Why we are different: Highly profi table The Group has delivered year-on-year profi t growth, reaching a record £266 million in 2010. Our Group combined ratio in 2010 was below 90%.
Our newest operation outside the UK is based in Paris. L’Olivier Assurances, a French car insurer started trading in December 2010
Spain We launched our fi rst business outside the UK in Spain in 2006. Balumba made its fi rst full-year profi t in 2010 and insured nearly 71,000 cars at the end of 2010. Balumba is now combined with our second Spanish car insurance brand, Globalty, to form Admiral Seguros España
USA The largest market we operate in is the USA (albeit only currently in Virginia and Maryland). Elephant Auto launched there in October 2009 and just completed its fi rst full year
The review also underlined the importance of the Board increasing its exposure to senior managers across the Group in order to assist the Board’s assessment of the bench strength available to support the broader executive succession planning and the Group’s continued expansion. Whilst the straightforward nature of our business, being a monoline direct private motor insurer, means that Solvency II is less complex for Admiral than for more broadly-based competitors, we recognise the need to increase our depth in risk management to ensure that the models supporting Solvency II are appropriately embedded in our business.
I am often asked what is the principal reason for Admiral’s success: the answer is a simple one – our people, embracing our Board, our executive team, our management, and our staff in all roles and across all geographies. It is they who develop the business models, have the creative intuition, and design and implement the processes that, when taken all together, engender success. To all our people my thanks on behalf of the Board for another very successful year.
Movember Staff at Admiral’s offi ce in Halifax, Canada took part in the Movember fundraising event for prostate cancer. Colleagues in the UK operations also grew moustaches.
2,459 • Five year compound growth now at 19%, year-on-year growth at 32%
(£31.3 million) in 2009. The reduction refl ects the recent shift in contribution between releases and profi t commission in respect of business written in prior periods (refer to the claims reserving note below).
The contracts in place for Germany, Italy, France and the USA include proportional sharing of ancillary profi ts.
The Group’s new French car insurer launched in Paris in late 2010.
Non-UK Price Comparison Rastreator Having launched in March 2009, Rastreator completed its fi rst full year of operation in 2009. Revenue totalled £3.3 million, and the loss of £1.0 million represented an encouraging result after just 22 months in business.
Non-UK UK Car Car Price Insurance Insurance Comparison Other Total £m £m £m £m £m
Around 67% of the funds are available without notice (2009: 68%), providing the Group with satisfactory levels of liquidity.
Operating cash fl ow, before transfers to investments 251.5 286.4 522.0
Outside the UK, there is no current evidence to suggest that partners will withdraw support when the opportunity becomes contractually available to them, and it is important to note that capital within the Non-UK businesses is materially lower than for the UK.
Again in 2010 the Group won a number of awards supporting our commitment to CR and these are detailed in the following sections.
88% of the measures throughout the period achieved a green grade (2009: 91%).
10. John Sussens (65) Non-Executive Director ● John was appointed the Senior Independent Non-Executive Director in August 2004, and is Chairman of the Remuneration Committee. He is also a Non-Executive Director of Cookson plc and Anglo & Overseas Trust Plc. He was the Group Managing Director of Misys plc between 1998 and May 2004 having been on the Board of the Company since 1989. Prior to joining Misys, he was Manufacturing Director at JC Bamford Excavators Limited. He was a NonExecutive Director at Chubb plc between 2001 and 2003.
The Directors have declared a fi nal dividend of £95.3 million (35.5 pence per share), payable on 10 June 2011.
• pursuant to the Listing Rules of the Financial Services Authority whereby certain employees of the Company require the approval of the Company to deal in the Company’s securities
Power to issue shares At the last AGM, held on 28 April 2010, authority was given to the Directors to allot unissued relevant securities in the Company up to a maximum of an amount equivalent to one third of the shares in issue. This authority 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.
• prepare the fi nancial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business
Corporate Governance continued operates; and any other signifi cant changes affecting the Group and the industry of which it is a part. All Board members are also encouraged to attend relevant training courses at the Company’s expense.
The Committee has formal terms of reference which were reviewed and updated during the year and were approved by the Board in December 2010. The Committee met eight times during 2010.
Based on the Group’s current fi nancial assets, which are all held at fair value through profi t or loss which will continue to be a valid classifi cation under IFRS 9, this standard is not expected to have a material impact on the Group’s fi nancial statements in future periods.
The claims provisions are subject to independent review by the Group’s actuarial advisors. Management’s reserving policy is to reserve at a level above best estimate projections to allow for unforeseen adverse claims development. Refer to page 13 for further detail. For further detail on objectives, policies and procedures for managing insurance risk, refer to note 18 of the fi nancial statements.
Co-insurance: The Group has entered into certain co-insurance contracts under which insurance risks are shared on a proportional basis, with the co-insurer taking a specifi c percentage of premium written and being responsible for the same proportion of each claim. As the contractual liability is several and not joint, neither the premiums nor claims relating to the co-insurance are included in the income statement. Under the terms of these agreements the coinsurers reimburse the Group for the same proportionate share of the costs of acquiring and administering the business.
Translation of fi nancial statements of foreign operations The fi nancial statements of foreign operations whose functional currency is not pounds sterling are translated into the Group presentation currency (sterling) as follows: (i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; (ii) Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the date of the transaction); and
The goodwill held on the Consolidated statement of fi nancial position at 31 December 2010 is allocated solely to the UK Car Insurance segment.
Analysis of fees paid to the auditor for other services: Tax services 0.1 0.1 Other services 0.1 – Total as above 0.2 0.1
Weighted average number of shares – basic 267,827,176 265,712,457 Unadjusted earnings per share – basic 72.3p 59.0p
15. Property, plant and equipment Improvements to short leasehold Computer Offi ce Furniture and buildings equipment equipment fi ttings Total £m £m £m £m £m
Transferred to ‘assets classifi ed as held for sale’ (0.5) (1.2) (0.4) (0.2) (2.3)
Economic and fi nancial market conditions have led the Directors to consider counterparty exposure more frequently and in signifi cant detail. The Directors consider that the policies and procedures in place to manage credit exposure continue to be appropriate for the Group’s risk appetite, and no material credit losses have been experienced by the Group.
The Board of Directors is responsible for the management of insurance risk, although as mentioned in note 17, it has delegated the task of supervising risk management to the Risk Management Committee (RMC) and its overseas equivalents.
SIP H207 scheme 337,770 April 2011 SIP H108 scheme 352,732 September 2011 SIP H208 scheme 477,432 April 2012 SIP H109 scheme 396,200 September 2012 SIP H209 scheme 377,641 March 2013 SIP H110 scheme 352,100 August 2013 DFSS 2008 scheme 1st award 1,306,081 April 2011 DFSS 2008 scheme 2nd award 87,202 November 2011 DFSS 2009 scheme 1st award 1,311,686 April 2012 DFSS 2009 scheme 2nd award 126,740 August 2012 DFSS 2010 scheme 1st award 1,543,203 April 2013 DFSS 2010 scheme 2nd award 119,100 August 2013 Total awards committed 6,787,887 * 1 – being the maximum number of awards expected to be made before accounting for expected staff attrition.
Total transactions 0.3 – Balances outstanding at 31 December – –