Another busy year Important moments in 2014: Return on equity (%)
@ Rastreator and LeLynx hold leading positions in their respective markets in Spain and France
So with that strategy in mind, what do I worry about? Here we go then, in David Letterman style, my Top Ten Worries for 2015 (as written in January) from least worrying worry to most worrying worry: 10. We don’t get our mobile phone access strategy right in ConTe (Italy).
7. Big quote volumes for LeLynx (France) due to the introduction of the Loi Hamon.
4. We can’t get Brian Toys made fast enough to meet demand.
Admiral launches Multicar, enabling UK customers to insure two or more cars on the same policy, with all cars eligible for a discount.
Chiarezza.it, a car insurance price comparison website, launches in Milan, Italy.
Admiral tends not to focus on particular market segments, but aims to offer great value products and services to all customers in its markets.
Our success has been based on having the right people with the right skills. We believe that good service and customer satisfaction is crucial for success. Our strategy is delivered through our people; they are crucial to our success.
What this means Stay ahead of the competition – in particular maintaining a material combined ratio advantage. This means underwriting profitable business and pricing effectively for risk, providing great customer service and maintaining a cost conscious culture.
In the last 12 months we have had a lot of questions from investors and analysts alike. Here we try to answer some of them.
The decrease in Group profit was predominantly due to the increased investment made in compare.com – the Group’s US comparison business (Admiral’s share of the loss was £15.0 million in 2014).
Surplus over regulatory capital requirement 416 *1 Before accounting for the 2014 final dividend of £136 million. Comprises tangible equity plus debt *2 Based on the sum of the individual capital requirements of Group subsidiaries at 31 December 2014
Details of the potential impact and mitigating factors the Group has in place are available on pages 36 to 38.
*1 Ratios calculated on original net share uses the proportion of the portfolio that Admiral wrote on a net basis at the start of the underwriting year in question
Spain Admiral Seguros (Seville, Spain) The most mature of the Group’s international businesses, having traded since October 2006. The business trades via two brands: Balumba and Qualitas Auto
@ It remains a highly competitive market of four principal players, with persistently high levels of marketing spend.
@ LeLynx strengthened its leading position in the insurance price comparison market in France.
In 2014, LeLynx strengthened its leading position in the insurance price comparison market in France. With solid incumbent competitors when we launched back in 2010, LeLynx is proud to have achieved this leadership in such a short time.
The US market is clearly divided between those insurers that advertise and those that don’t. With nearly $3 billion of the $6 billion insurance advertising dollars concentrated in the top four insurers, the remaining c.300 players look for ways to compete for a greater share of the third of consumers that shop for insurance annually. Comparison sites, like compare.com, provide them with an easy route to do that. With more than 40 auto insurance companies, including eight of the top 20, now under contract with compare.com, it makes it an attractive choice for consumers too.
Revenue from non-car insurance comparison sources increased in actual terms and now represents over a quarter of total revenue. Confused.com’s operating margin reduced to 20% (2013: 25%).
This Strategic Report was approved by the Board of Directors and signed on its behalf by: Henry Engelhardt Chief Executive Officer 38 ANNUAL REPORT AND ACCOUNTS 2014 WWW.ADMIRALGROUP.CO.UK
Kevin Chidwick stepped down as Group Chief Financial Officer and was succeeded by Geraint Jones with effect from 13 August 2014. Both Kevin and Geraint attended all Board meetings as required in their roles as CFO.
@ Inviting external experts to present on customers, competitors and/or societal trends every one–two years to provoke thinking and debate in advance of likely changes in customer preferences or competitor practices. It was felt that although some progress had been made there was still the opportunity through external presentations to lift the perspective of the Board, spending more time on the strategic context for the business and less on its routine operating activity.
The Group Risk Committee’s responsibilities can be summarised as: @ Agreeing the Group’s risk management framework, including the remits of Risk Management Committees that are established within each of the Group’s operational entities and overseeing the risk management functions.
Remuneration paid to Executive Directors in 2014 and remuneration arrangements proposed for 2015 are set out in the Annual Report on Remuneration.
@ Individual performance and effectiveness, and experience of the individual in the role.
Remuneration arrangements for founding Directors Two of the three Executive Directors (Henry Engelhardt and David Stevens) are founding Directors. They and the Committee continue to hold the view that the significant shareholdings held by them provide a sufficient alignment of their interest in the performance of the Group with the interests of other shareholders. In light of this, their remuneration packages consist only of a below market rate salary and benefits such as private medical cover, permanent health insurance and death in service cover. During the year David Stevens joined the Group’s Personal Pension Plan and from October 2014 the Group matched his contributions under the Plan. The Group does not contribute to any pension arrangements on behalf of Henry Engelhardt. Henry Engelhardt and David Stevens have not participated, nor is it intended that they participate, in any Group share schemes.
The Group Chairman fee is determined by the Committee after consultation with the Executive Directors. The NED fees are determined by the Group Chairman together with the Executive Directors.
10% for reaching threshold with straight line relationship to 100% at maximum performance.
@ the part of the Corporate Governance Statement on page 40 relating to the company’s compliance with the ten provisions of the 2012 UK Corporate Governance Code specified for our review.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 1. General information Admiral Group plc is a company incorporated in England and Wales. Its registered office is at Capital Tower, Greyfriars Road, Cardiff, CF10 3AZ and its shares are listed on the London Stock Exchange.
Other segment items: *1 Turnover is a non-GAAP measure and consists of total premiums written (including co-insurers’ share) and Other Revenue. Refer to note 12 for further information
The segment assets and liabilities at 31 December 2013 are as follows: As at 31 December 2013
Reserving risk is the risk that the value of insurance liabilities established is insufficient to cover the ultimate cost of claims incurred at the balance sheet date, whether reported or unreported. Other risks include inadequate pricing and reinsurance policies, and inappropriate claims management processes and controls.
The Group’s deposits with credit institutions and gilts are classified as held to maturity investments, which is consistent with the intention for which they were purchased.
Net insurance premium revenue 365.1 464.9 403.9 483.0 12c. Reconciliation of expenses related to insurance contracts to reported Group expense ratio
The Company issued subordinated notes in 2014. Refer to note 6 of the Group financial statements for details of the subordinated notes issue.
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