Committee to reach informed decisions on executive remuneration, the Committee purchased consultancy services, including external research on market data and trends, from independent consultants, Kepler Associates. In addition, the Committee received advice on the structure of the Group’s share schemes from PwC. The Company Secretary also circulates market survey results as appropriate.
The Committee presents a summary of its principal activities to shareholders through this remuneration
For the Chief Financial Offi cer, all share awards are subject to the above performance criteria.
• Private Medical Cover and Permanent Health Insurance, available to approximately 120 management level staff
• Discretionary Free Share Scheme (DFSS). Awards under the DFSS are distributed on a wider basis than is the case for most plans of this type. The Committee believes that as the DFSS develops, and awards continue to vest, it will have the effect of reducing staff attrition and further strengthening the alignment of the interests of staff and shareholders
Of the Group’s current Executive Directors, only Kevin Chidwick (Chief Financial Offi cer) participates in this scheme, as Henry Engelhardt and David Stevens have declined to be included.
In addition to benefi ts such as private medical cover, permanent health insurance, death in service cover and eligibility for the Group’s Personal Pension Plan, there are two main elements to the Chief Financial Offi cer’s remuneration package: • Basic annual salary • Awards under the DFSS
Alastair Lyons 3 years commencing 1 July 2010, terminable by either party giving three months’ written notice.
Base fee 45,000 Plus: Member of Audit Committee 12,000 Senior Independent Director 5,000 Chair of Audit Committee 20,000 Chair of Nominations Committee 5,000 Chair of Remuneration Committee 5,000
Executive Directors Kevin Chidwick* 50,067 38,822 Henry Engelhardt** 40,490,720 40,490,720 David Stevens 10,234,000 10,234,000 Chairman and Non-Executive Directors Alastair Lyons 562,152 562,152 Manfred Aldag – – Colin Holmes – – Martin Jackson – – Keith James 44,500 44,500 Margaret Johnson – – Lucy Kellaway – – John Sussens 8,000 8,000 * Includes 1,403 shares within the Group’s SIP details of which are shown overleaf. Of these, 546 have reached their three-year maturity date.
Awards made under the Discretionary Free Share Scheme (DFSS) and Free Share Incentive Plan (SIP) The table below sets out the awards made to Directors under the DFSS and SIP, including the dates of the awards, the value at the time of the award and vesting date.
Opinion on fi nancial statements In our opinion: • the fi nancial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2010 and of the Group’s profi t for the year then ended
Opinion on other matters prescribed by the Companies Act 2006 In our opinion: • the part of the Directors’ Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006
• the information given in the Directors’ report for the fi nancial year for which the fi nancial statements are prepared is consistent with the fi nancial statements; and
Independent auditor’s report to the members of Admiral Group plc continued
Under the Listing Rules we are required to review: • the Directors’ statement, set out on page 47, in relation to going concern
• the part of the Corporate Governance Statement on page 39 relating to the Company’s compliance with the nine provisions of the June 2008 Combined Code specifi ed for our review; and
• certain elements of the report to shareholders by the Board on Directors’ remunerationby the Board on Directors remuner
for and on behalf of KPMG Audit Plc, Statutory Auditor Chartered Accountants 3 Assembly Square Britannia Quay Cardiff Bay Cardiff CF10 4AX
Insurance premium revenue 574.6 386.4 Insurance premium ceded to reinsurers (286.5) (174.5) Net insurance premium revenue 5 288.1 211.9
Investment and interest income 8 9.5 8.8 Net revenue 640.8 507.5 Insurance claims and claims handling expenses (416.7) (283.1) Insurance claims and claims handling expenses recoverable from reinsurers 208.2 131.4 Net insurance claims (208.5) (151.7)
Profi t after tax attributable to: Equity holders of the parent 193.8 156.9 Non-controlling interests (0.2) –
Earnings per share: Dividends declared and paid (total) 13 164.7 142.4 Dividends declared and paid (per share) 13 62.4p 54.2p
Profi t for the period 193.6 156.9 Other comprehensive income Exchange differences on translation of foreign operations (0.8) (5.3) Other comprehensive income for the period, net of income tax (0.8) (5.3) Total comprehensive income for the period 192.8 151.6
Total comprehensive income for the period attributable to: Equity holders of the parent 193.0 151.6 Non-controlling interests (0.2) –
Consolidated statement of comprehensive income for the year ended 31 December 2010
Deferred income tax 24 12.4 – Trade and other receivables 17, 19 47.9 32.7 Cash and cash equivalents 17, 20 246.7 211.8 Assets held for sale 15, 21 1.5 – Total assets 1,766.7 1,177.4
These fi nancial statements were approved by the Board of Directors on 1 March 2011 and were signed on its behalf by: Kevin Chidwick Director Admiral Group plc
Consolidated cash fl ow statement for the year ended 31 December 2010 31 December 31 December
Consolidated statement of changes in equity for the year ended 31 December 2010
Share Foreign NonShare premium exchange Retained controlling capital account reserve profi t and loss interests Total equity £m £m £m £m £m £m
Profi t for the period – – – 193.8 (0.2) 193.6 Other comprehensive income Currency translation differences – – (0.8) – – (0.8) Total comprehensive income for the period – – (0.8) 193.8 (0.2) 192.8 Transactions with equity holders Dividends – – – (164.7) – (164.7) Share scheme credit – – – 18.5 – 18.5 Deferred tax credit on share scheme credit – – – 3.3 – 3.3 Total transactions with equity holders – – – (142.9) – (142.9)
Dividends 73 Earnings per share 74 Events after the balance sheet date 83 Expense ratio 72 Finance lease liabilities 82
Share incentive plan 83 - 85 Staff costs 72 Staff numbers 73
Notes to the fi nancial statements 1. General information and basis of preparation General information Admiral Group plc is a Company incorporated in England and Wales. Its registered offi ce is at Capital Tower, Greyfriars Road, Cardiff CF10 3AZ and its shares are listed on the London Stock Exchange.
There are a number of standards, amendments to standards and interpretations that were issued by 31 December 2010 but have either yet to be endorsed by the EU, or were endorsed shortly after the year end. These are as follows: • IFRS 9 Financial Instruments • Amendments to IFRS 7 Financial Instruments: Disclosures • Improvements to IFRSs (Issued May 2010) • Deferred tax: Recovery of Underlying Assets
(Amendments to IAS 12) • Severe Hyperinfl ation and Removal of Fixed
IFRS 9, Financial Instruments is the only new standard, all the others being improvements, amendments to standards, interpretations or revisions of current standards.
This standard was issued in November 2009 by the IASB and focuses on the classifi cation and measurement of fi nancial instruments. Under the new standard only two possible classifi cations arise, rather than the four existing classifi cations currently available under IAS 39, and will result in all fi nancial assets being valued at amortised cost or fair value. This includes an option to measure equities at fair value, but with movements in fair value taken to the other comprehensive income statement with non-recycling of realised gains.
• Revised IAS 24 Related Party Disclosures • Improvements to IFRSs (Issued April 2009) • Amendments to IFRS 2 Group Cash-settled
• Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement
None of these standards or interpretations adopted for the fi rst time have had a material impact on the consolidated fi nancial results or position of the Group for the year ended 31 December 2010.
Investment income: Investment income from fi nancial assets comprises interest income and net gains (both realised and unrealised) on fi nancial assets classifi ed as fair value through profi t and loss and interest income on held to maturity deposits.
The most signifi cant sensitivity in the use of the projection techniques arises from any future step change in claims costs, which would cause future claim cost infl ation 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 signifi cantly above or below the historical trend.
3. Signifi cant accounting policies a) Revenue recognition Premiums, ancillary income and profi t commission: Premiums relating to insurance contracts are recognised as revenue proportionally over the period of cover. Premiums with an inception date after the end of the period are held in the statement of fi nancial position as deferred revenue. Outstanding collections from policyholders on deferred revenue are recognised within policyholder receivables.
d) Intangible assets Goodwill: All business combinations are accounted for using the purchase method. Goodwill has been recognised in acquisitions of subsidiaries, and represents the difference between the cost of the acquisition and the fair value of the net identifi able assets acquired.
The classifi cation and accounting treatment of acquisitions occurring before 1 January 2004 have not been reconsidered in preparing the Group’s opening IFRS balance sheet at 1 January 2004 due to the exemption available in IFRS 1 (First time adoption). In respect of acquisitions prior to 1 January 2004, goodwill is included at the transition date on the basis of its deemed cost,
e) Property, plant and equipment and depreciation All property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method to write off the cost less residual values of the assets over their useful economic lives. These useful economic lives are as follows: Motor vehicles – 4 years Fixtures, fi ttings and equipment – 4 years Computer equipment – 2 to 4 years Improvements to short leasehold properties – 4 years
Impairment of property, plant and equipment In the case of property plant and equipment, carrying values are reviewed at each balance sheet date to determine whether there are any indications of impairment. If any such indications exist, the asset’s recoverable amount is estimated and compared to the carrying value. The carrying value is the higher of the fair value of the asset, less costs to sell and the asset’s value in use. Impairment losses are recognised through the income statement.
f) Leased assets The rental costs relating to assets held under operating leases are charged to the income statement on a straight-line basis over the life of the lease.
which represents the amount recorded under UK GAAP, which was tested for impairment at the transition date. On transition, amortisation of goodwill has ceased as required by IAS 38.
Impairment of goodwill: The annual impairment review involves comparing the carrying amount to the estimated recoverable amount (by allocating the goodwill to CGUs) and recognising an impairment loss if the recoverable amount is lower. Impairment losses are recognised through the income statement and are not subsequently reversed.
The value in use calculations use cash fl ow projections based on fi nancial budgets approved by management covering a three year period. Cash fl ows beyond this period are considered, but not included in the calculation. The discount rate applied to the cash fl ow projections in the value in use calculations is 11.5 % (2009: 8.9%), based on the Group’s weighted average cost of capital, which is in line with the market. (Source: Bloomberg).
The headroom above the goodwill carrying value is very signifi cant, and there is no foreseeable event that would eliminate this margin.
The total charge expensed over the vesting period is determined by reference to the fair value of the free shares granted as determined at the grant date (excluding the impact of non-market vesting conditions). Non-market conditions such as profi tability targets as well as staff attrition rates are included in assumptions over the number of free shares to vest under the applicable scheme.
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.
At initial recognition assets are recognised at fair value and classifi ed according to the purpose for which they were acquired: The Group’s investments in money market liquidity funds are designated as fi nancial assets at fair value through profi t or loss (FVTPL) at inception.
Impairment of fi nancial assets The Group assesses at each balance sheet date whether any fi nancial assets or groups of fi nancial assets held at amortised cost are impaired. Financial assets are impaired where there is evidence that one or more events occurring after the initial recognition of the asset, may lead to a reduction in the estimated future cash fl ows arising from the asset.
Grants relating to assets are deducted from the carrying amount of the asset. The grant is therefore recognised as income over the life of the depreciable asset by way of a reduced depreciation charge.
m) Non-current assets held for sale Non-current assets that are expected to be recovered primarily through sale or distribution rather than continuing use are classifi ed as held for sale. Immediately before classifi cation as held for sale, the assets are remeasured in accordance with the Group’s accounting policies, and thereafter are measured at the lower of carrying value and fair value less costs to sell.
Impairment losses on initial classifi cation as held for sale and subsequent gains and losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative loss.
4. Operating segments The Group has four reportable segments, as described below. These segments represent the principal split of business that is regularly reported to the Group’s Board of Directors, which is considered to be the Group’s chief operating decision maker in line with IFRS 8, Operating Segments.
UK Car Insurance This segment consists of the underwriting of car insurance and the generation of ancillary income in the UK. The Directors consider the results of these activities to be reportable as one segment as the activities carried out in generating the income are not independent of each other and are performed as one business. This mirrors the approach taken in management reporting.
Price comparison This segment relates to the Group’s price comparison websites Confused.com in the UK, Rastreator in Spain, LeLynx in France and Chiarezza in Italy. LeLynx and Chiarezza were launched in 2010, and are therefore included in this Price Comparison segment for the fi rst time.
Taxes are not allocated across the segments and, as with the corporate activities, are included in the reconciliation to the Consolidated income statement and Consolidated statement of fi nancial position.
Segment income, results and other information An analysis of the Group’s revenue and results for the year ended 31 December 2010, by reportable segment are shown below. The accounting policies of the reportable segments are consistent with those presented in note 3 for the Group.
Net insurance premium revenue 199.1 12.8 – – – 211.9 Other revenue and profi t commission 188.6 4.2 80.5 10.6 – 283.9 Investment and interest income 7.5 0.2 – – – 7.7
Segment profi t/(loss) before tax 206.9 (9.5) 24.9 2.4 – 224.7 Other central revenue and expenses, including share scheme charges (10.0) Interest income 1.1 Consolidated profi t before tax 215.8 Taxation expense (58.9) Consolidated profi t after tax 156.9 Other segment items: Capital expenditure 6.3 4.1 0.7 0.7 – 11.8 * Turnover is a non-GAAP measure and consists of total premiums written (including co-insurers’ share) and other revenue.
The total of Price Comparison revenues from transactions with other reportable segments is £15.0 million (2009: £13.3 million). These amounts have not been eliminated in order to avoid distorting expense and combined ratios which are key performance indicators for insurance business. There are no other transactions between reportable segments.
Segment assets and liabilities The identifi able segment assets and liabilities at 31 December 2010 are as follows: Non-UK UK Car Car Price Segment Insurance Insurance Comparison Other Eliminations total £m £m £m £m £m £m
Total motor insurance premiums before co-insurance 1,308.6 847.7 Group gross premiums written after co-insurance 738.5 439.9 Outwards reinsurance premiums (380.0) (207.4) Net insurance premiums written 358.5 232.5 Change in gross unearned premium provision (163.9) (53.5) Change in reinsurers’ share of unearned premium provision 93.5 32.9 Net insurance premium revenue 288.1 211.9
Ancillary revenue 174.6 129.5 Price Comparison revenue 75.7 80.6 Other revenue 25.9 22.5 Total other revenue 276.2 232.6
Net investment return 8.4 7.7 Interest receivable 1.1 1.1 Total investment and interest income 9.5 8.8
Total expenses and share scheme charges 48.9 117.9 166.8 43.3 96.7 140.0
Ancillary sales expenses 26.9 20.0 Price Comparison operating expenses 63.6 55.6 Other expenses 12.4 11.9
The £28.0 million (2009: £26.0 million) administration and marketing costs allocated to insurance contracts is principally made up of salary costs.
Insurance contract expenses from above 48.9 43.3 Add: claims handling expenses 8.5 5.5 Adjusted expenses 57.4 48.8 Net insurance premium revenue 288.1 211.9 Reported expense ratio 19.9% 23.0%
10. Staff costs and other expenses Included in gross expenses, before co-insurance arrangements are the following: 31 December 31 December £m £m
Social security charges 12.7 10.5 Pension costs 1.3 0.7 Share scheme charges (see note 26) 18.5 13.7 Total staff expenses 125.0 100.8
Depreciation charge: – Owned assets 4.1 3.8 – Leased assets 0.5 1.3 Amortisation charge: – Software 2.7 2.3 – Deferred acquisition costs 23.4 7.6 Operating lease rentals: – Buildings 6.4 5.7 Auditor’s remuneration: – Fees payable for the audit of the Company’s annual accounts – – – Fees payable for the audit of the Company’s subsidiary accounts 0.2 0.2 – Fees payable for other services 0.2 0.1 Net foreign exchange losses 0.8 0.2
Direct customer contact staff 3,280 2,695 Support staff 972 846 12. Taxation 31 December 31 December £m £m
Current tax Corporation tax on profi ts for the year 87.4 63.0 Over provision relating to prior periods (0.7) (1.2) Current tax charge 86.7 61.8 Deferred tax Current period deferred taxation movement (15.3) (2.8) Under/(over) provision relating to prior periods – deferred tax 0.5 (0.1) Total tax charge per income statement 71.9 58.9
Profi t before tax 265.5 215.8 Corporation tax thereon at UK corporation tax rate of 28% 74.3 60.4 Expenses and provisions not deductible for tax purposes (0.1) (0.6) Difference in tax rates 0.2 – Other differences (2.4) 0.3 Adjustments relating to prior periods (0.1) (1.2) Total tax charge for the period as above 71.9 58.9 13. Dividends Dividends were declared and paid as follows: 31 December 31 December £m £m
Notes to the fi nancial statements continued 14. Earnings per share 31 December 31 December
16. Intangible assets Deferred acquisition Goodwill costs Software Total £m £m £m £m
17. Financial assets and liabilities The Group’s fi nancial instruments can be analysed as follows: 31 December 31 December £m £m
Financial assets: Investments held at fair value 363.6 237.7 Held to maturity deposits with credit institutions 299.6 183.5 Receivables – amounts owed by policyholders 341.5 209.7 Total fi nancial assets 1,004.7 630.9 Trade and other receivables 47.9 32.7 Cash and cash equivalents 246.7 211.8
Objectives, policies and procedures for managing fi nancial assets and liabilities The Group’s activities expose it primarily to the signifi cant fi nancial risks of credit risk, interest rate risk, liquidity risk, and foreign exchange risk. The Board of Directors has delegated the task of supervising risk management and internal control to the Risk Management Committee (RMC) and non-UK equivalent Committees. There is also an Investment Committee that makes recommendations to the Board on the Group’s investment strategy.
To mitigate the risk arising from exposure to reinsurers, the Group only conducts business with companies of specifi ed fi nancial strength ratings. In addition, most reinsurance contracts are operated on a funds withheld basis, which substantially reduces credit risk.
The Group’s maximum exposure to credit risk at 31 December 2010 is £1,251.4 million (2009: £842.7 million), being the carrying value of fi nancial assets and cash. The Group does not use credit derivatives or similar instruments to mitigate exposure.
The amount of bad debt expense relating to policyholder debt charged to the income statement in 2010 and 2009 is insignifi cant.
There were no signifi cant fi nancial assets that were past due at the close of either 2010 or 2009.
Financial institutions – Money market funds AAA 363.6 237.7 Financial institutions – Credit institutions AA 252.6 85.0 Financial institutions – Credit institutions A 47.0 310.3
The Group also holds a number of fi xed rate, longer-term deposits with UK credit institutions rated A or above. These are classifi ed as held to maturity and valued at amortised cost. Therefore neither the capital value of the deposits, or the interest return will be impacted by fl uctuations in interest rates.
The Group has traditionally been strongly cash generative due to the large proportion of profi t arising from non-underwriting activity. Further, as noted above, a signifi cant portion of insurance funds are invested in money market liquidity funds with same day liquidity, meaning that a large proportion of the Group cash and investments are immediately available.
A breakdown of the Group’s fi nancial liabilities – trade and other payables is shown in note 22. In terms of the maturity profi le of these liabilities, all amounts may potentially mature within three to six months of the balance sheet date except for a minority of fi nance lease liabilities which will expire after 12 months. (Refer to note 23 and the maturity profi le at the start of this note for further details.)
The maturity profi le for fi nancial assets is included at the start of this note. The Group’s Directors believe that the cash fl ows arising from these assets will be consistent with this profi le.
A number of the key elements of these policies and procedures are detailed below: i) Co-insurance and reinsurance: As noted in the business review, the Group cedes a signifi cant amount of the motor insurance business generated to external underwriters. In 2010, 45% of the UK risk was shared under a co-insurance contract, under which the primary risk is borne by the co-insurer.
Arrangements outside of the UK are set out in the business review on page 17.
iii) Effective claims management: The Group adopts various claims management strategies designed to ensure that claims are paid at an appropriate level and to minimise the expenses associated with claims management. These include: • An effective, computerised workfl ow system (which along with the appropriate level of resources employed helps reduce the scope for error and avoids signifi cant backlogs)
C) Analysis of recognised amounts: 31 December 31 December £m £m
Non-UK net claims incurred – (2.8) (9.5) (13.6) (15.9) Claims handling costs and other amounts (3.5) (3.4) (4.7) (5.7) (8.5) Total net claims incurred (107.1) (99.8) (114.6) (151.7) (208.5)
G) Reconciliation of movement in net unearned premium provision: 31 December 31 December £m £m
Trade receivables 47.9 32.5 Prepayments and accrued income – 0.2 Total trade and other receivables 47.9 32.7 20. Cash and cash equivalents 31 December 31 December £m £m
Cash at bank and in hand 246.7 191.8 Cash on short term deposit – 20.0 Total cash and cash equivalents 246.7 211.8
At the balance sheet date, a disposal group consisting of property, plant and equipment assets belonging to the AdmiralDirekt operation were separately classifi ed as held for sale. The carrying amount of these assets is lower than the fair value of the assets less costs to sell and therefore no impairment loss has been recognised on the reclassifi cation. No other assets or liabilities of the AdmiralDirekt operation were included in the sale.
22. Trade and other payables 31 December 31 December £m £m
Trade payables 13.3 10.7 Amounts owed to co-insurers and reinsurers 327.4 154.4 Finance leases due within 12 months – 0.3 Finance leases due after 12 months 0.2 0.1 Other taxation and social security liabilities 16.5 10.9 Other payables 59.7 29.1 Accruals and deferred income (see below) 143.9 101.3 Total trade and other payables 561.0 306.8
Premium receivable in advance of policy inception 82.3 53.9 Accrued expenses 46.2 35.3 Deferred income 15.4 12.1 Total accruals and deferred income as above 143.9 101.3 23. Obligations under fi nance leases Analysis of fi nance lease liabilities: Minimum Minimum lease lease payments Interest Principal payments Interest Principal £m £m £m £m £m £m
24. Deferred income tax (asset)/liability 31 December 31 December £m £m
Analysis of net deferred tax (asset)/liability: 31 December 31 December £m £m
Tax treatment of share scheme charges (6.9) (4.4) Capital allowances (1.3) (1.6) Other differences (4.2) (0.6) Unremitted overseas income – 12.3 Deferred tax (asset)/liability at end of period (12.4) 5.7
The UK corporation tax rate will move from 28% to 27% on 1 April 2011. Deferred tax has been calculated at 27% where the temporary difference is expected to reverse after this date.
Tax treatment of share scheme charges (0.8) 0.3 Capital allowances (0.3) 1.6 Other differences 3.6 0.5 Unremitted overseas income 12.3 0.5 Net deferred tax credited to income 14.8 2.9
25. Events after the balance sheet date On 1 March 2011, the European Court of Justice (ECJ) gave a preliminary ruling that upheld the recommendation that Article 5 (2) of the Gender Directive is invalid, due to it being incompatible with the general principle of equal treatment for men and women which is a fundamental principal under EU law. Article 5 (2) of the Gender Directive allowed insurers to use gender related information in determining insurance premiums and benefi ts if insurers can provide statistically valid data that proved gender is a determining risk factor. As a result insurance companies will no longer able to use gender specifi c information in determining insurance premiums and benefi ts.
The requirement for unisex premiums and benefi ts will come into effect after a transitional period on 21 December 2012, by which time the Group’s EU insurers will have gender neutral pricing and benefi ts in place.
594,434 (2009: 751,513) of these were issued to the Admiral Group Share Incentive Plan Trust for the purposes of this share scheme. These shares are entitled to receive dividends.
The share scheme charges reported above are net of the co-insurance share and therefore differ from the gross charge reported in note 10 (2010: £18.5 million, 2009: £13.7 million) and the gross credit to reserves reported in the consolidated statement of changes in equity.
(ii) The Discretionary Free Share Scheme (the DFSS) Under the DFSS, details of which are contained in the Remuneration policy section of the Remuneration report, individuals receive an award of free shares at no charge. Staff must remain in employment until the vesting date in order to receive shares. The maximum number of shares that can vest relating to the 2010 scheme is 1,662,303 (2009 scheme: 1,438,426).
The range of awards is as follows: • If the growth in EPS is less than the RFR, no awards vest • EPS growth is equal to RFR – 10% of maximum award vests • To achieve the maximum award, EPS growth has to be 36 points higher than RFR over the three-year period
Number of free share awards committed at 31 December 2010: Awards outstanding Vesting (*1) date
During the year ended 31 December 2010, awards under the SIP H206 and H107 schemes and the DFSS 2007 scheme vested. The total number of awards vesting for each scheme is as follows.
Number of free share awards vesting during the year ended 31 December 2010: Original Awards Awards vested
Within one year 0.2 – Within two to fi ve years 11.1 4.1 Over fi ve years 16.4 31.6 Total commitments 27.7 35.7
In addition, the Group had contracted to spend the following on property, plant and equipment at the end of each period: 31 December 31 December £m £m
Admiral Insurance Company Limited England and Wales Ordinary 100 Insurance Company Admiral Insurance (Gibraltar) Limited Gibraltar Ordinary 100 Insurance Company Able Insurance Services Limited England and Wales Ordinary 100 Intermediary Inspop.com Limited England and Wales Ordinary 100 Internet insurance intermediary Elephant Insurance Company United States of America Ordinary 100 Insurance Company Elephant Insurance Services, LLC United States of America Ordinary 100 Insurance intermediary Rastreator.com Limited England and Wales Ordinary 75 Internet insurance intermediary Inspop Technologies Private Limited India Ordinary 100 Internet technology provider Inspop.com (France) Limited England and Wales Ordinary 100 Internet insurance intermediary Inspop.com (Italy) Limited England and Wales Ordinary 100 Internet insurance intermediary EUI France Limited England and Wales Ordinary 100 Insurance intermediary Admiral Syndicate Limited England and Wales Ordinary 100 Dormant Admiral Syndicate Management Limited England and Wales Ordinary 100 Dormant Admiral Life Limited England and Wales Ordinary 100 Dormant Bell Direct Limited England and Wales Ordinary 100 Dormant Confused.com Limited England and Wales Ordinary 100 Dormant Diamond Motor Insurance Services England and Wales Ordinary 100 Dormant
In this section: 87 Parent Company fi nancial statements 88 Notes to the Parent Company fi nancial statements
Fixed assets – investments Shares in group undertakings 5 125.0 119.2 Other investments 10.0 –
As a result of this review the Directors have satisfi ed themselves that it is appropriate to prepare these fi nancial statements on a going concern basis.
The adoption of these improvements has not had a material impact on either the current year or comparative fi gures.
Refer to note 29 of the Consolidated fi nancial statements for disclosure of related party transactions.
2. Investments Shares in group undertakings are valued at cost less any provision for impairment in value.
Refer to note 26 of the consolidated fi nancial statements for further details on share schemes.
Investments in subsidiary undertakings: At 1 January 2009 108.6 Additions 10.6
6. Other creditors – due within one year 31 December 31 December £m £m
Actuarial advisers Ernst & Young 1 More Place London SE1 2AF
Financial calendar Final 2010 dividend 18 May 2011 – Ex dividend date 20 May 2011 – Record date 10 June 2011 – Payment date
The interim results will be available on the corporate website from 24 August 2011.