TIDMADM
11 August 2021
Positive claims experience drives strong Admiral Group results
for H1 2021
2021 Interim Results Highlights
30 June 2021 30 June 2020 % change
Group profit before tax, continuing GBP482.2 GBP274.4
operations (1) million million +76%
Earnings per share, continuing operations
(1) 132.9 pence 79.7 pence +67%
Group profit before tax, including
discontinued operations and gain GBP897.9 GBP286.1
on disposal(2) million million +214%
Interim dividend per share (3) 115.0 pence 70.5 pence +63%
First special dividend per share
from sale of Penguin Portals comparison
businesses 46.0 pence -- --
Return on equity (1) (2) 68% 50% +36%
GBP1.75 GBP1.60
Group turnover(1) (2) (4) billion billion +9%
GBP0.79 GBP0.61
Net revenue (1) billion billion +30%
Group customers(2) 8.02 million 7.17 million +12%
UK Insurance customers(2) 6.22 million 5.58 million +12%
International Insurance customers(2) 1.71 million 1.49 million +14%
Loans and advances to customers, GBP425.7 GBP455.3
net of provision million million -7%
Solvency ratio (post dividend) (2)
(5) 209% 186% +12%
Around 10,000 staff each receive an award worth up to GBP1,800
under the employee share scheme based on the interim 2021
results.
Comment from Milena Mondini de Focatiis, Group Chief Executive
Officer
"A good strategy is a plus; good execution is a must, especially
in times of disruption. It's been a half year of good execution for
Admiral. By and large, we've done the right things more often and a
bit earlier than most.
"This included adjusting pricing ahead of the market in the UK
to reflect shifting pandemic-related claims trends and providing
more self-service and digital options to our customers. These
actions have rewarded us with double digit growth in policy numbers
in the UK and in international insurance, whilst operating in very
competitive markets.
"Another highlight of this half year is a notably higher level
of profit (1) - driven by positive development of prior years in
our UK Motor book resulting in increased reserve releases and
higher than usual profit commission, as well as lower levels of
claims frequency. We also made progress against our long-term
strategy, increasing adoption of advanced analytics models and
planting new seeds for product diversification.
"I am delighted that we can once again pay a record dividend
(which includes a part of the proceeds from the sale our comparison
businesses) to our shareholders, including our staff who continued
to work hard to provide great service to our customers. I would
also like to thank all of our customers for their continued trust
in us."
(1) Group profit before tax, Earnings per share, Group turnover,
Net revenue and Return on equity presented on a continuing
operations basis
(2) Alternative Performance Measures - refer to the end of the
report for definition and explanation
(3) Prior period interim dividend excludes the 20.7 pence
special dividend, deferred from 2019
(4) Group Turnover in H1 2020 includes the impact of the 'Stay
at Home' premium refund issued to UK motor insurance customers of
GBP97 million. Refer to the Alternative Performance Measures
section at the end of this report for further explanation
(5) Solvency ratio excludes positive impact of capital held from
Penguin Portals disposal to be returned to shareholders
Dividend
The Board has declared an interim dividend of 115.0 pence, made
up of a normal dividend of 87.9 pence per share and a special
dividend of 27.1 pence per share, 63% higher than the 2020 interim
dividend of 70.5 pence per share (excluding the deferred special
dividend of 20.7 pence from 2019 which was paid alongside the 2020
interim dividend). The payment represents 87% of first half
earnings per share from continuing operations.
The Board has also declared a further special dividend of 46.0
pence per share reflecting the first payment of the phased return
to shareholders of the proceeds from the sale of the Penguin
Portals comparison businesses. This brings the total interim
dividend to 161.0 pence, made up of a normal dividend of 87.9 pence
per share and a total special dividend of 73.1 pence per share.
Payment will be on 1 October 2021. The ex-dividend date is 2
September 2021 and the record date is 3 September 2021.
Management presentation
Analysts and investors will be able to access the Admiral Group
management presentation which commences at 9.00 BST on Wednesday 11
August 2021 by registering at the following link on webcast at
https://pres.admiralgroup.co.uk/admiral040 or via conference call
at https://pres.admiralgroup.co.uk/admiral040/vip_connect. A copy
of the presentation slides will be available at
www.admiralgroup.co.uk
H1 2021 Group overview
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
-------------------------------------------- ---------- ---------- ---------- ------------
Group turnover (GBPbn)(*) (1) (*2)
(*4) 1.68 1.60 1.75 3.37
-------------------------------------------- ---------- ---------- ---------- ------------
Underwriting profit including investment
income(*) (2) 96.0 152.7 244.5 333.1
Profit commission 36.1 44.6 187.3 134.0
Net other revenue and expenses(*)
(2) 84.6 83.3 56.3 153.4
Operating profit, continuing operations 216.7 280.6 488.1 620.5
Group profit before tax, continuing
operations 210.5 274.4 482.2 608.2
Group profit before tax, including
discontinued operations and gain
on disposal 218.2 286.1 897.9 637.6
Analysis of profit:
UK Insurance 255.0 314.0 543.5 698.3
International Insurance (2.7) 6.5 (0.9) 8.8
Admiral Loans (4.3) (9.4) (1.9) (13.8)
Other (37.5) (36.7) (58.5) (85.1)
Group profit before tax, continuing
operations 210.5 274.4 482.2 608.2
Key metrics
Group loss ratio(*) (2) (*) (3) 69.1% 54.7% 49.1% 54.4%
Group expense ratio(*) (2) (*)
(3) 23.2% 28.3% 26.1% 26.8%
Group combined ratio(*) (2) 92.3% 83.0% 75.2% 81.2%
Customer numbers (million)(*) (2) 6.74 7.17 8.02 7.66
Earnings per share (*4) 60.9p 79.7p 132.9p 170.7p
Dividend per share (*5) 63.0p 70.5p 115.0p 156.5p
Special dividend from sale of Penguin
Portals -- -- 46.0p --
Return on equity(*2) (*4) 47% 50% 68% 52%
Solvency ratio(*) (2) 190% 186% 209% 187%
--------------------------------------------
*1 Group Turnover in H1 2020 includes the impact of the 'Stay at
Home' premium refund issued to UK motor insurance customers of
GBP97 million. Refer to note 14(d) to the financial statements for
reconciliation to the net insurance premium impact of GBP21
million
*2 Alternative Performance Measures -- refer to the end of the
report for definition and explanation
*3 See notes 14b and 14c for a reconciliation of reported loss
and expense ratios to the financial statements
*4 Group turnover, Earnings per share, Return on equity
presented on a continuing operations basis
*5 The 2020 interim dividend of 70.5 pence per share excludes
the deferred special dividend from 2019 of 20.7 pence per share,
that was paid alongside the interim 2020 dividend.
Group Highlights
Key highlights for the Group in H1 2021 include:
-- Group turnover from continuing operations increased by 9% to GBP1.75
billion (H1 2020: GBP1.60 billion); excluding the impact of the premium
refund in H1 2020, turnover increased by 3%. Customer numbers were 12%
higher at 8.02 million (30 June 2020: 7.17 million)
-- Group profit before tax from continuing operations increased to GBP482.2
million (H1 2020: GBP274.4 million), as a result of continued improvement
of UK motor insurance prior period claims, leading to strong prior period
reserve releases and profit commission, as well as a reduced current
period loss ratio due to lower claims frequency
-- Group profit before tax, including discontinued operations and the gain
on disposal of the Penguin Portals businesses increased to GBP897.9
million (H1 2020: GBP286.1 million), with the gain on disposal
contributing GBP404.4 million (H1 2020: nil)
-- UK Insurance recorded a 10% increase in turnover to GBP1.37 billion (H1
2020: GBP1.25 billion) with customer numbers growing by 12% to 6.22
million (30 June 2020: 5.58 million)
-- Significant profit growth of GBP229.5 million in UK Insurance, primarily
attributable to favourable development in prior year loss ratios and a
reduced current year loss ratio for UK Motor
-- UK Household profit improved in H1 2021 to GBP13.9 million (H1 2020:
GBP5.5 million), with more benign weather in 2021 compared to the bad
weather impact of approximately GBP5 million in H1 2020
-- International Insurance businesses made a combined loss of GBP0.9 million
(GBP6.5 million profit in H1 2020), with lower profit in the European
operations and slightly increased losses in the US partly attributable to
weather in Texas in the period
-- The combined International Insurance turnover grew by 5% to
GBP347.2 million (H1 2020: GBP329.5 million) and customer numbers
grew by 14% to 1.71 million (30 June 2020: 1.49 million), with
prior period figures negatively impacted by the reduced new
business demand in the early Covid lockdown period in H1 2020.
Earnings per share
Earnings per share from continuing operations is 67% higher than
in H1 2020 at 132.9 pence (H1 2020: 79.7 pence). This is lower than
the growth in pre-tax profit of 76%, primarily as a result of a
higher effective tax rate, relating primarily to an adjustment to
prior year tax as a result of changes in intra-group contractual
arrangements.
Dividends and solvency
The Group's dividend policy is to pay 65% of post-tax profits as
a normal dividend and to pay a further special dividend comprising
earnings not required to be held in the Group for solvency or
buffers.
The Board has declared a total interim dividend of 115.0 pence
per share (approximately GBP335 million).
The 115.0 pence per share interim 2021 dividend is split as
follows:
-- 87.9 pence per share normal dividend, based on the dividend policy of
distributing 65% of the Group's share of post-tax profits; plus
-- A special dividend of 27.1 pence per share
The 2021 interim dividend (excluding the further special
dividend referred to below) is 63% ahead of the 2020 interim
dividend (70.5 pence per share, which excludes the payment of the
deferred special dividend from 2019), with a pay-out ratio of 87%
of earnings per share from continuing operations.
The Group has confirmed plans for the use of the net proceeds
from the disposal of the Penguin Portals Comparison businesses and
will return GBP400 million to shareholders in the form of special
dividends phased equally over the interim 2021, final 2022 and
interim 2022 dividends. The Board has consequently declared a
further special interim dividend of 46.0 pence per share to reflect
the first payment. This brings the total interim 2021 dividend to
161.0 pence per share, split 87.9 pence per share normal element
and 73.1 pence per share special element.
The payment date is 1 October 2021, ex-dividend date 2 September
2021 and record date 3 September 2021.
The Group reports a strong solvency ratio of 209% post-dividend,
excluding the positive impact of capital held from the Penguin
Portal disposal to be returned to shareholders as noted above. The
solvency ratio has increased by 22 percentage points from the end
of 2020 and surplus capital has increased by GBP55 million. This is
primarily due to a reduction in the Solvency Capital Requirement
(SCR), which includes a lower risk charge related to profit
commission risk.
Covid-19 impact
The Covid-19 ('Covid') pandemic has continued to impact the
interim results across the Group. In most markets, whilst road
traffic levels have started to return towards more normal levels,
this has been slower than expected as lockdown restrictions have
persisted longer, resulting in continued lower claims frequency
relative to pre-pandemic levels. The UK, in particular, saw a
longer than expected lockdown in the first half of 2021, with
claims frequency taking longer to recover. In contrast, the US has
seen a more rapid return towards more normal levels.
Admiral Loans continued to cautiously grow its loans book in the
first half of 2021. Provisions remain prudent, whilst reflecting
the reduced likelihood of a severe economic downturn. No
significant increase in the level of defaults has been experienced
to date.
Admiral remains committed to supporting its customers, staff and
local communities throughout the pandemic. Measures in 2021 to date
have included continued assistance for customers needing support,
prioritising staff safety and wellbeing and numerous community
initiatives to support charities in the areas in which the Group
operates.
The Group's results are presented in the following sections:
-- UK Insurance -- including UK Motor (Car and Van), Household and Travel
-- International Insurance -- including L'olivier (France), Admiral Seguros
(Spain), ConTe (Italy), and Elephant (US)
-- Admiral Loans
-- Other Group Items -- including compare.com (US comparison) and Admiral
Pioneer
-- Discontinued operations -- Penguin Portals Group and Preminen Price
Comparison Holdings Limited Group (disposal of which completed in April
2021)
UK Insurance
30 June
2019(*) 30 June 30 June 31 Dec
GBPm (2) 2020(*2) 2021 2020(*2)
-------------------------------------------- ----------- ------------ ---------- ---------------
Turnover(*1) 1,338.8 1,248.4 1,372.0 2,672.0
-------------------------------------------- ----------- ------------ ---------- ---------------
Total premiums written(*1) 1,186.0 1,101.6 1,230.9 2,373.3
-------------------------------------------- ----------- ------------ ---------- ---------------
Net insurance premium revenue 264.7 251.7 295.6 539.7
-------------------------------------------- ----------- ------------ ---------- ---------------
Underwriting profit including investment
income(*1) 106.7 158.1 259.6 346.5
-------------------------------------------- ----------- ------------ ---------- ---------------
Profit commission and other income 148.3 155.9 283.9 351.8
-------------------------------------------- ----------- ------------ ---------- ---------------
UK Insurance profit before tax 255.0 314.0 543.5 698.3
-------------------------------------------- ----------- ------------ ---------- ---------------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
*2 Re-presented to statutory profit before tax from group share
of profit before tax
Split of UK Insurance profit before tax
30 June 30 June 30 June 31 Dec
GBPm 2019(*1) 2020(*1) 2021 2020(*1)
--------------------- ------------ ------------ ---------- ---------------
Motor 252.0 310.6 530.4 683.6
Household 4.2 5.5 13.9 15.4
Travel (1.2) (2.1) (0.8) (0.7)
---------------------
UK Insurance profit 255.0 314.0 543.5 698.3
--------------------- ------------ ------------ ---------- ---------------
*1 Re-presented to statutory profit before tax from group share
of profit before tax
Key performance indicators
30 June 30 June 30 June 31 Dec
2019 2020 2021 2020
------------------------------- ---------- ---------- ---------- ------------
Vehicles insured at period
end 4.33m 4.42m 4.93m 4.75m
Households insured at period
end 0.92m 1.07m 1.23m 1.16m
Travel Insurance customers 0.07m 0.09m 0.06m 0.07m
-------------------------------
Total UK Insurance customers 5.32m 5.58m 6.22m 5.98m
------------------------------- ---------- ---------- ---------- ------------
Highlights for the UK insurance business for H1 2021
include:
In UK Motor insurance:
-- Good customer growth of 12% to 4.93 million customers (H1 2020: 4.42
million)
-- A significant increase in profit to GBP530.4 million (H1 2020: GBP310.6
million) driven by positive development of prior period claims resulting
in significantly higher reserve releases and profit commission, as well
as a favourable current year loss ratio as a result of continued reduced
claims frequency
In UK Household insurance:
-- Continued growth, with customers 15% higher than one year ago at 1.23
million (30 June 2020: 1.07 million)
-- Profit of GBP13.9 million (H1 2020: GBP5.5 million), with lower claims
incurred in H1 2021 as a result of benign weather compared to H1 2020
(which saw an approximate weather impact of GBP5 million, net of Flood Re
recoveries) and positive development on prior year claims driving
increased profit commission
UK Motor Insurance
30 June 30 June 30 June 31 Dec
GBPm 2019(*) (4) 2020(*) (4) 2021 2020(*4)
----------------------------------- --------------- --------------- ---------- ---------------
Turnover(*1) 1,255.2 1,158.3 1,266.0 2,473.8
----------------------------------- --------------- --------------- ---------- ---------------
Total premiums written(*1) 1,110.1 1,019.8 1,135.0 2,193.0
----------------------------------- --------------- --------------- ---------- ---------------
Net insurance premium revenue 225.4 208.5 242.4 451.4
Investment income 15.9 30.6 20.7 50.8
Net insurance claims (106.2) (48.9) 16.6 (97.1)
Net insurance expenses (36.1) (38.6) (39.9) (77.2)
-----------------------------------
Underwriting profit including
investment income(*1*2) 99.0 151.6 239.8 327.9
Profit commission 35.0 41.1 177.7 124.7
-----------------------------------
Underwriting profit and profit
commission 134.0 192.7 417.5 452.6
Net other revenue(*3) 118.0 117.9 112.9 231.0
-----------------------------------
UK Motor Insurance profit before
tax 252.0 310.6 530.4 683.6
----------------------------------- --------------- --------------- ---------- ---------------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
*2 Underwriting profit excludes contribution from underwritten
ancillaries (included in net other revenue)
*3 Net other revenue includes instalment income and contribution
from underwritten ancillaries and is analysed later in the
report
*4 Re-presented to statutory profit before tax from group share
of profit before tax
Key performance indicators
30 June 30 June 30 June 31 Dec
2019 2020 2021 2020
--------------------------------------- ------------- ---------- ---------- ------------
Reported Motor loss ratio(*1*2) 67.8% 49.4% 39.4% 49.2%
Reported Motor expense ratio(*1*3) 18.7% 21.3% 19.0% 19.8%
Reported Motor combined ratio 86.5% 70.7% 58.4% 69.0%
---------------------------------------
Written basis Motor expense ratio 17.5% 18.8% 18.7% 18.8%
--------------------------------------- ------------- ---------- ---------- ------------
Reported loss ratio before releases 90.0% 80.2% 72.9% 72.3%
--------------------------------------- ------------- ---------- ---------- ------------
Claims reserve releases -- original
net share(*1*4) GBP50.0m GBP64.2m GBP81.1m GBP104.3m
Claims reserve releases -- commuted
reinsurance(*1*5) GBP52.8m GBP60.0m GBP118.3m GBP137.3m
Total claims reserve releases GBP102.8m GBP124.2m GBP199.4m GBP241.6m
---------------------------------------
Vehicles insured at period end 4.33m 4.42m 4.93m 4.75m
--------------------------------------- ------------- ---------- ---------- ------------
Other Revenue per vehicle GBP66 GBP64 GBP58 GBP61
--------------------------------------- ------------- ---------- ---------- ------------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
*2 Motor loss ratio adjusted to exclude impact of reserve
releases on commuted reinsurance contracts. Reconciliation in note
14b
*3 Motor expense ratio is calculated by including claims
handling expenses that are reported within claims costs in the
income statement. Reconciliation in note 14c
*4 Original net share shows reserve releases on the proportion
of the account that Admiral wrote on a net basis at the start of
the underwriting year in question
*5 Commuted reinsurance shows releases on the proportion of the
account that was originally ceded under quota share reinsurance
contracts but has since been commuted and hence reported through
underwriting profit and not profit commission
UK Motor profit in the first six months of 2021 was GBP219.8
million ahead of the same period in 2020 (H1 2021: GBP530.4
million; H1 2020: GBP310.6 million). The increase was driven by
positive development in the cost of UK motor bodily injury claims
from a number of prior underwriting years which has led to higher
reserve releases and profit commission revenue. In addition, lower
than expected motor claims frequency in 2021 has led to a more
favourable current period loss ratio. It is not currently expected
that the level of reserve releases and profit commission for the
first half of 2021 will be repeated in the second half.
Claims frequency increased in the first half of 2021, albeit
slower than expected due to extended lockdown restrictions in the
UK. In addition, underlying claims inflation continued, primarily
driven by accidental damage claims, particularly an increase in the
cost of parts as a result of advances in technology. To reflect
increasing levels of claims frequency, Admiral increased prices
ahead of the market in the first half of 2021. The number of
vehicles insured increased by 12% to 4.93 million (30 June 2020:
4.42 million) which was driven by strong new business customer
growth in H2 2020 which slowed down in the first half of 2021,
where growth was mainly driven by renewing customers. Customer
retention remained strong.
Further highlights for the period were as follows:
-- Net insurance premium revenue was 16% higher than H1 2020 at GBP242.4
million (H1 2020: GBP208.5 million), with the 'Stay at Home' premium
rebate to customers having an adverse impact of GBP21.1 million in H1
2020. Excluding this impact, net insurance premium revenue increased by
6%, reflecting the growth in both Car and Van books over the last twelve
months, offset somewhat by lower average premiums in Car particularly.
-- Investment income was GBP20.7 million, down from GBP30.6 million in H1
2020. The prior period benefitted by GBP12.9 million from additional
investment income on cash held by Admiral relating to the portion of the
book reinsured under quota share contracts. Excluding this benefit,
investment income in the prior period was GBP17.7 million, with the
GBP3.0 million improvement in the current period primarily resulting from
a larger asset base.
-- The reported combined ratio improved significantly to 58.4% (H1 2020:
70.7%).The loss ratio improved to 39.4% (H1 2020: 49.4%) as follows:
Reported Motor loss ratio
Impact of
Reported Loss claims reserve
ratio before releases - net Reported Loss
releases original share Ratio
H1 2020 80.2% -30.8% 49.4%
Change in current period loss
ratio -7.3% -- -7.3%
Change in claims reserve release
-- original net share -- -2.7% -2.7%
H1 2021 72.9% -33.5% 39.4%
------------------------------------ ------------- --------------- -------------
-- The current period loss ratio is 7.3 percentage points better than the
first half of 2020, at 72.9% (H1 2020: 80.2%) as a result of continuing
Covid-19 restrictions and associated reductions in claims frequency, in
particular during the first quarter. Whilst the first half of 2020 also
saw Covid-related claims frequency reductions, the H1 2020 current period
loss ratio of 80.2% included the full impact of the Stay-at-Home premium
rebate on premium revenue as noted above.
-- Reserve releases on original net share of reserves of GBP81.1 million (H1
2020: GBP64.2 million) equated to 33.5% of premium, an improvement of 2.7
points (H1 2020: 30.8%). Excluding the impact of the Stay-at-Home premium
rebate in the prior period, the increase would be larger at 5.5
percentage points. This reflects the strong positive development of
claims reserves, in particular from the 2016 to 2019 underwriting years.
-- The margin held in the financial statements above the projected best
estimate reserves remains appropriately prudent and is consistent with
that held at the end of 2020 in relative terms.
-- The written basis expense ratio is 18.7% for H1 2021 (H1 2020: 18.8%),
with the earned expense ratio lower at 19.0% (H1 2020: 21.3%). The earned
expense ratio in H1 2020 was adversely impacted by the premium rebate and
additional costs of setting up remote working.
-- Both claims reserve releases from commuted reinsurance and profit
commission were significantly higher in H1 2021 than H1 2020, as follows:
Reserve releases
-- commuted Profit
GBPm reinsurance commission Total
H1 2020 60.0 41.1 101.1
Change in reserve releases on commuted
reinsurance 58.3 -- 58.3
Change in profit commission -- 136.6 136.6
------------------------------------------
H1 2021 118.3 177.7 296.0
------------------------------------------ ---------------- ---------- -----
-- Releases on reserves originally reinsured but since commuted were higher
at GBP118.3 million (v GBP60.0 million in H1 2020), with underwriting
years 2017 to 2019 making a more significant contribution than equivalent
years at the same stage of development in the first half of 2020.
-- Profit commission was significantly higher at GBP177.7 million (H1 2020:
GBP41.1 million). This increase is positively impacted by profit
commission recognised on the 2020 underwriting year. 2020 is more
profitable than previous underwriting years at the same stage of
development as a result of the Covid-related claims frequency trends.
Co- and reinsurance, commutations and profit commission
Admiral makes significant use of proportional risk sharing
agreements, where insurers outside the Group underwrite a majority
of the risk generated, either through co-insurance or quota share
reinsurance contracts. The Group's net retained share of UK Car
business is 22%. These arrangements include profit commission terms
which allow Admiral to retain a significant portion of the profit
generated.
The arrangements with Munich Re for 2021 are consistent with
those previously reported, with Munich Re writing 30% of the
business through co-insurance (via Great Lakes) and 10% through
quota share reinsurance arrangements.
Admiral has agreed terms for the extension of its contractual
arrangements with Munich Re and its subsidiary Great Lakes from
2022. The current 10% quota share contract remains in place until
at least 2023. For the remaining 30% share, 20% of this total will
be on a co-insurance basis (via Great Lakes), and will extend to
2029. The remaining 10% will be on a quota share reinsurance basis
and these arrangements extend to 2026.
Admiral also has other quota share arrangements in place,
confirmed to at least the end of 2023, covering 38% of the total UK
Car insurance business.
Admiral tends to commute its UK Car Insurance quota share
reinsurance contracts for an underwriting year 24 months from
inception, assuming there is sufficient confidence in the
profitability of the business covered by the reinsurance
contract.
As at 30 June 2021, all UK car quota share reinsurance contracts
for underwriting years up to 2016 have been commuted, along with
the majority of contracts for the 2017, 2018 and 2019 underwriting
years, meaning Admiral assumes a higher net risk for these years
than had the reinsurance been left in place.
Other Revenue and Instalment Income
UK Motor Insurance Other Revenue -- analysis of
contribution:
30
30 June 30 June June 31 Dec
GBPm 2019(*4) 2020(*4) 2021 2020(*4)
---------------------------------------------------------- -------- -------- ------ ---------
Contribution from additional products & fees, including
those underwritten by Admiral(*1) 111.1 105.1 97.2 203.3
---------------------------------------------------------- -------- -------- ------ ---------
Instalment income 42.0 47.6 50.8 100.9
Other revenue 153.1 152.7 148.0 304.2
Internal costs(*2) (35.1) (34.8) (35.1) (73.2)
Net other revenue 118.0 117.9 112.9 231.0
Other revenue per vehicle(*) (3) GBP66 GBP64 GBP58 GBP61
---------------------------------------------------------- -------- -------- ------ ---------
Other revenue per vehicle net of internal costs GBP56 GBP54 GBP48 GBP50
---------------------------------------------------------- -------- -------- ------ ---------
*1 Additional products underwritten by Admiral Included in
underwriting profit in income statement but re-allocated to Other
Revenue for purpose of KPIs.
*2 Internal costs reflect an allocation of insurance expenses
incurred in generating other revenue.
*3 Other revenue (before internal costs) divided by average
active vehicles, rolling 12-month basis.
*4 Re-presented to statutory profit before tax from group share
of profit before tax
Overall contribution (Other Revenue net of costs plus instalment
income) was GBP112.9 million which was lower than H1 2020 (GBP117.9
million). There was a reduction in optional ancillary income,
continuing to reflect a greater proportion of transactions
completing digitally and also the impact of Covid resulting in
lower sales.
Other revenue was equivalent to GBP58 per vehicle (gross of
costs; H1 2020: GBP64) and Net Other revenue (after deducting
costs) per vehicle was GBP48 (H1 2020: GBP54).
UK Household Insurance
GBPm 30 June 2019 30 June 2020 30 June 2021 31 Dec 2020
----------------------- ------------ ------------ ------------ -----------
Turnover(*1) 80.0 87.0 104.6 193.8
----------------------- ------------ ------------ ------------ -----------
Total premiums
written(*1) 72.2 78.7 94.5 175.9
----------------------- ------------ ------------ ------------ -----------
Net insurance premium
revenue 18.1 20.9 23.3 43.2
----------------------- ------------ ------------ ------------ -----------
Underwriting
profit/(loss) (*) (1) 0.6 (0.7) 1.7 2.5
Profit commission and
other income 3.6 6.2 12.2 12.9
----------------------- ------------ ------------ ------------ -----------
UK Household insurance
profit 4.2 5.5 13.9 15.4
----------------------- ------------ ------------ ------------ -----------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
Key performance indicators
30 June 2019 30 June 2020 30 June 2021 31 Dec 2020
----------------------- ------------ ------------ ------------ -----------
Reported Household loss
ratio(*1) 66.8% 69.0% 63.6% 64.8%
Reported Household
expense ratio(*1) 30.1% 34.2% 32.5% 29.4%
Reported Household
combined ratio(*1) 96.9% 103.2% 96.1% 94.2%
----------------------- ------------ ------------ ------------ -----------
Impact of extreme
weather and
subsidence(*1) -- 11.1% -- 5.3%
Households insured at
period end (m) 0.92 1.07 1.23 1.16
----------------------- ------------ ------------ ------------ -----------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
Admiral's Household business continued to grow strongly,
increasing the number of homes insured by 15% to 1.23 million (H1
2020: 1.07 million) across all channels, with good growth in
Admiral's multiproduct offering. Turnover increased to GBP104.6
million (H1 2020: GBP87.0 million) and retention remained strong.
Customers continue to use digital channels more for both shopping
and reporting claims.
The Household business reported a profit before tax of GBP13.9
million (H1 2020: GBP5.5 million profit), reflecting relatively
benign weather compared to H1 2020 where the result was impacted by
weather events in the first half of approximately GBP5 million (net
of recoveries from Flood Re; H1 2019: nil). The loss ratio also
benefitted from favourable experience in theft, escape of water and
fire perils with the positive development on prior periods claims,
resulting in higher profit commission. The claims mix remained
broadly similar to 2020 with fewer escape of water claims and more
damage claims as more people worked from home.
Admiral's expense ratio decreased to 32.5% (H1 2020: 34.2%), as
premium grew more rapidly than in H1 2020 which was impacted by
lower sales in the lockdown period.
International Insurance
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
------------------------------ ---------- ---------- ---------- ----------
Turnover(*1) 319.5 329.5 347.2 648.8
------------------------------ ---------- ---------- ---------- ----------
Total premiums written(*1) 288.0 297.6 314.3 584.0
------------------------------ ---------- ---------- ---------- ----------
Net insurance premium
revenue 80.6 95.5 111.7 204.2
------------------------------ ---------- ---------- ---------- ----------
Investment income 0.9 (0.1) 0.6 --
------------------------------ ---------- ---------- ---------- ----------
Net insurance claims (66.0) (63.3) (82.1) (139.3)
------------------------------ ---------- ---------- ---------- ----------
Net insurance expenses (26.7) (37.7) (44.7) (78.8)
------------------------------ ---------- ---------- ---------- ----------
Underwriting result(*1) (11.2) (5.6) (14.5) (13.9)
------------------------------ ---------- ---------- ---------- ----------
Net other income 8.5 12.1 13.6 22.7
------------------------------ ---------- ---------- ---------- ----------
International Car Insurance
result (2.7) 6.5 (0.9) 8.8
------------------------------ ---------- ---------- ---------- ----------
Key performance indicators
30 June 30 June 30 June 31 Dec
2019 2020 2021 2020
------------------------------- ---------- ---------- ---------- -----------
Loss ratio(*2) 75.5% 63.2% 70.2% 64.3%
Expense ratio(*2) 38.4% 44.8% 43.9% 43.9%
-------------------------------
Combined ratio(*3) 113.9% 108.0% 114.1% 108.2%
------------------------------- ---------- ---------- ---------- -----------
Combined ratio, net of Other
revenue(*4) 103.3% 95.4% 102.2% 97.9%
------------------------------- ---------- ---------- ---------- -----------
Claims reserve releases
(GBPm) 9.0 11.7 6.5 18.6
------------------------------- ---------- ---------- ---------- -----------
Vehicles insured at period
end (m) 1.36m 1.49m 1.71m 1.60m
------------------------------- ---------- ---------- ---------- -----------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
*2 Loss ratios and expense ratios adjusted to remove the impact
of reinsurer caps
*3 Combined ratio is calculated on Admiral's net share of
premiums and excludes Other Revenue. It excludes the impact of
reinsurer caps. Including the impact of reinsurer caps the reported
combined ratio would be H1 2021: 114%; H1 2020: 106%; FY 2020:
107%; H1 2019: 115%.
*4 Combined ratio, net of Other Revenue is calculated on
Admiral's net share of premiums and includes Other Revenue.
Including the impact of reinsurer caps the reported combined ratio,
net of Other Revenue would be H1 2021: 102%; H1 2020: 93%; FY 2020:
96%; H1 2019: 104%.
Geographical analysis(*1)
30 June 2021 Spain Italy France US Total
----------------------------- ----- ----- ------ ----- ------
Vehicles insured at period
end 0.35m 0.82m 0.32m 0.22m 1.71m
----------------------------- ----- ----- ------ ----- ------
Turnover (GBPm) 44.6 112.4 87.4 102.8 347.2m
----------------------------- ----- ----- ------ ----- ------
30 June 2020 Spain Italy France US Total
----------------------------- ----- ----- ------ ----- ------
Vehicles insured at period
end 0.30m 0.71m 0.26m 0.22m 1.49m
----------------------------- ----- ----- ------ ----- ------
Turnover (GBPm) 40.8 106.2 64.1 118.4 329.5
----------------------------- ----- ----- ------ ----- ------
31 Dec 2020 Spain Italy France US Total
----------------------------- ----- ----- ------ ----- ------
Vehicles insured at period
end 0.33m 0.77m 0.29m 0.21m 1.60m
----------------------------- ----- ----- ------ ----- ------
Turnover (GBPm) 83.9 213.0 139.3 212.6 648.8
----------------------------- ----- ----- ------ ----- ------
*1 Alternative Performance Measures -- refer to the end of this
report for definition and explanation
International Insurance financial performance
Admiral's International insurance businesses continued to grow
in turnover and customer numbers despite lockdown restrictions
continuing to impact demand as well as a competitive market
environment. Customer numbers increased by 14% to 1.71 million (30
June 2020: 1.49 million) and turnover growth increased by 5% to
GBP347.2 million (H1 2020: GBP329.5 million). The combined ratio,
net of other revenue, increased to 102% (H1 2020: 95%). This was
partly driven by higher claims frequency in the first half of 2021,
compared to H1 2020 and less positive prior year development,
together with some pressure on premium revenue particularly in
Italy and Spain, where competition remained high.
The expense ratio improved to 44% (H1 2020: 45%). An increase in
the expense ratio in 2020 was partly due to the cost of shifting to
work from home, and a higher net retained share of business in the
US.
The European insurance operations in Spain, Italy and France
insured 1.49 million vehicles at 30 June 2021 -- 17% higher than a
year earlier (30 June 2020: 1.27 million). Turnover was up 16% to
GBP244.4 million (H1 2020: GBP211.1 million). The combined European
profit was GBP3.3 million (H1 2020: profit of GBP9.8 million), a
GBP6.5 million decrease partly driven by a small loss in France,
higher cost of claims, and lower average market premiums. The
combined ratio net of other revenue (excluding the impact of
reinsurer caps) increased to 96% from 82%, impacted by lower
average market premiums and worsened claims experience primarily
due to higher than expected bodily injury inflation.
Admiral Seguros (Spain) grew by 15% to 346,000 customers over
the past year (30 June 2020: 302,000). The growth was supported by
strong acquisition and retention, despite the competitive market
environment. Investments in the business continue to focus on
building sustainable growth through the broker channel and
improvements in the online customer experience.
The Group's largest international operation, ConTe in Italy,
continued to perform well and increased vehicles insured by 15% to
820,000 (30 June 2020: 712,000). The business continued to focus on
improving loss ratio and risk selection capabilities, and grew
strongly despite challenging market conditions.
L'olivier assurance (France) continued to grow strongly. The
customer base increased by 24% to 324,000 at 30 June 2021 (30 June
2020: 261,000) with investments in direct channel acquisition
including brand investment, marketing campaigns, and an enhanced
user experience driving strong growth.
In the US, Admiral underwrites motor insurance in eight states
through its Elephant Auto business. The number of vehicles insured
remained broadly flat at 216,000 at 30 June 2021 (30 June 2020:
218,000) and turnover was down by 13% to GBP102.8 million (H1 2020:
GBP118.4 million; in local currency turnover was down 4%). The
business maintains a cautious approach to growth whilst the key
focus remains to focus on improving technical fundamentals.
Elephant reported a loss of GBP4.2 million (from GBP3.3 million
in H1 2020), in part due to severe weather in Texas in the first
half of the year and a reduced Covid impact as road usage and
claims frequency were higher than H1 2020. Continued efforts to
strengthen digital capabilities and increase acquisition efficiency
helped drive lower costs and improve customer outcomes. The
business is also testing expanded distribution to the broker
channel and through partnerships as opportunities to grow in
future. Overall, the combined ratio net of other revenue improved
to 110% (111% in H1 2020).
Admiral Loans
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
------------------------------ ---------- ---------- ---------- ----------
Total interest income 13.3 19.8 15.7 36.8
Interest expense(*1) (4.1) (5.1) (4.3) (10.1)
Net interest income 9.2 14.7 11.4 26.7
Other fee income 0.9 0.9 0.5 2.1
Total income 10.1 15.6 11.9 28.8
Credit loss charge (6.0) (16.2) (4.0) (25.8)
Expenses (8.4) (8.8) (9.8) (16.8)
Admiral Loans loss before
tax (4.3) (9.4) (1.9) (13.8)
------------------------------ ---------- ---------- ---------- ----------
(*1) Includes GBP1.4 million intra-group interest expense (FY
2020 GBP2.9 million; H1 2020: GBP1.5 million; H1 2019: GBP1.2
million)
Admiral Loans distributes and underwrites unsecured personal
loans and car finance products through the comparison channel and
direct to consumers via the Admiral website.
Gross loan balances totalled GBP469.4 million at the end of June
2021, with a GBP43.7 million provision, resulting in a net loans
balance of GBP425.7 million (net loans balance at 30 June 2020:
GBP455.3 million, 31 December 2020: GBP359.8 million).
In mid-March 2020, following a deterioration in the UK economic
outlook due to the impact of Covid, the Group made the decision to
pause the writing of new loans. Admiral Loans cautiously re-entered
the market in the second half of 2020 with the loan book starting
to grow more
significantly in 2021. Net interest income and other fee income remained lower than in H1 2020 due to lower average loan balances, although this is offset by a significantly lower charge for expected credit losses of GBP4.0 million (H1 2020: GBP16.2 million). This improvement was driven by improved future UK economic outlook and unemployment assumptions at 30 June 2021 compared to 30 June 2020, although caution remains given the additional uncertainty arising from the withdrawal of pandemic support measures. Admiral Loans continues to manage lending within a defined risk appetite and has not seen a significant change in defaults over the period and arrears remain low.
For further information on the loan provision for expected
credit losses, refer to note 7 in the financial statements.
Admiral Loans recorded a pre-tax loss of GBP1.9 million in the
first half of 2021 (decreased from GBP9.4 million loss in H1 2020
and GBP13.8 million loss in FY 2020). The lower loss predominantly
reflects the reduction in credit loss charge recognised in the
period as noted above.
Other Group Items
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
--------------------------------- ---------- ---------- ---------- ----------
Share scheme charges (24.2) (21.3) (30.6) (50.9)
Compare.com loss before tax (4.6) (0.8) (1.4) (2.3)
Other interest and investment
income 2.7 3.0 1.5 4.9
Business development costs (0.4) (0.5) (3.8) (1.8)
Other central costs (5.5) (11.2) (18.5) (22.9)
Finance charges (5.5) (5.9) (5.7) (12.1)
Total (37.5) (36.7) (58.5) (85.1)
--------------------------------- ---------- ---------- ---------- ----------
Share scheme charges relate to the Group's two employee share
schemes (refer to note 9 in the financial statements). The increase
in the charge is driven by a combination of the expected increase
of the proportion of shares that will eventually vest following
strong Group results, as well as a higher share price and higher
bonuses linked to the Group's dividend, compared to the first half
of 2020.
Business development costs include costs associated with
potential new ventures, in particular Admiral Pioneer which
incurred a loss of just over GBP2 million in H1 2021. Compare.com
reported a higher loss of GBP1.4 million, as a result of increased
investment in marketing and acquisition in a challenging market
environment in the US.
Other central costs consist of Group-related expenses and
include the cost of a number of significant Group projects, such as
preparation for the significant new insurance accounting standard,
IFRS 17, the development of the internal model and group
cross-charges. The increase in the period is primarily due to
higher costs of regulatory projects and matters that are unlikely
to be recurring.
Finance charges of GBP5.7 million (H1 2020: GBP5.9 million)
primarily relate to interest on the GBP200 million subordinated
notes issued in July 2014 (refer to note 6 to the financial
statements).
Discontinued Operations (Comparison)
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
--------------------------------------------- ---------- ---------- ---------- ---------
Profit before tax in period 7.7 11.7 11.3 29.4
Gain on disposal -- -- 404.4 --
Total profit before tax from discontinued
operations 7.7 11.7 415.7 29.4
--------------------------------------------- ---------- ---------- ---------- ---------
On the 30 April 2021, the Group announced that, following
regulatory and competition authority approvals, RVU had completed
the purchase of the Penguin Portals Group and Admiral's 50% share
of Preminen. MAPFRE has also sold its 25% holding in Rastreator and
50% holding in Preminen to RVU. The total transaction value was
settled in cash on completion.
The cash proceeds from the disposal amount to GBP471.8 million;
with the gain on disposal being GBP404.4 million.
The Group has confirmed plans for the use of the net proceeds
from the disposal and will return GBP400 million to shareholders in
the form of special dividends phased equally over the interim 2021,
final 2022 and interim 2022 dividends.
Group capital structure and financial position
Admiral's capital-efficient and profitable model led to a return
on equity from continuing operations of 68% (H1 2020: 50%). The
increase in the period relates to the higher profits generated by
the UK motor business. Refer to the Glossary at the end of this
report for the basis of the calculation. A continuing key feature
of the business model is the extensive use of co- and reinsurance
across the Group which reduces the level of capital the Group is
required to maintain.
The Group continues to develop its partial internal model to
form the basis of calculation of its capital requirement in the
future. The Board is currently reconsidering model methodology,
scope and platform and as a result, application to the Group's
regulators for model approval is unlikely to take place in the near
term. In the period before model approval, the Group will continue
to use the current standard formula plus capital add-on basis to
calculate its regulatory capital requirement.
The estimated Solvency II position for the Group at the date of
this report was as follows:
Group capital position (estimated)
30 June 2021 31 Dec 2020 30 June 2020
GBPbn GBPbn GBPbn
------------------------------------- ------------ ----------- ------------
Eligible Own Funds (pre dividend) 1.75 1.72 1.47
Dividend (0.34) (0.25) (0.20)
-------------------------------------
Eligible Own Funds (post dividend) 1.41 1.47 1.27
Solvency II capital requirement 0.68 0.79 0.68
-------------------------------------
Surplus over regulatory capital
requirement 0.73 0.68 0.59
------------------------------------- ------------ ----------- ------------
Solvency ratio (post dividend) 209% 187% 186%
------------------------------------- ------------ ----------- ------------
The Group reports a strong solvency ratio of 209% post-dividend,
excluding the positive impact of capital held from the Penguin
Portal disposal to be returned to shareholders. The solvency ratio
has increased by 22 percentage points from the end of 2020 and
surplus capital has increased by GBP55 million. This is primarily
due to a reduction in the Solvency Capital Requirement (SCR), which
includes a lower risk charge related to profit commission risk
The solvency capital requirement includes an updated capital
add-on which remains subject to regulatory approval. The solvency
ratio based on the previously approved capital add-on that is
calculated at the balance sheet date rather than the date of this
report, and will be submitted to the regulator within the Q2
Quantitative Reporting Template (QRT) is as follows:
30 June 30 June
Regulatory solvency ratio (estimated) 2021 31 Dec 2020 2020
------------------------------------------------- ------- ----------- -------
Solvency ratio as reported above 209% 187% 186%
Impact of Penguin Portals retained capital 40% -- --
Change in valuation date (6%) (5%) (7%)
Other (including impact of updated, unapproved
capital add-on) (16%) 27% (10%)
Solvency ratio (QRT basis) 227% 209% 169%
------------------------------------------------- ------- ----------- -------
Estimated sensitivities to the current Group solvency ratio are
presented in the table below. These sensitivities cover the two
most material risk types, insurance risk and market risk, and
within these risks cover the most significant elements of the risk
profile. Aside from the catastrophe events, estimated sensitivities
have not been calibrated to individual return periods.
Solvency ratio sensitivities
30 31 30
June Dec June
2021 2020 2020
--------------------------------------- ----------- ----------- -----------
UK Motor -- incurred loss ratio +5% -24% -10% -23%
UK Motor -- 1 in 200 catastrophe event -1% -1% -1%
UK Household -- 1 in 200 catastrophe
event -3% -2% -2%
Interest rate -- yield curve down 50
bps -3% -4% -3%
Credit spreads widen 100 bps -9% -6% -9%
Currency -- 25% movement in euro and
US dollar -2% -3% -3%
ASHE -- long term inflation assumption
up 0.5% -3% -3% -3%
Loans -- 100% weighting to severe
scenario -1% -1% -1%
----------- ----------- -----------
The impact of the incurred loss ratio +5% sensitivity has
returned to more typical levels after the reduction at YE 2020,
which saw higher levels of profit commission risk in the solvency
capital requirement reducing the sensitivity.
For further detail on Loans sensitivities refer to note 7a to
the financial statements.
Investments and cash
Admiral's investment strategy was unchanged in H1 2021. The main
focus of the Group's strategy is capital preservation, with
additional priorities including low volatility of returns, high
levels of liquidity and matching of asset durations with PPO and
non-PPO liability durations.
Cash and investments analysis
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
------------------------------------ ----------- ---------- ---------- ------------
Fixed income and debt securities 1,827.6 2,024.1 2,317.4 2,101.3
Money market funds and other fair
value
instruments 1,029.3 1,243.4 1,465.9 1,339.3
Cash deposits 88.7 85.0 96.0 65.4
Cash 461.4 396.3 395.9 351.7
------------------------------------ ----------
Total 3,407.0 3,748.8 4,275.2 3,857.7
------------------------------------ ----------- ---------- ---------- ------------
Investment return
30 June 30 June 30 June 31 Dec
GBPm 2019 2020 2021 2020
------------------------------------------- ----------- ---------- ---------- ------------
Investment return 23.3 21.3 23.1 47.8
Movement on accruals held for reinsurer
funds withheld (4.5) 12.9 -- 12.9
Unrealised (losses)/gains on forward
contracts (0.4) 0.2 (0.6) --
Movement in provision for expected
credit losses (0.1) (2.4) (1.1) (7.8)
------------------------------------------- ----------
Total 18.3 32.0 21.4 52.9
------------------------------------------- ----------- ---------- ---------- ------------
Net investment income for the first half of 2021 was GBP21.4
million (H1 2020: GBP32.0 million).
The higher income in 2020 was a result of the investment income
in the period being positively impacted by investment income
adjustments related to UK motor quota share reinsurance
arrangements. GBP12.9 million of investment income earned in 2019
was recognised in the H1 2020 income statement as the projection of
the result of the 2019 underwriting year improved to a profitable
level.
The investment return on the Group's investment portfolio
excluding unrealised gains and losses, the release of the
investment income accruals held in relation to reinsurance
contracts and the movement in provision for expected credit losses,
was GBP23.1 million in H1 2021 (compared to GBP21.3 million in H1
2020), with the annualised rate of return remaining flat at 1.2%
(H1 2020: 1.2%).
The Group continues to generate significant amounts of cash and
its capital-efficient business model enables the distribution of
the majority of post-tax profits as dividends. Total cash and
investments at 30 June 2021 was GBP4,275.2 million (31 December
2020: GBP3,857.7 million).
Taxation
The tax charge for the period, reported on a statutory basis for
continuing operations is GBP88.2 million (H1 2020: GBP40.3
million), which equates to 18.3% (H1 2020: 15.1%) of profit before
tax. The increase in the tax rate is primarily driven an adjustment
to prior year tax relating to changes in intra-group contractual
arrangements.
Principal Risks and Uncertainties
Admiral has performed a robust assessment of its principal risks
and uncertainties (PR&Us), including those which would threaten
its business model, future performance, liquidity and solvency. The
result of this assessment has concluded that Admiral's PR&Us
are consistent with those reported in the Group's 2020 Annual
Report (pages 85 - 90). However, given the ongoing importance of
the following topics, additional commentary has been provided on:
Covid-19; Brexit; FCA Pricing Remedies; and Climate Change.
Covid-19
The impact of Covid-19 on Admiral's PR&Us, as well as the
steps taken to appropriately manage these risks, continues to be
overseen by the Group Risk Committee (GRC). Some of the current
trends in risks most impacted by Covid-19 are highlighted
below.
Operational Risk: The impact of Covid-19 on levels of
operational risk continues to reduce across the Admiral Group,
largely a result of remote-working solutions becoming more robust
and the business continuously enhancing its approach to hybrid
working. Throughout the pandemic Admiral prioritised staff mental
and physical health, as well as excellent customer service, and
continues to do so.
During the period there was a rise in Covid-19 cases in India,
impacting Admiral support centres. The Group is monitoring the
situation daily and taking appropriate steps to ensure that
customer impacts are minimised and that operations and Admiral
staff are fully supported.
Insurance Risk: Admiral continues to closely monitor the impact
of Covid-19 on driving patterns, claims experience and the market,
especially in light of national lockdowns. Admiral has taken part
in the FCA industry-wide review of forbearance practices
implemented during the pandemic.
Market Risk & Credit Risk: The impact of Covid-19 on
Admiral's market and credit risks has also reduced in the first
half of 2021, with the improved economic outlook. However, there
remains significant uncertainty over the longer-term impacts of the
pandemic on the economic environment and Admiral continues to
monitor these uncertainties, in particular the risk of inflation,
and the potential impacts on the Group's balance sheet.
UK exit from the European Union ("Brexit")
The Group continues to closely monitor ongoing Brexit
developments, with the agreement of the EU-UK Trade and Cooperation
Agreement and the prudent approach adopted by Admiral prior to the
end of the transition period leading to the risks previously
identified by the Brexit Working Group to be largely mitigated.
These risks include supply chain changes, communications to
customers, and continuation of a high level of service. No new
significant risks have been identified.
FCA Pricing Remedies
The FCA's Policy Statement on General Insurance Pricing
Practices, which set out final rules to address harm in home and
motor insurance markets, was published in May 2021. Admiral is
supportive of the remedies, including the key proposal - the New
Business Equivalent price remedy - which is good for both the
market and for consumers. The Group is focused on ensuring that it
appropriately and compliantly interprets the Policy Statement;
achieving desired customer outcomes, whilst remaining competitive
in the UK home and motor insurance markets.
Admiral has been preparing for the reform for a number of years
in anticipation of the release of the Policy Statement and given
the significance and complexity of the remedies, continues to
consult with subject matter experts and an external assurance
partner. A range of potential scenarios and outcomes have been
modelled and whilst there is likely to be some volatility in market
pricing as a result of the reform, Admiral believes it is in a
strong position to mitigate the potential risks.
Climate Change
Admiral remains committed to recognising and understanding the
threats posed by climate change to the Group, as well as to
mitigating its impact on the environment. Climate-related risks can
impact on all of Admiral's business lines, operations, investments,
and reinsurance arrangements and the Group has a number of ongoing
streams of work that are focused on this issue.
As part of this work there is an ongoing Group focus on:
-- Ensuring full compliance with regulatory and disclosure requirements,
such as those outlined in FCA Policy Statement PS20/17, which confirmed
the introduction of a new listing rule LR 9.8;
-- Researching climate-change trends and better understanding the risks
arising from climate change;
-- Incorporating climate-related risk drivers into business-as-usual risk
management, such as enhancing Admiral's stress and scenario testing to
incorporate climate-change related financial risks; and
-- Continuing efforts to further reduce the Group's carbon footprint.
Disclaimer on forward-looking statements
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
assumptions and are subject to a number of known and unknown risks
and uncertainties that may cause actual events or results to differ
materially from any expected future events or results expressed or
implied in these forward-looking statements.
Persons receiving this announcement should not place undue
reliance on forward-looking statements. Unless otherwise required
by applicable law, regulation or accounting standard, the Group
does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future
developments or otherwise.
Condensed consolidated income statement (unaudited)
Six months ended
Re-presented Year ended
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
-------------------------------------- ------------ -------------
Insurance premium revenue 1,222.5 1,063.4 2,265.3
Insurance premium ceded to
reinsurers (806.3) (712.6) (1,513.7)
--------------------------------------
Net insurance premium revenue 5 416.2 350.8 751.6
Other revenue 8 152.5 166.2 329.4
Profit commission 5 187.3 44.6 134.0
Interest income 7 15.7 19.8 36.8
Interest expense 7 (2.9) (3.8) (7.2)
Net interest income from loans 12.8 16.0 29.6
Investment return -- interest income
at effective interest rate 6 19.8 17.7 33.9
Investment return -- other 6 2.7 16.7 26.8
Net revenue 791.3 612.0 1,305.3
Insurance claims and claims handling
expenses (597.3) (611.6) (1,318.6)
Insurance claims and claims handling
expenses recoverable from co- and
reinsurers 501.5 470.3 1,025.4
Net insurance claims (95.8) (141.3) (293.2)
Operating expenses and share scheme
charges 9 (440.8) (394.7) (814.6)
Operating expenses and share scheme
charges recoverable from co- and
reinsurers 9 238.5 223.2 456.6
6,
Expected credit losses 9 (5.1) (18.6) (33.6)
Net operating expenses and share
scheme charges (207.4) (190.1) (391.6)
Total expenses (303.2) (331.4) (684.8)
Operating profit 488.1 280.6 620.5
Finance costs 6 (6.7) (7.3) (14.3)
Finance costs recoverable from
co- and reinsurers 6 0.8 1.1 2.0
Net finance costs (5.9) (6.2) (12.3)
Profit before tax from continuing
operations 482.2 274.4 608.2
Taxation expense 10 (88.2) (40.3) (106.2)
Profit after tax from continuing
operations 394.0 234.1 502.0
-------------------------------------- ---- ------- ------------ -------------
Profit before tax from discontinued
operations 13 415.7 11.7 29.4
Taxation expense 13 (2.3) (2.8) (3.6)
Profit after tax from discontinued
operations 413.4 8.9 25.8
-------------------------------------- ---- ------- ------------ -------------
Profit after tax from continuing
and discontinued operations 807.4 243.0 527.8
-------------------------------------- ---- ------- ------------ -------------
Profit after tax attributable to:
Equity holders of the parent 807.6 243.7 528.8
Non-controlling interests (NCI) (0.2) (0.7) (1.0)
807.4 243.0 527.8
-------------------------------------- ---- ------- ------------ -------------
Earnings per share -- From continuing
operations
Basic 12 132.9p 79.7p 170.7p
Diluted 12 132.7p 79.6p 170.4p
-------------------------------------- ---- ------- ------------ -------------
Earnings per share -- From continuing
and discontinued operations
Basic 12 272.0p 82.9p 179.5p
Diluted 12 271.6p 82.8p 179.2p
-------------------------------------- ---- ------- ------------ -------------
Dividends declared and paid (total) 12 250.8 162.3 425.7
Dividends declared and paid (per 12 86.0p 56.3p 147.5p
share)
-------------
Condensed consolidated statement of comprehensive income
(unaudited)
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
--------------
Profit for the period 807.4 243.0 527.8
Other comprehensive income
Items that are or may be reclassified
to profit or loss
Movements in fair value reserve (32.2) 17.7 40.6
Deferred tax charge in relation to
movement in fair value reserve 0.5 (1.5) (1.8)
Exchange differences on translation
of foreign operations (7.0) 11.7 3.5
Movement in hedging reserve 1.9 (3.6) (2.4)
Other comprehensive income for the
period, net of income tax (36.8) 24.3 39.9
-------------------------------------- -------- -------- --------------
Total comprehensive income for the
period 770.6 267.3 567.7
-------------------------------------- -------- -------- --------------
Total comprehensive income for the
period attributable to:
Equity holders of the parent 771.2 267.5 568.6
Non-controlling interests (0.6) (0.2) (0.9)
770.6 267.3 567.7
-------------------------------------- -------- -------- --------------
Condensed consolidated statement of financial position
(unaudited)
As at
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
------- ------- -----------
ASSETS
Property and equipment 11 131.6 150.7 140.4
Intangible assets 11 177.4 162.2 166.7
Deferred income tax 10 7.3 2.1 --
Corporation tax asset 10 -- -- 22.9
Reinsurance assets 5 1,911.9 1,891.6 2,083.2
Loans and advances to customers 7 425.7 455.3 359.8
Insurance and other receivables 6 1,223.9 1,227.7 1,182.0
Financial investments 6 3,879.3 3,352.5 3,506.0
Cash and cash equivalents 6 395.9 396.3 298.2
Assets associated with disposal
group held for sale -- -- 83.0
Total assets 8,153.0 7,638.4 7,842.2
------------------------------------- ----- ------- ------- -----------
EQUITY
Share capital 12 0.3 0.3 0.3
Share premium account 13.1 13.1 13.1
Other reserves 59.8 78.9 94.9
Retained earnings 1,595.3 947.4 1,004.4
Total equity attributable to equity
holders of the parent 1,668.5 1,039.7 1,112.7
------------------------------------- ----- ------- ------- -----------
Non-controlling interests 3.5 11.2 10.7
------------------------------------- ----- ------- ------- -----------
Total equity 1,672.0 1,050.9 1,123.4
------------------------------------- ----- ------- ------- -----------
LIABILITIES
Insurance contracts liabilities 5 4,019.2 4,022.6 4,081.3
Subordinated and other financial
liabilities 6 548.8 644.2 488.6
Trade and other payables 6, 11 1,783.8 1,777.8 1,991.2
Lease liabilities 6 114.9 132.6 122.8
Deferred income tax 10 -- -- 0.9
Current tax liabilities 10 14.3 10.3 --
Liabilities associated with disposal
group held for sale -- -- 34.0
Total liabilities 6,481.0 6,587.5 6,718.8
------------------------------------- ----- ------- ------- -----------
Total equity and total liabilities 8,153.0 7,638.4 7,842.2
------------------------------------- ----- ------- ------- -----------
Condensed consolidated cash flow statement (unaudited)
Six months ended Year ended
Restated Restated
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
--------- ---------- ------------
Profit after tax 807.4 243.0 527.8
Adjustments for non-cash items
-- Depreciation of property, plant and equipment and
right-of-use assets 11 12.0 12.8 23.6
-- Impairment of property, plant and equipment and
right-of-use assets 11 -- -- 3.1
-- Amortisation and impairment of intangible assets 11 8.4 8.9 19.2
-- Gain on disposal of Comparison entities held for sale 13 (404.4) -- --
-- Movement in expected credit loss provision 6 2.8 16.2 25.8
-- Share scheme charges 9,13 31.1 22.9 54.0
-- Accrued interest income from loans and advances to
customers (0.2) (0.2) 0.2
-- Interest expense on funding for loans and advances to
customers 2.9 1.3 7.2
-- Investment return 6 (22.5) (34.4) (60.7)
-- Finance costs, including unwinding of discounts on
lease liabilities 6,13 6.0 6.2 12.4
-- Taxation expense 10,13 90.5 43.1 109.8
Change in gross insurance contract liabilities 5 (62.1) 47.6 106.3
Change in reinsurance assets 5 171.3 180.1 (11.5)
Change in insurance and other receivables 6, 11 (23.2) (1.7) 25.1
Change in gross loans and advances to
customers 7 (67.6) (16.4) 77.3
Change in trade and other payables, including
tax and social security 11 (232.3) (198.1) 40.2
Cash flows from operating activities,
before movements in investments 320.1 331.3 959.8
Purchases of financial instruments (1,898.5) (1,170.7) (2,389.2)
Proceeds on disposal/ maturity of financial
instruments 1,480.8 1,088.1 2,160.6
Interest and investment income received 6 21.5 24.6 52.6
Cash flows from operating activities,
net of movements in investments (76.1) 273.3 783.8
Taxation payments (57.8) (87.0) (175.0)
Net cash flow from operating activities (133.9) 186.3 608.8
Cash flows from investing activities:
Purchases of property, equipment and software (27.3) (15.3) (43.1)
Proceeds from sale of Comparison entities 13 471.8 -- --
Net costs paid on sale of Comparison entities (14.8) -- --
Net cash used in investing activities 429.7 (15.3) (43.1)
Cash flows from financing activities:
Non-controlling interest capital contribution -- 2.2 2.4
Proceeds/ (Repayment of) on issue of loan
backed securities 38.7 24.1 (46.3)
Proceeds from other financial liabilities 20.0 86.5 0.1
Finance costs paid, including interest
expense paid on funding for loans 6 (9.6) (6.7) (19.2)
Repayment of lease liabilities (4.7) (4.3) (9.4)
Equity dividends paid 12 (250.8) (162.3) (425.7)
Net cash used in financing activities (206.4) (60.5) (498.1)
------------------------------------------------------------ ----- --------- ---------- ------------
Net increase in cash and cash equivalents 89.4 110.5 67.6
Cash and cash equivalents at 1 January 351.7 281.7 281.7
Cash and cash equivalents included within
disposal of Comparison entities (41.3) -- --
Effects of changes in foreign exchange
rates (3.9) 4.1 2.4
Cash and cash equivalents at end of period 6 395.9 396.3 351.7
------------------------------------------------------------ ----- --------- ---------- ------------
Condensed consolidated statement of changes in equity
(unaudited)
Attributable to the owners of the Company
Share Fair Foreign Retained
Share premium value Hedging exchange profit Non-controlling Total
Capital account reserve reserve reserve and loss Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------- -------- -------- -------- --------- --------- -------
At 1 January 2020 0.3 13.1 46.6 (1.2) 9.7 840.9 909.4 9.2 918.6
Profit/(loss) for the
period -- from continuing
and discontinued operations -- -- -- -- -- 243.7 243.7 (0.7) 243.0
Other comprehensive
income
Movements in fair value
reserve -- -- 17.7 -- -- -- 17.7 -- 17.7
Deferred tax charge
in relation to movement
in fair value reserve -- -- (1.5) -- -- -- (1.5) -- (1.5)
Movement in hedging
reserve -- -- -- (3.6) -- -- (3.6) -- (3.6)
Currency translation
differences -- -- -- -- 11.2 -- 11.2 0.5 11.7
Total comprehensive
income for the period -- -- 16.2 (3.6) 11.2 243.7 267.5 (0.2) 267.3
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
Transactions with equity
holders
Dividends -- -- -- -- -- (162.3) (162.3) -- (162.3)
Share scheme credit -- -- -- -- -- 24.9 24.9 -- 24.9
Deferred tax credit
on share scheme credit -- -- -- -- -- 0.2 0.2 -- 0.2
Contributions by NCIs -- -- -- -- -- -- -- 2.2 2.2
Total transactions
with equity holders -- -- -- -- -- (137.2) (137.2) 2.2 (135.0)
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
As at 30 June 2020 0.3 13.1 62.8 (4.8) 20.9 947.4 1,039.7 11.2 1,050.9
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
At 1 January 2020 0.3 13.1 46.6 (1.2) 9.7 840.9 909.4 9.2 918.6
Profit/(loss) for the
period -- from continuing
and discontinued operations -- -- -- -- -- 528.8 528.8 (1.0) 527.8
Other comprehensive
income
Movements in fair value
reserve -- -- 40.6 -- -- -- 40.6 -- 40.6
Deferred tax charge
in relation to movement
in fair value reserve -- -- (1.8) -- -- -- (1.8) -- (1.8)
Movement in hedging
reserve -- -- -- (2.4) -- -- (2.4) -- (2.4)
Currency translation
differences -- -- -- -- 3.4 -- 3.4 0.1 3.5
Total comprehensive
income for the period -- -- 38.8 (2.4) 3.4 528.8 568.6 (0.9) 567.7
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
Transactions with equity
holders
Dividends -- -- -- -- -- (425.7) (425.7) -- (425.7)
Share scheme credit -- -- -- -- -- 53.8 53.8 -- 53.8
Deferred tax credit
on share scheme credit -- -- -- -- -- 6.6 6.6 -- 6.6
Contributions by NCIs -- -- -- -- -- -- -- 2.2 2.2
Changes in ownership
interests without a
change in control -- -- -- -- -- -- -- 0.2 0.2
Total transaction with
equity holders -- -- -- -- -- (365.3) (365.3) 2.4 (362.9)
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
As at 31 December 2020 0.3 13.1 85.4 (3.6) 13.1 1,004.4 1,112.7 10.7 1,123.4
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
Condensed consolidated statement of changes in equity
(unaudited) (continued)
Attributable to the owners of the Company
Share Fair Foreign Retained
Share premium value Hedging exchange profit Non-controlling Total
Capital account reserve reserve reserve and loss Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------- -------- -------- -------- --------- --------- -------
At 1 January 2021 0.3 13.1 85.4 (3.6) 13.1 1,004.4 1,112.7 10.7 1,123.4
Profit/(loss) for
the period -- from
continuing and discontinued
operations -- -- -- -- -- 807.6 807.6 (0.2) 807.4
Other comprehensive
income
Movements in fair
value reserve -- -- (32.2) -- -- -- (32.2) -- (32.2)
Deferred tax charge
in relation to movement
in fair value reserve -- -- 0.5 -- -- -- 0.5 -- 0.5
Movement in hedging
reserve -- -- -- 1.9 -- -- 1.9 -- 1.9
Currency translation
differences -- -- -- -- (6.6) -- (6.6) (0.4) (7.0)
Total comprehensive
income for the period -- -- (31.7) 1.9 (6.6) 807.6 771.2 (0.6) 770.6
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
Transactions with
equity holders
Dividends -- -- -- -- -- (250.8) (250.8) -- (250.8)
Share scheme credit -- -- -- -- -- 33.2 33.2 -- 33.2
Deferred tax credit
on share scheme credit -- -- -- -- -- 2.9 2.9 -- 2.9
Transfer to gain
on disposal of assets
held for sale -- -- -- -- 1.3 (2.0) (0.7) 0.1 (0.6)
NCIs on disposal
of comparison entities
held for sale -- -- -- -- -- -- -- (6.7) (6.7)
Total transactions
with equity holders -- -- -- -- 1.3 (216.7) (215.4) (6.6) (222.0)
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
As at 30 June 2021 0.3 13.1 53.7 (1.7) 7.8 1,595.3 1,668.5 3.5 1,672.0
----------------------------- -------- -------- -------- -------- --------- --------- ------- --------------- -------
Notes to the financial statements (unaudited)
1. General information
Admiral Group plc (the "Company") is a company incorporated in
the United Kingdom and registered and domiciled in England and
Wales. Its registered office is at T Admiral, David Street,
Cardiff, CF10 2EH and its shares are listed on the London Stock
Exchange.
The condensed interim financial statements comprise the results
and balances of the Company and its subsidiaries (the Group) for
the six-month period ended 30 June 2021 and the comparative periods
for the six-months ended 30 June 2020 and the year ended 31
December 2020. This condensed set of financial statements has been
prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the UK, and should be read in conjunction with the
Group's last annual consolidated financial statements as at and for
the year ended 31 December 2020 ("last annual financial
statements"). They do not include all of the information required
for a complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
financial statements.
As required by the FCA's Disclosure and Transparency Rules, the
condensed set of financial statements has been prepared applying
the accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial
statements for the year ended 31 December 2020, except where new
accounting standards apply as noted below.
The financial statements of the Company's subsidiaries are
consolidated in the Group financial statements. In accordance with
IAS 24, transactions or balances between Group companies that have
been eliminated on consolidation are not reported as related party
transactions.
The comparative figures for the financial year ended 31 December
2020 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the Company's
auditors and delivered to the registrar of companies. The report of
the auditors was:
1. unqualified;
2. did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report; and
3. did not contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The accounts have been prepared on a going concern basis. In
considering the appropriateness of this assumption, the Board have
reviewed the Group's projections for the next twelve months and
beyond. Further information is given in note 2 below.
2. Basis of preparation
The condensed set of interim financial statements have been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Company's published
consolidated financial statements for the year ended 31 December
2020.
A number of other IFRS and interpretations have been endorsed by
the UK in the period to 30 June 2021 and although they have been
adopted by the Group, none of them has had a material impact on the
Group's financial statements.
The Group's assessment of the impact of standards that have yet
to be adopted remains consistent with that reported on page 182 of
the Group's 2020 Annual Report. In particular, the Group continues
to assess the impact of IFRS 17 on its results and financial
position, and work towards implementation by the effective date of
1 January 2023.
The consolidated financial statements have been prepared on a
Going Concern basis. In making this going concern assessment, the
Directors have considered in detail the impact of the Covid-19
pandemic on the Group's financial position and performance,
including the projection of the Group's profits, regulatory capital
surpluses and sources of liquidity for the next 12 months and
beyond.
In particular, as part of this assessment the Board has
considered updated projections of performance and profitability a
number of times during the pandemic, with some key highlights
including:
-- The impact of the pandemic on the Group's profit projections, including:
-- The continuation of reduced motor insurance claims frequency when
compared to pre-pandemic levels
-- Changes in premium rates and projected policy volumes across the
Group's insurance businesses
-- Potential impacts on the cost of settling claims across all
insurance businesses
-- Projected trends in other revenue generated by the Group's
insurance business from fees and the sale of ancillary products
-- The sale of the Group price comparison businesses, Penguin Portals and
Preminen along with the intention to return a majority of net proceeds
back to shareholders
-- The Group's solvency position, which has been closely monitored through
periods of market volatility, in particular, early in the pandemic. The
Group continues to maintain a strong solvency position above target
levels.
-- The adequacy of the Group's liquidity position after considering all of
the factors noted above
-- The results of business plan scenarios and stress tests on the projected
profitability, solvency and liquidity positions including the impact of
severe downside scenarios that assume severe adverse economic, credit and
trading stresses
-- The regulatory environment, in particular focusing on regulatory guidance
issued by the FCA and the PRA in the UK and ongoing communications
between management and regulators
-- A review of the Company's principal risks and uncertainties and the
assessment of emerging risk
Following consideration of all of the above, the Directors have
reasonable expectation that the Group has adequate resources to
continue in operation for the foreseeable future, a period of not
less than 12 months from the date of this report, and that it is
therefore appropriate to adopt the going concern basis in preparing
the consolidated financial statements.
The accounting policies set out in the notes to the financial
statements have, unless otherwise stated, been applied consistently
to all periods presented in these Group financial statements.
The financial statements are prepared on the historical cost
basis, except for the revaluation of financial assets classified as
fair value through profit or loss or fair value through other
comprehensive income. The financial statements are presented in
pounds sterling, rounded to the nearest GBP0.1 million.
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable. The acquisition date
is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Losses applicable to
the non-controlling interests in a subsidiary are allocated to the
non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance. The
preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making the judgements about carrying values of assets
and liabilities that are not readily apparent from other
sources.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is reviewed if this revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods. To the extent that a change in an accounting estimate
gives rise to changes in assets and liabilities, it is recognised
by adjusting the carrying amount of the related asset or liability
in the period of the change.
Restatement of prior year Consolidated cash flow statement
A prior period classification error within the Consolidated cash
flow statement has been identified impacting both the six months
ended 30 June 2020 and the year ended 31 December 2020. In both
prior periods, amounts that should have been presented as "Interest
and investment income received" were incorrectly presented as
'Proceeds on disposal/maturity of financial instruments'. The prior
periods have been restated, resulting in an increase of GBP18.0
million (30 June 2020) and GBP42.5 million (31 December 2020) in
Interest and investment income received, and a corresponding
decrease in 'Proceeds on disposal/ maturity of financial
instruments'. The error has had no impact on the Condensed
consolidated statement of financial position, Condensed
consolidated income statement or the Earnings per share
calculations within.
3. Critical accounting judgements and estimates
The Group's 2020 Annual Report provides full details of
significant judgements and estimates used in the application of the
Group's accounting policies. There have been no additional critical
judgements or estimates applied in the period.
Note 5 provides further information as to the changes in the
estimates with respect to the calculation of insurance
reserves.
Note 7 provides further information as to changes in the
estimates with respect to the calculation of the expected credit
loss provision for the Admiral Loans business, following the impact
of Covid on management's key judgements and the sources of
estimation uncertainty.
Note 13 provides further information on the accounting and
presentation of the discontinued operations and sale of the
comparison businesses that took place in the period.
4. Operating segments
The Group has four reportable segments; UK Insurance,
International Insurance, Admiral Loans, and Other. The result of
the discontinued operations is also shown for completeness. These
reportable segments are consistent with those set out on page 186
of the Group's 2020 Annual Report.
Note that as a result of the sale of the comparison businesses
(other than compare.com), and the growth of the Admiral Loans
business, the Group's reportable segments changed at the end of
2020, so that compare.com is now presented within 'Other' along
with Admiral Pioneer, and Admiral Loans is presented as a separate
segment. Accordingly, the Group has restated the previously
reported segment information for the six months ended 30 June
2020.
Segment income, results and other information
An analysis of the Group's revenue and results for the period
ended 30 June 2021, by reportable segment, is shown below. The
accounting policies of the reportable segments are consistent with
those presented in the notes to the 2020 Group financial
statements.
Six months ended 30 June 2021
International Admiral Discontinued Total
UK Insurance Insurance Loans Other operations(*) Eliminations(*2) (continuing) Total
GBPm GBPm GBPm GBPm (6) GBPm GBPm GBPm GBPm
------------ ------------- ------- ----- -------------- ---------------- ------------- -------
Turnover(*1) 1,372.0 347.2 16.2 11.1 67.2 (7.7) 1,746.4 1,806.0
-------------------------- ------------ ------------- ------- ----- -------------- ---------------- ------------- -------
Net insurance premium
revenue 295.6 116.0 -- 4.6 -- -- 416.2 416.2
Other revenue and
profit commission 320.0 16.1 0.5 3.3 67.2 (7.7) 339.8 399.4
Net interest income -- -- 11.4 -- -- 1.4 12.8 12.8
Investment return(*)
(5) 20.7 0.6 -- -- -- (1.4) 19.9 19.9
Net revenue 636.3 132.7 11.9 7.9 67.2 (7.7) 788.7 848.3
Net insurance claims (8.1) (84.6) -- (3.1) -- -- (95.8) (95.8)
Expenses (84.7) (49.0) (13.8) (8.4) (55.4) 7.7 (155.8) (203.6)
Gain on disposal
of Comparison entities -- -- -- -- 404.4 -- -- 404.4
--------------------------
Segment profit/(loss)
before tax 543.5 (0.9) (1.9) (3.6) 416.2 -- 537.1 953.3
-------------------------- ------------ ------------- ------- ----- -------------- ---------------- ------------- -------
Other central revenue and expenses, including
share scheme charges (50.7) (51.2)
Investment and interest income 1.5 1.5
Finance costs(*) (4) (5.7) (5.7)
Consolidated profit before tax(*)
(3) 482.2 897.9
Taxation expense (88.2) (90.5)
Consolidated profit
after tax 394.0 807.4
-------------------------- ------------ ------------- ------- ----- -------------- ---------------- ------------- -------
*1 Turnover is an Alternative Performance Measure presented
before intra-group eliminations and consists of total premiums
written (including co-insurers' share) and Other revenue. Refer to
the glossary and note 14 for further information.
*2 Eliminations are in respect of the intra-group trading
between the Group's comparison and UK and International insurance
entities and intra-group interest. Of the GBP7.7 million
elimination of other revenue and profit commission, GBP7.6 million
relates to discontinued operations, with the remaining GBP0.1
million relating to compare.com.
*3 Profit before tax above of GBP897.9 million is presented
cumulative of profit before tax from continuing operations
(GBP482.2 million) and discontinued operations (GBP415.7 million,
including GBP0.5 million of central expenses ).
*4 GBP0.3 million of IFRS 16 interest expense (being the Group's
net share of IFRS 16 interest expense) included within Finance
Costs in the Income Statement has been reallocated to individual
segments within expenses, in line with management segmental
reporting.
*5 Investment return is reported net of impairment on financial
assets, in line with management reporting.
*6 See note 13 for further detail on discontinued
operations.
Revenue and results for the corresponding reportable segments
for the period ended 30 June 2020 are shown below.
Six months ended 30 June 2020 (Re-presented)
International Admiral Discontinued Total
UK Insurance Insurance Loans Other operations(*6) Eliminations(*2) (continuing) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------- ------- ------ --------------- ---------------- ------------- -------
Turnover(*1) 1,248.4 329.5 20.7 3.4 87.6 (10.0) 1,601.9 1,679.6
------------------------- ------------ ------------- ------- ------ --------------- ---------------- ------------- -------
Net insurance
premium revenue 251.7 99.1 -- -- -- -- 350.8 350.8
Other revenue
and profit commission 191.8 14.8 0.9 3.4 87.6 (10.0) 210.8 288.5
Net interest
income -- -- 14.7 -- -- 1.3 16.0 16.0
Investment return(*5) 30.6 (0.1) -- -- -- (1.5) 29.0 29.0
Net revenue 474.1 113.8 15.6 3.4 87.6 (10.2) 606.6 684.3
Net insurance
claims (76.2) (65.1) -- -- -- -- (141.3) (141.3)
Expenses (83.9) (42.2) (25.0) (4.2) (74.3) 10.0 (155.2) (219.6)
Segment profit/(loss)
before tax 314.0 6.5 (9.4) (0.8) 13.3 (0.2) 310.1 323.4
------------------------- ------------ ------------- ------- ------ --------------- ---------------- ------------- -------
Other central revenue and expenses, including
share scheme charges (32.9) (34.5)
Investment and interest income 3.0 3.0
Finance costs(*4) (5.8) (5.8)
Consolidated profit before
tax(*3) 274.4 286.1
Taxation expense (40.3) (43.1)
Consolidated profit after
tax 234.1 243.0
------------------------------------------------------ ------- ------ --------------- ---------------- ------------- -------
*1 Turnover is an Alternative Performance Measure presented
before intra-group eliminations and consists of total premiums
written (including co-insurers' share) and Other revenue. Refer to
the glossary and note 14 for further information.
*2 Eliminations are in respect of the intra-group trading
between the Group's comparison and UK and International insurance
entities and intra-group interest. Of the GBP10.0 million
elimination of other revenue and profit commission, GBP9.9 million
relates to discontinued operations, with the remaining GBP0.1
million relating to compare.com.
*3 Profit before tax above of GBP286.1 million is presented
cumulative of profit before tax from continuing operations
(GBP274.4 million) and discontinued operations (GBP11.7 million,
including GBP1.6 million of central expenses).
*4 GBP0.4 million of IFRS 16 interest expense (being the Group's
net share of IFRS 16 interest expense) included within Finance
Costs in the Income Statement has been reallocated to individual
segments within expenses, in line with management segmental
reporting.
*5 Investment return is reported net of impairment on financial
assets, in line with management reporting.
*6 See note 13 for further detail on discontinued operations
Revenue and results for the corresponding reportable segments
for the year ended 31 December 2020 are shown below.
Year ended 31 December 2020
----------------------------------------------------------------------------------------------------
Discontinued
International Admiral (Comparison) Total
UK Insurance Insurance Loans Other (*) (6) Eliminations(*2) (continuing) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------- ------- ----- ------------- ---------------- ------------- -------
Turnover(*1) 2,672.0 648.8 38.4 6.8 183.9 (22.2) 3,365.8 3,527.7
------------------------- ------------ ------------- ------- ----- ------------- ---------------- ------------- -------
Net insurance
premium revenue 539.8 211.8 -- -- -- -- 751.6 751.6
Other revenue
and profit commission 427.9 27.4 1.6 6.7 183.9 (22.2) 463.4 625.3
Net interest
income -- -- 26.7 -- -- 2.9 29.6 29.6
Investment return(*)
(5) 50.8 -- 0.5 -- -- (3.3) 48.0 48.0
Net revenue 1,018.5 239.2 28.8 6.7 183.9 (22.6) 1,292.6 1,454.5
Net insurance
claims (150.2) (143.0) -- -- -- -- (293.2) (293.2)
Expenses (170.0) (87.4) (42.6) (9.8) (151.4) 22.2 (309.6) (439.0)
Segment profit/(loss)
before tax 698.3 8.8 (13.8) (3.1) 32.5 (0.4) 689.8 722.3
------------------------- ------------ ------------- ------- ----- ------------- ---------------- ------------- -------
Other central revenue and expenses, including
share scheme charges (74.8) (77.9)
Investment and interest income 4.9 4.9
Finance costs(*) (4) (11.7) (11.7)
Consolidated profit before
tax(*) (3) 608.2 637.6
Taxation expense (106.2) (109.8)
Consolidated profit after tax 502.0 527.8
------------------------------------------------------ ------- ----- ------------- ---------------- ------------- -------
*1 Turnover is an Alternative Performance Measure presented
before intra-group eliminations and consists of total premiums
written (including co-insurers' share) and Other revenue. Refer to
the glossary and note 14 for further information.
*2 Eliminations are in respect of the intra-group trading
between the Group's comparison and UK and International insurance
entities and intra-group interest. Of the GBP22.2 million
elimination of other revenue and profit commission, GBP22.0 million
relates to discontinued operations, with the remaining GBP0.2
million relating to compare.com.
*3 Profit before tax above of GBP637.6 million is presented
cumulative of profit before tax from continuing operations
(GBP608.2 million) and discontinued operations (GBP29.4 million,
including GBP3.1 million of central expenses).
*4 GBP0.7 million of IFRS 16 interest expense (being the Group's
net share of IFRS 16 interest expense) included within the Finance
Costs in the Income Statement has been reallocated to individual
segments within expenses, in line with management segmental
reporting.
*5 Investment return is reported net of impairment on financial
assets, in line with management reporting.
*6 See note 13 for futher detail on discontinued operations
Segment revenues
The UK Insurance, International Insurance and Other reportable
segments derive all insurance premium income from external
policyholders. Revenue within these segments is not derived from an
individual policyholder that represents 10% or more of the Group's
total revenue.
The total of discontinued revenues from transactions with other
reportable segments is GBP7.6 million (H1 2020: GBP9.9 million, FY
2020: GBP22.0 million) which has been eliminated on consolidation,
along with GBP0.1 million (H1 2020: GBP0.1 million, FY 2020: GBP0.2
million) of revenues from compare.com that are also eliminated on
consolidation.
GBP1.4 million of intra-group interest charges (H1 2020: GBP1.5
million, FY 2020: GBP2.8 million) related to the UK Insurance and
Admiral Loans segment have also been eliminated on consolidation.
There are no other transactions between reportable segments.
Revenues from external customers for products and services is
consistent with the split of reportable segment revenues as shown
above.
5. Premium, Claims and Profit Commissions
5a. Net insurance premium revenue
30 June 31 December
30 June 2020(*) 2020(*)
2021 (1) (1)
GBPm GBPm GBPm
---------------------------------------- ------------- --------------
Total insurance premiums written before
co-insurance(*) (2) 1,553.1 1,399.3 2,957.2
---------------------------------------- ------------- -------------- -----------
Group gross premiums written after
co-insurance 1,253.9 1,119.8 2,344.0
Outwards reinsurance premiums (821.3) (741.3) (1,555.9)
Net insurance premiums written 432.6 378.5 788.1
Change in gross unearned premium
provision (31.4) (56.4) (78.7)
Change in reinsurers' share of unearned
premium provision 15.0 28.7 42.2
Net insurance premium revenue 416.2 350.8 751.6
---------------------------------------- ------------- -------------- -----------
*1 See note 14d for the impact of the Stay At Home premium
refund issued to UK motor insurance customers on premiums written
and net insurance premium revenue
*2 Alternative Performance Measures -- refer to the end of the
report for definition and explanation, and to note 14a for
reconciliation to Group gross premiums written
The Group's share of its insurance business was underwritten by
Admiral Insurance (Gibraltar) Limited, Admiral Insurance Company
Limited, Admiral Europe Compania Seguros, and Elephant Insurance
Company LLC. The vast majority of contracts are short term in
duration, lasting for 12 months.
5b. Profit commission
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
------------- --------- -------------
Underwriting year
2016 & prior 37.3 34.1 63.3
2017 15.8 6.2 23.3
2018 13.3 0.8 5.5
2019 22.8 -- 20.9
2020 88.5 -- 11.7
Total UK motor profit commission(*1) 177.7 41.1 124.7
------------------------------------- ------------- --------- -------------
Total UK household and International
profit commission(*1) 9.6 3.5 9.3
------------------------------------- ------------- --------- -------------
Total profit commission 187.3 44.6 134.0
------------------------------------- ------------- --------- -------------
(*1) Of the total UK motor profit commission recognised of
GBP177.7 million (H1 2020: GBP41.1 million, FY 2020 GBP124.7
million), GBP100.5 million (H1 2020: GBP39.6 million, FY 2020
GBP102.3 million) relates to co-insurance arrangements and GBP77.2
million (H1 2020: GBP1.5 million, FY 2020 GBP22.4 million) to
reinsurance arrangements. The UK Household and International profit
commission relates solely to reinsurance arrangements.
No profit commission has yet been recognised on the 2021
underwriting year as the combined ratios calculated from the
financial statement loss ratios on these years sit above the
threshold for profit commission recognition.
Sensitivities of the recognition of profit commission to
movements in the booked loss ratio are shown in note 5c(v).
5c. Reinsurance assets and insurance contract liabilities
(i) Analysis of recognised amounts:
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Gross
Claims outstanding(*1) 2,837.4 2,872.7 2,919.9
Unearned premium provision 1,181.8 1,149.9 1,161.4
-----------
Total gross insurance liabilities 4,019.2 4,022.6 4,081.3
------------------------------------ ------- ------- -----------
Recoverable from reinsurers
Claims outstanding 1,140.4 1,137.0 1,319.3
Unearned premium provision 771.5 754.6 763.9
-----------
Total reinsurers share of insurance
liabilities 1,911.9 1,891.6 2,083.2
------------------------------------ ------- ------- -----------
Net
Claims outstanding(*2) 1,697.0 1,735.7 1,600.6
Unearned premium provision 410.3 395.3 397.5
-----------
Total insurance liabilities - net 2,107.3 2,131.0 1,998.1
------------------------------------ ------- ------- -----------
*1 Gross claims outstanding at 30 June 2021 is presented before
the deduction of salvage and subrogation recoveries totaling
GBP70.1 million (30 June 2020: GBP68.6 million, 31 December 2020:
GBP70.5 million).
*2 The Group typically commutes quota share reinsurance
contracts in its UK Motor Insurance business 24-36 months following
the start of the underwriting year. After commutation, claims
outstanding from these contracts are included in the Group's net
claims outstanding balance. Refer to note (ii) below.
(ii) Analysis of gross and net claims reserve releases:
The following table analyses the impact of movements in prior
year claims provisions on a gross and net basis. This data is
presented on an underwriting year basis.
30 June 30 June 31 December
2021 2020 2020
Gross GBPm GBPm GBPm
--------- ---------
Underwriting year (UK Motor Insurance):
2016 & prior 62.8 63.2 116.2
2017 41.0 22.4 69.8
2018 46.9 22.2 57.3
2019 56.7 71.3 54.8
2020 32.1 -- --
Total gross release (UK Motor Insurance) 239.5 179.1 298.1
----------------------------------------- --------- --------- -----------
Total gross release (UK Household
Insurance) 4.0 9.4 9.2
----------------------------------------- --------- --------- -----------
Total gross release (International
Insurance) 19.6 34.1 53.2
----------------------------------------- --------- --------- -----------
Total gross release 263.1 222.6 360.5
30 June 30 June 31 December
2021 2020 2020
Net GBPm GBPm GBPm
--------- ---------
Underwriting year (UK Motor Insurance):
2016 & prior 62.7 63.2 116.2
2017 39.6 21.8 67.7
2018 45.3 17.0 40.7
2019 42.2 22.2 17.0
2020 9.6 -- --
Total net release (UK Motor Insurance) 199.4 124.2 241.6
--------------------------------------------------- --------- --------- -----------
Total net release (UK Household Insurance) 2.0 2.8 2.8
--------------------------------------------------- --------- --------- -----------
Total net release (International Insurance) 6.5 11.7 18.6
--------------------------------------------------- --------- --------- -----------
Total net release 207.9 138.7 263.0
--------------------------------------------------- --------- --------- -----------
Analysis of net releases on UK Motor
Insurance
-- Net releases on Group net share (UK Motor) 81.1 64.2 104.3
-- Releases on commuted quota share reinsurance
contracts (UK Motor) 118.3 60.0 137.3
Total net releases as above 199.4 124.2 241.6
--------------------------------------------------- --------- --------- -----------
Releases on the share of reserves originally reinsured but since
commuted are analysed by underwriting year as follows:
30 June 30 June 31 December
2021 2020 2020
Net GBPm GBPm GBPm
--------- ---------
Underwriting year:
2016 & prior 36.5 36.9 67.9
2017 26.7 13.0 46.0
2018 30.5 10.1 23.4
2019 24.6 -- --
Total releases on commuted quota share
reinsurance contracts 118.3 60.0 137.3
--------------------------------------- --------- --------- -----------
The table below shows the development of UK Car Insurance loss
ratios for the past six financial periods, presented on an
underwriting year basis.
31 December 30 June
----------------------------
UK Car Insurance loss
ratio development 2016 2017 2018 2019 2020 2021
---- ---- ---- ---- ----
Underwriting year (UK
Car only)
2016 88% 84% 77% 73% 68% 66%
2017 -- 87% 83% 75% 70% 67%
2018 -- -- 92% 81% 78% 74%
2019 -- -- -- 92% 76% 73%
2020 -- -- -- -- 72% 69%
2021 -- -- -- -- -- 77%
(iii) Reconciliation of movement in claims provision
30 June 2021
Gross Reinsurance Net
GBPm GBPm GBPm
------- ----------- -------
Claims provision at start of period 2,919.9 (1,319.3) 1,600.6
Claims incurred (excluding claims
handling costs and releases) 827.6 (535.3) 292.3
Reserve releases (263.1) 55.2 (207.9)
Movement in claims provision due
to commutation -- 318.4 318.4
Claims paid and other movements (647.0) 340.6 (306.4)
Claims provision at end of period 2,837.4 (1,140.4) 1,697.0
------------------------------------ ------- ----------- -------
30 June 2020
Gross Reinsurance Net
GBPm GBPm GBPm
------- ----------- -------
Claims provision at start of period 2,899.4 (1,354.2) 1,545.2
Claims incurred (excluding claims
handling costs and releases) 801.8 (533.1) 268.7
Reserve releases (222.6) 83.9 (138.7)
Movement in claims provision due
to commutation -- 352.7 352.7
Claims paid and other movements (605.9) 313.7 (292.2)
Claims provision at end of period 2,872.7 (1,137.0) 1,735.7
------------------------------------ ------- ----------- -------
31 December 2020
Gross Reinsurance Net
GBPm GBPm GBPm
--------- ----------- -------
Claims provision at start of period 2,899.4 (1,354.2) 1,545.2
Claims incurred (excluding claims
handling costs and releases) 1,612.4 (1,079.6) 532.8
Reserve releases (360.5) 97.5 (263.0)
Movement in claims provision due
to commutation -- 352.7 352.7
Claims paid and other movements (1,231.4) 664.3 (567.1)
Claims provision at end of period 2,919.9 (1,319.3) 1,600.6
------------------------------------ --------- ----------- -------
(iv) Reconciliation of movement in net unearned premium provision
30 June 2021
Gross Reinsurance Net
GBPm GBPm GBPm
--------- ----------- -------
Unearned premium provision at start
of period 1,161.4 (763.9) 397.5
Written in the period 1,253.9 (821.3) 432.6
Earned in the period (1,222.5) 806.3 (416.2)
Foreign exchange differences (11.0) 7.4 (3.6)
Unearned premium provision at end
of period 1,181.8 (771.5) 410.3
------------------------------------ --------- ----------- -------
30 June 2020
Gross Reinsurance Net
GBPm GBPm GBPm
--------- ----------- -------
Unearned premium provision at start
of period 1,075.6 (717.5) 358.1
Written in the period 1,119.8 (741.3) 378.5
Earned in the period (1,063.4) 712.6 (350.8)
Foreign exchange differences 17.9 (8.4) 9.5
Unearned premium provision at end
of period 1,149.9 (754.6) 395.3
------------------------------------ --------- ----------- -------
31 December 2020
Gross Reinsurance Net
GBPm GBPm GBPm
--------- ----------- -------
Unearned premium provision at start
of period 1,075.6 (717.5) 358.1
Written in the period 2,344.0 (1,555.9) 788.1
Earned in the period (2,265.3) 1,513.7 (751.6)
Foreign exchange differences 7.1 (4.2) 2.9
Unearned premium provision at end
of period 1,161.4 (763.9) 397.5
------------------------------------ --------- ----------- -------
(v) Sensitivity of recognised amounts to changes in assumptions:
The following table sets out the impact on equity and post-tax
profit or loss at 30 June 2021 that would result from a 1%, 3% and
5% deterioration and improvement in the UK Car insurance loss
ratios used for each underwriting year for which material amounts
remain outstanding.
Underwriting year
------------------------------
Impact on income statement (including profit
commission) 2017 2018 2019 2020
------ ------ ------ ------
Booked loss ratio - 30 June 2021 67% 74% 73% 69%
Impact of 1% deterioration in booked loss
ratio (GBPm) (15.7) (15.9) (15.4) (14.8)
Impact of 3% deterioration in booked loss
ratio (GBPm) (47.1) (46.5) (43.7) (43.4)
Impact of 5% deterioration in booked loss
ratio (GBPm) (78.4) (73.4) (68.7) (70.9)
Impact of 1% improvement in booked loss ratio
(GBPm) 15.7 15.9 15.4 14.8
Impact of 3% improvement in booked loss ratio
(GBPm) 47.1 47.6 46.3 44.3
Impact of 5% improvement in booked loss ratio
(GBPm) 78.4 80.3 78.0 73.8
The following table sets out the impact on equity and post-tax
profit or loss at 30 June 2021 that would result from a 1%, 3% and
5% deterioration and improvement in the UK Car insurance loss
ratios used for each underwriting year for which material amounts
remain outstanding, on profit commission only.
Underwriting year
------------------------------
Impact on profit commission
only 2017 2018 2019 2020
------ ------ ------ ------
Booked loss ratio - 30 June
2021 67% 74% 73% 69%
Impact of 1% deterioration in
booked loss ratio (GBPm) (4.3) (4.0) (5.9) (11.4)
Impact of 3% deterioration in
booked loss ratio (GBPm) (13.0) (11.0) (15.1) (33.2)
Impact of 5% deterioration in
booked loss ratio (GBPm) (21.6) (14.1) (21.0) (53.9)
Impact of 1% improvement in
booked loss ratio (GBPm) 4.3 4.0 5.9 11.4
Impact of 3% improvement in
booked loss ratio (GBPm) 13.0 12.1 17.7 34.1
Impact of 5% improvement in
booked loss ratio (GBPm) 21.6 21.1 30.4 56.8
6. Investment income and finance costs
6a. Investment return
Re-presented 30
30 June 2021 June 2020
GBPm GBPm
At At
EIR Other Total EIR Other Total
Investment return
On assets classified as FVTPL -- 3.3 3.3 -- 3.3 3.3
On debt securities classified as
FVOCI(*) (1) (,) (*) (3) 19.5 -- 19.5 17.0 -- 17.0
On assets classified as amortised
cost(*1) 0.3 -- 0.3 0.7 -- 0.7
Net unrealised losses
Unrealised (losses)/gains on forward
contracts -- (0.6) (0.6) -- 0.2 0.2
Movement in reinsurers' share of
investment return(*4) -- -- -- -- 12.9 12.9
Interest receivable on cash and
cash equivalents(*1) -- -- -- -- 0.3 0.3
Total investment and interest
income(*2) 19.8 2.7 22.5 17.7 16.7 34.4
------------------------------------- ---- ----- ----- ----- ----- -----
31 December 2020
GBPm
At EIR Other Total
Investment return
On assets classified as FVTPL -- 8.5 8.5
On debt securities classified as FVOCI(*)
(1) (,) (*) (3) 32.5 5.0 37.5
On assets classified as amortised
cost(*1) 1.4 -- 1.4
Net unrealised losses
Movement in reinsurers' share of investment
return(*4) -- 12.9 12.9
Interest receivable on cash and cash
equivalents(*1) -- 0.4 0.4
Total investment and interest income(*2) 33.9 26.8 60.7
-------------------------------------------- ------ ----- -----
*1 Interest received during the period was GBP21.5 million (30
June 2020: GBP6.6 million, 31 December 2020: GBP10.1 million)
*2 Total investment return excludes GBP1.4 million of
intra-group interest (30 June 2020: GBP1.5million, 31 December
2020: GBP2.9 million)
*3 Realised gains/losses on sales of debt securities classified
as FVOCI are immaterial
*4 Refer to "Cash and investments analysis" for further detail
6b. Finance costs
30 June 30 June 31 December
2021 2020 2020
Continuing operations GBPm GBPm GBPm
------- ------- -----------
Interest payable on subordinated loan
notes and other credit facilities(*1)
(*) (2) 5.7 5.8 11.7
Interest payable on Lease Liabilities 1.0 1.5 2.6
Interest recoverable from co- and
reinsurers (0.8) (1.1) (2.0)
Total finance costs 5.9 6.2 12.3
--------------------------------------- ------- ------- -----------
*1 Interest paid during the year to date was GBP7.0 million (30
June 2020: GBP6.7 million, 31 December 2020: GBP14.0 million)
*2 See note 7c for details of credit facilities
Finance costs include interest payable on the GBP200.0 million
(30 June 2020: GBP200.0 million, 31 December 2020: GBP200.0
million) subordinated notes and other financial liabilities.
Interest payable on lease liabilities represents the unwinding
of the discount on lease liabilities under IFRS 16 and does not
result in a cash payment.
6c. Changes in Expected Credit Loss ('ECL') provision
30 June 30 June 31 December
2021 2020 2020
Note GBPm GBPm GBPm
------- ------- -----------
Expected credit losses on financial
investments 6 1.1 2.4 7.8
Expected credit losses on loans
and advances to customers (*1) 7 4.0 16.2 25.8
Total expense for expected credit
losses 5.1 18.6 33.6
------------------------------------ ---- ------- ------- -----------
*1 Includes GBP2.3m of write-offs (30 June 2020: GBP0.6 million,
31 December 2020: GBP7.8 million)
6d. Financial assets and liabilities
The Group's financial instruments can be analysed as
follows:
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Financial investments measured at FVTPL
Money market and other funds 1,465.9 1,243.4 1,339.3
Financial investments classified as
FVOCI
Debt securities 2,134.0 1,833.6 1,912.7
Fixed interest gilts 169.9 180.0 177.3
2,303.9 2,013.6 2,090.0
Equity investments (designated FVOCI) 13.5 10.5 11.3
2,317.4 2,024.1 2,101.3
--------------------------------------------- ------- ------- -----------
Financial assets measured at amortised
cost
Deposits with credit institutions 96.0 85.0 65.4
Total financial investments 3,879.3 3,352.5 3,506.0
--------------------------------------------- ------- ------- -----------
Other financial assets
Insurance receivables 979.9 971.6 977.9
Trade and other receivables (measured
at amortised cost) 244.0 256.1 204.1
Insurance and other receivables 1,223.9 1,227.7 1,182.0
Loans and advances to customers (note
7) 425.7 455.3 359.8
Cash and cash equivalents 395.9 396.3 298.2
Total financial assets 5,924.8 5,431.8 5,346.0
--------------------------------------------- ------- ------- -----------
Financial liabilities
Subordinated notes 204.3 204.2 204.3
Loan backed securities 299.6 328.6 260.7
Other borrowings 40.0 106.5 20.0
Derivative financial instruments 4.9 4.9 3.6
Subordinated and other financial liabilities 548.8 644.2 488.6
Trade and other payables(*1) 1,783.8 1,777.8 1,991.2
Lease liabilities 114.9 132.6 122.8
Total financial liabilities 2,447.5 2,554.6 2,602.6
--------------------------------------------- ------- ------- -----------
*1 Trade and other payables total balance of GBP1,783.8 million
(30 June 2020: GBP1,777.8 million, 31 December 2020: GBP1,991.2
million) above includes GBP1,384.5 million (30 June 2020:
GBP1,302.2 million, 31 December 2020: GBP1,502.6 million) in
relation to tax and social security, deferred income and reinsurer
balances that are outside the scope of IFRS 9.
All investments held at fair value at the end of the period are
invested in funds; mainly money market funds.
The measurement of investments at the end of the period, for the
majority investments held at fair value, is based on active quoted
market values (level one). Equity investments held at fair value
are measured at level three of the fair value hierarchy. No further
information is provided due to the immateriality of the balance at
30 June 2021.
Deposits are held with well rated institutions; as such the
approximate fair value is the book value of the investment as
impairment of the capital is not expected.
The amortised cost carrying amount of receivables is a
reasonable approximation of fair value.
During the period, an impairment charge of GBP1.1 million has
been recognized in H1 2021 in relation to the Group's assets held
at FVOCI (H1 2020: GBP2.4 million, FY 2020: GBP7.8 million). The
credit rating of the Group's financial assets with an external
rating is shown below.
30 June
2021
Amortised
FVTPL FVOCI Cost Total
GBPm GBPm GBPm GBPm
AAA- AA 492.3 914.2 16.1 1,422.6
A 711.9 834.8 436.8 1,983.5
BBB 51.3 422.6 39.0 512.9
Sub BBB 34.6 62.4 -- 97.0
Not
rated(*1) 175.8 83.4 -- 259.2
Total
financial
investments 1,465.9 2,317.4 491.9 4,275.2
------------ -------------- --------------- --------------- ---------------
*1 The majority (GBP163.6 million) of the unrated exposure stems from money market funds, which are rated AAA, but where the underlying securities are unrated. The remaining unrated exposure is a mixture of private debt (GBP82.1 million) and other holdings (GBP13.5 million).
The fair value of subordinated notes (level one valuation) at 30
June 2021 is GBP225.5 million (H1 2020: GBP224.4 million, FY 2020:
GBP222.9 million).
6e. Cash and cash equivalents
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Cash at bank and in hand 395.9 396.3 298.2
Total cash and cash equivalents(*1) 395.9 396.3 298.2
------------------------------------ ------- ------- -----------
*1 Total cash and cash equivalents, including discontinued
operations, is GBP395.9 million (30 June 2020: 396.3 million, 31
December 2020: 351.7 million)
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, and other short-term deposits with original
maturities of three months or less.
6f. Insurance and other receivables
Restated
30 June 30 June 31 December
2021 2020(*1) 2020
GBPm GBPm GBPm
Insurance receivables 979.9 971.6 977.9
Trade and other receivables 209.2 221.0 179.0
Prepayments and accrued income 34.8 35.1 25.1
Total insurance and other receivables(*) (2) 1,223.9 1,227.7 1,182.0
--------------------------------------------- ------- --------- -----------
*1 -- Trade and other receivables and prepayments and accrued
income in H1 2020 have been restated to better reflect the nature
of the underlying balances
*2 -- Total insurance and other receivables at 30 June 2021
include GBP70.1 million in respect of salvage and subrogation
recoveries (30 June 2020: GBP68.6 million, 31 December 2020:
GBP70.5 million).
7. Loans and Advances to Customers
7a. Loans and advances to customers
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
--------------------------------------------------
Loans and advances to customers -- gross carrying
amount 469.4 495.5 401.8
Loans and advances to customers -- provision (43.7) (40.2) (42.0)
Total loans and advances to customers 425.7 455.3 359.8
-------------------------------------------------- ------- ------- -----------
Loans and advances to customers are comprised of the
following:
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Unsecured personal loans 430.6 463.7 371.3
Finance leases 38.8 31.8 30.5
Total loans and advances to customers, gross 469.4 495.5 401.8
--------------------------------------------- ------- ------- -----------
The table below shows the gross carrying value of loans in
stages 1 -- 3.
30 June 30 June 31 December
2021 2020 2020
Gross carrying amount Expected credit loss allowance Other loss allowance*1 Carrying amount Carrying amount Carrying amount
GBPm GBPm GBPm GBPm GBPm GBPm
Stage
1 367.1 (8.6) (0.5) 358.0 437.3 331.8
Stage
2 78.5 (14.2) -- 64.3 15.3 24.8
Stage
3 23.8 (20.4) -- 3.4 2.7 3.2
Total 469.4 (43.2) (0.5) 425.7 455.3 359.8
------ --------------------- ------------------------------ ---------------------- --------------- --------------- ---------------
*1 Other loss allowance covers losses due to a reduction in
current or future vehicle value or costs associated with recovery
and sale of vehicles.
Enhancements to ECL methodology
There have been several enhancements to the provisioning
methodology since the 31 December 2020 year end position. The key
changes include:
-- The definition of default to now includes loans 3 cycles in arrears
(previously 4 cycles or more)
-- The Significant Increase in Credit Risk (SICR) criteria and forward
looking probability of default modelling have been updated utilising
updated analysis.
Forward-looking information
Under IFRS9 the provision must reflect an unbiased and
probability-weighted amount that is determined by evaluating a
range of possible outcomes. The means by which the Group has
determined this is to run scenario analyses.
Management judgment has been used to define the weighting and
severity of the different scenarios based on available data without
undue cost or effort.
The key economic driver of the losses from the scenarios is the
likelihood of a customer entering hardship through unemployment.
Unemployment forecasts include a risk grade split of probability of
default (PD) based on the correlation between grade-level default
rates observed relative to the change in unemployment rates in the
previous downturn, adjusted for the unemployment forecast expected
in the current economic environment.
The scenario weighting assumptions used are detailed below,
along with the unemployment rate assumed in each scenario at 30
June 2021.
Scenario
Scenario Probability Probability Peak Unemployment
Weighting Weighting Peak Unemployment rate %
31 December 30 June rate % 31 December
2020 Movement 2021 30 June 2021 2020
Base 40% -- 40% 7.2 8.2
Upturn 5% -- 5% 6.4 7.0
Downturn 25% -- 25% 8.0 9.3
Severe 30% -- 30% 9.1 10.7
Probability
weighted 100% 100% 7.9 9.2
Economic scenarios have been developed using the latest Bank of
England Monetary Policy Committee report as per the year end
approach. Four scenarios are used representing a base case, a
downturn, an upturn and a severe downturn. The view of management
is that given the inherent uncertainty of the current economic
environment and the impact of the new delta variant, and delays to
relaxation of measures and recent high growth in UK COVID-19 case
numbers, it is likely there will be a high level of variance in
actual unemployment vs the forecast.
This is further supported by the high level of change of
forecasts in each update, from the Bank of England and other market
commentators. Therefore, an economic response uncertainty uplift
has been applied to each scenario, which represents the average
forecast uncertainty as published in the MPC data pack. This
results in a level of forecast unemployment that represents
management's best estimate under each scenario at the half
year.
In addition to unemployment, characteristics including whether
customers have communicated to Admiral an impact due to COVID-19
are considered. For each customer, the sensitivities from each
characteristic are combined to determine an overall
sensitivity.
The PD by stage has moved since the year end as shown below. The
gross balance of loans in stage 2 is now 119% higher than it was at
year-end, with 98% relating to up to date customers, resulting in a
reduction in overall probability of default in the stage. This was
as a result of the changes discussed above. Stage 1 and 3 are
largely consistent with year-end.
PD 30 June 2021 31 December 2020
Stage 1 3.1% 1.8%
Stage 2 28.9% 58.7%
Stage 3 100% 100%
Sensitivities to key areas of estimation uncertainty
31 December Sensitivity
30 June 2021 Sensitivity (GBPm) 2020 (GBPm)
Base 40% (1.8) 40% (2.0)
Upturn 5% (3.9) 5% (4.9)
Downturn 25% 0.2 25% 0.3
Severe 30% 3.0 30% 3.2
The sensitivities in the above tables show the variance to ECL
that would be expected if the given scenario unfolded rather than
the weighted position the provision is based on. At 30 June 2021,
the implied weighted unemployment rate is 7.9%. A downturn only
scenario with an 8.0% unemployment rate would increase the
provision by GBP0.2m, whilst the upturn scenario would create a
reduction of GBP3.9m, base case a reduction of GBP1.8m and the
severe downturn an increase in the ECL allowance of GBP3.0m.
The sensitivity to each of the scenarios has reduced since year
end, driven by improvements in forecast economic conditions across
each scenario during the period. However, uncertainty remains
around the timing and strength of economic recovery during the
second half of 2021 and into 2022, which is reflected in the impact
that a fully severe scenario weighting would have.
Credit grade information
Credit grade is the internal credit banding given to a customer
at origination and is based on external credit rating information.
The credit grading as at 30 June 2021 is as follows:
30 June 31 December
2021 2020
Stage 1 Stage 2 Stage 3
12- month ECL Lifetime ECL Lifetime ECL Total Total
GBPm GBPm GBPm GBPm GBPm
Credit
Grade*1
Higher 244.5 62.0 -- 306.5 269.6
Medium 99.5 14.3 -- 113.8 94.1
Lower 23.1 2.2 -- 25.3 17.0
Credit
Impaired -- -- 23.8 23.8 21.1
Gross
carrying
amount 367.1 78.5 23.8 469.4 401.8
---------- -------------- ------------- ------------- ------- -----------
*1 Credit grade is the internal credit banding given to a
customer at origination. This is based on external credit rating
information
7b. Interest income
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Loans and advances to customers 15.7 19.8 36.8
-------------------------------- ------- ------- -----------
Interest receivable on loans and advances to customers is
recognised in the Income Statement using the effective interest
method, which calculates the amortised cost of the financial asset
and allocates the interest income over the expected product
life.
7c. Interest expense
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
--------------------------------- ------------------------ ------------------------ ------------------------
Interest payable on Loan backed
securities 2.7 3.2 6.2
Interest payable on other credit
facilities 0.2 0.6 1.0
------------------------ ------------------------ ------------------------
Total interest expense(*1) 2.9 3.8 7.2
--------------------------------- ------------------------ ------------------------ ------------------------
*1 Interest paid in total during the year to date was GBP2.6
million (30 June 2020: GBP2.5 million, 31 December 2020: GBP5.2
million)
Interest expense represents the interest payable on loan backed
securities through:
(i) a Special Purpose Entity (SPE) of GBP400.0 million (H1 2020: GBP400.0 million, FY 2020 GBP400.0 million), of which GBP299.6 million (H1 2020: GBP328.6; FY 2020: GBP260.7 million) was drawn down at 30 June 2021; and
(ii) funding specifically allocated to the Admiral Loans business, in the form of credit facilities of GBP120.0 million (H1 2020 GBP120.0 million, FY 2020 GBP120.0 million), of which GBP40.0 million (H1 2020: GBP66.5 million; FY 2020: GBP20.0 million) was drawn down at 30 June 2021.
Admiral Group also has a further credit facility of GBP100.0
million (H1 2020 GBP100.0 million, FY 2020 GBP100.0 million) of
which GBPnil was drawn down at 30 June 2021 (H1 2020: GBP40.0
million; FY 2020: GBPnil).
8. Other Revenue
8a. Disaggregation of revenue
In the following tables, other revenue is disaggregated by major
products/service lines and timing of revenue recognition. The total
revenue disclosed in the table of GBP399.4 million (H1 2020:
GBP288.5 million, FY 2020: GBP625.3 million) represents total other
revenue and profit commission and is disaggregated into the
segments included in note 4.
Six months ended 30 June 2021
Comparison
International Admiral Total (discontinued)(*)
UK Insurance Insurance Loans Other (continuing) (2) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ ------------ ------------- ------- ----- ------------- ------------------ -----
Major products/ service
line
Comparison(*1) -- -- -- 2.9 2.9 59.6 62.5
Instalment income 51.5 1.8 -- -- 53.3 -- 53.3
Fee and commission
revenue 62.5 14.1 0.5 -- 77.1 -- 77.1
Revenue from law firm 13.4 -- -- -- 13.4 -- 13.4
Other 5.5 -- -- 0.3 5.8 -- 5.8
Total other revenue 132.9 15.9 0.5 3.2 152.5 59.6 212.1
Profit commission 187.1 0.2 -- -- 187.3 -- 187.3
Total other revenue
and profit commission 320.0 16.1 0.5 3.2 339.8 59.6 399.4
------------------------ ------------ ------------- ------- ----- ------------- ------------------ -----
Timing of revenue
recognition
Point in time 167.7 14.1 0.5 3.2 185.5 59.6 245.1
Over time 14.2 -- -- -- 14.2 -- 14.2
Revenue outside the
scope of IFRS 15 138.1 2.0 -- -- 140.1 -- 140.1
320.0 16.1 0.5 3.2 339.8 59.6 399.4
------------------------ ------------ ------------- ------- ----- ------------- ------------------ -----
Re-presented
Six months ended 30 June 2020
Comparison
International Admiral Total (discontinued)(*)
UK Insurance Insurance Loans Other (continuing) (2) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------- ------- ----- ------------- ------------------ -----
Major products/ service
line
Comparison(*1) -- -- -- 3.0 3.0 77.7 80.7
Instalment income 48.4 2.0 -- -- 50.4 -- 50.4
Fee and commission
revenue 78.6 12.8 0.9 -- 92.3 -- 92.3
Revenue from law firm 17.2 -- -- -- 17.2 -- 17.2
Other 3.0 -- -- 0.3 3.3 -- 3.3
Total other revenue 147.2 14.8 0.9 3.3 166.2 77.7 243.9
Profit commission 44.6 -- -- -- 44.6 -- 44.6
Total other revenue
and profit commission 191.8 14.8 0.9 3.3 210.8 77.7 288.5
------------------------ ------------ ------------- ------- ----- ------------- ------------------ -----
Timing of revenue
recognition
Point in time 120.7 12.8 0.9 3.3 137.7 77.7 215.4
Over time 17.7 -- -- -- 17.7 -- 17.7
Revenue outside the
scope of IFRS 15 53.4 2.0 -- -- 55.4 -- 55.4
191.8 14.8 0.9 3.3 210.8 77.7 288.5
------------------------ ------------ ------------- ------- ----- ------------- ------------------ -----
Year ended 31 December 2020
International Admiral Total Comparison
UK Insurance Insurance Loans Other (continuing) (discontinued)(*2) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------- ------- ----- ------------- ------------------- -----
Major products/ service
line
Comparison(*1) -- -- -- 5.9 5.9 161.9 167.8
Instalment income 102.4 4.0 -- -- 106.4 -- 106.4
Fee and commission revenue 155.3 21.8 1.6 -- 178.7 -- 178.7
Revenue from law firm 26.7 -- -- -- 26.7 -- 26.7
Other 11.1 -- -- 0.6 11.7 -- 11.7
Total other revenue 295.5 25.8 1.6 6.5 329.4 161.9 491.3
Profit commission 132.4 1.6 -- -- 134.0 -- 134.0
Total other revenue and
profit commission 427.9 27.4 1.6 6.5 463.4 161.9 625.3
-------------------------- ------------ ------------- ------- ----- ------------- ------------------- -----
Timing of revenue
recognition
Point in time 267.1 21.8 1.6 6.5 297.0 161.9 458.9
Over time 28.4 -- -- -- 28.4 -- 28.4
Revenue outside the scope
of IFRS 15 132.4 5.6 -- -- 138.0 -- 138.0
427.9 27.4 1.6 6.5 463.4 161.9 625.3
-------------------------- ------------ ------------- ------- ----- ------------- ------------------- -----
*1 -- Comparison revenue excludes GBP7.7 million (30 June 2020:
GBP10.0 million, 31 December 2020: GBP22.2 million) of income from
other Group companies, including GBP7.6 million (30 June 2020:
GBP9.9 million, 31 December 2020: GBP22.0 million) from
discontinued operations
*2 -- See note 13 for further detail on discontinued
operations
Instalment income is recognised applying the effective interest
rate over the term of the policy, and is outside the scope of IFRS
15. Profit commission from reinsurers is recognised under IFRS 4,
and is discussed further in note 5 to the financial statements.
9. Expenses
9a. Operating expenses and share scheme charges
30 June 2021
Recoverable
from co- and
Gross reinsurers Net
Continuing operations GBPm GBPm GBPm
Acquisition of insurance contracts 89.5 (56.3) 33.2
Administration and other marketing costs (insurance
contracts) 229.6 (165.6) 64.0
Insurance contract expenses 319.1 (221.9) 97.2
Administration and other marketing costs (other) 74.5 -- 74.5
Share scheme charges 47.2 (16.6) 30.6
Movement in the expected credit loss provision 5.1 -- 5.1
Total expenses and share scheme charges -- continuing
operations 445.9 (238.5) 207.4
------------------------------------------------------ ----- ------------- -----
Re-presented
30 June 2020
Recoverable
from co- and
Gross reinsurers Net
Continuing operations GBPm GBPm GBPm
Acquisition of insurance contracts 80.1 (52.6) 27.5
Administration and other marketing costs (insurance
contracts) 217.9 (158.2) 59.7
Insurance contract expenses 298.0 (210.8) 87.2
Administration and other marketing costs (other) 63.0 -- 63.0
Share scheme charges 33.7 (12.4) 21.3
Movement in expected credit loss provision 18.6 -- 18.6
Total expenses and share scheme charges -- continuing
operations 413.3 (223.2) 190.1
------------------------------------------------------ ----- ------------- -----
31 December 2020
Recoverable
from co- and
Gross reinsurers Net
Continuing operations GBPm GBPm GBPm
Acquisition of insurance contracts 166.2 (106.8) 59.4
Administration and other marketing costs (insurance
contracts) 437.4 (321.0) 116.4
Insurance contract expenses 603.6 (427.8) 175.8
Administration and other marketing costs (other) 131.3 -- 131.3
Share scheme charges 79.7 (28.8) 50.9
Movement in expected credit loss provision 33.6 -- 33.6
Total expenses and share scheme charges -- continuing
operations 848.2 (456.6) 391.6
------------------------------------------------------ ----- ------------- -----
The GBP64.0 million (H1 2020: GBP59.7 million, FY 2020: GBP116.4
million) administration and marketing costs allocated to insurance
contracts is principally made up of salary costs.
Analysis of other administration and other marketing costs:
30 June 30 June
2021 2020 31 December 2020
Continuing operations GBPm GBPm GBPm
Expenses relating to additional products
and fees 43.0 42.2 80.6
Loans expenses (excluding movement on ECL
provision) 9.8 8.8 16.8
Other expenses 21.7 12.0 33.9
Total 74.5 63.0 131.3
------------------------------------------ ------- ------- ----------------
Refer to note 14 for a reconciliation between insurance contract
expenses and the reported expense ratio.
9b. Staff share schemes
Total share scheme costs for the continuing operations of the
Group are analysed below:
30 June 2021
SIP(*1) charge DFSS(*2) charge Total charge
----------------- --------------
Gross Net Gross Net Gross Net
GBPm GBPm GBPm GBPm GBPm GBPm
------- ------- -------- ------- ------ ------
IFRS 2 charge for
equity settled share
schemes 8.7 5.8 22.0 14.3 30.7 20.1
IFRS 2 charge for
cash settled share
schemes -- -- 2.5 1.4 2.5 1.4
Total IFRS 2 charge 8.7 5.8 24.5 15.7 33.2 21.5
Social security costs
on IFRS 2 charge 0.6 0.4 5.7 3.9 6.3 4.3
Discretionary bonus
on shares allocated
but unvested -- -- 7.7 4.8 7.7 4.8
Total share scheme
charges 9.3 6.2 37.9 24.4 47.2 30.6
--------------------- ------- ------- -------- ------- ------ ------
Re-presented 30 June 2020
SIP(*1) charge DFSS(*2) charge Total charge
---------------- ----------------- --------------
Gross Net Gross Net Gross Net
GBPm GBPm GBPm GBPm GBPm GBPm
------- ------- -------- ------- ------ ------
IFRS 2 charge for
equity settled share
schemes 8.5 5.7 15.2 9.5 23.7 15.2
IFRS 2 charge for
cash settled share
schemes -- -- 1.2 0.7 1.2 0.7
Total IFRS 2 charge 8.5 5.7 16.4 10.2 24.9 15.9
Social security costs 0.9 0.5 2.7 1.8 3.6 2.3
Discretionary bonus
on shares allocated
but unvested -- -- 5.2 3.1 5.2 3.1
Total share scheme
charges 9.4 6.2 24.3 15.1 33.7 21.3
--------------------- ------- ------- -------- ------- ------ ------
Re-presented 31 December 2020
SIP(*1) charge DFSS(*2) charge Total charge
----------------- --------------
Gross Net Gross Net Gross Net
GBPm GBPm GBPm GBPm GBPm GBPm
------- ------- -------- ------- ------ ------
IFRS 2 charge for
equity settled share
schemes 17.3 11.6 34.3 21.8 51.6 33.4
IFRS 2 charge for
cash settled share
schemes -- -- 3.9 2.2 3.9 2.2
Total IFRS 2 charge 17.3 11.6 38.2 24.0 55.5 35.6
Social security costs
on IFRS 2 charge 1.7 1.1 8.4 5.7 10.1 6.8
Discretionary bonus
on shares allocated
but unvested -- -- 14.1 8.5 14.1 8.5
Total share scheme
charges 19.0 12.7 60.7 38.2 79.7 50.9
--------------------- ------- ------- -------- ------- ------ ------
*1 -- Share Incentive Plan
*2 -- Discretionary Free Share Scheme
For equity settled schemes, the charge, which reflects the fair
value of the employee services received in exchange for the grant
of the free shares, is recognised as an expense, with a
corresponding increase in equity, as shown in the Consolidated
Statement of Changes in Equity of GBP33.2 million (H1 2020: GBP24.9
million, FY 2020: GBP53.8 million).
For the cash settled schemes, the expense recognised for the
fair value of services received results in a corresponding increase
in liabilities.
Net share scheme charges are presented after allocations to
co-insurers (in the UK and Italy) and reinsurers (in the
International Insurance businesses). The proportion of net to gross
share scheme charges would be expected to be consistent in each
period, at approximately 65%.
1. Taxation
10a. Taxation
Re-presented
30 June 30 June 31 December
2021 2020 2020
Continuing operations GBPm GBPm GBPm
Current tax
Corporation tax on profits for the year 81.7 44.1 101.6
Under provision relating to prior periods 7.1 -- 0.6
Current tax charge 88.8 44.1 102.2
Deferred tax
Current period deferred taxation movement (0.6) (3.8) 4.0
Under provision relating to prior periods -- -- --
Total tax charge per Consolidated Income
Statement 88.2 40.3 106.2
------------------------------------------ ------- ------------ -----------
Factors affecting the total tax charge are:
Re-presented
30 June 30 June 31 December
2021 2020 2020
Continuing operations GBPm GBPm GBPm
Profit before tax 482.2 274.4 608.2
---------------------------------------------------- ------- ------------ -----------
Corporation tax thereon at effective UK corporation
tax rate of 19.0% (2020: 19.0%) 91.6 52.1 115.5
Expenses and provisions not deductible for
tax purposes (0.1) -- 0.7
Non-taxable income (3.7) (5.8) (10.5)
Impact of change in UK tax rate on deferred
tax balances 2.6 (0.7) 0.4
Adjustments relating to prior periods 7.1 -- 0.6
Impact of different overseas tax rates (10.4) (5.8) (1.6)
Unrecognised deferred tax 1.1 0.5 1.1
Total tax charge for the period as above 88.2 40.3 106.2
---------------------------------------------------- ------- ------------ -----------
The outstanding corporation tax payable for continuing
operations as at 30 June 2021 was GBP14.3 million (30 June 2020:
GBP10.3 million; 31 December 2020: corporate tax receivable of
GBP22.9 million). See note 13 for details of the corporation tax
charge on discontinued operations, and the related corporation tax
balance as at 30 April 2021.
10b. Deferred income tax asset/ (liability)
The average effective rate of tax for 2021 is 19.0% (2020:
19.0%).
The deferred tax asset at 30 June 2021 has been calculated based
on the rate at which each timing difference is most likely to
reverse.
At 30 June 2021, the Group had unused tax losses amounting to
GBP241.7 million (H1 2020: GBP233.6 million, FY 2020: GBP236.8
million), relating to the Group's US businesses Elephant Auto and
compare.com, for which no deferred tax asset has been
recognized.
11. Other Assets and Other Liabilities
11a. Property and equipment
Improvements
to short ROU Asset
leasehold Computer Office Furniture -- Leasehold
buildings equipment equipment and fittings buildings Total
GBPm GBPm GBPm GBPm GBPm GBPm
Cost
At 1 January 2020 33.4 71.4 22.4 10.6 134.4 272.2
Additions 1.5 5.4 0.2 0.7 0.3 8.1
Disposals -- -- (0.4) (0.1) (0.8) (1.3)
Foreign exchange and other
movements 0.3 0.5 0.4 0.2 1.5 2.9
At 30 June 2020 35.2 77.3 22.6 11.4 135.4 281.9
------------------------------ ------------ ---------- ---------- ------------- ------------- ------
Depreciation
At 1 January 2020 19.8 58.7 18.4 9.1 11.8 117.8
Charge for the year 1.7 3.4 1.1 0.6 6.0 12.8
Disposals -- -- (0.2) (0.1) (0.1) (0.4)
Foreign exchange and other
movements 0.2 0.3 0.1 0.1 0.3 1.0
At 30 June 2020 21.7 62.4 19.4 9.7 18.0 131.2
------------------------------ ------------ ---------- ---------- ------------- ------------- ------
Net book amount
At 1 January 2020 13.6 12.7 4.0 1.5 122.6 154.4
Net book amount
At 30 June 2020 13.5 14.9 3.2 1.7 117.4 150.7
Cost
At 1 January 2020 33.4 71.4 22.4 10.6 134.4 272.2
Transfer of assets associated
with disposal group held
for sale (1.2) (6.2) (0.9) (0.2) (5.5) (14.0)
Additions 3.1 14.1 0.8 0.2 0.1 18.3
Impairment -- -- -- -- (3.1) (3.1)
Disposals -- (0.6) -- (0.3) (1.8) (2.7)
Foreign exchange and other
movements 0.7 (0.1) 0.3 (0.1) 0.1 0.9
At 31 December 2020 36.0 78.6 22.6 10.2 124.2 271.6
Depreciation
At 1 January 2020 19.8 58.7 18.4 9.1 11.8 117.8
Transfer of depreciation
associated with disposal
group held for sale (0.6) (5.2) (0.5) (0.2) (1.6) (8.1)
Charge for the year 3.7 6.8 1.8 0.5 10.8 23.6
Disposals -- (0.7) -- (0.2) (1.5) (2.4)
Foreign exchange and other
movements 0.1 -- 0.3 (0.1) -- 0.3
At 31 December 2020 23.0 59.6 20.0 9.1 19.5 131.2
------------------------------ ------------ ---------- ---------- ------------- ------------- ------
Net book amount
At 31 December 2020 13.0 19.0 2.6 1.1 104.7 140.4
Cost
At 1 January 2021 36.0 78.6 22.6 10.2 124.2 271.6
Additions 1.0 5.1 0.2 0.3 1.3 7.9
Disposals -- -- -- (0.1) (5.0) (5.1)
Foreign exchange and other
movements (0.3) (0.2) (0.2) (0.1) 0.3 (0.5)
At 30 June 2021 36.7 83.5 22.6 10.3 120.8 273.9
------------------------------ ------------ ---------- ---------- ------------- ------------- ------
Depreciation
At 1 January 2021 23.0 59.6 20.0 9.1 19.5 131.2
Charge for the year 2.3 4.1 0.6 0.2 4.8 12.0
Disposals -- -- -- (0.1) -- (0.1)
Foreign exchange and other
movements (0.1) (0.2) (0.2) -- (0.3) (0.8)
At 30 June 2021 25.2 63.5 20.4 9.2 24.0 142.3
------------------------------ ------------ ---------- ---------- ------------- ------------- ------
Net book amount
At 30 June 2021 11.5 20.0 2.2 1.1 96.8 131.6
11b. Intangible assets
Deferred
acquisition
Goodwill costs Software(*1) Total
GBPm GBPm GBPm GBPm
At 1 January 2020 62.3 24.8 73.2 160.3
Additions -- 28.5 7.5 36.0
Amortisation charge -- (27.7) (8.9) (36.6)
Disposals -- -- -- --
Transfers -- -- -- --
Foreign exchange movement -- 0.9 1.6 2.5
At 30 June 2020 62.3 26.5 73.4 162.2
At 1 January 2020 62.3 24.8 73.2 160.3
Additions -- 61.3 24.8 86.1
Amortisation charge -- (59.0) (19.2) (78.2)
Disposals -- -- (1.2) (1.2)
Transfer of assets associated
with disposal group held for sale -- -- (1.2) (1.2)
Foreign exchange movement -- 0.2 0.7 0.9
At 31 December 2020 62.3 27.3 77.1 166.7
Additions -- 31.3 20.7 52.0
Amortisation charge -- (31.3) (8.4) (39.7)
Disposals -- -- -- --
Transfers -- -- -- --
Foreign exchange movement -- (0.6) (1.0) (1.6)
At 30 June 2021 62.3 26.7 88.4 177.4
----------------------------------- -------- ------------ ------------ ------
*1 Software additions relating to internal development are
immaterial in both 2021 and 2020. Gross carrying amount and
accumulated amortisation of software as at 30 June 2021 are
GBP203.3 million (30 June 2020: GBP178.8 million; 31 December 2020:
GBP184.8 million) and GBP114.9 million respectively (30 June 2020:
GBP105.3 million; 31 December 2020: GBP107.7 million).
Goodwill relates to the acquisition of Group subsidiary EUI
Limited (formerly Admiral Insurance Services Limited) in November
1999. The amortisation of this asset ceased on transition to IFRS
on 1 January 2004. All annual impairment reviews since the
transition date have indicated that the estimated recoverable value
of the asset is greater than the carrying amount and therefore no
impairment losses have been recognised. Refer to the accounting
policy for goodwill in the 2020 financial statements for further
information.
An analysis of deferred acquisition costs is given in the table
below:
Gross Reinsurance Total
GBPm GBPm GBPm
At 1 January 2020 74.6 (49.8) 24.8
Additions 77.9 (49.4) 28.5
Amortisation (81.8) 54.1 (27.7)
Foreign exchange movement 2.4 (1.5) 0.9
At 30 June 2020 73.1 (46.6) 26.5
-------------------------- ------- ----------- ------
At 1 January 2020 74.6 (49.8) 24.8
Additions 168.4 (107.1) 61.3
Amortisation (166.4) 107.4 (59.0)
Foreign exchange movement 1.0 (0.8) 0.2
At 31 December 2020 77.6 (50.3) 27.3
-------------------------- ------- ----------- ------
Additions 85.3 (54.0) 31.3
Amortisation (85.1) 53.8 (31.3)
Foreign exchange movement (1.4) 0.8 (0.6)
At 30 June 2021 76.4 (49.7) 26.7
-------------------------- ------- ----------- ------
11c. Trade and other payables
Restated
30 June 30 June
2021 2020(*1) 31 December 2020
GBPm GBPm GBPm
Trade payables 40.5 30.9 34.9
Amounts owed to co-insurers 128.3 198.3 240.9
Amounts owed to reinsurers 1,131.0 1,067.6 1,262.8
Other taxation and social security
liabilities 80.7 79.6 72.9
Other payables 151.5 168.2 135.6
Accruals and deferred income 251.8 233.2 244.1
Total trade and other payables 1,783.8 1,777.8 1,991.2
---------------------------------------- ------- --------- ----------------
*1 Other payables and accruals and deferred income balances in
H1 2020 have been restated to better reflect the nature of the
underlying balances
Of amounts owed to reinsurers, GBP1,029.9 million (H1 2020:
GBP949.2 million, FY 2020: GBP1,175.1 million) is held under funds
withheld arrangements.
11d. Contingent liabilities
The Group's legal entities operate in numerous tax jurisdictions
and on a regular basis are subject to review and enquiry by the
relevant tax authority.
One of the Groups' previously owned subsidiaries was subject to
a Spanish Tax Audit which concluded with the Tax Authority denying
the application of the VAT exemption relating to insurance
intermediary
services. The company has appealed this decision via the Spanish Courts and is confident in defending its position which is, in its view, in line with the EU Directive and is also consistent with the way similar supplies are treated throughout Europe. Whilst the company is no longer part of the Admiral Group, the contingent liability which the company is exposed to has been indemnified by the Admiral Group up to a cap of GBP22 million.
The Group is also in discussions with tax authorities in Italy
and Spain
on various corporate tax matters. To date these discussions have focused primarily on the transfer pricing and cross-border arrangements in place between the Group's intermediaries and insurers.
No provision has been made in these Financial Statements in
relation to the matters noted above
The Group is, from time to time, subject to threatened or actual
litigation and/or legal and/or regulatory disputes, investigations
or similar actions both in the UK and overseas. All potentially
material matters are assessed, with the assistance of external
advisers if appropriate, and in cases where it is concluded that it
is more likely than not that a payment will be made, a provision is
established to reflect the best estimate of the liability. In some
cases it will not be possible to form a view, for example if the
facts are unclear or because further time is needed to properly
assess the merits of the case. In these circumstances, specific
disclosure of a contingent liability will be made where
material.
The Directors do not consider that the final outcome of any such
current case will have a material adverse effect on the Group's
financial position, operations or cash flows, and no material
provisions are currently held in relation to such matters.
12. Dividends, Earnings and Share Capital
12a. Dividends
Dividends were proposed, approved and paid as follows.
30 June 30 June
2021 2020 31 December 2020
GBPm GBPm GBPm
-------------------------------------------------------- ---------- ---------- ------------------
Proposed, March 2020 (56.3p approved April 2020 and
paid June 2020)(*) (1) -- 162.3 162.3
Declared August 2020 (91.2 pence per share, including
20.7 pence per share deferred, paid October 2020) -- -- 263.4
Proposed, March 2021 (86.0 pence per share, approved
April 2021 and paid June 2021) 250.8 -- --
-------------------------------------------------------- ---------- ---------- ------------------
Total 250.8 162.3 425.7
-------------------------------------------------------- ---------- ---------- ------------------
*1 56.3 pence of proposed 2019 final dividend of 77.0 pence was
approved in April 2020 and paid in June 2020, with the remaining
special dividend of 20.7 pence per share being deferred and later
paid in October 2020
The dividends proposed in March (approved in April) represent
the final dividends paid in respect of the 2019 and 2020 financial
years. The dividend declared in August reflects the 2020 interim
dividend.
A 2021 interim dividend of 161.0 pence per share (approximately
GBP469 million) has been declared, reflecting 115.0 pence per share
relating to continuing operations, and 46.0 pence per share as the
first special dividend relating to the disposal of the Penguin
Portal comparison businesses.
12b. Earnings per share
Re-presented
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Profit for the financial year after
taxation attributable to equity shareholders
-- continuing operations 394.7 234.4 502.9
---------------------------------------------- ------------ ------------ -----------
Profit for the financial year after
taxation attributable to equity shareholders
-- discontinued operations 412.9 9.3 25.9
---------------------------------------------- ------------ ------------ -----------
Profit for the financial year after
taxation attributable to equity shareholders
-- continuing and discontinued operations 807.6 243.7 528.8
---------------------------------------------- ------------ ------------ -----------
Weighted average number of shares --
basic 296,881,162 293,877,486 294,563,978
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- basic
-- continuing operations 132.9p 79.7p 170.7p
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- basic
-- discontinued operations 139.1p 3.2p 8.8p
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- basic
-- continuing and discontinued operations 272.0p 82.9p 179.5p
---------------------------------------------- ------------ ------------ -----------
Weighted average number of shares --
diluted 297,315,818 294,464,776 295,034,233
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- diluted 132.7p 79.6p 170.4p
-- continuing operations
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- diluted 138.9p 3.2p 8.8p
-- discontinued operations
---------------------------------------------- ------------ ------------ -----------
Unadjusted earnings per share -- diluted 271.6p 82.8p 179.2p
-- continuing and discontinued operations
---------------------------------------------- ------------ ------------ -----------
The difference between the basic and diluted number of shares at
the end the period (being 434,656; 30 June 2020: 587,290 31
December 2020: 470,255) relates to awards committed, but not yet
issued under the Group's share schemes.
12c. Share capital
30 June 30 June
2021 2020 31 December 2020
GBPm GBPm GBPm
Authorised
500,000,000 ordinary shares of 0.1 pence 0.5 0.5 0.5
Issued, called up and fully paid
296,692,063 ordinary shares of 0.1p -- -- 0.3
294,037,749 ordinary shares of 0.1p -- 0.3 --
297,021,168 ordinary shares of 0.1p 0.3 -- --
Total share capital 0.3 0.3 0.3
----------------------------------------- ------- ------- ----------------
During the first half of 2021, 329,105 (HY 2020: 351,420; FY
2020: 3,005,734) new ordinary shares of 0.1p were issued to the
trusts administering the Group's share schemes.
329,105 (HY 2020: 351,420; FY 2020: 775,734) of these were
issued to the Admiral Group Share Incentive Plan Trust for the
purposes of this share scheme.
No shares (HY 2020: nil; FY 2020: 2,250,000) were issued to the
Admiral Group Employee Benefit Trust for the purposes of the
Discretionary Free Share Scheme.
12d. Objectives, policies and procedures for managing capital
The Group manages its capital to ensure that all entities within
the Group can continue as going concerns and 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.
The Group's dividend policy is to pay 65% of post-tax profits as
a normal dividend and to pay a further special dividend comprising
earnings not required to be held in the Group for solvency or
buffers.
Refer to the financial review for further information about the
Group's capital structure and financial
position.
12e. Related party transactions
Details relating to the remuneration and shareholdings of key
management personnel are set out in the Directors' Remuneration
Report within the Group's 2020 Annual Report. Key management
personnel can obtain discounted motor insurance at the same rates
as all other Group staff.
The Board considers that Executive and Non-Executive Directors
of Admiral Group plc are key management personnel. Aggregate
compensation for the Executive and Non-Executive Directors is
disclosed in the Directors' Remuneration Report in the 2020 Annual
Report.
13. Discontinued Operations
13a. Background
On 29 December 2020, the Group announced that it had reached an
agreement with ZPG Comparison Services Holdings UK Limited ("RVU")
that RVU would purchase the Penguin Portals Group ("Penguin
Portals", comprising online comparison portals Confused.com,
Rastreator.com and LeLynx.fr and the Group's technology operation
Admiral Technologies) and its 50% share of Preminen Price
Comparison Holdings Limited ("Preminen"). MAPFRE would also sell
its 25% holding in Rastreator and 50% holding in Preminen as part
of the transaction.
As such, management considered these entities to meet the
definition of a disposal group as set out under IFRS 5 above. The
disposal group is included within the "Discontinued (comparison)"
operating segment as stated in note 4.
On 30 April 2021, the Group announced that, following regulatory
and competition authority approvals, RVU had completed the purchase
of the Penguin Portals Group and Admiral's 50% share of Preminen.
MAPFRE also sold its 25% holding in Rastreator and 50% holding in
Preminen to RVU. The total transaction value was settled in cash on
completion.
13b. Financial performance
Financial information relating to the discontinued operations
for the period ending 30 June 2021 and 2020 are presented below.
The results for the period ending 30 June 2021 relates to the
period prior to completion on 30 April 2021, and the gain
recognised on disposal.
30 June 2021 30 June 2020
Gross Eliminations Net Gross Eliminations Net
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 67.2 (7.6) 59.6 87.6 (9.9) 77.7
Net Revenue 67.2 (7.6) 59.6 87.6 (9.9) 77.7
Operating expenses
and share scheme
charges (55.8) 7.6 (48.2) (75.9) 9.9 (66.0)
----------------------
Operating profit 11.4 -- 11.4 11.7 -- 11.7
Finance costs (0.1) -- (0.1) -- -- --
Gain on disposal
sale of Comparison
entities held for
sale 404.4 -- 404.4 -- -- --
----------------------
Profit before tax
from discontinued
operations 415.7 -- 415.7 11.7 -- 11.7
Taxation expense (2.3) -- (2.3) (2.8) -- (2.8)
Profit after tax
from discontinued
operations 413.4 -- 413.4 8.9 -- 8.9
---------------------- ------ ------------ ------ ------ ------------ ------
31 December 2020
Gross Eliminations Net
GBPm GBPm GBPm
Revenue 183.9 (22.0) 161.9
Net Revenue 183.9 (22.0) 161.9
Operating expenses and share scheme charges (154.4) 22.0 (132.4)
Operating profit 29.5 -- 29.5
Finance costs (0.1) -- (0.1)
Profit before tax from discontinued operations 29.4 -- 29.4
Taxation expense (3.6) -- (3.6)
Profit after tax from discontinued operations 25.8 -- 25.8
---------------------------------------------- ------- ------------ -------
Operating expenses and share scheme charges include GBP0.5
million (HY 2020: GBP1.6 million, FY 2020: GBP3.1 million) of share
scheme expenses that are not included in the segmental result in
note 4.
13c. Assets disposed of
Consideration received consisted of cash only and was received
at the point of completion. The total consideration received by the
Group in cash was GBP471.8 million. This excludes any costs
incurred by the Group in relation to the sale. The total gain on
disposal is GBP404.4 million.
The carrying amount of assets and liabilities as at the date of
sale (30 April 2021) were:
30 April 2021
GBPm
Assets
Property, plant and equipment 5.4
Intangible assets 1.1
Deferred tax asset 4.2
Trade and other receivables 41.9
Corporation tax asset 0.2
Cash and cash equivalents 41.3
Total Assets 94.1
Liabilities
Trade payables and other liabilities 33.3
Lease Liabilities 3.6
Total liabilities 36.9
Net Assets 57.2
------------------------------------- -------------
13d. Gain on disposal
30 June
2021
GBPm
Gross sales proceeds 508.1
Accrued sale proceeds less dividends received
prior to disposal and costs to sell recharged
from purchaser (7.4)
Non-controlling interest share of sales proceeds (28.9)
Total Admiral Group cash received (note 13c) 471.8
Costs to sell incurred by seller, out of proceeds (17.6)
Proceeds to Admiral, net of minority interests
and transaction costs 454.2
Assets held for sale (Note 13c) (57.2)
Non-controlling interest share of assets held
for sale 6.6
Other adjustments 0.8
Gain on disposal of comparison entities held
for sale 404.4
-------------------------------------------------- -------
14. Reconciliations
The following tables reconcile significant Key Performance
Indicators (KPIs) and Alternative Performance Measures (APMs)
included in the financial review above to items included in the
financial statements.
14a. Reconciliation of turnover to reported total premiums written and other revenue as per the financial statements
30 June 30 June 31 December
2021 2020 2020
GBPm GBPm GBPm
Gross premiums written after co-insurance
per note 5a of financial statements 1,253.9 1,119.8 2,344.0
Premiums underwritten through co-insurance
arrangements 299.2 279.5 613.2
Total premiums written 1,553.1 1,399.3 2,957.2
Other Revenue(*) (1) 152.5 166.2 329.4
Admiral Loans interest income and other
fee income 15.7 19.8 36.8
1,721.3 1,585.3 3,323.4
Other(*) (2) 25.1 16.6 42.4
Turnover as per note 4 of financial statements
(*) (3) 1,746.4 1,601.9 3,365.8
Intra-group income elimination(*) (4) 0.1 0.1 0.2
Total turnover(*) (1 *) (3) 1,746.5 1,602.0 3,366.0
----------------------------------------------- ------- ------- -----------
*1 Continuing operations
*2 Other reconciling items represent co-insurer and reinsurer
shares of Other Revenue in the Group's Insurance businesses outside
of UK Car Insurance
*3 See note 14d for the impact of the "Stay at home" premium
refund issued to UK motor insurance customers on Turnover in H1
2020.
*4 Intra-group income elimination related to comparison income
earned by compare.com from other Group entities.
14b. Reconciliation of claims incurred to reported loss ratio, excluding releases on commuted reinsurance
Int. Int.
UK Motor UK Home UK other(*1) UK Total Int. other Total Other Group
June 2021 GBPm GBPm GBPm GBPm Car GBPm GBPm GBPm GBPm GBPm
Net insurance claims (16.6) 14.7 10.0 8.1 82.1 2.5 84.6 3.1 95.8
Deduct claims handling
costs (6.1) (0.7) -- (6.8) (4.4) -- (4.4) (0.1) (11.3)
Prior year release/strengthening
-- net original share 81.1 1.2 -- 82.3 6.5 -- 6.5 -- 88.8
Prior year release/strengthening
-- commuted share 118.3 0.8 -- 119.1 -- -- -- -- 119.1
Impact of reinsurer
caps -- -- -- -- 0.7 -- 0.7 -- 0.7
Attritional current
period claims 176.7 16.0 10.0 202.7 84.9 2.5 87.4 3.0 293.1
-------- ------- ------------ -------- --------- ------ ------ ----- -------
Net insurance premium
revenue 242.4 23.3 29.9 295.6 111.7 4.3 116.0 4.6 416.2
Loss ratio -- current
period attritional 72.9% 68.8% -- -- 76.0% -- -- -- 70.4%
Loss ratio -- prior
year release/strengthening
(net original share) (33.5%) (5.2%) -- -- (5.8%) -- -- -- (21.3%)
Loss ratio -- reported 39.4% 63.6% -- -- 70.2% -- -- -- 49.1%
-------- ------- ------------ -------- --------- ------ ------ ----- -------
Int. Int. Int.
UK Motor UK Home UK Other UK Total Car Other Total Group
June 2020 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Net insurance claims 48.9 15.0 12.3 76.2 63.3 1.8 65.1 141.3
Deduct claims handling
costs (5.9) (0.6) -- (6.5) (4.8) -- (4.8) (11.3)
Prior year release/strengthening
-- net original share 64.2 2.8 -- 67.0 11.7 -- 11.7 78.7
Prior year release/strengthening
-- commuted share 60.0 -- -- 60.0 -- -- -- 60.0
Impact of reinsurer
caps -- -- -- -- 1.8 -- 1.8 1.8
Impact of weather
events -- (2.3) -- (2.3) -- -- -- (2.3)
Attritional current
period claims 167.2 14.9 12.3 194.4 72.0 1.8 73.8 268.2
-------- ------- -------- -------- ------- ------ ------ -------
Net insurance premium
revenue 208.5 20.9 22.3 251.7 95.5 3.6 99.1 350.8
Loss ratio -- current
period attritional 80.2% 71.3% -- -- 75.4% -- -- 76.4%
Loss ratio -- current
period weather events -- 11.1% -- -- -- -- -- 0.7%
Loss ratio -- prior
year release/strengthening
(net original share) (30.8%) (13.4%) -- -- (12.2%) -- -- (22.4%)
Loss ratio -- reported 49.4% 69.0% -- -- 63.2% -- -- 54.7%
Int. Int.
UK Motor UK Home UK Other UK Total Int. Other Total Group
December 2020 GBPm GBPm GBPm GBPm Car GBPm GBPm GBPm GBPm
Net insurance claims 97.1 29.3 23.8 150.2 139.3 3.7 143.0 293.2
Deduct claims handling
costs (12.3) (1.3) -- (13.6) (9.8) -- (9.8) (23.4)
Prior year release/strengthening
-- net original share 104.3 2.8 -- 107.1 18.6 -- 18.6 125.7
Prior year release/strengthening
-- commuted share 137.3 -- -- 137.3 -- -- -- 137.3
Impact of reinsurer
caps -- -- -- -- 1.9 -- 1.9 1.9
Impact of weather events -- (2.3) -- (2.3) -- -- -- (2.3)
Attritional current
period claims 326.4 28.5 23.8 378.7 150.0 3.7 153.7 532.4
-------- ------- -------- -------- --------- ------ ------ -------
Net insurance premium
revenue 451.4 43.2 45.2 539.8 204.2 7.6 211.8 751.6
Loss ratio -- current
period attritional 72.3% 65.9% -- 70.2% 73.4% -- -- 70.8%
Loss ratio -- current
period weather events -- 5.3% -- 0.4% -- -- -- 0.3%
Loss ratio -- prior
year release/strengthening
(net original share) (23.1%) (6.4%) -- (19.8%) (9.1%) -- -- (16.7%)
Loss ratio -- reported 49.2% 64.8% -- 50.8% 64.3% -- -- 54.4%
(*1) 'UK other' includes travel insurance and underwritten
ancillaries; 'Int. other' includes underwritten ancillaries
14c. Reconciliation of expenses related to insurance contracts to reported expense ratio
Int.
UK Other Int. Other Int.
UK Motor UK Home GBPm(*) UK Total Car GBPm(*) Total Group
June 2021 GBPm GBPm (2) GBPm GBPm (2) GBPm Other GBPm
Net insurance expenses 39.8 6.9 1.8 48.5 44.5 1.8 46.3 2.4 97.2
Claims handling costs 6.1 0.7 -- 6.8 4.4 -- 4.4 0.1 11.3
Intra-group expenses
elimination(*1) -- -- -- -- 0.1 -- 0.1 -- 0.1
Impact of reinsurer
caps -- -- -- -- -- -- -- -- --
Net IFRS 16 finance
costs 0.1 -- -- 0.1 0.1 -- 0.1 -- 0.2
Adjusted net insurance
expenses 46.0 7.6 1.8 55.4 49.1 1.8 50.9 2.5 108.8
-------- ------- -------- -------- ----- -------- ------ ----- -----
Net insurance premium
revenue 242.4 23.3 29.9 295.6 111.7 4.3 116.0 4.6 416.2
Expense ratio --
reported 19.0% 32.5% -- -- 43.9% -- -- -- 26.1%
Int.
UK Other Int. Other Int.
UK Motor UK Home GBPm(*) UK Total Car GBPm(*) Total Group
June 2020 GBPm GBPm (2) GBPm GBPm (2) GBPm GBPm
Net insurance expenses 38.4 6.6 2.8 47.8 37.6 1.8 39.4 87.2
Claims handling costs 5.9 0.6 -- 6.5 4.8 -- 4.8 11.3
Intra-group expenses
elimination(*1) -- -- -- -- 0.1 -- 0.1 0.1
Impact of reinsurer
caps -- -- -- -- 0.3 -- 0.3 0.3
Net IFRS 16 finance
costs 0.2 -- -- 0.2 -- -- -- 0.2
Adjusted net insurance
expenses 44.5 7.2 2.8 54.5 42.8 1.8 44.6 99.1
-------- ------- -------- -------- ----- -------- ------ -----
Net insurance premium
revenue 208.5 20.9 22.3 251.7 95.5 3.6 99.1 350.8
Expense ratio --
reported 21.3% 34.2% -- -- 44.8% -- -- 28.3%
Int.
UK Other Int. Other Int.
UK Motor UK Home GBPm UK Total Car GBPm(*) Total Group
December 2020 GBPm GBPm (*) (2) GBPm GBPm (2) GBPm GBPm
Net insurance expenses 76.7 11.4 5.2 93.3 78.5 4.0 82.5 175.8
Claims handling costs 12.3 1.3 -- 13.6 9.8 -- 9.8 23.4
Intra-group expenses
elimination(*1) -- -- -- -- 0.2 -- 0.2 0.2
Impact of reinsurer
caps -- -- -- -- 1.1 -- 1.1 1.1
Net IFRS 16 finance
costs 0.5 -- -- 0.5 0.1 -- 0.1 0.6
Adjusted net insurance
expenses 89.5 12.7 5.2 107.4 89.7 4.0 93.7 201.1
-------- ------- -------- -------- ----- -------- ------ -----
Net insurance premium
revenue 451.4 43.2 45.2 539.8 204.2 7.6 211.8 751.6
Expense ratio --
reported 19.8% 29.4% -- 19.9% 43.9% -- -- 26.8%
*1 The intra-group expenses elimination amount relates to
aggregator fees charges by the Group's comparison entities to other
Group companies: given the re-presentation of other comparison
businesses to discontinued operations, those expenses are now
included in net insurance expenses in note 9, as acquisition
costs
*2 'UK other' includes travel insurance and underwritten
ancillaries; 'Int. other' includes underwritten ancillaries
14d. Reconciliation of Impact of "Stay at Home" premium refund issued to UK motor insurance customers on Turnover, Total written premiums, Gross written premiums and net insurance premium revenue
30 June and
31 December
20
GBPm
Total "stay at home" premium refund issued to
UK motor insurance customers 110.0
Insurance premium tax (12.7)
Impact of premium refund on turnover and total
written premium 97.3
Co-insurer share of premium refund (27.3)
Impact of premium refund on gross written premium
and gross earned premium 70.0
Reinsurer share of premium refund on reinsurers'
written and earned premium (48.9)
Impact of premium refund on net insurance premium
revenue (written and earned) 21.1
-------------------------------------------------- ------------
There is no impact of the premium refund on Turnover, Total
written premiums, Gross written premiums or net insurance premium
revenue in the period ended 30 June 2021.
15. Statutory Information
The financial information above does not constitute the
Company's statutory accounts. Statutory accounts for 2020 have been
delivered to the Registrar of Companies, and those for 2021 will be
delivered in due course. The auditors have reported on the
statutory accounts for 2020, and their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Glossary
Alternative Performance Measures
Throughout this report, the Group uses a number of Alternative
Performance Measures (APMs); measures that are not required or
commonly reported under International Financial Reporting
Standards, the Generally Accepted Accounting Principles (GAAP)
under which the Group prepares its financial statements.
These APMs are used by the Group, alongside GAAP measures, for
both internal performance analysis and to help shareholders and
other users of the Annual Report and financial statements to better
understand the Group's performance in the period in comparison to
previous periods and the Group's competitors.
The table below defines and explains the primary APMs used in
this report. Financial APMs are usually derived from financial
statement items and are calculated using consistent accounting
policies to those applied in the financial statements, unless
otherwise stated. Non-financial KPIs incorporate information that
cannot be derived from the financial statements but provide further
insight into the performance and financial position of the
Group.
APMs may not necessarily be defined in a consistent manner to
similar APMs used by the Group's competitors. They should be
considered as a supplement rather than a substitute for GAAP
measures.
Turnover Turnover is defined as total premiums written (as below),
other revenue and income from Admiral Loans. It is reconciled
to financial statement line items in note 14a to the
financial statements. It has been redefined in the current
period to exclude revenue from discontinued operations.
This measure has been presented by the Group in every
Annual Report since it became a listed Group in 2004.
It reflects the total value of the revenue generated
by the Group and analysis of this measure over time provides
a clear indication of the size and growth of the Group.
The measure was developed as a result of the Group's
business model. The UK Car insurance business has historically
shared a significant proportion of the risks with Munich
Re, a third party reinsurance Group, through a co-insurance
arrangement, with the arrangement subsequently being
replicated in some of the Group's international insurance
operations. Premiums and claims accruing to the external
co-insurer are not reflected in the Group's income statement
and therefore presentation of this metric enables users
of the Annual Report to see the scale of the Group's
insurance operations in a way not possible from taking
the income statement in isolation.
In 2020 a "Stay at Home" premium rebate of GBP25 per
vehicle was issued to UK motor insurance customers. The
total refunded was GBP110 million. Of this total, GBP97
million was reflected within the 2020 total premiums
written, and therefore, turnover metric, with the remaining
amount reflecting insurance premium tax.
--------------- ---------------------------------------------------------------
Total Premiums Total premiums written are the total forecast premiums,
Written net of forecast cancellations written in the underwriting
year within the Group, including co-insurance. It is
reconciled to financial statement line items in note
14a to the financial statements.
This measure has been presented by the Group in every
Annual Report since it became a listed Group in 2004.
It reflects the total premiums written by the Group's
insurance intermediaries and analysis of this measure
over time provides a clear indication of the growth in
premiums, irrespective of how co-insurance agreements
have changed over time.
The reasons for presenting this measure are consistent
with that for the Turnover APM noted above.
As noted in the Turnover metric above, in 2020 a reduction
of GBP97 million has been reflected within 2020 total
premiums written, to reflect the "Stay at Home" premium
rebate.
--------------- ---------------------------------------------------------------
Group profit Group's profit before tax represents profit before tax
before tax from continuing and discontinued operations.
--------------- ---------------------------------------------------------------
Underwriting For each insurance business an underwriting result is
result (profit presented showing the segment result prior to the inclusion
or loss) of profit commission, other income contribution and instalment
income. It demonstrates the insurance result, i.e. premium
revenue and investment income on insurance assets less
claims incurred and insurance expenses.
--------------- ---------------------------------------------------------------
Loss Ratio Reported loss ratios are expressed as a percentage of
claims incurred divided by net earned premiums.
There are a number of instances within the Annual Report
where adjustments are made to this calculation in order
to more clearly present the underlying performance of
the Group and operating segments within the Group. The
calculations of these are presented within note 14b to
the accounts and explanation is as follows.
UK reported motor loss ratio: Within the UK insurance
segment the Group separately presents motor ratios, i.e.
excluding the underwriting of other products that supplement
the car insurance policy. The motor ratio is adjusted
to i) exclude the impact of reserve releases on commuted
reinsurance contracts and ii) exclude claims handling
costs that are reported within claims costs in the income
statement.
International insurance loss ratio: As for the UK Motor
loss ratio, the international insurance loss ratios presented
exclude the underwriting of other products that supplement
the car insurance policy. The motor ratio is adjusted
to exclude the claims element of the impact of reinsurer
caps as inclusion of the impact of the capping of reinsurer
claims costs would distort the underlying performance
of the business.
Group loss ratios: Group loss ratios are reported on
a consistent basis as the UK and international ratios
noted above. Adjustments are made to i) exclude the impact
of reserve releases on commuted reinsurance contracts,
ii) exclude claims handling costs that are reported within
claims costs in the income statement and iii) exclude
the claims element of the impact of international reinsurer
caps.
--------------- ---------------------------------------------------------------
Expense Ratio Reported expense ratios are expressed as a percentage
of net operating expenses divided by net earned premiums.
There are a number of instances within the Annual Report
where adjustments are made to this calculation in order
to more clearly present the underlying performance of
the Group and operating segments within the Group. The
calculations of these are presented within note 14c to
the accounts and explanation is as follows.
UK reported motor expense ratio: Within the UK insurance
segment the Group separately presents motor ratios, i.e.
excluding the underwriting of other products that supplement
the car insurance policy. The motor ratio is adjusted
to i) include claims handling costs that are reported
within claims costs in the income statement and ii) include
intra-group aggregator fees charged by the UK comparison
business to the UK insurance business.
International insurance expense ratio: As for the UK
Motor loss ratio, the international insurance expense
ratios presented exclude the underwriting of other products
that supplement the car insurance policy. The motor ratio
is adjusted to i) exclude the expense element of the
impact of reinsurer caps as inclusion of the impact of
the capping of reinsurer expenses would distort the underlying
performance of the business and ii) include intra-group
aggregator fees charged by the overseas comparison businesses
to the international insurance businesses.
Group expense ratios: Group expense ratios are reported
on a consistent basis as the UK and international ratios
noted above. Adjustments are made to i) include claims
handling costs that are reported within claims costs
in the income statement, ii) include intra-group aggregator
fees charged by the Group's comparison businesses to
the Group's insurance businesses and iii) exclude the
expense element of the impact of international reinsurer
caps.
--------------- ---------------------------------------------------------------
Combined Ratio Reported combined ratios are the sum of the loss and
expense ratios as defined above. Explanation of these
figures is noted above and reconciliation of the calculations
are provided in notes 14b and 14c.
--------------- ---------------------------------------------------------------
Return on Return on equity is calculated as profit after tax from
Equity continuing operations for the period attributable to
equity holders of the Group divided by the average total
equity attributable to equity holders of the Group in
the year excluding any net assets related to discontinued
operations, including the exclusion of the net proceeds
from sale still to be distributed. This average is determined
by dividing the opening and closing positions for the
year by two. It has been redefined in the current period
to exclude the impact of discontinued operations.
--------------- ---------------------------------------------------------------
Group Customers Group customer numbers reflect the total number of cars,
households and vans on cover at the end of the year,
across the Group, and the total number of travel insurance
and loans customers.
This measure has been presented by the Group in every
Annual Report since it became a listed Group in 2004.
It reflects the size of the Group's customer base and
analysis of this measure over time provides a clear indication
of the growth. It is also a useful indicator of the growing
significance to the Group of the different lines of business
and geographic regions.
--------------- ---------------------------------------------------------------
Effective Tax Effective tax rate is defined as the approximate tax
Rate rate derived from dividing the Group's profit before
tax by the tax charge going through the income statement.
It is a measure historically presented by the Group and
enables users to see how the tax cost incurred by the
Group compares over time and to current corporation tax
rates.
--------------- ---------------------------------------------------------------
Additional Terminology
There are many other terms used in this report that are specific
to the Group or the markets in which it operates. These are defined
as follows:
Accident year The year in which an accident occurs, also referred to
as the earned basis.
---------------- ----------------------------------------------------------------
Actuarial best The probability-weighted average of all future claims
estimate and cost scenarios calculated using historical data,
actuarial methods and judgement.
---------------- ----------------------------------------------------------------
ASHE 'Annual Survey of Hours and Earnings' -- a statistical
index that is typically used for calculation inflation
of annual payment amounts under Periodic Payment Order
(PPO) claims settlements.
---------------- ----------------------------------------------------------------
Claims reserves A monetary amount set aside for the future payment of
incurred claims that have not yet been settled, thus
representing a balance sheet liability.
---------------- ----------------------------------------------------------------
Co-insurance An arrangement in which two or more insurance companies
agree to underwrite insurance business on a specified
portfolio in specified proportions. Each co-insurer is
directly liable to the policyholder for its proportional
share of the risks underwritten.
---------------- ----------------------------------------------------------------
Commutation An agreement between a ceding insurer and the reinsurer
that provides for the valuation, payment, and complete
discharge of all obligations between the parties under
a particular reinsurance contract.
The Group typically commutes UK motor insurance quota
share contracts after 24-36 months from the start of
an underwriting year where it makes economic sense to
do so. Although an individual underwriting year may be
profitable, the margin held in the financial statement
claims reserves may mean that an accounting loss on commutation
must be recognised at the point of commutation of the
reinsurance contracts. This loss on commutation unwinds
in future periods as the financial statement loss ratios
develop to ultimate.
---------------- ----------------------------------------------------------------
Insurance market The tendency for the insurance market to swing between
cycle highs and lows of profitability over time, with the potential
to influence premium rates (also known as the "underwriting
cycle").
---------------- ----------------------------------------------------------------
Net claims The cost of claims incurred in the period, less any claims
costs recovered via salvage and subrogation arrangements
or under reinsurance contracts. It includes both claims
payments and movements in claims reserves.
---------------- ----------------------------------------------------------------
Net insurance Also referred to as net earned premium. The element of
premium revenue premium, less reinsurance premium, earned in the period.
---------------- ----------------------------------------------------------------
Ogden discount The discount rate used in calculation of personal injury
rate claims settlements in the UK.
---------------- ----------------------------------------------------------------
Periodic Payment A compensation award as part of a claims settlement that
Order (PPO) involves making a series of annual payments to a claimant
over their remaining life to cover the costs of the care
they will require.
---------------- ----------------------------------------------------------------
Premium A series of payments are made by the policyholder, typically
monthly or annually, for part of or all of the duration
of the contract. Written premium refers to the total
amount the policyholder has contracted for, whereas earned
premium refers to the recognition of this premium over
the life of the contract.
---------------- ----------------------------------------------------------------
Profit A clause found in some reinsurance and coinsurance agreements
commission that provides for profit sharing.
---------------- ----------------------------------------------------------------
Reinsurance Contractual arrangements whereby the Group transfers
part or all of the insurance risk accepted to another
insurer. This can be on a quota share basis (a percentage
share of premiums, claims and expenses) or an excess
of loss basis (full reinsurance for claims over an agreed
value).
---------------- ----------------------------------------------------------------
Securitisation A process by which a group of assets, usually loans,
is aggregated into a pool, which is used to back the
issuance of new securities. A company transfer assets
to a special purpose entity (SPE) which then issues securities
backed by the assets.
---------------- ----------------------------------------------------------------
Special Purpose An entity that is created to accomplish a narrow and
Entity (SPE) well-defined objective. There are specific restrictions
or limited around ongoing activities. The Group uses
an SPE set up under a securitisation programme.
---------------- ----------------------------------------------------------------
Ultimate loss A projected actuarial best estimate loss ratio for a
ratio particular accident year or underwriting year.
---------------- ----------------------------------------------------------------
Underwriting The year in which an insurance policy was incepted.
year
---------------- ----------------------------------------------------------------
Underwriting Also referred to as the written basis. Claims incurred
year basis are allocated to the calendar year in which the policy
was underwritten. Underwriting year basis results are
calculated on the whole account (including co-insurance
and reinsurance shares) and include all premiums, claims,
expenses incurred and other revenue (for example instalment
income and commission income relating to the sale of
products that are ancillary to the main insurance policy)
relating to policies incepting in the relevant underwriting
year.
---------------- ----------------------------------------------------------------
Written/Earned An insurance policy can be written in one calendar year
basis but earned over a subsequent calendar year.
---------------- ----------------------------------------------------------------
Responsibility statement of the directors in respect of the
half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance
with UK-adopted IAS 34 Interim Financial Reporting;
-- the interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board,
Geraint Jones
Chief Financial Officer
10 August 2021
INDEPENT REVIEW REPORT TO ADMIRAL GROUP PLC
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2021 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated cash flow statement,
the condensed consolidated statement of changes in equity and
related notes 1 to 15. We have read the other information contained
in the half-yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group will be prepared in accordance with United Kingdom adopted
International Financial Reporting Standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial
Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the Company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
10 August 2021
(END) Dow Jones Newswires
August 11, 2021 02:00 ET (06:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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