Annual Report and Accounts 2023

BETTER

TOGETHER

Celebrating 30 years

Contents2023 Financial and

Strategic Highlights

Company Overview

6 About us

8 Our Business Model

10 – What we do

11 – The drivers of our success

12 – Creating value for our stakeholders

13 2023 Awards

Strategic Report

15 Chair’s statement

18 Chief Executive Oﬃcer's statement

22 Our Strategy

28 Q&A with Milena, Geraint, Cristina

and Costantino

31 Key Performance Indicators

32 Group Chief Financial Oﬃcer's review

34 2023 Group overview

38 UK Insurance review

45 International Insurance review

50 Admiral Money review

52 Other Group Items

53 Group Capital Structure and Financial Position

56 Sustainability

71 Streamlined Energy and Carbon

Reporting (SECR)

73 Task Force on Climate-related Financial

Disclosures (TCFD)

87 Section 172 Statement

96 Non-Financial and Sustainability

Information Statement

98 Principal Risks and Uncertainties

109 Viability Statement

Corporate Governance

114 Chair's Introduction to Governance

116 Q&A with the Chair

118 Board of Directors

125 Board Leadership and Company Purpose

140 Division of Responsibilities

146 Nomination and Governance

Committee Report

161 Audit Committee Report

168 Group Risk Committee Report

172 Remuneration Committee Report

174 Remuneration at a Glance

176 Director's Remuneration Policy

185 Annual Report on Remuneration

198 Directors’ Report

Financial Statements

205 Independent Auditor's Report

216 Consolidated Income Statement

217 Consolidated Statement of

Comprehensive Income

218 Consolidated Statement of Financial Position

219 Consolidated Cashflow Statement

220 Consolidated Statement of Changes in Equity

221 Notes to the Consolidated

Financial Statements

303 Appendix to the Group Financial Statements

(unaudited)

305 Parent Company Financial Statements

306 Notes to the Parent Company

Financial Statements

Additional Information

316 Glossary

1 Alternative performance measures, see page 316.

2 Group profit before tax, Earnings per share, Insurance revenue and Return on equity for 2022 are restated for IFRS 17.

3 2021 and 2022 Customer numbers restated – refer to the end of the report for definition and explanation.

4 1% includes non-binary and other genders, and colleagues who’d prefer not to say.

5 Scope 1 and 2 market based emissions per employee per SECR on page 71.

6 Relational NPS, methodology updated in 2022. We've seen a decrease in the NPS mainly due to increased prices,

which are a reflection of current market conditions.

Financial Highlights

Sustainability Highlights

Net Promoter Score (NPS)

Group average across our operations

>45

(2022: >50)

9.7m

9.2m

8.4m

Customers

(mi

ion)

9.7m

2023

2022

2021

£4.8bn

£3.7bn

£3.5bn

Turnover

£4.8bn

2023

2022

2021

200%

180%

195%

vency rat

(post

ivi

)

200%

2023

2022

2021

0.150.08

0.14

ons

(tonnes CO

per emp

oyee)

0.15 tonnes

2023

2022

103.0p

112.0p

187.0p

per s

are (pence)

103.0p

2023

2022

2021

£443m

£361m

Group pro

ﬁ

efore tax

1,2

£443m

2023

2022

36%

29%

ROE

1,2

36%

2023

2022

111.2p

95.4p

EPS

1,2

(pence)

111. 2 p

2023

2022

£3.5bn

£3.0bn

Insurance revenue

1,2

£3.5bn

2023

2022

Gender split across the Group

(2022: 50% female, 50% male)

Female

50%

Male

49%

* Excluding one-off leak event

30 years ago in Cardiff, Wales, Admiral was born.

We started as a small motor insurance Company, but

have grown to become an established multinational

and multi-product insurer, putting our customers first,

doing business in five countries and proud to be

Wales’ only FTSE 100 Company.

We are always striving to be ‘better together’, as

outlined in our purpose statement – and it’s our unique

culture and dedicated colleagues that help us achieve this.

Thank you to every single person who, over the last

30 years, has contributed to our purpose to help more

people to look after their future.

eople who like what they do,

bette

30 YEARS

of Admiral

Celebrating

Company Overview

Admiral Group plc Annual Report and Accounts 2023

Henry

Engelhardt

David

Stevens

SOMETHING

BETTER

Starting

Admiral was launched in 1993 by Henry Engelhardt, David

Stevens and their team. With only one brand and 57 colleagues,

they built Admiral from the ground up. They chose to do

things differently. They were happy to embrace innovation,

new technology, new ways of working, and to take risks.

They put customers at the heart of what they did and believed

in the power of the team. In 2004, Admiral floated on the

London Stock Exchange, and in 2007 became, and still is,

theonlyWelshCompanyinthe FTSE 100.

2 Company Overview2

Admiral Group plc Annual Report and Accounts 2023

TOGETHER.

FOR BETTER,

ALWAYS STRIVING

Best Big Company to

Work for in the UK

Happy colleagues = happy customers

The secret to our success is our people and our culture.

We recognise that “people who like what they do, do it better”

and it’s because we care, that we get exceptional results.

From 57 to over 13,000 people worldwide,

we have always done things the Admiral way.

Read more onpage 22

ON THE FUTURE

Focusing

Company Overview

Admiral Group plc Annual Report and Accounts 2023

About us

UK Insurance

International Insurance (US)

International Insurance (EUR)

UK Loans

People employed globally:

>13,000

Customers worldwide:

9.7m

Turnover worldwide

£4.8bn

Admiral Group plc is an established ﬁnancial

services provider oﬀering Motor, Household,

Travel and Pet insurance, as well as personal

lending products. We are trading in ﬁve countries,

namely the UK, France, Italy, Spain and the US.

6 Company Overview6

Admiral Group plc Annual Report and Accounts 2023

Our Business Segments

UK Motor Insurance

Admiral is one of the largest car

and van insurers in the UK

Brands

Customers:

4.9 million

(2022: 4.9 million)

Turnover

£3.4 billion

(2022: £2.5 billion)

Insurance revenue:

£2.6 billion

(2022: £1.9 billion)

7 Alternative Performance Measures – refer to the

end of the report for definition and explanation.

8 International Insurance numbers include Motor,

Home and Pet.

UK Household Insurance

Admiral has growing Household, Travel

and Pet insurance businesses.

Brands

Customers:

1.8 million

(2022: 1.6 million)

Turnover

£339 million

(2022: £255 million)

Gross insurance revenue:

£293 million

(2022: £237 million)

Loans

Admiral offers unsecured personal loans

and car finance products.

Brands

Customers:

152,000

(2022: 143,000)

Total revenue:

£67 million

(2022: £45 million)

Gross balances:

£1 billion

(2022: £0.9 billion)

International Insurance

Admiral has Motor insurance businesses

in Italy, France, Spain, and the US, a

Household insurance business in France

and a Pet business in Italy.

Brands

Customers:

2.2 million

(2022: 2.1 million)

Turnover

£895 million

(2022: £795 million)

Insurance revenue:

£843 million

(2022: £750 million)

Company Overview

Admiral Group plc Annual Report and Accounts 2023

Our Business Model

Everything starts with our purpose:

Help more people to look after their future.

Always striving for better, together.

Our strategy is

the foundation for

future growth.

So we can maximise the

value we create for our

stakeholders.

Our drivers of

success help achieve

our purpose.

Excellent

customer service

• Simple and clear communication

• Responsible sales and transparent

claims processes

• Satisfied customers

Unique

Company culture

• Communication

• Equality

• Recognition and reward

•Fun

Operational

excellence

• Good value financial products

• Risk selection and data analytics

• Efficient claims management

• Financial discipline

Efficient capital

employment

• Good risk management

• Strong shareholder returns

Track record

of long-term

profitable growth

• Prudent reserving philosophy

• Test-and-learn approach

• Responsible and sustainable operations

Read more about what we do on page 10

Our people

People are at the heart

of our business. We have

always focused on providing

a supportive environment

that allows people to develop

and grow. Our unique culture

drives openness, equality

and employees who care

about their work.

Our customers pay us an agreed premium to insure themselves

against a speciﬁc risk. We eﬃciently pool these risks and manage

our capital with discipline to protect our customers when they need

us. We generate further income from investing premiums, selling

ancillary add-ons and unsecured personal lending products, and

from fees generated over the lifetime of a policy. The diﬀerence

between our revenues and our paid and expected claims and

operating costs drives our proﬁtability. The majority of our proﬁts

are paid out in dividends, with a proportion held back to continue

investing in our capabilities and business opportunities, and to

support growth.

Company Overview

Admiral Group plc Annual Report and Accounts 2023

Our Business Model

continued

Insurance underwriting

and other products

Our primary business is to sell car,

van, home, travel, and pet insurance.

The majority of our customers buy our

products through the price comparison

channel, with a smaller proportion buying

either directly or through brokers and

agents. We generate further income from

the sale of ancillary add-ons and from fees

generated over the lifetime of a policy.

The UK is our core market and we have

an estimated 19% share of the private

car insurance market (2022: 17%) and

a 8% share of the private home insurance

market

(2022: 7%). We leverage the

capabilities and resources from our

established UK business to grow our

international businesses.

Outside of our core underwriting

activities, we sell a range of unsecured

personal loans and car finance products

in the UK through Admiral Money.

We also invest in new ventures through

Admiral Pioneer, which is designed to

test new products and identify future

sources of earnings.

9 Estimated based on 2023 Gross Written Premium data from the Association of British Insurers (ABI).

These numbers are an approximation and consistently calculated year-on-year.

What we do

IN THE

ADMIRAL

GAMES

Competing

Optimising capital structure

through reinsurance

A key feature of our business model

and success is the extensive use of

reinsurance and co-insurance partnerships.

These include proportional and non-

proportional risk-sharing agreements,

where insurers outside of the Group

underwrite the majority of the risk

generated. These arrangements include

profit commission terms which allow

us to retain a significant portion of the

profit generated.

Investing premiums

We also generate income by investing

the premiums we collect. Our investment

strategy is focused on capital preservation

and low volatility of returns relative

to liabilities. We have an asset liability

matching strategy to manage interest

rate and currency risk. We hold a prudent

level of liquidity and the investment

portfolio has a high-quality credit profile.

In 2023, colleagues from around

the Group had a great time taking

part in the first Admiral Games.

Every business put a team together

and came to Cardiff with high spirits

and an aspiration to win, competing

in sports ranging from athletics,

swimming, football and a pentathlon!

Admiral Pioneer was crowned the

2023 champion, with UK Business

Support coming second and Admiral

Seguros third.

Emma Huntington, Admiral Pioneer

CEO: “I am so proud of our team and

how well we competed during the

Admiral Games. We had an amazing

team that supported each other

through the whole two days. It was a

defining two days for me at Admiral.”

Andrea Ferri, ConTe: “You find yourself

spending four days on a university

campus in Wales, with 160 athletes

and colleagues from different parts

of the world, competing in ten sports,

carrying the Italian and ConTe flag:

this is Admiral!”

10 Company Overview10

Admiral Group plc Annual Report and Accounts 2023

Excellent customer service

Our focus on providing good customer

service remains as crucial today as it was

in 1993.

We aim to create insurance products

that are easily understood and accessible

through simple and clear communication.

Our sales teams provide all relevant

information, including limitations, so our

customers can make informed decisions

and choose the right products for

their needs.

To ensure responsible sales and

transparent claims processes, we actively

review our practices against internal

policies and regulatory requirements.

We provide clear guidance and focus

on delivering good outcomes to

our customers in a timely manner.

Customers can reach us via multiple

channels and we have controls in place

to identify and appropriately support

vulnerable customers.

We regularly measure customer

satisfaction across key benchmarks,

such as the Net Promoter Score® (NPS),

to stay close to customers’ views and

understand areas where our service needs

improvement, as well as where we are

doing well.

Unique Company culture

A great culture goes a long way towards

building long-term commercial success.

Our four pillars of culture are the

foundation for why we enjoy coming

to work every day and why Admiral is

celebrated as a Great Place To Work®.

We encourage open and transparent

communication at all levels.

Our management operate an open-door

policy, and our Group CEO engages with

colleagues through the ‘Ask Milena’

initiative.

We promote equality and an environment

where everyone can succeed and be

themselves. Employee-led diversity and

inclusion groups empower colleagues

to actively shape our employee policies.

2023 highlights

Excellent customer service

• 4.7 “Excellent” Trustpilot score

in ConTe

• >45 Group average NPS

score

across our operations (2022: >50)

• >80%

of customers likely to renew

after a claim

(2022: >80%)

Unique Company culture

• 87% of colleagues believe Admiral

is a Great Place To Work®

(2022: 86%)

• 90% of colleagues feel that

management is approachable and

easy to talk to

(2022: 88%)

• 96% of people feel they are treated

fairly regardless of race or sexual

orientation

(2022: 96%)

Long-term profitable growth and

efficient capital employment

• Total shareholder return of 296%

over the last 10 years

(2022: 259%)

• 49% of customers are now

from non-UK Motor businesses

(2022: 46%)

• 200% solvency ratio (2022: 180%)

Our share ownership scheme

plays an important role in how we

recognise and reward our colleagues.

When people own a part of their

Company, they share in its success.

Since day one we’ve said, ‘if people like what

they do, they do it better’. Our ‘ministry of

fun’ organises events so that colleagues can

spend time together, have fun and connect.

Operational excellence

We take great pride in providing good value

financial products and services that meet

customer needs.

Our focus on risk selection and data

analytics shapes our decision-making and

is built upon extensive claims experience,

underwriting capabilities, and insights

from big data.

Our efficient claims management is backed

by a culture of continuous improvement,

proactive engagement, decades of

experience in claims handling, and great

customer service.

We remain focused on building long-term

sustainable and profitable businesses

through financial discipline. Our cost-

conscious approach is strongly embedded

across the organisation as our employees

are shareholders, and this translates into

a competitive expense ratio.

Efficient capital employment

Our partnerships with our reinsurers are

underpinned by a track-record of strong

underwriting results and good risk

management. Sharing risk allows us to hold

less capital whilst ensuring protection from

losses, thus supporting our commitment

to strong shareholder returns. We include

an assessment of the projected solvency

and principal and emerging risks as

part of our capital plan and Own Risk

and Solvency Assessment.

Track record of long-term

profitable growth

Our success is in part due to our prudent

reserving philosophy. We release reserves

over time as we gain more information

on the development of claims or defaults

across our insurance and loans businesses.

Our strong culture of innovation and

organic growth has helped build our

businesses from the ground up using our

test-and-learn approach. We identify

opportunities, take measured steps to

test our understanding of the challenges,

and acquire learnings.

Central to our approach to lasting value

creation is our continued dedication

to drive positive outcomes for our

stakeholders. As their needs evolve,

we consciously adapt to remain a

responsible and sustainable business

for the long-term.

Our drivers of success help us achieve our purpose, maximise

the value we create for our stakeholders, and stand out as a

go-to insurance provider.

The drivers of our success

10 ConTe Insurance sales only.

11 Relational NPS, methodology updated in 2022.

12 UK Motor Customers, monthly score averaged over the

year. 2022 figure is restated as methodology changed

in 2023.

13 Great Place To Work Survey (GPTW) result.

14 Total shareholder return is defined as the percentage

change over the period, assuming reinvestment

of income.

Company Overview

Admiral Group plc Annual Report and Accounts 2023

Our Business Model

Our Customers

Our Business:

Shareholders

Our People

Our Society:

Communities

Our Society:

Environment

The needs of our customers shape

the products we deliver, and the ways

in which we do so. We strive to create

good value financial products to help

more people look after their future.

Value created in 2023

• We implemented new online

processes across our businesses to

improve customer journeys and

deliver a smoother experience

• During storm events, we handled

c6,000 claims. During our busiest

periods we sustained an average

weekly call answer rate of 97%,

demonstrating our commitment

to our customers when they need

us the most

• Our affordability team supported

many of our customers during the

cost of living crisis.

Market engagement is key to helping

investors understand our business,

strategy, and investment case.

It also provides opportunities for

shareholders and investors to share

their views.

Value created in 2023

• Visits to our Cardiff head office

provided investors with the

opportunity to meet managers

from across the business

• IFRS 17 Q&A sessions helped

analysts and investors understand

the new accounting standard and

its impact on our results

• Our new Group Chair and several

Board members held meetings

with our largest shareholders

encouraging open dialogue.

A culture of giving and a sense of

responsibility for our communities

is shared across the Group.

Our employees play a key role in how

we engage with our communities to

drive long-term change both inside

and outside the Group.

Value created in 2023

• We invested over £1.4m into

employability programmes, helping

people into jobs

• We donated over £400,000

through our Global

Community Fund

• We supported over 200

organisations via our Community

and Match Fund initiatives

• We launched Admiral 5-9 Club

with Welsh ICE

to support

female entrepreneurs.

It is increasingly important to

demonstrate responsible business

behaviour and reduce environmental

impacts, in line with our values and

those of our stakeholders.

Value created in 2023

• We fully offset our carbon emissions

by purchasing Gold Standard

carbon credits,

and additionally

supported charities dedicated to

sequestering emissions

• Our MSCI ESG rating assessment

remained at AA, and our Carbon

Disclosure Project (CDP) score

increased to B in 2023, from D

in 2022

• Due to a one-off leak event our

overall Scope 1 and 2 market-based

emissions have increased 26%.

Without this event we would have

seen a decrease of 33%.

People who like what they do, do

it better. This attitude enables our

test-and-learn culture, operational

excellence, happier and more

productive employees, and ultimately

better outcomes for all stakeholders.

Value created in 2023

• We became an official Real Living

Wage accredited employer

in the

UK and helped colleagues during

the cost of living crisis

• We launched the ‘leading at

Admiral’ framework throughout

the Group, which equips leaders

with deeper skills in managing

our people

• We are proud to be recognised in

all our markets as a great place to

work in a number of awards and in

varying categories.

Our partners and suppliers are

integral to us achieving our strategic

goals and we work hard to foster

strong relationships and mitigate

risks. They comprise financial,

reinsurance, IT hosting, distribution,

and claims services partners.

Value created in 2023

• We optimised our UK repair network,

providing greater oversight of our

customer and supplier interactions

and improving customer outcomes,

post the network reconfiguration at

the end of 2022

• We partnered with the AA to now

provide all our UK EV customers with

free out-of-charge recovery, after a

successful test in 2022

• Our Italian Pet Insurance business

partnered with the biggest pet store

chain in Italy, Arcaplanet, to sell our

products in-store and online.

15 Accredited Living Wage Employer with the Living Wage Foundation.

16 Welsh ICE is an innovation centre for enterprise.

17 Gold Standard carbon credits represents the reduction or removal of one tonne of C0

(tC0

e).

18 The use by Admiral Group of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship,

endorsement, recommendation, or promotion of Admiral Group by MSCI. MSCI services and data re the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty.

MSCI names and logos are trademarks or service marks of MSCI.

19 Scope 1 and 2 market based emissions per the SECR report on page 98. Increase due to one-off leak event due to activation of a fire suppression system. This is the only location to use this type of

gas in the UK and will be replaced in 2024.

Our Business:

Partners and Suppliers

Creating value for our stakeholders

12 Company Overview12

Admiral Group plc Annual Report and Accounts 2023

GPTW Best Workplaces

6th

GPTW Best Workplaces for Women

3rd

GPTW Best Workplaces in Financial

Services and Insurance

1st

GPTW Best Workplaces for Wellbeing

14 t h

Best Leader

Milena Mondini de Focatiis, Group CEO,

in Best Companies Awards

Milena Mondini de Focatiis, Group CEO,

15th in Insurance Post Power List

Antonio Bagetta, ConTe CEO,

Recognised in the Social Impact category of the

CEOforLIFE Awards Italia

Dan Caunt, Company Secretary,

Named in UK Legal 500 GC Powerlist

Hannah Davies, Head of UK Data Academy,

Named in WeAreTechWomen’s #Techwomen100 Awards

Michael Lewis, Group Chief Privacy Officer,

Named in DataIQ’s 100 most influential people in data

Pankaj Kane, Chief Engineer in UK,

Named in Computing’s IT Leaders 100 list

Owen James, Senior Lawyer,

Named in Managing IP’s Ones to Watch

2023 Awards

Great Place

To Work UK®

People Awards

Best Big Companies to Work For in the UK

Best Companies, 1st

Bigger, Bolder and Braver Partner Award

Women in Data

Commended Home Insurance Provider of the Year

Moneyfacts UK

Highly Commended in the STEM

Educational

Programme of the Year

Wales STEM Awards

Best Data Academy or Skills Development

Programme shortlist

DataIQ

Best Environment and Sustainability Strategy

Welsh Contact Centre Forum, 1st

Best Performing FTSE 100 Companies

for Women on Boards

FTSE Women Leaders Review, 4th

Outstanding Achievement Award

Wales UK Fast Growth 50 Index

Other Awards

GPTW World’s

Best Workplaces

13 t h

GPTW Best Workplaces

Europe Multinational

14 t h

GPTW Best Workplaces

in Italy

10th

GPTW Best Workplaces

in France

6th

GPTW Best Workplaces

in Canada

2nd

GPTW Best Workplaces

in Spain

2nd

Great Place

To Work®

International

20 Awarded by the Great Place To Work (GPTW) Institute.

21 Science, Technology, Engineering and Mathematics (STEM).

Company Overview

Admiral Group plc Annual Report and Accounts 2023

In this section

15 Chair’s statement

18 Chief Executive Oﬃcer’s statement

22 Our Strategy

28 Q&A with Milena, Geraint, Cristina and Costantino

31 Key Performance Indicators

32 Group Chief Financial Oﬃcer’s review

34 2023 Group overview

38 UK Insurance review

45 International Insurance review

50 Admiral Money review

52 Other Group Items

53 Group Capital Structure and Financial Position

56 Sustainability

71 Streamlined Energy and Carbon Reporting (SECR)

73 Task Force on Climate-related Financial Disclosures (TCFD)

87 Section 172 Statement

96 Non-Financial and Sustainability Information Statement

98 Principal Risks and Uncertainties

109 Viability Statement

STRATEGIC

REPORT

14 Strategic Report14

Admiral Group plc Annual Report and Accounts 2023

Chair’s statement

As I reflect on the challenges

and triumphs of the past

year, I am pleased to present

my inaugural Chair statement

for Admiral Group.

This was certainly a challenging

year, with high inflation and macro-

economic uncertainty. Against this

backdrop, Admiral remained steadfast

in its commitment to providing peace

of mind for our colleagues, customers

and shareholders. Having worked in the

insurance industry for a number of years,

I can say that there is an authenticity of

culture and strong commercial thinking at

Admiral. The pace and passion for better

consumer outcomes is infectious.

Exceptional leadership

in difficult times

Milena and her Executive team have

exhibited exceptional leadership

throughout a challenging period within

the industry and economic cycle.

Our customers, suppliers, colleagues

and shareholders have all endured a

very demanding year – our ability to not

only weather these storms, but to adapt

and grow is a testament to the collective

strength and strategic foresight of

our management team.

“Admiral’s vision to

help more people look

after their future is

evident in the strong

2023 performance.”

Mike Rogers

Group Chair

103.0p

112.0p

187.0p

per s

are (pence)

103.0p

2023

2022

2021

OUR RESILIENT

PERFORMANCE AND

AUTHENTIC CULTURE

Celebrating

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Green transition

Our commitment to sustainability remains

strong. Businesses, now more than ever,

play a critical role in the transition to

a greener economy. Admiral recognises

this responsibility and underscores its

commitment in our latest Sustainability

Report. Our journey toward a greener

future is not just a reflection of corporate

responsibility but a strategic imperative

reflected in the Group’s Net Zero

ambition. From supporting our customers

in the adoption of electric vehicles to

using renewable energy in our sites,

sustainability is becoming embedded

throughout the business.

30 years of growth

None of the Group’s achievements would

be possible without the dedication and

resilience of our thousands of colleagues

worldwide. Their energy, adaptability,

and commitment have been the

driving force behind Admiral’s success.

From Cardiff to Rome, their commitment

to each other and our customers is the

beating heart of our organisation.

This year marked a significant milestone

as Admiral celebrated its 30th anniversary.

The insurance industry and the nature

of work have evolved since Admiral’s

inception in 1993, and the Group has

consistently adapted to remain a leader

in the field.

Resilience in performance

Admiral’s vision to help more people

look after their future is evident in the

strong 2023 performance. The Group

demonstrated its traditional ability

to adapt, evolve, and deliver results.

This resilience is no accident; it reflects

our financial discipline and longstanding

commitment to looking after our people

and customers; thereby safeguarding our

shareholders’ interests and ensuring the

sustained success of Admiral Group.

Admiral retains outstanding competitive

advantage in the UK motor market:

defending and extending this remains

our number one priority.

We are also mindful of our opportunity

to leverage our brand, capabilities and

customer relationships into new products

and markets.

Presently, we cater to the needs of

nearly ten million customers across five

countries. We have made good progress

in Admiral Money and Household, Pet,

Travel and Van insurance in the UK, along

with our European franchises. We believe

that diversifying our income streams

where we have competitive advantage

will add significant shareholder value.

Chair’s statement

continued

I extend my thanks to Annette Court

who joined the Board in 2012 and was

appointed Chair in 2017. Annette guided

the management team through the

transition from a founder-led business,

strengthening leadership development

and succession, helping the business

navigate regulatory, economic, and

global challenges.

We also fondly remember Jean Park,

who retired from the Board earlier this

year and sadly passed away soon after.

Jean’s contributions, particularly as the

Chair of the Group Risk Committee

and Senior Independent Director,

were invaluable. Her legacy of steadfast

support and wise counsel will be greatly

missed. I welcome the addition of Fiona

Muldoon to the Board. Fiona enhances

our collective expertise and strengthens

our customer-centric approach.

Staying true to our values

While the industry has undergone

changes, Admiral’s core values remain.

Looking ahead, we remain optimistic

about the future. The Group’s strategic

roadmap is designed to drive long-term

value for our shareholders. We are

confident that our diversified portfolio,

agile business model, and unwavering

commitment to achieve the best

outcomes for our customers, will position

us for continued success.

I extend my gratitude to the Board,

management team, and colleagues for

their dedication and support. Together,

we will continue to shape the future

and continue our journey of sustained

growth and success.

Mike Rogers

Group Chair

6 March 2024

16 Strategic Report16

Admiral Group plc Annual Report and Accounts 2023

In 2021 we formalised our purpose

statement and framework:

Help more people to look after

their future. Always striving for

better, together. Our purpose

deﬁnes the reason we exist and

underpins everything we do, from

creating products to supporting

customers as well as our approach

to sustainability.

In October 2023, we launched our

purpose toolkit for managers across the

Group. It supports “Leading with purpose”

workshops where teams explore our

framework in more detail, leading to an

increased understanding of individual,

team and departmental roles in delivering

our purpose. Continuing to cascade and

Since 2004, Admiral Group has

given colleagues up to £3,600 worth

of share awards per year through

the employee share scheme

Our colleagues play a very important

role in our success, and we want

them to beneﬁt ﬁnancially from

their hard work and dedication.

We caught up with some of our colleagues

to find out how they have used their

shares over the years and what the

scheme means to them:

Will: “The Admiral share scheme has

made a huge difference to me; I feel

invested in the success of the business and

motivated to do my best to contribute to

it. The scheme has also helped me to look

after the future of my family – including

making it possible for us to fund the

construction of a house extension.“

OUR PURPOSE

COLLEAGUES THROUGH

OUR SHARE SCHEME

Rewarding

Cheya: “I used my shares to pay for

three months travelling across Australia,

New Zealand and Thailand when I had a

career break at Admiral. It was an amazing

experience and I loved every minute of

it. The shares helped me save up money

without even having to think about it.

It’s great to feel like I own a part of the

business I work for!”

Aaron: “Like a lot of other people across

the Company, I’ve cashed my shares with

the intention of putting together a house

deposit. However, after a bit of accounting

I realised I had some spare and decided

to treat myself to a new guitar!”

embed our purpose at all levels of our

Company ensures it remains top of mind

when engaging with all stakeholders.

Having one common statement brings

us together so we all strive to achieve

the same goal.

Our Group Governance and UK Household

product teams held their workshops

in November, where they considered

how they play a part in helping more

people to look after their future

and looking after our stakeholders.

During the workshops colleagues shared

their individual purpose, writing on

jigsaw pieces that all fitted together to

demonstrate how each colleague plays

their part and the importance of working

together as a team.

1 Employees working at Admiral for more than one year

receive shares through our Approved Free Share Plan (SIP)

or equivalent schemes.

Embedding

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

2023 was a strong year.

In the context of challenging

market conditions, we

reported another set of solid

results with strong Group

proﬁt of £443 million and

turnover up 31%.

We welcomed more than 500,000

additional customers across the Group,

an increase of 6% and substantially

improved our loss ratios, while continuing

to strengthen and diversify our business.

Over the past couple of years, the industry

was hit by the worst inflation in recent

history and we faced a cost-of-living

crisis in the UK. This had a negative

impact on our customers and our people,

who needed more support too.

Once again, we maintained pricing

discipline and acted ahead of the

market to adapt to these trends.

We continued to build on our historical

strengths and to look after our customers

and our people, whilst at the same

time making positive progress on

our strategic objectives.

The combination of these three

things has left us well placed to achieve

further growth, increase underwriting

margins and better provide for more

customers’ needs.

Celebrating 30 years together

Our 30th anniversary served as a great

reminder to reflect on Admiral’s journey.

From a small start-up in Wales, the

Admiral team built a £4.8 billion business

catering to over nine million customers

across five countries. We became the

market leader in UK Motor insurance, with

cumulative profits of around £7 billion

over our 30 years and a dividend payout

ratio of around 90% for our shareholders

“Our core values of

putting our customers

and people ﬁrst and

enjoying what we

doareastrue today

as they were in 1993.”

Milena Mondini de Focatiis

Group Chief Executive Oﬃcer

Chief Executive Oﬃcer’s statement

THE LITTLE THINGS

THAT ADD VALUE FOR ALL

OUR STAKEHOLDERS

Doing

18 Strategic Report18

Admiral Group plc Annual Report and Accounts 2023

over the last few years. We continued

our historical trend of strong capital

efficiency and a return on equity of 36%

in 2023. This is a growth story fueled

by a strong combination of core technical

competence and continuous innovation

in every part of the value chain: service,

pricing, products and distribution.

Whilst so much has changed, I am proud

that so much has also stayed the same.

Our core values of putting our customers

and people first and enjoying what we

do are as true today as they were in 1993.

A year of two halves

Something else that sets us apart is our

ability to focus on the long term whilst

being pragmatic in how we steer the

business in different parts of the insurance

cycle. We do not forego difficult decisions

for short term targets. This has been

a year of two halves, and our approach

serves as a perfect example of

this mindset.

In January it felt like we were standing

at the foot of a mountain. We knew we

had a steep climb ahead of us. As we

entered 2023, we were still helping

customers with the freeze events of 2022.

The year began with a spike in inflation,

which persisted, and the onset of new

supply chain concerns.

As in 2022, we acted fast. We continued

to increase premiums ahead of the market

to account for inflation, even if this meant

a further reduction of our UK Motor

book, which was 7% down year on year

at the end of June (albeit this reduction

was more than compensated by growth

in other parts of the Group).

After a few challenging months we

reached the summit of the mountain

and started to get comfortable with

our pricing levels, but it still felt like

we needed a stronger foothold amidst

the macro-economic uncertainty.

As the summer arrived, we started to

have a better outlook and a clear sight

of the downward path. Inflation and claims

trends started to stabilise. As the rest

of the market followed by increasing

their premiums, our competitiveness and

our retention improved and in the second

half of the year we reversed our loss of

policies in UK Motor.

Our strategic progress

One of Admiral’s historical characteristics

is to navigate the ups and downs of

the insurance cycle well, together with

continuing to enhance our capabilities

and preparing for the next climb.

This year we made strong progress in

all of our three core strategic pillars:

Admiral 2.0, business diversification and

motor evolution.

Customer experience and outcomes

have remained our primary focus,

including embracing the new Consumer

Duty act in the UK. Something I’ve been

particularly proud of was the smooth

implementation of some large technology

delivery projects, including Guidewire

claims systems for our UK customers

and a new platform for lending.

We completed the transformation

to scaled agile across all our businesses,

materially reducing the cost of

technology change.

We continued to diversify the business

with the number of policies beyond UK

Motor up 12% and now accounting for

almost half of total Group customers.

It has been pleasing to see, despite

the challenging market conditions,

that all our businesses older than

3 years improved their results.

It wasn’t only organic growth that

we achieved in 2023. We accelerated

our diversification strategy in the UK,

announcing our intention to acquire

the renewal rights for RSA’s pet and

home direct insurance businesses,

under the More Than brand. It marked

our first acquisition of relevant size

but more importantly, the opportunity

was a perfect fit with our strategy.

We achieved double digit growth in

our electric vehicle book, supporting

more of our customers to transition

to green mobility, and through Veygo

we are offering differentiated propositions

to customers to meet their evolving

mobility needs.

Tim

Tim started in Admiral on 7 June

1993, working in the post room.

After various positions in IT,

he now works as a systems

monitoring engineer.

Teri

Teri began her journey with

Admiral on 29 September 1992 as a

programmer and analyst. She’s had

a number of roles in IT and is now an

IT consultant.

Bethan

Bethan joined Admiral on

19 July 1993 as an analyst

programmer. 30 years

later, after working some

time as a team manager,

she now works as a senior

analyst programmer.

Recognising

OUR COLLEAGUES

WHO HAVE

BEEN HERE

(41/6*'Ì56#46

Ì;'#45Ì#)1

Read more about Tim, Bethan and Teri

on page 35

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Chief Executive Oﬃcer’s statement

continued

Our people

It was another memorable year of

accolades for our culture. Not only

were we voted as the number one

Best Company to work for in the UK

and recognised as a diversity leader

in Europe, we were also ranked 13th

globally as one of the World’s Best

Workplaces™ by 2023 Great Place to

Work®. We now have over 13,000 amazing

colleagues and we celebrated Admiral’s

30th birthday together with the

first edition of the Admiral Games

sporting event.

Together, we also stepped up our

contribution to ‘employability’

supporting around 2,000 people

to find new jobs and volunteering

over 14,000 impact hours.

2024 and beyond

Despite persistent geopolitical and

macro-economic uncertainty, our

outlook is more positive. We are

benefiting from better market conditions

and a stronger position, thanks to

the discipline we maintained over

the past year.

I am always mindful that the descent

from a mountain can be more dangerous

than the climb up. There is no room

for complacency or distractions.

We will focus on every single step,

with clear priorities, strong execution

and continuing to leverage on our

historical competencies.

We are well positioned for further

growth and diversification.

Assuming no unforeseen market

disruptions, I am confident that

we should expect stronger underwriting

performance across all our geographies.

And in the long term, I look forward

to seeing Admiral celebrate another

30 years of success.

Milena Mondini de Focatiis

Group Chief Executive Oﬃcer

6 March 2024

20 Strategic Report20

Admiral Group plc Annual Report and Accounts 2023

£400,000 AS PART

OF OUR GLOBAL

EMERGENCY FUND

Donating

In 2023, we sadly saw many

diﬃcult events devastate

communities across the world.

Helping more people to look after

their future is part of our core

purpose, and so in 2021 we set

up our Global Emergency Fund,

allowing a process to speed up

making donations when people

and organisations need it most.

OUR CUSTOMERS

THROUGH IMPACTS

OF EXTREME WEATHER

Helping

Weather events can be extremely

disruptive and stressful if homes

are damaged. One of our customers

and their family were faced with the

possibility of months out of their

home after Storm Babet left their

house flooded. Their daughter had

been diagnosed with an aggressive

form of cancer a few weeks prior to

the event, and their home had been

set up to care for her.

In 2023, we donated over £400,000 to a

number of urgent appeals, including:

Canada

The wildfires in Nova Scotia brought

devastation to its communities with

over 200 homes and structures lost or

damaged, and over 16,000 residents

having to evacuate. To support the

recovery, we donated CAN$50,000

through our Global Emergency Fund and

created an emergency colleague support

fund to provide immediate assistance to

employees affected by the fires.

Italy

The region of Emilia-Romagna suffered

severe flooding in May, resulting in more

than 36,000 people displaced across

100 cities and towns. Through the Global

Emergency Fund, and working with

ConTe’s Charity Team, we donated €25,000

to the Civil Protection Department that

supported relief efforts on the ground.

Turkey and Syria

We donated £250,000 to the Disasters

Emergency Committee (DEC) Turkey

and Syria Earthquake Appeal following

the devastating effects of the

Kahramanmaras earthquakes in February

2023. This supported aid efforts including

emergency food for 2,000 families for ten

days, plus tents for 240 families who lost

their homes.

Our UK business also matched any

donations made from colleagues to

Turkey-Syria appeals via our Give-As-You-

Earn programme, from February to April,

raising an additional £6,250.

As their insurer, we wanted to do

whatever was possible to get them safely

back in their home before Christmas,

knowing that claims of this magnitude

can mean restoration works take a very

long time. We worked closely with our

suppliers to assist the family in finding a

rental property suitable for their needs,

however as the restoration process was

expedited with the help from suppliers,

the family decided to remain in the

hotel instead.

Thanks to the effort of all involved, the

family were back in their home in time

for Christmas.

We understand the value of quality

products and efficient service, and are

proud to have helped the family get back

into their home quickly. Supporting our

customers is at the heart of what we do:

we focus on being there for our customers

when they need us the most.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Our Strategy

• L’olivier introduced a welcome

bot which uses AI to identify and

authenticate the customer and

their reasons for calling. This means

customers can quickly be put through

to the right person to help

• Admiral Seguros opened new customer

communication channels, including

WhatsApp for service, chat online for

quotes, and online claims help for ‘first

notification of loss’

• ConTe launched a digital assistant that

identifies customer needs and guides

them to a solution, avoiding the need

for a phone call when appropriate.

Smart working

• We continued to evolve our hybrid

working model to focus on making

the time in the office meaningful

with more spaces for engagement

and collaboration

• We regularly complete Pulse surveys

to ensure the happiness of staff

and effectiveness of our new way of

working, and have continued to ensure

we support all colleagues no matter

where and how they work.

Data and advanced analytics and

enhanced risk selection

• In the UK, we have implemented the

NextGen Application Programming

Interface (API) platform alongside

a range of services, to improve the

experience of our contact centre

agents by swiftly providing them with

the information that they need when

they are on calls with customers

• We are nearing completion of our new

European data platform. This is a suite

of innovative technologies which will

deliver faster and more insightful data

to support decision-making

• We continued to enhance our risk

selection capabilities, and we leveraged

our cloud-based machine learning

platform by implementing our first

models in our Van insurance business

and continued to develop models in

our other businesses.

Overview

Our ambition is to accelerate the

evolution of our core businesses

toward what we refer to as Admiral 2.0,

continuing to leverage our historical

strengths whilst becoming even more

agile, digital and technology-focused.

Admiral 2.0 puts the customer first and

leverages data and advanced analytics to

constantly be more efficient to improve

their overall experience.

Core competencies:

• Digital first

• Scaled agile

• Customer-centric innovation

• Smart working

• Data and advanced analytics and

enhanced risk selection

Progress in 2023:

Digital first

• We have continued transitioning to the

cloud. This enables us to better serve our

customers by using modern, feature-

rich technology platforms with a good

digital experience

• In 2023 >50% of Group digital

interactions, sales and renewals were

completed online, allowing customers to

reach us in the way that suits them best

• The Elephant UK app brand in the UK

now has the ability for breakdown

customers to report a breakdown

directly through the Elephant app,

thus accessing AA breakdown recovery

assistance easily and quickly.

Scaled agile

• All businesses have further embedded

agile ways of working. Scaled agile

enables better collaboration between

functions and quicker customer

feedback, leading to improved products

and processes

• Our UK insurance business created

a new operating model that ensures

greater alignment between IT and

business areas, further reducing

dependencies between teams and

creating an optimised flow of value

delivered to our customers

• Implementing scaled agile has helped to

better organise people and outcomes,

with dedicated focus on growth,

customer and efficiency targets.

Customer-centric innovation

• Our UK operations have continued to

develop our virtual assistant capability

in our contact centres. Customers are

effectively directed to the right service

to them, whether digital or an agent

1. ACCELER AT ING

TOWARDS

#&/+4#.Ì

Relevant Principal Risks

Read more on page 98

A IEB JFC KGD LH

22 Strategic Report22

Admiral Group plc Annual Report and Accounts 2023

It’s been a hugely successful ﬁrst

year for the UK Data Academy.

The Academy was set up to supply

training and development programmes

and events, increase data awareness

and education, and improve diversity in

the data world. It has surpassed its 2023

target of 3,000 training hours, with over

500 people across 50 different teams

engaging with the Academy during the

year, and over 70 mentoring relationships

established. The training has focused on

learning events, cloud tooling, our data

strategy and topics such as generative

AI. Our people have benefitted from

access to training, learning events such

as lunch and learns and community

drop-in knowledge sessions, including

more than 50 people benefitting from

individual development programmes since

We have updated our US and UK

core product systems that manage

customer payments and policies and

have migrated these to the cloud.

We have also started the process

of upgrading the systems in our

European businesses. This will drive

better outcomes for our customers,

upgrade our technology stack and

future-proof our businesses.

This upgrade helps to mitigate

technology and security risk, improves the

speed of release, reduces the overhead

of upgrades going forward and the total

cost of ownership of the estate.

DATA ACADEMY

TURNING ONE!

TO THE CLOUD

2 British Data Awards 2023 Finalist – Education

Initiative of the Year/Wales STEM Awards 2023

Highly Commended STEM Educational Programme

of the Year/DataIQ 2023 Finalist – Best data academy

or skills development programme.

Celebrating

Our UK Insurance business now performs

the majority of its transactions in the

cloud, and crucially all new policies

and most claims are cloud managed.

This increases agility and speed to market

by reducing the cost and risk of launching

new products.

Security remains paramount and is

embedded into all cloud-based processes:

anything hosted externally is managed

with directory-integrated, role-based

access and multi-factor authentication.

launching. As well as this, the Academy

has continued to partner with Women in

Data, providing us access to their 35,000

strong Data Community. This has given us

a unique opportunity to advertise roles to

their members and be represented at the

Women in Data Flagship event.

As of October 2023, our Data Community

figures are at 28% female, with the

industry benchmark from WiD being

25%. This is a great result for us – but we

recognise that there’s still more to do.

We are delighted that in 2023, the

Academy was a finalist across three

industry recognised awards

in the UK for

Best Data Academy, and our UK business

has been represented at 16 external

events including podcasts, panels and

conference talks.

Transitioning

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Our Strategy

continued

Strengthen customer propositions

• Our Italian and Spanish operations have

focused on expanding distribution

channels by scaling their broker

networks and building their teams,

in line with our strategy to reach more

customers through different channels

in these markets

• We kicked-off our digital experience

platform project this year, which will

enable digital self-service across further

products, improving our customers’

experience online. We recognise the

importance of offering customers a

choice in how they deal with us, either

online or over the phone

• UK Household launched the home

emergency digital notice of loss

form, facilitating the registration

of emergency claims online, should

customers wish to

• UK Household also released a Storm

Hub website in 2023, which sends

timely weather warnings to customers

ensuring they are aware of any extreme

weather events that may affect them

• We have launched new functionality

for new and existing customers to add

a van onto MultiCover through digital

channels, whilst also optimising and

improving our existing customers’

journey.

Leverage core strengths

• We are leveraging our strengths and

knowledge from our core business into

new products and businesses

• Our UK Pet product turned one in

2023 and went live with renewals in

July 2023. It was great to see a number

of furry friends joining us again for a

second year

• After reporting its first profit in 2022,

Admiral Money has continued to

deliver sustainable profits, up nearly

five-fold to £10.2m, despite a difficult

economic environment.

Overview

Diversification is essential to our strategy

to keep building a sustainable and resilient

business. Our approach is to leverage

the capabilities and knowledge from our

established businesses to build future

successful propositions and to transition

to a low carbon economy. We make

focused and gradual investments in

new opportunities that strengthen and

complement our existing customer

offerings and leverage our core strengths.

In just over a decade, we have launched

numerous products including Household,

Travel and Pet insurance and a personal

lending business. Our diversified business

model means that customers can engage

with us across a number of products,

and we can support a growing variety of

their needs.

Core competencies

• Scale up promising products

• Strengthen customer propositions

• Leverage core strengths

Progress in 2023

Scale up promising products

• This year we saw growth in turnover for

all key diversification areas with 33% in

UK Household, 56% in Admiral Money

and 17% in European Motor. 49% Of

customers are now from non-UK Motor

businesses (2022: 46%)

• UK Travel insurance expanded customer

numbers by 41%, a positive turn after

the challenges faced post-pandemic.

UK Travel also expanded its footprint,

pricing for a wider range of customers,

enabling more access to our products

• ConTe in Italy remained profitable

and reached the milestone of selling

one million policies during the year

(2022: 0.97 million policies), showing a

good growth trajectory for the business

• L’olivier in France returned to

profitability, driven by rate

increases and improvement in

expenses, strengthening our Group

diversification objective.

2. DIVERSIFICATION

Relevant Principal Risks

Read more on page 98

A JEB KFC LGD H

24 Strategic Report24

Admiral Group plc Annual Report and Accounts 2023

We successfully entered a new

market in 2022 with the launch

of our UK Pet insurance product.

In July 2023 we went live with

renewals and enjoyed seeing many

customers keeping their cover

with Admiral. Fun fact: our most

popular pet name is Luna!

The Pet insurance team are continually

looking for new ways to enhance the

product. In partnership with Burns Pet

Nutrition, we launched new puppy

parenting classes, with help from

Lioness Bethany England and the TikTok

influencer Ben the Vet, to support new

pet parents. These 15-30 minute sessions

were streamed live and customers could

ask our special guests any question from

pet health and training, to finding the

right breeder.

PET TURNING ONE!

Celebrating

ConTe in Italy is our largest

operation outside the UK and

provides customers with Motor

and Pet insurance. In 2023 ConTe

sold over one million Motor

policies and continued to increase

customer numbers (7%) proﬁtably.

This success demonstrates our

ability to take what we do well in

our UK Motor business and leverage

our core strengths into other

markets and products.

/14'%7561/'45#5Ì%106'

SELLS OVER ONE MILLION

POLICIES DURING THE YEAR

ConTe is also advancing channel

diversification, by exploring alternative

acquisition methods. This year they have

been dedicating time to expanding their

broker networks and connections.

In line with their customer-centric

approach, ConTe made several digital

improvements in 2023, such as

introducing a digital assistant to their

website. This tool helps to identify what

the customer needs and quickly provides

a solution, for example a correct phone

number, an informative video or a link

to their online portal.

Reaching

Our learnings from ConTe are being

applied across our businesses and drive

our diversification achievements forward.

Throughout 2023, we achieved strong

growth in sales and market share.

The acquisition due in 2024 of the “More

Than” Pet and Household renewal rights

from RSA will help accelerate the growth

we have seen this year in our Pet product

and we are looking forward to welcoming

more pets on board in 2024.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Our Strategy

continued

Evolve our proposition

• During the year, we saw a double-digit

increase in electric vehicle customers.

We have a bespoke electric vehicle

customer journey to ensure our

policyholders are well informed of the

benefits and cover we provide

• Out of charge recovery was rolled out

to all our UK EV customers at the start

of 2023 after a successful test in 2022.

This means customers in the UK and

the Channel Islands who completely

run out of charge will be recovered

alongside their vehicle and taken to

either the nearest charging point, their

home address, or any other destination

• We have continued to strengthen

our electric vehicle proposition by

launching wall box cover for our

customers. This means that their

home vehicle charger will be covered if

damaged during an accident or fire, or

from theft

• Veygo, our short-term car insurance

provider, launched a new subscription

service offering customers rolling

monthly insurance cover. Customers pay

monthly and can cancel at any time

with no fees, allowing customers to

easily buy insurance when they need it

at the right price.

Develop competencies for

the future

• In partnership with Ford Credit we

launched Ford Insure Live, a connected

car insurance product for Ford private

car customers. This will allow us to

further explore connected car data and

what it means for the future of mobility

• Through Admiral Pioneer, we are testing

new propositions around changing

consumer preferences. This includes the

rise in popularity of subscription models

and the growth of embedded insurance

at the point of sale.

Overview

Our Evolution of Motor strategic pillar is

built on evolving our proposition for the

changes that are happening in mobility

worldwide. Different views exist on future

mobility trends and where the greatest

future impact will be, but all agree that

the way people move is changing. It is

an exciting time for the industry, and

we want to make sure that we fully

understand the changes and what they

will mean for our customers and for

our business.

To stay close to these trends, we are

harnessing our test-and-learn philosophy,

looking at emerging propositions, and

developing core competencies that will be

relevant for the future.

Core competencies

• Understand changes in mobility

• Evolve our proposition

• Develop competencies for the future

Progress in 2023

Understand changes in mobility

• Our dedicated mobility team continues

to investigate how changes in mobility

will impact our customers and ways we

can adapt our products to changing

customer needs

• We continue to explore new methods

of mobility and what that means for

the insurance industry through the

work of our dedicated Autonomous

Vehicle team

• We have entered into a collaboration

agreement with ZF, We Know, BP Pulse

and Ferrovial to explore the feasibility

of autonomous transportation between

Heathrow Airport and nearby hotels.

We aim to understand the insurance

requirements and processes, and the

fundamentals of what a successful

autonomous transportation business

would look like.

3. EVOLUTION

1(Ì/1614

Relevant Principal Risks

Read more on page 98

C GD JE KF L

26 Strategic Report26

Admiral Group plc Annual Report and Accounts 2023

Wayve are one of the leading

autonomous vehicle software

companies in the UK. We ﬁrst

partnered with Wayve at the

beginning of their journey in

April 2018, insuring their very

ﬁrst test vehicle. The partnership

has expanded over time to now

insure their fleet of autonomous

test vehicles in central London.

This allows us to remain close to

the forefront of autonomous vehicle

development, gaining real world

experience by working with new

and emerging technologies, and

understanding what it takes to prepare

for the future of autonomous mobility.

Recently Wayve partnered with grocery

brands ASDA and Ocado to explore the

future of last mile delivery and self-driving

technology and Admiral supported them

by sharing our experience. We are proud

of this collaboration and excited about

the future of autonomous technology.

Understanding our customers’

is essential to delivering products

and services that really meet their

needs and provide added value.

We partnered with Ford Credit in

2019, and together in 2023 we

launched Admiral Live and Ford

Insure Live, both for Ford private

car drivers.

The products utilise Ford’s connected car

technology, which shares live data and

has tracking capabilities to help provide a

more personalised and accurately priced

product based on how customers drive.

Data is only shared with us if the customer

permits it, and ranges from the speed of

the vehicle to the status of seatbelts and

number of passengers.

Data is sent directly from the vehicle’s

modem, which replaces the need for

an engineer to install a telematics

box, making the experience smoother

for customers.

The introduction of Admiral Live and Ford

Insure Live will enable us to learn more

about connected car technology and how

it can benefit customers now and in the

future. Their introduction encapsulates

how we collaborate with the motor

industry and embrace technological

changes to provide ever-improving,

customer-focused products and services.

(14&+0574'Ì.+8'

OUR PARTNERSHIP

WITH WAYVE

Launching

Strengthening

“Our partnership

with Admiral has proven

instrumental to our

development to date.

With their support,

we are able to conduct

real-world testing of

autonomous vehicles

on UK public roads and

operate the UK’s largest

autonomous grocery

delivery trial with ASDA.”

Alex Kendall

Co-Founder & CEO, Wayve

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Q&A with Milena, Geraint, Cristina and Costantino

Q: How does Admiral stay ahead of

the game and look to the future?

I believe our strategic pillars –

diversification, Admiral 2.0, and evolution

of motor – provide a good foundation

to serve our customers, strengthened

by our unique Company culture. As we

progress in all three, we aim to maintain

our competitive edge in the long term

and ensure sustainable value creation

for our stakeholders.

Embracing technology through Admiral

2.0, such as the roll out of Guidewire

10 and transitioning to the Cloud,

has improved efficiencies and our

tech foundations. We use large data

sources and data analytics to refine

our risk selection and decision making,

and our extensive claims experience

and underwriting capabilities leave

us well placed to effectively manage

claims. In addition, we have a strong

culture of managing costs well. All of

these have resulted in a market leading

combined ratio. Diversifying into non-

Motor insurance markets is essential

to building a sustainable and resilient

business. It creates more options for our

customers and leverages our brand and

experience. 49% of our customers are

now non-UK Motor customers, including

one of our more recent propositions, UK

Pet business, that just turned one.

Evolving with emerging mobility trends,

for example electric vehicle insurance,

makes it easier for customers to find the

right insurance for their needs and make

greener choices. Our EV growth was again

double digits in 2023.

We continue to challenge ourselves

to improve and strengthen our

fundamentals, and I believe Admiral’s

proven track record of growth, agility

and discipline positions us well for 2024

and the future!

Q: How is Admiral helping

communities and meeting its

sustainability objectives?

Considering long-term sustainability has

been part of Admiral’s DNA long before we

had a sustainability team. We have people

that have been here since we started 30

years ago, we’ve established long-term

partners and strong relationships, and

our employees are engaged in their work

and invested in the performance of the

business, as they’re shareholders through

our share scheme.

Admiral donates to worthy causes across

our businesses using many avenues.

A large part of our community investment

is focused on skills development and

employability, reducing inequalities

so that people can lead more secure

lives. Through our Global Emergency

Fund we have helped communities

through devastating events such as the

wildfires in Canada, flooding in Italy, and

earthquakes in Turkey and Syria. We also

fund many environmental causes and

through our Match Fund employees can

nominate charities they’d like to support.

I am proud that our people have given

over 14,000 hours of their time to such

great causes. Volunteering for charities,

mentoring, and planting trees are just

a few ways our employees got involved

and made a difference in 2023.

From a customer perspective, our

affordability team has supported our

customers with their payments and

concerns during the cost of living crisis

and we have helped them enjoy improved

customer journeys. During storm events

we maintained an average weekly call

answer rate of 97%, demonstrating

our commitment to our customers

when they need us.

“It’s been an amazing

30 years and whilst so

much has changed,

I’m proud that so much

has also stayed the same.

Our core values of

putting our customers

and people ﬁrst and

enjoying what we do are

as true today as they

were in 1993.”

Milena Mondini de Focatiis

Group Chief Executive Oﬃcer

CHALLENGING

MARKET CONDITIONS

Navigating

3 Proposed baseline year for emissions cuts is 2021,

still to be verified by SBTi.

28 Strategic Report28

Admiral Group plc Annual Report and Accounts 2023

From an environmental perspective,

we have targets to reach Net zero by

2040, and to cut emissions in half by

2030

. Our UK scope 2 emissions have

already reduced to zero. We are well on

our way to setting Science Based Targets

for our emissions which we aim to share

in the future alongside our Net Zero

transition plan. Our focus is to do the

right thing, and this has been reflected in

an MSCI index rating of AA, as well as an

improved CDP rating to B.

Q: What are your thoughts on

the 2023 results and what should

we expect going forward?

I am pleased with how we have come

through two challenging years, having

managed a lot of change and navigating

a complex cycle. Our teams also worked

very hard as we transitioned to the new

accounting standard, IFRS 17, to provide

clear information.

It was a solid set of results with a healthy

Profit Before Tax of £443 million driven

by improvements in almost all businesses.

We are gaining customers in the UK, Spain,

Italy and France with Group customer

growth of 6%. Admiral Money has grown

profit nearly five-fold to £10.2 million;

whilst having maintained our cautious

approach to growth and prudently held

provisions within the uncertain economic

context, which we believe continues to

build a good foundation for the future.

We said 2022 was probably the worst

point of the cycle, and we are now starting

to see the benefits of our pricing actions.

In particular, this is reflected for UK Motor

Insurance where we slowed growth in

the first half but managed to grow in the

second half of 2023, and are well placed

moving into 2024.

Q. Are you confident with the

solvency position and do you have

any updates on the internal model?

I am confident that our capital position

remains strong and well above risk

appetite level. We had a successful debt

issue during the year and our improved

solvency rate of 200% is still supportive

of a stable dividend payout and the

ability to make future investments.

We’ve demonstrated over the past 15

years that we’ve been able to grow

five insurance businesses from scratch,

a lending business, and multiple price

comparison businesses whilst maintaining

a 90% average pay-out ratio.

In addition, we have been progressing

on the internal model process and expect

to enter a pre-application process with

our regulators soon. We will provide

a further update when we have more

information to share.

Geraint Jones

Group Chief Financial Oﬃcer

Cristina Nestares

CEO, UK Insurance

Our customer base has remained stable

despite the year’s challenges showing

that we can offer our customers good

quality products and services and give

them more options through MultiCover

which saw even more customers take

up these great products.

We were well placed for the

implementation of Consumer Duty

regulation, which aligns with our

commitment to deliver good value and

good outcomes for our customers.

I am also proud to say we were voted the

#1 Best Big Companies to Work For in the

UK and also #1 in Great Place To Work®

Best Workplaces in Financial Services and

Insurance. This along with our 4.4 ‘Excellent’

Trustpilot score means we must be doing

something right for our people and our

customers – which will remain key going

into 2024!

Q: How is Home Insurance

performing?

The Home Insurance book continues to

show promise, with customer growth

of 12% and a profit of £7.9 million.

Weather events were less severe in 2023,

but some of the severe weather in 2022,

particularly the December freeze event,

continued to impact the 2023 result.

Weather impacts will naturally come

through every few years, but the reported

loss ratio – excluding prior period releases

and the impact of severe weather - was

only marginally higher due to inflation as

we continued to improve risk selection

and claims capabilities. In response to

the threat of more regular and severe

weather, we regularly review our approach

from a pricing and risk selection and

claims perspective and continue invest

in associated areas.

We have been part of Flood Re since

2016. Flood Re is an agreement between

insurers and the UK government which

allows insurers to offer more affordable

insurance for UK homes in areas most at

risk of flooding that were built before 2009.

This allows us to help more customers get

the products they need at a fairer price.

Cost efficiencies were observed due

to our increased scale and higher inflation

was countered by raising prices ahead

of the market. The acquisition due in 2024

of RSA’s direct home and pet operations

will strengthen our offering and scale

in these businesses and I am excited

to welcome our new colleagues from

the More Than business.

Q: What has been the biggest

challenge for UK Insurance this year?

It’s once again been a year of balancing

pricing increases with the continued

high claims inflation and macroeconomic

uncertainties. Our aim has been to

navigate this cycle well, focussing on

profit over growth and maintaining

pricing discipline. We are now seeing the

benefits of raising prices ahead of the

market, with a return to customer growth

in the second half of the year. Inflation was

high but stable with high repair costs

and used car prices impacting claims, as

well as supply chain pressures and labour

shortages. Uncertainty on small bodily

injury claims together with the potential

impact of wage inflation on large

bodily injury claims have added to the

challenges, but we adapted the business

where needed, with prudent reserving

and with some changes in our supply

network having a positive impact.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Costantino Moretti

CEO, International Insurance

4 Great Place To Work® Best Workplaces in Italy 10th,

France 6th, Spain 2nd.

Q: Are you pleased with the

progress in EU Insurance after

a challenging 2022?

I’m very proud of our hard work this year

and of the Admiral culture that is so

embedded in our businesses, reflected

in having been voted in the top 10 in

Great Place To Work®

across all our

European entities.

We continued to prioritise margin over

growth and to strengthen business

fundamentals in tough market

environments, and delivered much

improved results overall with a £6 million

profit before tax in European Motor

from strong rating action and improved

efficiency. As Admiral celebrates a big

birthday, I’ll take a moment to reflect

back on our journey so far.

Our first international operation,

Admiral Seguros, was launched in

2006. The Spanish insurance market is

challenging, with intense competition.

Within this context, we focused on

building strong fundamentals and

adapting our strategy to market

dynamics. We now have over 440,000

customers, a growing direct channel,

and are setting the basis for future growth

by investing and expanding our broker

and partnership channels, for example

with our ING partnership.

ConTe, which was launched in Italy in 2008,

is our largest business outside the UK

with more than one million customers.

We delivered another year of profit and

a 19% year on year increase in turnover.

We continue to explore new distribution

channels while remaining focused on

our direct channels, efficiency and

advanced analytics, and market-leading

customer service.

In France, we launched L’olivier in 2011,

steadily building scale in the direct market

and now insuring over 470,000 customers.

Our sustained focus on margin protection,

cost controls and efficiency has made

us very competitive and we are now

accelerating our product diversification

with our Household proposition to unlock

cross-selling opportunities.

We have built good businesses in Europe,

customer-centric and well set-up for

sustainable growth and creating long-

term value for the Group, and we intend

to continue to deliver on our strategy.

Q: What is the outlook

for the US business?

We launched Elephant in 2009 and

the last couple of years have seen

an exceptionally challenging market

environment with strong competition

and very high levels of claims inflation.

We have taken strong action by increasing

prices to combat claims inflation, cost

reductions, and improved risk selection.

The reduced loss reported in 2023 is

encouraging, and we expect to see further

benefits from our recovery plan earned

through in 2024.

In addition, we have built a solid tech

platform that allows us to service our

customers better and faster and we

continued to maintain our commitment

to Admiral 2.0 with upgrades to our main

policy and billing IT platform, Guidewire,

during the year which contributed to

improving efficiencies.

Looking ahead, we have made good

progress in exploring options for Elephant

to reach its full potential in a huge market.

These assessments take time and are

receiving our full attention.

Q&A with Milena, Geraint, Cristina and Costantino

continued

30 Strategic Report30

Admiral Group plc Annual Report and Accounts 2023

Key Performance Indicators

In order to implement, develop and measure the Group’s

strategic performance, we monitor several ﬁnancial and

non-ﬁnancial key performance indicators (KPIs).

Financial Measures

Non-Financial Measures

Group profit

Group profit before tax

£443m

(2022: £361m)

Growth

Group customer numbers

+6%

(2022: +10%)

International growth

International customers

+4%

(2022: +15%)

Diversification

UK Household customers

+12%

(2022: +19%)

Shareholder returns

Dividend per share

103p

(2022: 112p)

Capital position

Solvency ratio

200%

(2022: 180%)

Customer satisfaction

Customers likely to renew after a claim

>80%

(2022: >80%)

Customer service

Net Promoter Score

>45

(2022: >50)

Digital progress

Customer engagement

>50%

>50% MTAs

done online

Great Place To Work®

GPTW rankings

6th

Positive impact on society

Number of hours donated

by employees

+14 , 0 0 0

(2022: +3,300)

Net zero by 2040

Carbon emissions reductions

+26%

(-33%)

excluding one-off leak event

(2022: -22%)

5 2022 Customer numbers restated– refer to the end of the report for definition and explanation.

6 UK Motor Customers, monthly score averaged over the year.

7 Restated figure, methodology changed in 2023.

8 Relational NPS, methodology updated in 2022. We’ve seen a decrease in the NPS mainly due to increased prices,

which are a reflection of current market conditions.

9 Mid Term Adjustments (UK operations) – adjustments made to a policy mid-term, by the customer.

10 Scope 1 and 2 (market based) emissions per SECR on page 71. Per SECR the 2022 comparative data is restated

to reflect final 12 month verified data.

11 Restated figure. Scope 1 and 2 (market based) emissions per SECR on page 71.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Group Chief Financial Oﬃcer’s review

The past few years have

surely been some of the most

challenging in the Group’s

30-year history – exiting the

pandemic into two heavily

inflationary years leading

to tough conditions for the

industry (and of course for

our customers). And that’s

not to mention several major

UK regulatory changes in

the past couple of years –

well navigated by our teams.

Our clear goal for 2023 was to significantly

improve underlying insurance results

and it’s very positive to see clear

evidence of that emerging through the

year. I’ve been very satisfied with the

disciplined approach taken across the

Group, even if that resulted in a shrinking

customer base for a period in the UK

motor business.

“In 2023, the Group

delivered a solid set

of results. 2023 was

clearly a year where the

strong actions taken

since early 2022 started

to bear fruit.”

Geraint Jones

Group Chief Financial Oﬃcer

The 2023 numbers are the first full year

results reported under the major new

insurance accounting standard, IFRS

17. I want to repeat my huge thanks to

the team involved in getting the Group

ready to produce these results, which was

definitely no small achievement A really

great team effort!

As usual I’ll begin with a quick review

of the group profit versus last year*

in the table on the next page.

Considering the impact of the lower

profitability of the 2021/22 years is still

an important factor in the 2023 result,

the near £600 million profit for the main

business was very positive. Only three

years have seen higher UK profit and

two of those were very impacted by

reduced frequency during the pandemic.

Critically the impact of significant price

increases over 2022 and 2023 has led to

much improved underwriting year results

which will feed into the results over the

next few years. The business is well placed

moving into 2024 too.

TO EXTERNAL

CHALLENGES TO DELIVER

SOLID RESULTS IN 2023

Rising

32 Strategic Report32

Admiral Group plc Annual Report and Accounts 2023

The UK Household business continued

to grow and delivered a profit of around

£8 million, benefitting from reinsurer

profit commission related to older years.

Price increases led to higher average

premiums which should improve margins

as we head into 2024.

Outside the UK our businesses

substantially improved their combined

result compared to 2022, with the

European businesses returning to overall

profit (despite continuing to invest

in new products beyond motor and

diversified distribution within Motor).

In the US, whilst the reported loss was still

not small, underlying results showed sharp

improvement year-on-year thanks to the

strong actions of our team there.

And a few observations on the other lines:

• Admiral Money’s £10 million profit

was a clear highlight; the team took a

cautious approach to volume through

the year and paused growth in the

second half of the year to focus on

high quality risk selection. We’re very

comfortable with arrears trends and our

cautious credit loss provision and the

business is well set to restart growth

in 2024

• In Admiral Pioneer, the tremendous

growth and continued steps forward in

products in Veygo stood out, though

one particularly large claim impacted

the bottom line. Pioneer continues to

invest in testing its small commercial

insurance business line

• The cost of the Group’s share schemes

was basically in line with the previous

year, but other overheads and charges

increased fairly notably. There are

a number of factors explaining the

increase, many of which shouldn’t be

repeated in 2024 (e.g. M&A project fees,

adverse currency movement, costs

to settle a historic Italian tax matter).

Fuller details on page 52. I definitely

expect a much lower number in 2024

(barring anything unexpected).

More Than acquisition

As mentioned through the report,

Admiral’s first significant acquisition

will complete during H1 2024. We will

fund the upfront payment of £82.5 million

from free cash.

As the acquisition is entirely of intangible

assets with no new capital raised to fund

it, the transaction will result in a reduction

to the Group’s solvency ratio of around

10 points. Given the Group’s very strong

capital position, this is comfortably

absorbed. More details on the accounting

will feature in 2024’s accounts.

Internal model

The Group has been developing an

internal model to calculate its solvency

capital requirement (SCR) in a way

that reflects Admiral’s risk profile more

accurately than the standard formula and

allows management to better incorporate

capital considerations into business

decisions. The model will calculate the

SCR for the Group’s main UK lines of

business and for most of market risk.

Progress to application and approval

by the Group’s two main prudential

regulators has been slower than we’d

have liked, though huge effort from our

team has gone, and continues to go

into the project. We expect to enter the

regulatory pre-application process soon

and will then hopefully have a clear path

to application and approval thereafter.

It’s too early to give concrete information

on the exact timing of the application or

likely financial outcome of the process

and more information will follow at the

appropriate time.

Dilution

Starting in 2024 we will make a change

to the way we provide shares to the

Group’s employee share schemes.

Historically we’ve issued new shares to

the trusts each year, mindful of a 10%

rolling ten-year cap. We will no longer

dilute shareholders to fund the share

schemes, initially (probably for 2024

and 2025) making use of shares already

within the trusts and thereafter buying

shares in the market, funded through a

reduction in special dividend. This change

will increase earnings per share by around

1% per year from now on compared to

our previous approach.

Wrap-up

Whilst the current year reported profit

won’t break many records, 2023 was

clearly a year when the strong actions

taken since early 2022 started to bear

fruit. We enter 2024 with much improved

margins across our insurance businesses

and a strong position in Admiral Money.

I look forward to seeing the improvements

start to feed through into the reported

results in 2024.

Geraint Jones

Chief Financial Oﬃcer

6 March 2024

A note on the 2022 IFRS 17 comparatives:

As explained more fully on page 37, the

restated 2022 IFRS 17 insurance profits

are lower than the originally reported

IFRS4 numbers. This is due to differences

in the movements in reserve strength or

risk adjustment position over 2022 under

each standard.

£m

IFRS 17

2023

IFRS 17

2022

Change v

2022

IFRS 4

2022

UK Insurance 597 510 +87 616

Europe Insurance (motor & other lines) 2 (20) +22 (5)

US Insurance (20) (36) +16 (49)

Admiral Money 10 2 +8 2

Admiral Pioneer (16) (14) (2) (16)

Share scheme cost (54) (52) (2) (52)

Other costs (76) (29) (47) (27)

Pre-tax profit 443 361 +82 469

* See important footnote below on the basis of preparation of the 2022 IFRS 17 numbers. The original IFRS 4 numbers are also shown.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

2023 Group overview

£m 2023

2022

(restated) *

% change vs.

2022*

Group turnover (£bn)

4.81 3.68 +31%

Net insurance and investment result 363.1 207.5 +75%

Net interest income from financial services 68.1 46.1 +48%

Other income and expenses 31.7 119.6 -73%

Operating profit

462.9 373.2 +24%

Group profit before tax

442.8 361.2 +23%

Analysis of profit:

UK Insurance 596.5 509.7 +17%

International Insurance (18.0) (56.2) Nm

International Insurance – European Motor 6.1 (16.5) Nm

International Insurance – US Motor (19.6) (36.4) Nm

International Insurance – Other (4.5) (3.3) Nm

Admiral Money 10.2 2.1 +386%

Other (145.9) (94.4) -55%

Group profit before tax

442.8 361.2 +23%

Key metrics

Reported Group loss ratio

*1*2 *3

63.9% 70.6% -7pts

Reported Group expense ratio

*1*2 *3

24.8% 26.2% -1pts

Reported Group combined ratio

*1*2 *3

88.7% 96.8% -8pts

Insurance service margin

*2 *3

10.2% 7.4% +3pts

Customer numbers (million)

*2*4

9.73m 9.20m +6%

Earnings per share

111.2p 95.4p 17%

Dividend per share 103.0p 112.0p -8%

Special dividend from sale of Penguin Portals – 45.0p Nm

Return on equity

*1*2

36.0% 29.4% +7pts

Solvency ratio

200% 180% +20pts

*1. Operating profit, profit before tax (including analysis by segment), earnings per share, return on equity, and reported group loss, expense ratio and combined ratios restated following the

implementation of IFRS 17. See later in the report for further details.

*2. Alternative Performance Measures – refer to the end of the report for definition and explanation.

*3. Reported Group loss and expense ratios are calculated on a basis inclusive of all insurance revenue – this includes insurance premium revenue net of excess of loss reinsurance, plus revenue from

underwritten ancillaries, an allocation of instalment and administration fees/related commissions. See glossary for an explanation of the ratios and Appendix 1a for a reconciliation of reported loss

and expense ratios, and insurance service margin, to the financial statements.

*4. 2022 Customer numbers restated – refer to the end of the report for definition and explanation.

*5. For % change vs 2022, + shows favourable movements, – shows unfavourable movements.

Nm – not meaningful.

34 Strategic Report34

Admiral Group plc Annual Report and Accounts 2023

As our co-founder Henry Engelhardt

said “people who like what

they do, do it better”, and this

has underpinned our culture

across the Group for the last 30

years. Since starting out in our

Cardiﬀ oﬃce in 1993 with just

51 colleagues, to growing to over

13,000 across the world today,

we have always put our people at

the heart of what we do. We are

incredibly proud that some of those

51 colleagues have stayed with us

for the last 30 years and helped

make us the Company we are today.

We asked them what they remember

about their first day at Admiral and what

has kept them here…

What do you remember about your

first day at Admiral?

Tim: This should be fun!

Bethan: How small the department was!

I’d followed my friend Teri to Admiral from

our previous jobs (she started September

1992 and is also still here) so I wasn’t

nervous, and it took about 10 minutes

to meet everyone. IT were based on floor

11 of the building along with ex-CEO

and founder Henry, the server room, post

room and Marketing – a tight squeeze!

Teri: I was convinced I’d made a horrible

mistake. When I accepted the job, we were

called DIAL and that’s what my contract

said. On my first day I came into the office

to find we’d changed our name, we had

desks and PCs but no chairs so I had to sit

on a pile of boxes of listing paper. Bear in

mind that this was only three months

before we were due to launch. I spent

the first couple of weeks at offices in

Reading amending I/90 to fit our model

of direct insurance.

What has been your best Admiral

memory from the past 30 years?

Tim: Probably the day we floated

after many years of waiting to see if it

would happen.

Teri: There have been a few days that

stand out; my first day, the day we opened

for business, the day we floated!

Bethan: I know most people say it was

when we floated on the Stock Exchange,

but I was on maternity leave then and

missed all the excitement in work! Other

highlights for me have been the Stay

at Home Refund during the pandemic.

A few of us worked on that, and after it

was tested and live - which was done really

quickly - we monitored and ran the job

every day for a month to get them all out

by when we’d promised. Twitter was

good for instant feedback, I loved seeing

people post about what they were doing

with their £25. My favourite was a girl

who bought new slippers and spent the

rest on cider!

What kinds of roles have you had

during your time at Admiral?

Bethan: I’ve been in IT Development

since I joined - I started as an Analyst/

Programmer, then Senior Analyst/

Programmer, Team Manager.

Tim: I started in the Post Room, then

moved to IT. Then within IT I’ve moved

from Operations in Cardiff to Swansea

and back again to Cardiff again!

What makes Admiral special to you?

Teri: Every day is different and every

day is a challenge. What makes Admiral

special; even seeing the business grow

from 30-odd people to over 13,000,

it’s never lost its small local Company

feeling. I doubt you’d see senior managers

in the lift dressed in pyjamas in every

major Company.

Bethan: The answer to this has changed

as the Company has grown and changed.

In the early days, it was that we felt like

a family and everyone knew everyone.

When we got too big for that, it was the

way Admiral looks after us and the rewards

that come as a by-product of that.

Along the way it’s been the interesting

work, and more recently it’s been how

we give back to the community and the

world. There’ll always be something to

be proud of.

COLLEAGUES

THAT HAVE

BEEN HERE

SINCE THE START

Celebrating

Bethan

Teri

Tim

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

2023 Group overview

continued

ANOTHER SOLID

SET OF RESULTS

Group highlights

Admiral reports another solid set of results

in 2023 against a backdrop of continued

elevated levels of claims inflation, and

resulting significant rate increases.

Highlights of the Group’s results for 2023

are as follows:

• Businesses across the Group grew

strongly in 2023, with customer

numbers up 6% and turnover up

significantly more at 31% year-on-year:

– UK Motor customers were broadly

flat at the end of 2023 having

fallen in the first half. Market price

increases accelerated relative to

Admiral in the second half, leading

to improved competitiveness and a

return to growth

– UK Household grew turnover by 33%

as a result of an increase in customers

of 12% and continued increases in

average premium. Including Travel

Insurance, (which reported its first

small profit), and Pet Insurance,

overall UK insurance customers grew

by 6%

– Outside the UK, International

Insurance customer numbers

increased by 4%, made up of a 7%

increase in Europe and a reduction

in the US. Increases in average

premiums to reflect the level of

claims inflation led to a growth in

turnover of 12%

– Admiral Money has employed a

controlled approach to growth, with

a total loans balance at the year end

of £0.96 billion, 8% growth since

December 2022 and slightly lower

than the HY 2023 position.

• Group pre-tax profit was £443 million,

23% higher than 2022, restated on an

IFRS 17 basis:

– UK Motor Insurance profit was

£593 million, 13% higher than 2022

(£525 million) as the significant

increases in average premium

over the last year started to earn

through, as well as higher investment

income due to the higher interest

rate environment

– UK Household reported a profit of

£8 million (2022: loss of £11 million),

with 2023 less impacted by severe

weather events, and benefitting from

the positive impact of a commutation

of quota share arrangements on prior

underwriting years.

• The International Insurance business

reported a notably lower loss of

£18 million (2022: £56 million):

– The EU Motor business returned

to a profit of £6 million for the year

(2022: loss of £16 million), as a result

of a lower current year combined

ratio arising from higher average

premiums and small releases on prior

underwriting years

– The result in the US also improved

from a loss of £36 million in 2022

to a loss of £20 million in 2023,

following actions taken to improve

the underwriting result through

large price increases and a focus on

reducing costs.

• Admiral Money reported a higher profit

of £10 million (2022: £2 million), the

increase in the average loans portfolio

year-on-year driving the positive result

through increased net interest income

“We enter 2024 with

improved margins across

our insurance businesses

and a strong position

in Admiral Money.”

Geraint Jones

Group Chief Financial Oﬃcer

Reporting

• Other Group costs increased to

£146 million (2022: £94 million), the

adverse movement driven by higher

central costs due to a number of one-

off items, as well as higher business

development costs and finance charges.

Earnings per share

Earnings per share for 2023 is 111.2 pence

(2022: 95.4 pence, restated on an IFRS 17

basis). The increase from 2022 is aligned

to the increase in pre-tax profit above,

offset partly by a higher effective tax rate,

with the increase in the UK corporation

tax rate to 25% (from 19%) from 1 April

2023 being a significant driver of the

higher effective rate.

Return on equity

The Group’s return on equity was

36% in 2023, 7 points higher than the

restated 29% for 2022. Average equity

for 2023 is lower than 2022 as a result

of the transition to IFRS 17 and higher

dividends were paid out compared to

profits recognised on an IFRS 17 basis.

2022 full year post-tax profits on an

IFRS 17 basis were £86 million lower

than those reported under the previous

standard, IFRS 4. Further information on

the restatement of 2022 financials follows

later in the report.

36 Strategic Report36

Admiral Group plc Annual Report and Accounts 2023

Dividends

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 proposed a final dividend

of 52.0 pence per share (approximately

£156 million) split as follows:

• 35.4 pence per share normal dividend

• A special dividend of 16.6 pence

per share

The 2023 final dividend reflects a pay-out

ratio of 97% of second half earnings

per share. 52.0 pence per share is in line

with the final 2022 dividend (52.0 pence

per share).

The total 2023 dividend, including the

interim dividend of 51.0 pence per share,

declared with the Group’s interim 2023

results is 103.0 pence per share, 8% lower

than the 112.0 pence per share paid

in 2022.

The total 2022 dividend also included the

final additional special dividend of 45.0

pence per share arising from the phased

return to shareholders of the proceeds

from the sale of the Penguin Portals

comparison businesses which completed

in 2021. The total 2022 dividend was

157.0 pence per share.

The 2023 final dividend payment date is

7 June 2024, ex-dividend date 9 May 2024

and record date 10 May 2024.

Re-statement of prior

period comparatives following

IFRS 17 adoption

IFRS 17, the new insurance contracts

accounting standard has been effective

from 1 January 2023. As a result, the

opening balance sheet as at 1 January

2022, the 2022 comparative Income

Statement and the balance sheet as at

31 December 2022 have been restated

under IFRS 17, using a fully retrospective

approach (i.e. as though IFRS 17 had

always been in place).

The new accounting policies and choices

adopted in the implementation of IFRS

17 are disclosed in the notes to these

financial statements. Both the policies

and transition impact are consistent with

the key accounting policy decisions and

transition impact set out on page 234 of

the 2022 Annual Report.

Throughout this report, the Group’s

results under IFRS 17 at 31 December

2023 are compared to the 31 December

2022 comparatives which have been

restated under IFRS 17.

IFRS 17 reported profits for 2022 are

lower than the previously reported IFRS 4

profits. The difference primarily arises as

a result of differences in the movements

in reserve strength or risk adjustment

position over 2022 under each standard.

Under IFRS 4, Admiral moved down to the

95th percentile over the course of 2022,

with a greater proportion of this move

taking place in the second half of the

year. Under IFRS 17, Admiral moved down

to the 95th percentile at the transition

date of 1 January 2022, and remained at

that percentile during 2022. This results

in lower reserve releases under IFRS 17 in

2022, and therefore lower profit.

Note 1 to the financial statements

provides further information regarding

the key factors driving the differences

between the IFRS 4 and IFRS 17 reported

results in 2022.

Economic backdrop

Global inflation continued to impact

claims inflation across Admiral’s markets

in 2023, although with some positive signs

of improvement in the second half of

the year, particularly in the Group’s main

UK market.

The main drivers of this claims inflation

continue to be higher repair costs,

longer repair timescales and high levels

of wage inflation which impacts the

projected costs of bodily injury claims.

Used car prices continue to be one of

the largest contributors to damage

inflation, although they stabilised in 2023

with inflation easing in the latter part of

the year.

Admiral continues to focus on medium

term profitability, and has maintained a

disciplined approach to business volumes,

increasing prices to reflect the elevated

claims inflation. The Group customer

base has continued to grow, although this

disciplined approach has resulted in slower

growth in some businesses. UK Motor

customers were broadly flat year-on-year

at the end of 2023, having slowed in the

first half as a result of price increases

ahead of the market since 2022, offset by

growth during the second half of the year

as Admiral increased prices at a slower rate

than the market. The Group continues to

set claims reserves cautiously.

Admiral Money grew its consumer loans

book year-on-year, though the portfolio

reduced in size in the second half due

to a prudent approach reflecting the

macroeconomic environment and

potential financial impact on consumers.

The business continues to hold

appropriately cautious provisions for

credit losses.

The Group’s results

are presented in the

following sections:

• UK Insurance – including UK

Motor (Car and Van), Household,

Travel and Pet

• International Insurance –

including L’olivier (France),

Admiral Seguros (Spain), ConTe

(Italy), and Elephant (US)

• Admiral Money

• Other Group Items – including

Admiral Pioneer and other

central costs

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

UK Insurance review

2023 was a more encouraging

year after a diﬃcult 2022 for

the industry. Inflationary pressures

began to stabilise and our early

and strong pricing response

positions the business for a robust

improvement in results.

Product proposition and pricing

enhancements and the Group’s

commitment to helping more people

to look after their future, led to the

growth of the UK customer base by

6% while achieving a Trustpilot rating

of 4.4 (one of the best in the industry).

Further, to remain competitively

priced, we continued to focus on

improving operational efficiencies

and sustaining our leading position

in claims management.

The cost-of-living crisis has created

a lot of pressure for our people and in

addition to the energy support payments

and package improvements in 2022,

we officially recognised that we were

paying our people the real living wage

by signing up to the Real Living Wage

Foundation in 2023.

Our award winning culture was again

recognised by being placed in the Top 10

Great Places to Work survey and number

three for Great Places to Work for women.

A feature of our culture throughout our

history is to support our communities

and in 2023 our teams provided over

14,000 impact hours and helped over

a thousand people into work or helped

them to gain new skills with funding

and support for our community partners.

We’re very pleased that our motor book

has returned to growth in the last six

months of 2023, after 12 months of

contraction following our disciplined

approach of strong price increases

to offset the impact of inflation.

Our relatively early pricing response

led to a fall in our competitiveness and

market share in the second half of 2022

and first half of 2023. We recognise that

the market moves in cycles and there

are times when it’s better to protect

margin at the expense of growth,

with a view to capturing volume when

the market opportunity arises.

Inflation remained elevated compared

to pre-pandemic years. Supply chain

pressures across the global repair network

led to slower damage repair times during

2022 and early 2023, resulting in service

pressures across the industry. In response,

Admiral leveraged our scale and strong

working relationships with our repair

network partners to counter these

effects, leading to good improvements in

repair times and easing service challenges

faced by our teams. Overall, damage

inflation appears to have moderated

towards the end of the year from the

levels seen during 2022, but higher wage

inflation is likely to feed into bodily injury

claims over time, which we have provided

for in our reserves.

Beyond motor, our diversification

businesses continued to show growth

and deliver against key objectives.

Our strong multi-product proposition

and retention performance supported

further growth in our Household insurance

business, despite unprecedented rate

increases during the year to offset

inflation pressures. Enhanced pricing

capabilities and improvements to the

Household proposition has established

a great platform to capitalise on

future opportunities. The refreshed

Pet proposition that was relaunched

in late 2022 appears to resonate with

our customers and the book has grown

strongly (albeit from a low base).

The acquisition of the More Than Pet

and Household renewal rights from Royal

Sun Alliance (RSA) will give a further

boost to these businesses, significantly

accelerating our growth ambitions for Pet.

Our Travel business has bounced back

very well post-pandemic with record sales

volumes and a growing renewal book,

and reports a profit for the first time.

“A solid set of results,

demonstrating the

resilience of the business

during challenging

economic conditions,

whilst continuing to

invest in the business,

and support our

customers and people.”

Cristina Nestares

CEO, UK Insurance

WAYS TO MAKE

A DIFFERENCE

Finding

38 Strategic Report38

Admiral Group plc Annual Report and Accounts 2023

To sustain our competitiveness and

operational resilience, we’ve continued

to invest to refresh our technology

estate and transform our channel and

distribution capabilities. During the

year, a key pillar of the strategy was the

migration of over 6.5 million customer

risks to a new policy and billing centre

on Guidewire, which I’m proud to say

was successfully completed.

Formed during the Covid pandemic,

our Aﬀordability team, has helped

to further focus on how we look

after vulnerable policyholders.

With high inflation and the high

cost of living in the UK, the team

has been working with our most

impacted policyholders to get

their insurance payments back

on track. The team plays a pivotal

role in helping customers who

are struggling, as well as those

dealing with other concerns

such as terminal illness, loss of

employment, disability, and

mental health.

In 2023, we trained over 3,000 colleagues

on vulnerable customer awareness

to better identify and support these

customers. We also introduced a

phone line that UK customers can call

for support and discuss alternative

payment arrangements. The feedback

has been resoundingly positive, with one

customer saying:

“The amount of stress I’ve been in

lately in terms of finances has been

very overwhelming. I lost my dad in

December, prior to that he had remained

in hospital. I’m now the only driver in

my household and I passed my test

because I needed to take responsibility

for my family. I’ve never been in financial

difficulty, and I’m just trying to get back

on track. I can’t thank you enough for

helping me in my lowest time.”

OUR

CUSTOMERS

DURING THE

COST OF

LIVING CRISIS

Supporting

UK Insurance financial performance

£m 2023 2022 (restated)

Turnover

*1*2

3,776.0 2,784.3

Total premiums written

*1*3

3,502.6 2,555.0

Insurance revenue 2,596.9 2,174.1

Underwriting result including net investment income

438.6 301.6

Co-insurer profit commission and net other revenue 157.9 208.1

UK Insurance profit before tax

596.5 509.7

Split of UK Insurance profit before tax

£m 2023 2022 (restated)

Motor 593.3 524.9

Household 7.9 (10.7)

Travel and Pet (4.7) (4.5)

UK Insurance profit before tax 596.5 509.7

Key performance indicators

2023 2022 (restated)

Vehicles insured at period end 4.94m 4.94m

Households insured at period end 1.76m 1.58m

Travel and Pet policies at period end 0.69m 0.44m

Total UK Insurance customers 7.39m 6.96m

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation

*2. Alternative Performance Measures – refer to note 13 for explanation and reconciliation to statutory Income

Statement measures

*3. Total premiums restated for prior periods to include premiums for all underwritten ancillary products.

There is a corresponding reduction in Other net income, and no impact on turnover

Highlights for the UK Insurance business include:

• In UK Motor Insurance:

– Customer numbers grew in the second half of the year, to finish at 4.94 million,

in line with a year earlier. Admiral’s price increases to account for claims inflation

in the second half of 2022 and early 2023 were more significant than the wider

market, but this gap closed over the latter part of 2023. Turnover increased by

35% to £3.4 billion from £2.5 billion

– Profit growth of 13% to £593 million (v £525 million) as the rate increases

implemented over the past year are now earning through, and the higher

interest yield environment results in increased investment income.

• In UK Household Insurance:

– Customer numbers grew by 12% to 1.76 million (31 December

2022: 1.58 million). As in Motor, price increases have led to higher average

premiums which contributed to a strong 33% increase in turnover

– Profit was £7.9 million (2022: loss of £10.7 million) as a result of less severe

impact of weather in 2023 compared to 2022, along with the benefit of the

commutation of quota share arrangements on prior underwriting years.

2023 will be defined as the key turning

point in the recent challenging

insurance cycle and I believe we’re well

positioned with a strong team and

good fundamentals to capture market

opportunities for profitable growth in

2024 and further earnings momentum.

Admiral Group plc Annual Report and Accounts 2023

Strategic Report

UK Insurance review

continued

UK Motor Insurance financial review

£m 2023 2022 (restated)

Turnover

3,371.8 2,493.0

Total premiums written

*1*2*4

3,118.2 2,271.3

Gross earned premium

2,115.4 1,795.7

Gross other insurance revenue 134.8 114.0

Insurance revenue 2,250.2 1,909.7

Insurance revenue net of XoL

*2*5

2,188.6 1,865.1

Insurance expenses

*1*2*3

(451.2) (389.6)

Insurance claims incurred net of XoL

*2*5

(1,729.0) (1,596.0)

Insurance claims releases net of XoL

*2*5

392.8 327.2

Quota share reinsurance result

*2*3

(16.8) 95.2

Movement in onerous loss component net of

reinsurance

4.1 5.2

Underwriting result

388.5 307.1

Investment income 111.8 53.8

Net insurance finance expenses (58.2) (36.4)

Net investment income 53.6 17.4

Co-insurer profit commission 76.5 127.5

Other net income 74.7 72.9

UK Motor Insurance profit before tax

593.3 524.9

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation

*2. Alternative Performance Measures – refer to Appendix 1 for explanation and reconciliation to statutory Income

Statement measures

*3. Insurance expenses and quota share reinsurance result excludes gross and reinsurers’ share of share scheme charges

respectively. For share scheme charges refer to Other Group Items

*4. Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding

reduction in Other net income, and no impact on Turnover

*5. XoL. Refers to Excess of Loss (non-proportional) reinsurance; see glossary at end of report for further information

Key performance indicators

2023 2022 (restated)

Reported Motor loss ratio

*1*2

61.1% 68.0%

Reported Motor expense ratio

*1*3

20.6% 20.9%

Reported Motor combined ratio

*1*2

81.7% 88.9%

Reported Motor Insurance service margin

*1*4

17.7% 16.5%

Core Motor loss ratio before releases

*1*5

87.0% 95.7%

Core Motor claims releases

*1*5

(20.2%) (20.0%)

Core Motor loss ratio

*1*5

66.8% 75.7%

Core Motor expense ratio

*1*6

21.4% 21.6%

Core Motor combined ratio

*1*7

88.2% 97.3%

Core Motor written expense ratio

17.8% 20.8%

Vehicles insured at period end

4.94m 4.94m

Other revenue per vehicle

£62 £58

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation.

*2. Reported Motor loss ratio defined as insurance claims incurred and claims releases divided by insurance revenue, net of excess

of loss reinsurance. Reconciliation in Appendix 1b.

*3. Reported Motor expense ratio defined as insurance expenses divided by insurance revenue, net of excess of loss reinsurance.

Reconciliation in Appendix 1b.

*4. Reported Motor insurance service margin defined as underwriting result divided by insurance revenue, net of excess of

loss reinsurance.

*5. Core Motor loss ratio defined as insurance claims incurred and claims releases divided by core product insurance premium

revenue, net of excess of loss reinsurance. Presented to enable analysis of core Motor result excluding other ancillary income.

Reconciliation in Appendix 1b.

*6. Core Motor expense ratio defined as insurance expenses divided by core product insurance premium revenue, net of excess of

loss reinsurance. Reconciliation in Appendix 1b.

*7. Core Motor written expense ratio defined as insurance expenses divided by core product written insurance premium, net of

excess of loss reinsurance.

*8. Other revenue per vehicle includes other revenue included within insurance revenue. See “Other Revenue” section for

explanation and reconciliation.

UK Motor profit increased by 13% to

£593.3 million (2022: £524.9 million) as

a result of a lower current period loss

ratio as the significant rate increases

from late 2022 and early 2023 start

to earn through, as well as higher net

investment income due to the higher

interest rate environment. This was partly

offset by lower quota share recoveries

due to both the more favourable

current period loss ratio and continued

loss ratio improvements on prior

underwriting years, and lower co-insurer

profit commission.

By year end 2023, customer numbers

were flat when compared to the end of

2022, with growth in the second half

of 2023 due to market price increases

resulting in Admiral becoming increasingly

competitive, after lower customers

earlier in the year due to the strong price

increases implemented by Admiral ahead

of the market in late 2022 and early 2023

reflecting the inflationary environment.

Gross earned premium at

£2,115.4 million is 18% higher than 2022

(2022: £1,795.7 million), reflecting the

significant increase in average earned

premium as the price increases over the

last year start to earn through.

The UK Motor core expense ratio

decreased to 21.4% (2022: 21.6%),

with the written expense ratio decreasing

by 3 points to 17.8% (2022: 20.8%), as

a result of the higher premiums noted

above. Insurance expenses are higher

in 2023, driven by wage increases,

higher amortisation of intangible assets

from the new systems that are now

in use, and a short-term increased cost

of claims handling as new claims systems

were implemented.

The movement in onerous loss

component reflects the movement in

the provision for projected claims costs,

inclusive of risk adjustment, on unearned

premium. The onerous loss component at

the start and end of 2023 was small (less

than £2 million), with movements over the

course of both years leading to immaterial

impacts in the Income Statement.

40 Strategic Report40

Admiral Group plc Annual Report and Accounts 2023

Claims incurred

Claims inflation remains high and

continues to be influenced by the average

costs of repairing vehicles, in turn due to

the elevated cost of replacement parts

and paint, as well as high labour costs

and shortages. Used car price inflation

has stabilised, showing signs of slowing

down in the second half of the year,

and repair times have also started to

reduce resulting in stabilising costs for

replacement vehicles.

Average claims cost inflation for 2023 is

approximately 10%, with higher inflation

in the first half of 2023, easing modestly

in the second half. Claims frequency was

also slightly higher in 2023 compared to

2022 as a result of increased miles driven,

although remains below pre-Covid levels.

The longer-term impacts of inflation on

bodily injury claims remain uncertain.

Admiral has not observed material

changes in inflation for bodily injury

claims settled in 2023 when compared to

2022. However, an allowance in the best

estimate reserve to reflect the potential

impacts of higher than historic levels of

future wage inflation on certain elements

of large bodily injury claims reserves,

is maintained.

There is still a relatively high level of

uncertainty within motor claims across

the market arising from inflation and the

future developments relating to both

whiplash reforms and the Ogden discount

rate. The review of the Ogden discount

rate is due to start in mid-2024, with the

new rate, and any change to methodology,

unlikely to be known until late 2024 or

early 2025. Admiral’s assumption for the

Ogden discount rate within best estimate

reserves continues to be the prevailing

rate of minus 0.25 per cent.

Admiral holds significant and prudent risk

adjustment above best estimate reserves,

which has reduced (93rd percentile

confidence level) when compared to the

end of 2022 (95th percentile confidence

level), the movement being in line with

expectations given the slightly less

volatile inflationary environment and a

perceived lower likelihood of an adverse

movement in the Ogden discount

rate, together with the continued

diversification of the business. Whilst the

underlying methods to calibrate the

reserve risk distribution from which the

percentile is selected are consistent year

on year, a number of developments in the

reserve risk modelling in 2023 result in a

slightly less volatile distribution than at

the end of 2022.

Further information is included in notes 2,

3 and 5 to the financial statements.

The core Motor loss ratio has reduced to

66.8% (2022: 75.7%) as a result of a lower

current period loss ratio. Movements in

the current period loss ratio and prior year

reserve releases were as follows:

Core Motor loss ratio

Core Motor

loss ratio before

releases

Impact of

claims reserve

releases

Core Motor

loss ratio

FY 2022 95.7% (20.0%) 75.7%

Change in current period loss ratio (8.7%) – (8.7%)

Change in claims reserve release – (0.2%) (0.2%)

FY 2023 87.0% (20.2%) 66.8%

*1. Reported Motor loss ratio shown on a discounted basis, excluding unwind of finance expenses

The current period loss ratio improved

by 8.7 points which can be primarily

attributed to higher average premium

in the period following significant

price increases.

The benefit from prior period releases

was flat at 20.2% (2022: 20.0%), with the

absolute level of prior period releases

increasing by £65.6 million or 20% to

£392.8 million, from £327.2 million.

The benefit includes both favourable

development of the best estimate reserve

for prior period claims, and the movement

in the risk adjustment as set out above.

Reserve releases as a percentage of

premium are heavily impacted by the 18%

increase in earned premium in the year.

Quota share reinsurance

Under IFRS 17, Admiral’s quota share

reinsurance result reflects the net

movement on ceded premiums, reinsurer

margins and expected recoveries (claims

and expenses) for each underwriting

year on which quota share reinsurance

is in place (primarily 2021 underwriting

year onwards).

Admiral’s UK Motor quota share

contracts operate on a funds withheld

basis, with Admiral retaining ceded

premium (net of the reinsurer margin)

which then covers claims and expenses.

If an underwriting year is not profitable,

investment income is allocated to the

withheld fund and used to delay the point

at which cash recoveries are collected

from the reinsurer. Other features of the

arrangements include expense ratio caps

and commutation options for Admiral

that become available 24-36 months after

the start of the underwriting year.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

UK Insurance review

continued

Quota share reinsurance result

The quota share reinsurance result by underwriting year is as follows:

£m 2023 2022 (restated)

2020 & prior 2.3 (2.9)

2021 (57.6) 7.1

2022 8.2 91.0

2023 30.3 –

Total (16.8) 95.2

The adverse quota share result in 2023 is

therefore driven by:

– Lower recoveries of £30.3 million on

the 2023 underwriting year (UWY

2023) compared to £91.0 million

recoveries on the 2022 underwriting

year (UWY 2022) in 2022 due to the

significantly improved loss ratio on

UWY 2023 compared to UWY 2022

– A significant reversal of recoveries

that had been previously recognised

on the 2021 underwriting

year, as a result of favourable

developments in loss ratio.

Co-insurer profit commission

Co-insurer profit commission is lower

in 2023 (£76.5 million) compared to

2022 (£127.5 million). In 2022, a greater

proportion of the reserve releases were

related to older underwriting years

(2019 and prior) which have lower

combined ratios, with the releases

therefore attracting higher profit

commission. In addition, in 2023 no profit

commission has been recognised on

underwriting years 2021 and 2022

due to the current combined ratio

positions on those years.

Net investment income

Net investment income benefitted

significantly from the higher yield

environment during 2023, increasing to

£53.6 million from £17.4 million in 2022.

Investment income before insurance

finance expense more than doubled

to £111.8 million (2022: £53.8 million)

primarily as a result of the yield

environment. Further information on

the Group’s investment portfolio and

the income generated in the period

is provided in the Investments and Cash

section later in the report.

Net insurance finance expense reflects

the unwind of the discounting benefit

recognised when claims are initially

incurred. The expense has increased

significantly in 2023 (£58.2 million;

2022 £36.4 million) as a result of the

significant increase in risk-free interest

rates since the start of 2022, with a

significant proportion of the insurance

finance expense in 2023 relating to claims

incurred during 2022 and, to a slightly

lesser extent, 2023.

Other revenue

UK Motor Insurance Other revenue:

2023

£m

Within underwriting

result

Other net

income Total

Premium and revenue from additional products & fees

107.8 89.4 197.2

Instalment income and administration fees

134.8 29.3 164.1

Other revenue 242.6 118.7 361.3

Claims costs and allocated expenses

(70.0) (44.0) (114.0)

Net other revenue 172.6 74.7 247.3

Other revenue per vehicle

£62

Other revenue per vehicle net of internal costs £52

2022 (restated)

£m

Within underwriting

result

Other net

income Total

Premium and revenue from additional products & fees

113.3 90.5 203.8

Instalment income and administration fees

114.0 21.9 135.9

Other revenue 227.3 112.4 339.7

Claims costs and allocated expenses

(63.4) (39.5) (102.9)

Net other revenue 163.9 72.9 236.8

Other revenue per vehicle

£58

Other revenue per vehicle net of internal costs £48

*1. Premium from underwritten ancillaries is recognised within the insurance service result (underwriting result). Other income from non-underwritten products and fees is included within other net

income, below the underwriting result but part of the insurance segment result.

*2. Instalment income and administration fees are recognised within insurance revenue (% aligned to Admiral’s share of premium, net of co-insurance) and other revenue (% aligned to co-insurance

share of premium).

*3. Claims costs relating to underwritten ancillary products, along with an allocation of related expenses, are recognised within the insurance result. Expenses allocated to the generation of revenue

from non-underwritten ancillaries are recognised within other net income.

*4. Other revenue per vehicle (before internal costs) divided by average active vehicles, rolling 12-month basis. Presented here based on all ancillary income.

42 Strategic Report42

Admiral Group plc Annual Report and Accounts 2023

Admiral generates other revenue from

a portfolio of insurance products that

complement the core car insurance

product, and fees, generated over the

life of the policy. The most material

contributors to other revenue continue

to be:

• Profit earned from Motor policy

upgrade products underwritten

by Admiral, including breakdown,

car hire and personal injury covers

• Revenue from other insurance products,

not underwritten by Admiral

• Fees such as administration and

cancellation fees

• Interest charged to customers paying

for cover in instalments.

Under IFRS 17, income from underwritten

ancillaries and an allocation of instalment

income and administration fees in

line with Admiral’s gross share of the

core motor product premium, are

included within Insurance Revenue in

the underwriting result as ‘Gross other

insurance revenue’. The remaining income

from instalment income, fees as well

as income from other non-underwritten

ancillary products is presented in other

net income.

Overall contribution increased to

£247.3 million (2022: £236.8 million),

primarily as a result of increased

instalment income following an increase

in the proportion of customers paying

by instalment and the increase in

average premiums.

Other revenue was equivalent to £62

per vehicle (gross of costs), with net other

revenue per vehicle at £52 per vehicle,

both favourable compared to 2022 as

a result of the above-mentioned increases

as well as a broadly flat customer base.

UK Household Insurance financial review

£m 2023 2022 (restated)

Turnover

338.6 255.4

Total premiums written

*1*2

318.8 245.7

Insurance revenue 292.8 236.9

Insurance revenue net of XoL

275.3 222.8

Insurance expenses

(80.9) (70.0)

Insurance claims incurred net of XoL

(199.8) (198.1)

Insurance claims releases net of XoL

6.4 16.5

Underwriting result, net of XoL reinsurance

1.0 (28.8)

Quota share reinsurance result

*1*3

(1.4) 9.2

Underwriting result

(0.4) (19.6)

Net insurance investment income 1.6 1.2

Other income 6.7 7.7

UK Household Insurance result before tax

7.9 (10.7)

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation.

*2. Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding reduction in Other net income, and no impact on turnover.

*3. Quota share reinsurance result within the segment result excludes reinsurers’ share of share scheme costs.

Key performance indicators

2023 2022 (restated)

Reported Household loss ratio

70.2% 81.5%

Reported Household expense ratio

29.4% 31.4%

Reported Household combined ratio

99.6% 112.9%

Household insurance service margin (0.1%) (8.8%)

Household loss ratio before releases 72.6% 88.9%

Impact of severe weather and subsidence on reported loss ratio

11.3% 29.0%

Impact of severe weather and subsidence on result before tax

(£m) 9.8 33.3

Households insured at period end (m) 1.76 1.58

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

UK Insurance review

continued

The UK Household business enjoyed

strong top line growth in 2023 with a

33% increase in turnover to £338.6 million

(2022: £255.4 million) as a result of

significant price increases in response to

higher claims inflation.

The number of households insured

increased by 12% to just under 1.8 million

with Admiral’s multicover offering

contributing strongly to the growth.

The result for the year also improved

materially, with the business delivering

a profit of £7.9 million compared to a loss

of £10.7 million in 2022. The improvement

was due to two factors:

• The impact of severe weather and

subsidence in 2023 was significantly

lower in 2023 than 2022. Whilst the

final quarter of 2023 saw a run

of named storms which were the main

contributor to the £9.8 million weather

impact in the year, 2022 was impacted

by a significant winter freeze event

which impacted the prior year result

by £33.3 million.

• The 2023 result benefitted from a

one-off recognition of reinsurer profit

commission relating to prior period

following a commutation. This benefit

is recognised in the quota share

reinsurance result, with the prior period

quota share result being negatively

impacted by the original de-recognition

of that profit commission following

significant weather events.

The reported loss ratio for the period

was 70.2%, increasing to 72.6% when

excluding prior period releases which

primarily reflect the reduction in risk

adjustment in the current period.

The impact of releases on the 2023

reported loss ratio (benefit of 2.4 points)

is lower than the prior period (benefit

of 7.4 points) partly as a result of an

increase in the estimate of the ultimate

cost of the December 2022 freeze event.

The reported loss ratio - excluding prior

period releases and the impact of severe

weather - for 2023 was 61.3%, marginally

higher than the equivalent ratio for 2022

of 59.9%. The impact of higher claims

inflation was largely matched by the

increases in average premium, which

earned through in the second half of the

year and are expected to continue earning

through into 2024.

Admiral’s expense ratio improved to

29.4% (2022: 31.4%), with the impact

of continued investment in technology

more than offset by increasing

average premiums and the benefits of

increased scale.

The quota share result for the period was

a loss of £1.4 million (2022: £9.2 million

profit). Despite the benefit from the

one-off recognition of reinsurer profit

commission, the quota share result was

materially lower than 2022 as there was

no repeat of the recoveries made from

reinsurers following the December 2022

freeze event.

Overall, excluding the impact of severe

weather, profit for the period was

£17.7 million, £4.9 million lower than 2022

(2022: £22.6 million), primarily as a result

of the slightly higher attritional loss ratio.

44 Strategic Report44

Admiral Group plc Annual Report and Accounts 2023

In 2023, markets continued

to be challenging with high

claims severity inflation,

and the Motor insurance

industry has reported high

combined ratios. Within this

context, we continued to

prioritise margin over growth

and managed to achieve

solid customer and turnover

growth, with average

premiums ﬁnally growing

in all geographies.

Despite the inflation decelerated

compared to 2022 it remains high, placing

pressure on claims, so it is imperative

to continue to stay prudent and

prioritise profitability.

The overall profit in Europe is a combined

outcome of the positive contribution

from Italy and France, while Spain has

reported a loss. France and Italy are now

both profitable, and we will continue to

grow the book with discipline and invest

in diversification (distribution in Italy;

product with Household in France).

The Spanish result is a function of the

unprecedented high combined ratio

of the Motor insurance industry, as well

as continued investment to build our

distribution diversification capabilities.

We have taken strong action and have built

good foundations, which we believe will

result in improved performance in 2024.

The US has shown a strong improvement

of all KPIs and has reported a lower loss

compared to last year. We are confident

that the actions taken will continue to

have a positive impact and contribute to

move Elephant closer to breakeven.

Due to those improvements, Elephant

did not require a capital injection from

the Group and we expect this will also

be the case in 2024. We have made good

progress on assessing strategic options

and we are now deep diving on a short list

of them, aiming to get to a final decision

in the first part of 2024.

I am grateful for the hard work of

our employees who have made our

companies a Great Place to Work. I am

also proud of the focus we have put on

helping our customers and supporting

the communities in which we operate.

Well done to the team, as we look forward

to a positive 2024!

“Markets hit the worst

part of their cycle in 2023,

but we have continued

to demonstrate strong

performance and results.”

Costantino Moretti

CEO, International Insurance

International Insurance review

A DIVERSIFIED

SET OF CHANNELS

AND PRODUCTS

Establishing

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

International Insurance review

continued

In 2023, L’olivier performed well in the

context of challenging market conditions.

Amidst escalating inflation and sluggish

market volumes that fell short of

projections, L’olivier adeptly navigated

these uncertainties by prioritising margin

protection. This approach inevitably

moderated our growth trajectory,

resulting in a 6% year-on-year increase

in our motor policy base up to 420,000

customers. Concurrently, our turnover saw

a 15% increase to £219 million, bolstered

by a robust average premium.

By proactively adjusting our pricing

strategies ahead of competitors, we

saw favourable loss ratio development.

This, combined with stringent expense

control and continuous enhancements in

operational efficiency, culminated in our

fifth year of written profits, achieving a

robust 95% written combined ratio.

2023 was a positive year for ConTe, with

continued focus on sustainable growth:

+20% revenue increase led by higher

average premiums (+13%) and customer

growth (+7%). Market conditions have

been improving, following a challenging

2022 which saw the market combined

ratio increase to 108% and 128% for

the direct channel. These inflationary

pressures, together with regulatory

changes, led direct competitors to raise

prices materially, allowing ConTe.it to do

the same.

Our key aim is to be a very profitable

insurer in Italy through advanced

technologies and analytics.

We strengthened our fundamentals with

a new data platform which improves

the time to market for analytics

model releases.

Sustainability has been a cornerstone of

our operations making significant strides

in being more efficient (4pp of written

expense ratio reduction), responding

to customers’ needs and expectations,

investing in data capabilities and ensuring

long term-viability.

“L’olivier adeptly navigated

market uncertainties

and I am pleased

to report a proﬁtable

Motor performance.”

Pascal Gonzalvez

CEO, L’olivier

“In a diﬃcult market

environment, we

delivered good results and

operational successes.”

Antonio Bagetta

CEO, ConTe

ConTe also achieved the highest NPS in

the industry and the best Trustpilot score

for online insurance, largely reflecting our

excellent operational service levels.

Our people remained a key priority in

2023. We implemented several wellbeing

initiatives and increased our GPTW

Trust index by 9 points to 87 in 2023.

We were also awarded by Milano Finanza

for our innovative approach to people

management, and in particular for our

Corporate Welfare, Employee Benefit and

Family Care Welfare.

It has been a year of operational

successes, with sustainable growth of the

Italian business driven by higher average

premium and number of customers,

continuing to strengthen our data and

technological innovation and the launch

of new channels. In addition, we continued

to focus on our customers and our people,

and I would like to thank the ConTe team

for their continued commitment and hard

work in 2023!

France

Italy

Looking ahead to 2024, L’olivier is set to

further leverage our commitment to

digitalisation and artificial intelligence

deployment (for example, pushing

100% of new claims notification online).

This pivotal focus aims to serve our

customers faster and enables better

service while increasing our cost efficiency.

We are also poised to expedite our

product diversification with further

development in household insurance,

continuing our 2023 trend when turnover

grew by more than 100% (albeit from a

low base). This aligns with our ongoing

strategy to enhance cross-selling and our

multi-product offering.

Finally, I would like to thank all L’olivier

staff for their energy, enthusiasm

and great contribution to these good

2023 results.

46 Strategic Report46

Admiral Group plc Annual Report and Accounts 2023

Claims inflation was the major theme

for the Spanish car insurance industry in

2023. Q4 market results showed a market

combined ratio

exceeding 100% for the

first time in two decades. Market price

correction started early in the year and

accelerated in the second half, we expect

this trend to continue into 2024.

Admiral Seguros was not immune to this

market context. Inflation in the first two

quarters was ahead of our expectation,

putting pressure on loss ratios for both

the 2022 and 2023 underwriting years.

We took strong action, raising prices more

than the market across all channels with

a focus on protecting margin. Q4 average

premium was up 16% vs a year earlier,

despite a portfolio shift towards lower-risk

profiles. The increasing trend in income

per policy contributed to an improved

expense ratio and sets the business up

well going into 2024.

With a more medium-term perspective,

we continued to invest in new distribution

channels as routes to future scale.

June saw the successful launch of our

digital insurance product for ING bank,

“Seguro de Auto NARANJA”. This has

attracted positive feedback about both

the product and purchase experience.

In the broker channel, we reinforced our

commercial management team and

made pleasing progress in underwriting.

We improved productivity, and enhanced

our digital servicing platforms, increasing

our digital sales ratio by 30%, becoming

even more responsive to customer needs.

For another consecutive year, we were

voted 2nd Great Place to Work in Spain,

winning the special prize “Better for

People” in recognition of a collaborative

and open team culture. I would like to

thank all of my colleagues for their hard

work and contribution during 2023.

In 2023, Elephant materially improved its

result with a reduced loss of £20 million

from £36 million in 2022, in line with our

commitment to turn around our financial

performance and despite very challenging

market conditions with sustained severity

inflation. Our combined ratio decreased

by around 9 points

(compared to an

industry projection of 3.5

points lower)

driven by improvements in both our loss

and expense ratios.

Our expense ratio was 5 points

better

than 2022, benefitting from efficiency

initiatives (including a reduction in

headcount) and a more favourable

acquisition market. The latter was driven

by reduced competition in a difficult

market, as many players lowered their

growth appetite to protect their bottom

line while increasing rates.

Our loss ratio improved by 4 points

as a result of strong rating action and

intentional mix shift towards lower loss

ratio segments and away from newer

channels and states. We increased base

rates by an additional 38% in 2023,

compared to circa 16% across the top

five players in our states.

Important to

“Despite very challenging

market conditions,

Elephant materially

improved its result with

reduced losses in 2023.”

Alberto Schiavon

CEO, Elephant

note is that the most recent underwriting

quarters continue to show improving

results compared to prior ones, at the

same point of development. It remains

early days but this is promising.

Our significant rate increases over the last

few years have led to a 18% reduction in

vehicles insured throughout 2023, but at

a substantially higher average premium,

leading to an overall growth in turnover

of 1%.

I am very grateful to the Elephant team

for the dedication, hard work, and

commitment in delivering excellent

customer service, modernising our

technology stack, while improving our

business fundamentals at a much faster

rate than the market.

12 ICEA market data, net of reinsurance.

13 Earned whole account basis net of XoL.

14 Data is from S&P Global Market Intelligence 2023 Auto

Insurance Market Report.

15 Insurance expenses, excluding share schemes divided

by insurance revenue net of XoL.

16 Insurance claims incurred and claims releases divided

by insurance revenue net of XoL.

17 State filing rate changes for Virginia and Texas.

Weighted average change from top 5 players based

on market share.

“We are starting to

see the beneﬁt of strong

actions taken during

tough market

conditions in 2023.”

Sarah Harris

CEO, Admiral Seguros

Spain

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

International Insurance review

continued

International Insurance financial performance

£m 2023 2022 (restated)

Turnover

894.9 795.9

Total premiums written

*1*2

840.0 744.2

Insurance revenue 842.6 750.0

Insurance revenue net of XoL

811.8 732.0

Insurance expenses

(249.4) (254.6)

Insurance claims net of XoL

(565.2) (547.1)

Underwriting result, net of XoL

(2.8) (69.7)

Quota share reinsurance result

*1*3

(22.1) 13.9

Movement in net onerous loss component 0.6 (1.0)

Underwriting result

(24.3) (56.8)

Net investment income 4.3 1.1

Net other revenue 2.0 (0.5)

International Insurance loss before tax

*1*4

(18.0) (56.2)

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation

*2. Total premiums restated for prior periods to reflect premiums for all underwritten ancillary products. There is a corresponding reduction in Other net income, and no impact on turnover

*3. Quota share reinsurance result within the segment result excludes reinsurers’ share of share scheme costs

*4. Costs related to the settlement of a historic Italian tax matter during 2023 are excluded from the International Insurance result and presented within Group other costs, given that these are not

reflective of the underlying trading performance of the International Insurance business.

Key performance indicators

£m 2023 2022 (restated)

Loss ratio

69.6% 74.7%

Expense ratio

30.7% 34.8%

Combined ratio

100.3% 109.5%

Insurance service margin

(3.0%) (7.8%)

Customers insured at period end

(million) 2.17 2.08

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation

International Motor Insurance – Geographical analysis

2023 Spain Italy France US Total

Vehicles insured at period end 0.45m 1.04m 0.42m 0.19m 2.10m

Turnover (£m) 121.8 272.4 219.1 271.2 884.5

2022 Spain Italy France US Total

Vehicles insured at period end 0.43m 0.97m 0.40m 0.24m 2.04m

Turnover (£m) 104.6 227.9 190.4 268.5 791.4

*1. Alternative Performance Measures – refer to the end of this report for definition and explanation

Split of International Insurance result

£m 2023 2022 (restated)

European Motor 6.1 (16.5)

US Motor (19.6) (36.4)

Other (4.5) (3.3)

International Insurance loss before tax (18.0) (56.2)

48 Strategic Report48

Admiral Group plc Annual Report and Accounts 2023

Admiral’s International insurance

businesses continued to grow, with

customers increasing by 4% to

2.17 million (2022: 2.08 million) and

turnover growth of 12% to £894.9 million

(2022: £795.9 million).

The insurance service margin also

improved to -3.0% (2022: -7.8%),

driven by an improved combined

ratio. This, together with increased

investment income, resulted in a lower

reported loss before tax of £18.0 million

(2022: £56.2 million).

The combined ratio improved to 100.3%

(2022: 109.5%), due to the combined

effect of higher premiums, increased scale

in the European businesses, and a strong

focus on expense efficiency in Europe

as well as a reduced cost base in the US.

This resulted in the loss ratio improving to

69.6% (2022: 74.7%) while the expense

ratio reduced to 30.7% (2022: 34.8%).

Investment in diversification continued

with a focus on distribution in Italy

and Spain, and Household insurance in

France. This will further facilitate the

long-term growth and profitability of

these businesses.

The European insurance operations

in Spain, Italy and France insured

1.91 million vehicles at 31 December

2023 – 6% higher than a year earlier

(2022: 1.80 million). Motor turnover

was up 17% to £613.3 million

(2022: £522.9 million), driven by strong

price increases and the larger book sizes.

The combined European Motor profit was

£6.1 million (2022: loss of £16.5 million),

an improvement driven by higher average

premium and an improved expense ratio

despite continued inflationary pressures.

The combined ratio reduced to 95.4%

(2022: 104.2%).

Inflation remained high throughout

2023 and had a material impact on the

International results, driving increased

market premiums particularly in Italy,

Spain and the US. Admiral continues to

focus on medium term profitability.

Admiral Seguros (Spain) grew its customer

base by 3% to 0.45 million customers

over the past year (2022: 0.43 million)

despite strong price increases in a

competitive market with high claims

inflation. The business continues to

focus on improving margins, enhancing

digital and data capabilities, as well as

sustainable growth through distribution

diversification through the broker channel

and other partnerships.

The Group’s largest international

operation, ConTe in Italy, increased

vehicles insured by 7% to

1.04 million (2022: 0.97 million) and

Motor turnover by 20% to £272.4 million

(2022: £227.9 million) reflecting

disciplined growth and price increases.

The business continued to focus on risk

selection and expense reduction as well

as growth in the broker channel.

L’olivier (France) increased its

customer base by 6% to 0.42 million

(2022: 0.40 million). The business has

focused on margin protection in a difficult

market with risk selection and loss

ratio improvements, alongside strong

cost control and the development of

household insurance to leverage cross-

selling opportunities and further support

future growth.

In the US, Admiral underwrites motor

insurance through its Elephant Auto

business. After a disappointing 2022 and

in a context of high inflationary pressures,

Elephant focused on materially improving

its underwriting result in 2023 with

strong rating action and cost reduction.

The conscious decision to focus on

improving underwriting results led to an

18% decrease in the number of vehicles

insured to 0.19 million (2022: 0.24 million),

a moderately higher turnover of

£271.2 million (2022: £268.5 million) and

a reduced loss before tax of £19.6 million

(2022: loss of £36.4 million). In light of

this early progress, the business did not

need further capital from the Group in

2023. Elephant will continue to prioritise

improving the loss ratio ahead of growth

in the immediate future.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

I’m pleased to be able to say

it has been a positive 2023

for Admiral Money.

Coming into the year we knew there

would be continued uncertainty with

higher interest rates and inflation

impacting on the cost of living. I’m proud

of how we have navigated these uncertain

times and I am absolutely delighted with

our first double digit profit of £10 million.

I would also draw particular attention to

our cost income ratio which is below 40%

for the first time and which represents

growing evidence of a likely long-term

competitive advantage.

Through the year we have continued to

focus on high quality risk selection and

a controlled and conservative approach

to growth. Our on-balance sheet loan

book at end of December stands at

£0.96 billion, 8% growth since FY 2022

and slightly down on the HY 2023

position. Our net income of £66 million

has increased by 49% from 2022, largely

reflecting the higher average balances

through the year as well as margin

improvements to provide risk resiliency.

We retain a firm focus on prime

lending and are seeing a high level of

resilience from our customers despite

inflation and higher interest rates.

Where loss experience has varied from our

expectation, in true Admiral fashion we

have adapted our approach quickly and

decisively and have remained well below

our IFRS 9 expected credit loss (ECL)

reserve position. Our NPS score of 68 and

Trustpilot score of 4.5 provide continued

evidence that our commitment to being

an efficient prime focused lender and

providing certainty and transparency

to UK customers on their lending needs

is a successful formula.

2023 has also been a year of significant

and successful investment in our

capabilities, particularly in technology

and data. We are especially looking

forward to seeing the benefits of our

new origination platform in 2024.

This new technology also provides us

with options to broaden our participation

in the consumer lending market in

the future.

We have also completed the delivery

of several enablers for realising our goal

to be the lender of choice for Admiral

Insurance customers. This is a key pillar

of our strategy and where we have

the most significant and sustained

competitive advantage. Over 50% of

our new customer flows in 2023 came

from either current or recent Admiral

Insurance customers.

Looking to 2024, we enter the year

with good momentum. We expect to

benefit from our strong position in a

growing market as we see a continued

shift to comparison and credit score

marketplaces. I expect to see further

growth in our loan balances towards

the £1.2 billion range during 2024,

assuming current economic conditions.

Combined with a tightly controlled

cost base, we should see continued

improvements in the economics in the

coming years.

I’d like to finish by thanking our

customers and all of my colleagues

and wish everyone the best for 2024.

“I’m proud of how we

have navigated these

uncertain times,

and I am absolutely

delighted with our

ﬁrst double digit proﬁt

of £10 million.”

Scott Cargill

CEO, Admiral Money

Admiral Money review

OUR DIGITAL

CAPABILITIES

Enhancing

50 Strategic Report50

Admiral Group plc Annual Report and Accounts 2023

Admiral Money financial review

£m 2023 2022

Total interest income 94.7 58.7

Interest expense

(28.3) (14.1)

Net interest income 66.4 44.6

Other fee income 0.1 0.3

Total income 66.5 44.9

Credit loss charge (33.4) (20.6)

Expenses (22.9) (22.2)

Admiral Money profit before tax

10.2 2.1

*1. Includes £1.5 million intra-group interest expense (FY 2022: £1.5 million).

*2. Alternative Performance Measures – refer to the end of this report for definition and explanation.

Admiral Money distributes and

underwrites unsecured personal

loans and car finance products for UK

consumers through price comparison,

credit scoring applications and direct

channels. The proposition is focused on

offering real rates to provide customers

with upfront transparency and certainty.

Admiral Money recorded a pre-tax profit

of £10.2 million in 2023 (improved from

£2.1 million profit in 2022), continuing

the positive trajectory seen since 2020.

Gross loan balances grew 8% to

£0.96 billion (2022: £0.89 billion),

with a £81.7 million (2022: £63.7 million)

credit loss provision, leading to a net loan

balance of £875.1 million

(2022: £823.7 million). The increase

in average portfolio size year on year

contributed to a 49% increase in

net interest income to £66.4 million

(2022: £44.6 million).

As with prior year, Admiral Money

continued to carefully manage

affordability and credit criteria for

new lending in 2023 to reflect the

higher interest rate and elevated

inflation environment. At the same

time interest rates on new loans were

increased to reflect the rising cost

of funding. These measures will help

ensure sustainable financial performance

into the future.

The credit loss charge increased to

£33.4 million (2022: £20.6 million).

Overall, an appropriately cautious

approach has been taken to calculating

the credit loss provision, including

post model adjustments for model

performance, cost of living, economic

scenarios forecast uncertainty, reflecting

the level of uncertainty in the current

economic environment. For further

information, refer to note 7 in the

financial statements.

Admiral Money is funded through a

combination of internal and external

funding sources. The external funding

is secured against certain loans via

transfer of the rights to the cash-flows

to two special purpose entities (SPEs).

The securitisation and subsequent issue

of notes via SPEs does not result in a

significant transfer of risk from the Group.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Share scheme charges relate to the

Group’s two employee share schemes.

The increase in the charge compared to

2022 is driven primarily by the higher

share price in 2023 relative to 2022,

which increases the employer’s national

insurance cost on shares due to vest.

Other central costs consist of Group-

related expenses and include the cost of

a number of significant Group projects,

such as the internal model development

and other regulatory projects, central

management salaries and expenses,

and additional expenses including gains

and losses on amounts held in foreign

currencies. The significant increase in

other central costs is driven primarily by

costs incurred on interest and penalties

on settlement of a historic Italian tax

matter (further details are provided in

the taxation section later in this report);

an adverse impact of foreign exchange

movements (compared to a gain on these

balances recognised in 2022), and higher

costs related to M&A activity.

Admiral launched Admiral Pioneer

in 2020 to focus on new product

diversification opportunities, as part of

the investment in product diversification.

Pioneer businesses include Veygo (flexible

pay-as-you-go and learner driver insurer

in the UK) and small business insurance

in the UK. Pioneer reported a loss of

£16.2 million in 2023 (2022: £13.5 million).

This was mainly driven one particular

large claim in Veygo, for which a cautious

reserving approach has been adopted,

together with continued investment in

small business insurance.

Business development costs increased to

£15.3 million (2022: £8.8 million), primarily

attributed to increased investment in new

businesses within the operations across

the Group as part of the diversification

strategy. Admiral took the decision to

close its small fleet insurance business

in France, which also resulted in modest

closure costs.

Finance charges of £20.3 million

(2022: £12.1 million) primarily related

to interest on subordinated notes, as

well as a small one-off charge in relation

to the renewal of the Group’s revolving

credit facility. In July 2023, the Group

issued £250 million subordinated loan

notes, at a fixed rate of 8.5%, with a

redemption date of January 2034. At the

same time as the new issue, the Group

made a tender offer for the existing

£200 million subordinated loan notes, with

£145 million of the 2024 notes tendered.

At 31 December 2023 the resulting

nominal value of subordinated liabilities

on the balance sheet is £305 million,

which will reduce to £250 million in

July 2024.

A loss of £2.6 million (2022: £2.8 million)

was attributed to compare.com in

the first half of the year, which was

a combination of a small loss in the

business together with a small loss

recognised on disposal. The sale of this

US comparison business completed

during the period, with no cash exchange

as a result, but Admiral receiving a

minority share in the acquiring business.

Other interest and investment

income decreased to £4.6 million

(2022: £10.1 million). In 2022, there was

a gain of £4.7 million from the sale of

UK government bonds which was not

repeated in the current period, and

the current period also includes a loss

of £3.6 million in 2023 related to the

re-purchase of bonds as a result of the

debt restructure. Excluding these factors,

underlying interest and investment

income increased to £8.2 million from

£5.4 million, in line with the higher

interest rate environment.

Other Group Items

Other Group items financial review

£m 2023 2022 (restated)

Share scheme charges (54.4) (51.7)

Other central costs

(41.7) (15.6)

Admiral Pioneer result

(16.2) (13.5)

Business development costs

(15.3) (8.8)

Finance charges

(20.3) (12.1)

Compare.com loss before tax (2.6) (2.8)

Other interest and investment income

4.6 10.1

To t al (145.9) (94.4)

*1. A number of small re-allocations of costs/income have been made between these lines and UK insurance/International insurance segment results for 2022. These include moving costs related to

the French fleet insurance business (closed in H1 2023) out of the Admiral Pioneer operating result, leading to a lower loss in Admiral Pioneer than reported in 2022.

*2. Finance charges within other group items include £1.7 million (2022: £0.7 million) that relate to intra-group arrangements, with the corresponding income presented within the UK

Insurance result.

52 Strategic Report52

Admiral Group plc Annual Report and Accounts 2023

The Group manages its capital to ensure

that all entities are able to continue

as going concerns and that regulated

entities comfortably meet regulatory

capital requirements. Surplus capital

within subsidiaries is paid up to the Group

holding company in the form of dividends.

The Group’s regulatory capital is

based on the Solvency II Standard

Formula, with a capital add-on to reflect

recognised limitations in the Standard

Formula with respect to Admiral’s

business, predominantly in respect

of profit commission arrangements

in co- and reinsurance agreements.

The Group continues to develop its

partial internal model to form the

basis of future capital requirements.

Having taken time to review, update and

extend the scope of the model as well as

completing further cycles of independent

external validation, the Group expects to

enter a pre-application process with its

regulators soon. Once the pre-application

process is complete, the Group expects

to be able to communicate timelines

for a full application.

In the interim period before model

approval, the current standard formula

plus capital add-on basis will continue

to be used to calculate the regulatory

capital requirement.

The estimated and unaudited Solvency

ratio for the Group at the date of this

report is as follows:

The Group’s solvency ratio has improved

over 2023 to a strong closing position at

200% (2022: 180%). Strong generation

of economic capital in the core UK

motor business, in particular during the

second half of the year, contributed to an

increase in Own Funds of approximately

£200 million. The increase in Tier 2 Capital

of approximately £50 million (further

detail below) also contributed to the

Own Funds increase as well as smaller

favourable impacts from movements in

yields and spreads in the year, and the

impact of changes in the risk margin

arising from the PRA’s introduction of the

new UK prudential regime for insurers,

‘Solvency UK’.

The SCR also increased over the year,

though to a lesser extent. The increase of

approximately £50 million was primarily as

a result of the increase in premiums across

all Group businesses and the associated

impact on underwriting and operational

risk elements of the capital requirement.

The SCR above includes an updated

capital add-on which is recalculated at

the end of each period. As a result, it is

different to the fixed Group capital add-

on which is included in the regulatory

Quantitative Reporting Templates (QRTs)

reported to the PRA.

During the second half of 2023, the PRA

issued notice of an updated fixed Group

capital add-on of £24 million, which is

lower than the previously approved add-

on of £81 million, but higher than the

Group’s own assessment of the capital

add-on at the end of 2023.

The estimated solvency ratio including

the fixed Group capital add-on of

£24 million, that is calculated at the

balance sheet date rather than the date

of this report, and will be reported in

the Group’s 2023 Solvency and Financial

Condition Report (SFCR) is as follows:

Group Capital Structure and Financial Position

Group capital position (estimated and unaudited)

YE 2023

£bn

YE 2022

£bn

Eligible Own Funds (post-dividend)

1.42 1.20

Solvency II capital requirement

0.71 0.66

Surplus over capital requirement 0.71 0.54

Solvency ratio (post-dividend)

200% 180%

*1. 2023 Own Funds include approximately £250 million of Tier 2 capital following the Group’s recent issue of ten-year subordinated loan notes. YE’22 Own Funds include approximately £200 million of

Tier 2 capital.

*2. Solvency capital requirement includes updated, unapproved capital add-on.

*3. Solvency ratio calculated on a volatility adjusted basis.

Regulatory solvency ratio (estimated and unaudited)

2023

£m

2022

£m

Solvency ratio as reported above 200% 180%

Change in valuation date

(11%) (11%)

Other (including impact of updated, unapproved capital add-on) (6%) (20%)

Solvency ratio to be reported (SFCR) 183% 149%

*1. The solvency ratio reported above includes additional own funds generated post year end, up to the date of the approval of the dividend.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Investment return

£m 2023 2022

Underlying investment income yield 3.30% 1.6%

Investment return 124.4 64.1

Unrealised (losses)/gains on derivatives (0.2) 0.5

Movement in provision for expected credit losses 2.5 1.8

Total investment return 126.7 66.4

Cash and investments analysis

£m 2023 2022

Fixed income and debt securities 2,825.9 2,372.7

Money market funds and other fair value instruments 918.8 934.7

Cash deposits 116.7 101.4

Cash 353.1 297.0

To t al

4,214.5 3,705.8

*1. Total Cash and Investments include £278.2 million (2022: £198.2 million; 2020: £74.8 million) of Level 3 investments. Refer to

note 6e in the financial statements for further information.

The main items contributing to the operating cash inflow are as follows:

£m 2023 2022 (restated)

Profit after tax 337.2 285.3

Change in net insurance contract liabilities 309.5 248.6

Net change in trade receivables and liabilities (42.3) (21.2)

Change in loans and advances to customers (73.6) (280.6)

Non-cash Income Statement items 61.1 71.1

Taxation expense 105.6 75.9

Operating cashflow, before movements in investments 697.5 379.1

Solvency ratio sensitivities

£m 2023 2022

UK Motor – incurred loss ratio +5% -11% -11%

UK Motor – 1 in 200 catastrophe event -1% -1%

UK Household – 1 in 200 catastrophe event -5% -4%

Interest rate – yield curve up 100 bps -1% -2%

Interest rate – yield curve down 100 bps +1% +2%

Credit spreads widen 100 bps

-5% -6%

Currency – 25% movement in Euro and US dollar -3% -3%

ASHE – long term inflation assumption up 50 bps -3% -3%

Loans – 100% weighting to ‘severe’ scenario

-1% -1%

*1. 2022 credit spread sensitivity restated to include the benefit of offsetting movements in the volatility adjusted yield curve

used for discounting liabilities.

*2. Refer to note 7 to the financial statements for further information on the ‘severe’ scenario.

Cashflow

£m 2023 2022 (restated)

Operating cashflow, before movements in investments 697.5 379.1

Transfers to financial investments (285.5) 189.0

Operating cash flow 412.0 568.1

Tax payments (133.0) (91.2)

Investing cash flows (capital expenditure) (75.9) (101.0)

Financing cash flows (216.7) (692.8)

Loans funding through special purpose entity 44.9 267.8

Foreign currency translation impact 24.8 (26.6)

Net cash movement 56.1 (75.7)

Unrealised gains/(losses) on investments 98.1 (255.6)

Movement in accrued interest, foreign exchange and

unrealised gains/(losses) on derivatives 69.0 113.2

Net increase in cash and financial investments 508.7 (407.1)

Issue of subordinated loan notes

During July 2023, Group issued 10.5 year,

8.5% £250 million subordinated loan

notes. At the same time as the new issue,

the Group made a tender offer for the

existing £200 million subordinated loan

notes, due to mature in 2024. £145 million

of the 2024 notes were tendered, with

the remaining £55 million of 2024 notes

not classified as Tier 2 Capital within Own

Funds at the end of 2023.

Investments and cash

Investment strategy

Admiral Group’s investment strategy

focuses on capital preservation and low

volatility of returns relative to liabilities

and follows an asset liability matching

strategy to control interest rate, inflation

and currency risk. A prudent level of

liquidity is held and the investment

portfolio has a high-quality credit profile.

In 2023, the focus remained on matching,

and cashflows were invested into high

quality assets to take advantage of rising

risk-free rates, whilst being appropriately

cautious on the credit outlook. The Group

holds a range of government bonds,

corporate bonds, alternative and private

credit assets, alongside liquid holdings in

cash and money market funds.

A further aim of the strategy is to

reduce the Environmental, Social, and

Governance (ESG) related risks in the

portfolio whilst continuing to achieve

sustainable long-term returns. In 2023,

the portfolio weighted average ESG score

had an MSCI AA rating.

Net investment income for 2023 was

£126.7 million (2022: £66.4 million).

Provisions for expected credit losses

developed favourably, leading to

a £2.5 million release of provisions

(2022: £1.8 million favourable impact).

The investment return on the Group’s

investment portfolio (excluding unrealised

gains and losses and the movement in

provision for expected credit losses)

was £124.4 million (2022: £64.1 million).

The annualised rate of return was higher

at 3.3% (2022: 1.6%), due to higher

reinvestment yields and higher returns

on floating rate securities as interest rates

rose throughout the year.

Group Capital Structure and Financial Position

continued

54 Strategic Report54

Admiral Group plc Annual Report and Accounts 2023

An increase in the market value

of the portfolio of £98.1 million

(2021: £255.6 million reduction)

primarily relates to the reversal of losses

recognised in 2022 as the bonds are

held closer to maturity. That movement

is reflected in the Statement of Other

Comprehensive Income.

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 31 December 2023

was £4,214.5 million (31 December

2022: £3,705.8 million), the increase

reflecting market value gains noted

above, an increase in assets at the Group

level following the refinancing of the

Group’s subordinate debt during 2023,

and growth in premiums written.

The net increase in cash and investments

in the period is £508.7 million (2022:

decrease of £407.1 million).

Taxation

The tax charge for the period is

£105.6 million (2022: £75.9 million),

which equates to 23.8% (2022: 21.0%)

of profit before tax. The increase in the

UK rate of corporation tax to 25% (from

19%) from 1 April 2023 is a significant

driver of the increase. In addition, in

late 2023 the Group settled an amount

related to a historic Italian tax matter.

This is not expected to result in a material

increase in the tax charge going forward.

See note 10 to the financial statements

for further details.

Co-insurance and reinsurance

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.

These arrangements include profit

commission terms which allow Admiral

to retain a significant portion of the

profit generated.

Although the primary focus and disclosure

is in relation to the UK Motor insurance

book, similar longer-term arrangements

are in place in the Group’s international

insurance operations and the UK

Household and Van businesses.

UK Motor Insurance

Munich Re and its subsidiary entity,

Great Lakes, currently underwrites 40%

of the UK Motor business. From 2022,

20% of this total is on a co-insurance basis

(via Great Lakes) and will extend to 2029.

The remaining 20% is on a quota share

reinsurance basis and these arrangements

now extend to 2026.

The Group also has other quota share

reinsurance arrangements confirmed

to at least 2024, covering 38% of the

business written.

The nature of the co-insurance proportion

underwritten by Munich Re (via Great

Lakes) in the UK is such that 20% of all

Motor premium and claims accrue directly

to Great Lakes and are not reflected in the

Group’s financial statements. Similarly,

Great Lakes reimburses the Group for its

proportional share of expenses incurred in

acquiring and administering this business.

The quota share reinsurance

arrangements result in all Motor

premiums, claims and expenses that

are ceded to reinsurers being included

in the Group’s financial statements.

These agreements operate on a funds

withheld basis and include certain

features such as expense caps and an

allocation of investment income earned

on the funds held by Admiral on behalf

of the reinsurers. These features result

in higher profit commission should the

underwriting year reach profitability.

Admiral tends to commute its UK Car

Insurance quota share reinsurance

contracts 24-36 months after inception

of an underwriting year, assuming there

is sufficient confidence in the profitability

of the business covered by the

reinsurance contract.

After an underwriting year is commuted,

movements in financial statement

loss ratios result in reserve releases (or

strengthening if the loss ratios were

to increase) rather than reduced or

increased profit commission.

In 2023, there were no significant

commutations, with the majority of quota

share reinsurance covering underwriting

year 2020, and all arrangements covering

the 2019 and prior underwriting years,

having now been commuted.

UK Household Insurance

The Group’s Household business is

supported by long-term proportional

reinsurance arrangements covering

70% of the risk, that run to at least

2024. In addition, the Group has non-

proportional reinsurance to cover the

risk of catastrophes stemming from

weather events.

International Car Insurance

In both 2022 and 2023 Admiral retained

35% (Italy), 30% (France), 30% (Spain) and

40% (USA) of the underwriting risk in each

country respectively.

Excess of loss reinsurance

The Group also purchases excess of loss

reinsurance to provide protection against

large claims and reviews this cover annually.

The UK Motor excess of loss cover remained

similar to prior years with cover starting at

£10 million.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Sustainability

POSITIVE CHANGE

TOGETHER

Quick reference guide

Item Page

Strategy 56

Material Sustainability Issues 58

Our Customers 60

Our People 62

Our Business 64

Our Society 66

External Engagement 68

Sustainability Ratings

and Rankings 70

Our approach to sustainability

Sustainability has always been at the

heart of Admiral’s business, throughout

the Group’s thirty year history. Admiral has

supported millions of customers,

provided a great place for its employees

to work and thrive, and supported

its communities. The Group has sought

to reduce its carbon footprint for

over a decade.

In 2023, the Group further increased its

focus on sustainability. It has brought

together existing sustainability efforts

under a newly-appointed Group Head of

Sustainability, supported by an enhanced

sustainability governance structure.

This approach will provide the dedicated

resource, expertise, and Group-wide

focus needed to co-ordinate all aspects

of sustainability already present across

the Group.

The new structure supports the Group’s

ambition to further embed consideration

of sustainability within its commercial

strategy and all business activities and

behaviours. Admiral strives to increase

the impact of its focus on sustainability

through engagement of operations and

supply chain, the leveraging of skills and

volunteering to create more jobs in its

communities, evolution of its investment

portfolio, and the development of

new products and services to support

customers’ lifestyles.

Driving

56 Strategic Report56

Admiral Group plc Annual Report and Accounts 2023

Our Purpose

Admiral Group’s purpose is to help more

people to look after their future, while

always striving for better, together.

The purpose framework demonstrates

how our purpose is embedded across

Admiral Group.

The purpose framework and its

consideration of stakeholders provides

a roadmap for the types of decisions

taken across the business on issues

of sustainability. To see this in action,

please turn to our Materiality Assessment

on page 58.

Sustainability governance

Group Board: The Admiral Group Board is

ultimately responsible for understanding

the Group’s impact on the environment, as

well as the impact of a changing climate

on the Group. It is the principal governing

body for sustainability-related issues and

takes ownership of sustainability and

climate-related topics and associated

stakeholder engagement. The Board

approves the Group’s sustainability

approach and our sustainability ambitions

which can have a material impact

on Admiral. Milena Mondini, Group

CEO, is the accountable Sustainability

representative for the Group and the

Group CRO, Keith Davies has designated

SMCR responsibilities in relation to

understanding and managing the risks to

the business created by climate change.

Board Committees: The Board has

delegated authority to several permanent

committees that deal with sustainability

related matters. The principal committees

of the Board – Group Audit, Group

Remuneration, Group Risk, and Group

Nomination and Governance – play an

important role in the Group’s sustainability

related decision-making processes.

For example, the Group Risk Committee

oversees the management of climate-

related risk and ensures appropriate

oversight is in place for both ‘outside in’

risks and ‘inside out’ risks. The Group Audit

Committee oversees the reporting of risk

disclosures in respect of climate change

and ensures that all external reporting is

complete, accurate and not misleading.

Sustainability Steering Committee:

To support a more holistic and

co-ordinated approach to sustainability

issues, in October 2023 the Group Board

approved the creation of a management

Sustainability Steering Committee (SSC)

and five supporting Working Groups

(see below), to replace the former

Sustainability Working Group and Climate

Change Committee.

The SSC provides guidance on the overall

programme of sustainability-related work

and ensures a joined-up approach across

the entire Group. Chaired by the Executive

Sponsor for sustainability, it meets

quarterly and comprises the Group CEO,

AECS CEO, Chief Financial Officer, Group

Head of Sustainability and Chairs of the

Working Groups. In addition, the Group

Head of Sustainability provides updates

to the Group Board and relevant entity

Boards and Committees, as required.

The sustainability Working Groups

are based on the key areas of our

sustainability strategy. They discuss

and make decisions on how these areas

impact and are impacted by all the

elements of Environment, Social, and

Governance (ESG). Although the Climate

Change Committee has been retired,

climate – along with other ESG aspects

– is integrated into each of the Working

Groups, allowing for a more holistic

assessment of our sustainability approach.

The working groups are chaired by senior

management experts who lead the

Group’s activities in their respective areas:

• Sustainability Positioning

& Communications

• Customer & Product

• Operations, Investments

& Procurement

• Risk, Compliance & Reporting

• People, Learning & Development

Green Team: The Green Team is an

internal colleague-led group which looks

at initiatives on environmental topics,

such as minimising our operational

impact of climate change and engaging

colleagues directly with solutions.

The Green Team is also responsible for

organising environmentally-themed

events within the workplace in

association with partners such as Stump

Up for Trees and Size of Wales.

Our Purpose framework

Our Purpose

“Help more people

to look after their future.

Always striving for

better, together”

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Our approach to

sustainability materiality

To capture and address the sustainability

topics that matter most to Admiral

Group’s businesses, we ran a materiality

assessment in 2021. In this assessment,

internal and external stakeholders ranked

topics that they believed material to

Admiral Group’s success. Rankings were

based on topics’ relative importance

operations, not Admiral Group’s current or

historic performance.

We will undertake a revised assessment

in 2024 on a double materiality basis in

readiness for the upcoming EU’s Corporate

Sustainability Reporting Directive (CSRD).

Defining materiality via

stakeholder engagement

Admiral’s Board has affirmed that

Admiral has six stakeholder groups:

Customers, employees, suppliers and

partners, shareholders, community,

and the environment. These six groups

are reflected in the four quadrants of

our purpose framework.

Our materiality assessment was

conducted by reviewing the needs of

each of the six stakeholder groups and

surveying over 500 managers, over 2,000

customers and over 2,000 members

of our communities. The resulting

materiality assessment reflects the

priorities and concerns of stakeholders

during this work.

To view more about our stakeholder

engagement, see our Section 172 report

on page 87

Aligning issues with UN Sustainable

Development Goals

To better align our engagement

on material topics with worldwide

efforts around these topics, in 2023,

we began mapping the topics in our

materiality matrix to the UN Sustainable

Development Goals (see table below).

Whilst the SDGs are a useful tool to help

evaluate our contributions to sustainable

development, not all our material issues

from 2021 are aligned to the 17 goals.

Only those issues that are aligned are

included in the below table.

Sustainability

continued

Material Sustainability Issues

The UN Sustainable Development Goals

1. No poverty 7. Affordable and

clean energy

13. Climate action

2. Zero hunger 8. Decent work and

economic growth

14. Life below water

3. Good health

and well-being

9. Industry, innovation

and infrastructure

15. Life on land

4. Quality education 10. Reduced inequalities 16. Peace, justice and

strong institutions

5. Gender equality 11. Sustainable cities

and communities

17. Partnerships

for the goals

6. Clean water

and sanitation

12. Responsible

consumption and

production

Read more on our

engagement with the

UN SDGs, see page 68

58 Strategic Report58

Admiral Group plc Annual Report and Accounts 2023

Reviewing our materiality assessment

In 2024, we will revisit our materiality assessment to reflect ‘double materiality’. This will allow us to better understand the risks that

sustainability topics pose for us both internally and externally.

Priority Material issue

United Nations Sustainable

Development Goals

Focus

Risk governance and business resilience

Talent acquisition and development

Product quality

Employability and social mobility

Manage

Impact of operations on climate change

Eco-friendly products

Innovation

Diversity and inclusion

Educational opportunities

Fair and affordable price

People, health, and wellbeing

Smart, green, and safe mobility

Investing responsibly

Strong ethical partnerships

Community health and wellbeing

Monitor

External efforts to fight climate change

Sports, arts and culture

Executive remuneration

Financial inclusion

Homelessness and housing

To read more on the SDG’s, please refer to our Sustainability Report on our corporate website.

Monitor: These topics are part of our ESG tracker, with the view that they may progress to being actively managed in the long term.

Manage: These topics are prioritised on our ESG tracker. They are viewed as topics on which we do well, so they will be managed

and maintained.

Focus: These are topics that the Sustainability Approach will focus on in the short term (18-24 months). Our ambitions for Focus will

evolve over time.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Sustainability

continued

if customers’ vehicles run out of charge,

cover for wall boxes installed at the home,

cover for EV batteries and charging cables

already included in our cover. In 2023, UK

motor launched a partnership with BP

Pulse testing a free six-month ‘On-The-Go’

charging subscription for a subset of our

EV customers. Our aim was to ease the

EV transition by providing customers with

access to charging credit and discounted

charging rates.

As EV adoption continues to evolve in

2024, we will continue to take a customer-

led approach and develop our offering to

support UK customers’ EV transitions.

Climate-resilient products

As a UK insurer, since 2016 our UK

Household business has taken part in the

Flood Re scheme, which is designed to

allow insurers to offer more affordable

insurance for UK homes built before

2009 in areas most at risk of flooding.

Our UK Household business also utilises

quota share reinsurance arrangements,

including both catastrophe and aggregate

cover for the UK household lines.

These agreements allow us to support

more customers with home insurance at

fairer prices. We continue to assess how

we can better support customers affected

by extreme weather events as well as

explore new ways to work with suppliers

to make properties more resilient.

Our Customers

Customers are at the heart

of everything we do.

Our purpose of helping more people to

look after their future drives us to deliver

products and services that help our nine

million customers meet their needs,

achieve their goals and live resilient lives.

Implementation of Consumer Duty

The UK Financial Conduct Authority’s new

Consumer Duty (‘Duty’) regulation, which

came into force in July 2023, has helped

and will continue to help us demonstrate

how we put customers at the heart

of everything we do. Under the Duty,

customers are to receive communications

they can understand, products and

services that meet their needs and offer

fair value, and receive the support they

need, when they need it.

The Duty builds on our already strong

foundations: for example, where we

undertake regular customer service

monitoring, assessment of customer

demands and needs. We have also,

and will continue to, enhance our

Management Information (MI), reporting

against the four Duty outcomes on a

more granular basis, allowing us to view

outcomes through a customer lens better.

In the case where outcomes are not

as we would like, we make amendments

and enhancements to improve

customer outcomes.

This is particularly important as we

continue to refine our product and service

offerings in line with customers’ changing

sustainability preferences, so that they are

able to pursue their financial objectives

and sustainability goals.

Read more about Consumer Duty on

page 111 of this report

Sustainable and quality products

We strive to create and maintain good

quality, sustainable products for our

customers. Target market and fair value

assessments are undertaken internally,

to confirm that we aim to, and do, meet

customer needs. In the very few instances

where this is not the case, we act quickly

to make changes and improvements

where needed. Our Product and Oversight

Policy also acts as a control to provide

customers with products that perform as

expected and meet their needs.

Financially inclusive products

The nature of insurance means that

individuals, families, and households are

protected from unforeseen financial

difficulties, with the cost of the insured

risk shared amongst many, making it

more accessible to a greater proportion of

the population. It is important to us that

we provide accessible, inclusive financial

products and services that can help more

people plan for the future and protect

themselves against adverse events.

In 2023, this included performing a

premium finance review to ensure our

UK product APRs are delivering fair value,

allowing more customers to finance

insurance payments. In addition, we

continued to develop our tiered UK motor

product offering, which offers an essential

level of cover accessible at lower prices.

Sustainable products

In our UK motor products, we have

worked to support environmentally

friendly products like supporting

our customers with the transition to

alternative-fuel vehicles. In 2023, we are

one of the market-leading underwriters

of electric vehicles by leveraging our core

pricing strengths and developing new

product features.

We expanded our electric vehicle (EV)

insurance proposition by listening to

customer needs and understanding

how they have evolved. In 2023, our UK

motor product launched a range of EV

specific features, such as free recovery

Group average NPS

>45

Trustpilot Score

4.4

18 Relational NPS, methodology updated in 2022. We’ve

seen a decrease in the NPS mainly due to increased prices,

which are a reflection of current market conditions.

60 Strategic Report60

Admiral Group plc Annual Report and Accounts 2023

STORM HUB

In light of the recent extreme weather

events in the UK, our Household team

launched ‘Storm Hub’ in June 2023.

The Storm Hub aims to improve our

customers’ awareness of weather

events and how they can keep

themselves and their properties as safe

as possible. It also usefully highlights

what their insurance cover includes,

for any subsequent claims they need

to make.

Storm Hub sends weather warnings

to our customers to make sure they

are aware of any extreme weather

events due to happen in the UK, we

use this to direct to information in the

Storm Hub. Our key priority is keeping

our customers safe and helping them

better understand the risks around

extreme weather.

Transparent claims outcomes

As an insurer, we are committed to

providing appropriate claims experiences

that deliver good outcomes for our

customers in a timely manner.

We are continually improving claims

service in all areas. Notable enhancements

in 2023 include in UK Motor, making

handling processes clearer, increasing the

opportunity for additional contact, and

making it easier for our partner garages

to provide updates more regularly to our

customers. These initiatives combined

helped to provide reassurance to UK

customers throughout the claims process.

In Spain and Italy, customers are offered

‘cash settlements’ to reduce claims

settlement times and improve service.

In France, we upgraded our online claims

feature to make it easier for customers

to open claims in the channel of their

preference. Our France-based customers

can now open almost all claims through

the customer portal and chatbot, which

offers automated solutions, in turn

improving customer service and reducing

customer wait times.

Climate-related claims

The impact of climate change continues

to affect our customers through extreme

weather events such as flooding and

increased subsidence in the UK and

hailstorms in the US. In these situations,

it is important that there is clear and

transparent communication between

our claims department and customers.

For example, with our UK insurance

businesses, we send communication to

potentially affected customers ahead

of severe weather events to help them

take steps to reduce the chance of a

loss and to remind them how to make a

claim. In 2023, we launched a ‘Storm Hub’

to provide Household customers with

information on all things storm related.

Taking care of vulnerable customers

Financial inclusion is part of our

sustainability approach. We know

that individual customers may have

different requirements when it comes to

understanding and being informed about

our products, and to be inclusive, we seek

to accommodate those requirements.

Our Vulnerable Customer Policy underpins

our identification, treatment, and

monitoring of vulnerable customers

through their circumstances, whether

temporary or long-term. The Policy

aims to ensure that there are sufficient

controls in place so that these customers

are treated fairly and appropriately and

that their needs are considered in the

development of all products.

In 2023, in UK Motor, we put new

vulnerable customer standards in place,

as well as a process to share the needs of

vulnerable customers with our suppliers.

The aim was to our ensure customers

receive the right level of support

throughout their journey with us. Also in

2023, we launched a feature to allow

customers to update their accessibility

needs in the UK MyAccount portal.

In addition, we re-wrote our in-depth

process guides for customers who need

varying levels of support and rolled out

specific agent training and Company-wide

training to create more awareness.

One example of taking care of vulnerable

customers was in October 2023, when

a fire at Luton Airport affected several

hundred of our customers. We treated

all Luton claims customers as vulnerable

and high need at that stage, due to the

circumstances they faced.

When considering vulnerable customers,

it’s important to not take a ‘one-size-

fits-all’ approach. Our UK business has

dedicated work streams in place to ensure

changes around customer needs are

supported, making it easier for customers

to communicate their needs to us.

Launching

Admiral Group plc Annual Report and Accounts 2023

Strategic Report

Sustainability

continued

Our ambition is to be one

of the best places to work

in the world.

‘Always striving for better, together’ is

not only part of our purpose but a key

pillar when it comes to our approach to

our people. All of our people have the

opportunity to shape and contribute

to our unique culture, evolve our test-

and-learn approach, and support our

operational excellence. This opportunity

fosters happier and more productive

colleagues, ultimately shaping better

outcomes for our customers and

other stakeholders.

Diversity and Inclusion

We support Diversity and Inclusion (D&I)

initiatives across Admiral Group, with 94%

of our colleagues around the world stating

in 2023 that they believe that Admiral

Group is a diverse and inclusive employer.

We have Group-wide working groups

focused on maintaining fair processes for

our people and implementing new, better

ways to support diversity in our workspace

(see table below). Cristina Nestares, CEO

of UK insurance, is the Executive Sponsor

of D&I and supports these groups from

the top. Alongside our working groups,

we run D&I training sessions for all

colleagues on topics like neurodiversity,

and also run mandatory D&I training for

all of our line managers.

In the UK in 2023, we became a Foster and

Adoption Friendly Employer. The improved

UK adoption policy mirrors our maternity

policy and allows colleagues to attend pre-

adoption appointments throughout their

journey. Meanwhile, our Foster Carers

Policy gives colleagues paid time off to

Diversity and Inclusion Working Groups in 2023

Gender Equality Considers and raises awareness on issues

surrounding gender; continues to support

colleagues and promote an inclusive culture

Ethnicity and Culture Supports Admiral in becoming a more ethnically

diverse and inclusive Company through awareness,

discussion, and improvements to the working

environment

Ty Rainbow LGBTQ+ Promotes a safe and inclusive environment to

support LGBTQ+ colleagues and customers,

as well as providing a social support network

Age Focuses on understanding the needs of our

colleagues in various age ranges, including 16-30,

30-50, and 50+. Initiatives in this area include

menopause support, assisting colleagues with

access to appointments

Disability Promotes safe and healthy environments,

raises awareness, and advocates fair and inclusive

workplaces for our colleagues with disabilities

across our Group

Social Mobility Supports work to ensure that regardless of

socioeconomic background, everyone can fulfil

their potential and progress their careers.

Read more about our awards on page 13

attend any meetings or training during

the approval process, and paid leave to

settle a child or young person when they

first arrive. We recognise the different

journeys our colleagues may be on, and

want to ensure everyone has the right

support throughout.

In 2023, we continued to be a Disability

Confident employer in the UK, giving

us the recognition for our devotion

to ensuring that disabled people in

our workplaces are able to participate

fully and receive – a fair chance and

full consideration for job roles, and

development opportunities. In December

2023, we marked the ‘Purple Light Up’,

a global movement celebrating and

drawing attention to the contributions

of our colleagues with disabilities. As part

of our celebration for Purple Light Up,

we shared an inspirational chat event

for colleagues, highlighting the positive

impact of embracing disability at our

UK headquarters.

Our People

62 Strategic Report62

Admiral Group plc Annual Report and Accounts 2023

Employee engagement

Part of our culture is making sure our

people feel part of the bigger picture,

and that their contributions matter

and are valued. Our different Employee

Consultation Groups (ECG) across our

international locations provide our people

with a platform to share their views

and give them a voice at the highest

level of the organisation. We encourage

the ECG to share their opinions on any

topic they feel necessary, to ensure

transparent and fair conversations are

happening within Admiral Group, and their

conversations are regularly debated at

the Group Board. In 2023 there have been

four ECG meetings in the UK and many

more across our European operations,

addressing topics such as career

progression, the cost of living crisis, and

our sustainability approach.

As well as the ECG, we engage across the

group with multiple channels, such as

regular one to ones with line managers,

Intranet blogs and articles, colleague

surveys, feedback initiatives such as ‘

Ask Milena’ and ‘Have your say’, and our

global participation in the Great Place

To Work® initiative.

Learning and development

One of our five newly-created

sustainability working groups (see page 57

for more information) focuses on people,

learning, and development, with the

aim of educating colleagues on a range

of sustainability topics such as climate

change and sustainable consumption.

The goal is to support colleagues to

make changes that will have long-lasting,

positive impacts on our community

and planet.

Our specialised Learning and

Development teams act as the core

of our training and support across the

Group. We believe that giving our people

widespread excellent opportunities

to learn and grow elevates our culture

of helping people to love what they

do, and ultimately makes our business

better. Our learning tools include internal

leadership programmes and development

hubs, as well as mandatory training in

core areas.

In 2023 we have made over 5,000 courses

available on our internal development

hub for our UK colleagues, plus over

10,000 courses available globally to

our colleagues via LinkedIn Learning.

We run international, Group-wide

programmes such as Get Discovered,

aimed at supporting our next generation

of female leaders. In 2023 a group of 23

female colleagues took part, getting the

opportunity to extend their network

widely and have mentorship support

from some of our most successful leaders

across the Group.

Our new performance management

tool launched in 2023 across our UK

and European businesses, providing our

colleagues with better tools to empower

their careers, training and progress.

We also continued work on improving

global mobility across the group. In 2023

we set up new global mobility guidelines

and policies, offering more central support

to our colleagues with the aim to aiding

the future mobility of colleagues across

our entities, as well as making it more

accessible to our people.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Sustainability

continued

We strive to build successful

businesses with operational

resilience and deliver on both

ﬁnancial and non-ﬁnancial

targets.

Our net zero ambition

We strive to help more people look after

their future, which includes contributing

to global efforts on climate resilience

through limiting our impact upon the

planet, as best we can.

In 2021, Admiral Group formally

committed to achieving net zero

greenhouse gas emissions by 2040 and

to cut these emissions in half by 2030.

By knowing our market-based

emissions we gain greater control over

our operational footprint. We have

demonstrated this via our UK Scope 2

emissions, which we have reduced to zero.

This is due to purchasing 100% of our UK

energy from renewable sources in 2023.

Across the Group, we purchased 77% of

our energy from renewable sources in

2023, up 8% from 2022.

Greenhouse gas (GHG)

emissions from operations

In 2023 we were on track to reduce our

overall Scope 1 and Scope 2 emissions by

33%, continuing the downward trend.

However, due to a one-off fugitive gas

leak, this was not achieved.

During August 2023, our Admiral Group

House office in Swansea experienced a

one-off emissions event during building

servicing by a third-party vendor.

During the event, a fire suppression

system designed to protect our data

centres was activated, causing a fugitive

gas leak of 295kg of gas equalling 988.25

tonnes of carbon dioxide equivalent

(tCO

e). Due to this event, we saw an

increase in our combined Scope 1 and

2 emissions of 26% compared to the

previous year, despite the 33% fall in other

underlying emissions.

This is the last of our office locations to

use this type of refrigerant gas in the

UK. The refrigerant gas system will be

replaced in 2024, as planned. Otherwise,

we continue to ensure that changes in

operational activities are consistent with

our sustainability objectives. This includes

our environmental and social targets, and

how these are seen by agencies outside

of Admiral.

Successes from our internal

activities include:

• Offsetting emissions by purchasing

Gold Standard carbon offsets

since 2019

• Purchasing electricity in the UK from

100% renewable sources at all sites

• Our Cardiff headquarters is BREEAM

Excellent rated and has photopholtaics

which feed electricity back into the grid

• We have closed 396,000 sq ft of

office space in the last 3 years,

which has significantly reduced our

carbon footprint

• We are installing improved Building

Management Systems (BMS) to

improve the data reporting and adjust

controls accordingly.

Climate impact methodology

In 2017, the Task Force on Climate-related

Financial Disclosures (TCFD) defined

a climate-related risks and opportunities

classification. We have used this as

our starting point for our qualitative

methodology to identify climate risks and

opportunities that might impact Admiral

Group. We assess these risks using our

existing Emerging Risk Matrix.

The output of individual assessments is

an “expected magnitude”, assessed across

three distinct timeframes (0-5 years,

5-10 years, and 10+ years). We apply

this methodology to all our current and

potential future lines of business, our

operations, and our investments. We also

consider existing and emerging regulatory

requirements related to climate change.

Results of this assessment are disclosed in

our annual TCFD report (see page 73).

To quantify the impact of climate-related

issues, we conducted two climate change

scenarios from the Network for Greening

the Financial System (NGFS) 2022 phase

III. Results of these scenarios are disclosed

in our annual ORSA report (see page 109).

We are continually striving for

improvement in evaluating our impact

on climate change. We consistently aim

to improve our methodology by working

with third parties to help ensure we are

matched to industry developments and

standards. In 2023, we submitted our

proposal for Science-Based Targets (SBTs)

to the Science-Based Targets Initiative

after validating past years’ emissions with

Carbon Intelligence, an external advisory

body. Setting SBTs will help us set a clearly

defined path to reduce emissions in

line with Paris Agreement goals. We will

develop further targets and updates

once validated.

Our Business

64 Strategic Report64

Admiral Group plc Annual Report and Accounts 2023

Therefore, for 2024, we aim to draft and

implement our net zero transition plan

by leveraging existing work, getting

our SBTs independently verified, and

including the potential impacts of our

identified risks and opportunities on our

financial statements.

Responsible investment

Admiral Group has a responsible

investment policy in recognition of our

duty to protect the interests of our

customers, society, and environment

when investing the premiums we collect.

Our investment portfolio strategy

is focused on Net zero by 2040 to

achieve real economic carbon emissions

reductions. Admiral Group follows the

Institutional Investors Group on Climate

Change (IIGCC) Net zero Framework.

This guides how we decarbonise a range

of investments we hold.

In 2023, with the help of third parties,

we revamped our Environmental, Social,

Governance (ESG) reporting and reviewed

our carbon emissions methodology.

We monitor progress towards our

investment targets by regularly tracking

and reviewing ESG figures and statistics

and this ensures they remain the

most relevant.

We are confident in our approach to

sustainable investment as we continue to

reposition our portfolio to invest in more

assets that reduce carbon emissions and

contribute positively to the environment

and society. Examples of these include

investments in green bonds and

renewable energy infrastructure.

Read more about our responsible investment

portfolio in the TCFD report on page 73

Sustainable procurement

Admiral Group has embedded

sustainable business practices across

all procurement processes. Our due

diligence questionnaire asks questions

related to the environment, financial

crime, data protection, and modern

slavery, and ensures suppliers are

aligned to our sustainable procurement

standards. Suppliers are risk assessed

throughout the supplier lifecycle process.

Where suppliers’ responses demonstrate

no policies or procedures, Admiral

issues an assessment to the supplier

to capture further information and to

encourage improvements.

Read more about shareholder engagement

in the Governance section of the report

on page 136

Investment portfolio MSCI rating of

19 Proposed baseline year for emissions cuts is 2021, still to

be verified by SBTi.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Sustainability

continued

‘Together For Better’ is our

commitment to transforming

futures outside of our

organisation.

We have always strived to make positive

impact in our communities, and in

2023 we continued to reach this goal

through external partnerships and

philanthropic giving.

Our community investment strategy

In line with our business purpose, ‘to help

more people look after their future’, our

strategy includes:

• Employability

• Social mobility and reduced inequalities

• Educational opportunities

• Financial inclusion

• Sports, arts and culture

• Partnerships

As a large employer across several

countries, we want to help improve

our communities in a sustainable and

responsible way. Our approach to affecting

positive change is centred around skills

development and providing more people

with access to employment, helping them

lead more sustainable and inclusive lives.

We have partnered with expert charities

and organisations across the world who

specialise in supporting people into long

lasting and meaningful employment,

reducing skill gaps in local economies.

We are proud that the demographic of

people we’ve supported ranges from

young people to ex-offenders, females in

tech to females in construction, disabled

adults to those individual most distant

from employment opportunities.

Impact hours

Alongside our community investment,

our Impact Hour programme gives each

of our colleagues across the world two

paid volunteering days a year for them

to use to make positive impacts in

their communities.

Globally, from January to December

2023 our colleagues have volunteered

over 14,000 Impact Hours to their

communities reviewing CVs, sharing skills

and mentoring, planting trees, litter

picking, working with care homes and

working at animal shelters to name a few.

In 2023 we have continued our work to

find and build meaningful relationships

with organisations for our colleagues

to volunteer with. We aim to build and

encourage more bespoke opportunities

for our colleagues across Admiral Group.

Throughout 2023, we have encouraged

colleagues to share their skills through

mentoring programmes, teaching

presentations and inspirational talks

to people across our community. As an

example, some of our senior managers

helped facilitate ‘Admiral 5–9 Club’, a

programme for female entrepreneurs that

we funded with Welsh ICE.

Around the world, Generation prepares

individuals facing unemployment to

join or re-enter the workforce through

a career-launching job that provides

economic mobility with positive

intergenerational effects. Thanks to

the generous support from Admiral,

Generation Italy has supported learners

like Gianmarco whose inspiring stories

are shared below.

Before stepping into the transformative

world of Generation Italy’s program,

Gianmarco was navigating

unemployment, with brief stints as

a warehouse worker. Yet, deep inside,

a spark for the realm of IT was always

glowing. He chose the Junior Java

Developer course, his enthusiasm

fuelled by a friend’s success story

in the same field.

Our Society

25%

increase in people worked with through

the Jesus College access programme.

19%

increase in access speciﬁc events from

2022 thanks to the Admiral 2023 donation.

“The educators were truly extraordinary.

I found the soft skills lessons especially

invaluable. They’re not just theoretical –

I’ve been applying them daily in my job.

This emphasis on behavioural skills sets

Generation’s programme apart; I’ve never

encountered it in any other Java course.”

When Gianmarco completed the course,

Reactive Almaviva, a Company involved

in guiding the digital transformation

of the finance world, recognised

Gianmarco’s potential and offered him

a position. There, he’s been refining

his expertise and scaling professional

heights, “I’ve recommended this course

to a friend because Generation provided

me with the essential foundation to dive

into this sector. Thanks to Generation,

I joined a prestigious Company like

Reactive Almaviva. This course has been

a turning point in my life.”

PEOPLE INTO

JOBS WITH

GENERATION

Supporting

66 Strategic Report66

Admiral Group plc Annual Report and Accounts 2023

Partnerships

Partnerships with philanthropic and

impact organisations help us to increase

the breadth and depth of the impact

we can make with our community

contributions. In 2023 we are proud to

have invested over £1.4 million to support

people outside of our organisation into

sustainable employment. We have done

this by partnering with experts such

as Generation.

In the UK, 2023 was our third year of

partnership with University of Oxford’s

Jesus College on their Welsh access

initiative, which aims to reach more

academically gifted young people

across the country who are currently

underrepresented at Oxford and other

leading universities across the UK.

Through our ongoing support, the access

and outreach teams have been able to

continue their work improving their

access programmes, but also finding new

ways to engage with young people.

Internationally, our partner Generation

is a non-profit organisation striving to

transform the education system into an

employment system. Over 2023 we have

piloted programmes across the world,

supporting programmes in technology

in Italy and programmes in technology,

service, sales, and health sectors in India.

Global emergency fund

In 2022, we set up our global emergency

fund, which is dedicated to making

prompt donations to people and

organisations who need them the

most around the world. During 2023,

we have given over £400,000 to global

organisations such as International Red

Cross and the Disasters Emergency

Committee (DEC), ensuring that funds are

distributed to those most in need as soon

as possible. You can read more on about

our global emergency Fund on page 21.

Environmental engagement

In 2023 we authorised a donation to the

environmental organisation Stump Up For

Trees, part-funding carbon sequestration

via the planting of 2.75 hectares of new

woodland creation. The donation enabled

us to increase tree cover at sites across

the Bannau Brycheiniog, Brecon Beacons

and South Wales. Along with Stump Up

For Trees, we furthered our donations to

environmental conservation charity Size

of Wales. During the past nine months,

the Size of Wales project has worked with

a community in Boré, Kenya to protect

four of the kayas (sacred forests) in the

local area. Over 29,500 native species

seedlings have also been planted by Kaya

community members. The project has

engaged local unemployed youth in forest

restoration activities, such as building fire

breaks, while supporting them to earn a

living. The project therefore had a double

impact in helping more people look after

their future.

We believe in the importance of

demonstrating responsible business

behaviour with regards to the

environment, not just because our

stakeholders demand it, but because it

is the right thing to do.

Colleague-led donations

Our community and match fund

initiatives continued in 2023, and

from our colleagues’ nominations we

supported over 200 organisations with

grants, spending over £100,000 in total

with the majority going towards sports

and art clubs. As a business, we offer our

match fund for colleagues to request

their fundraising efforts be matched by

the business. In 2023, we have helped a

total of 59 fundraisers totalling around

£64,000 going towards causes close to

our colleagues’ hearts.

FEMALE

FOUNDERS

As part of our ongoing commitment

to help people into jobs, we recently

worked with the Welsh Innovation

Centre for Enterprise (ICE) to launch

the Admiral 5-9 Club for Female

Founders, a programme designed

to empower 30 ambitious female

entrepreneurs who want to turn their

business ideas into reality.

The Admiral 5-9 Club sets out to

provide female entrepreneurs with

the opportunity to strengthen their

business skills without having to

sacrifice their daytime commitments.

A total of 38 entrepreneurs took part

in the programme, with businesses

ranging from doggy daycare centres

to artificial intelligence and medical

robotics. Each week different speakers

from inside and outside of Admiral gave

presentations on key business topics.

Each entrepreneur was also allocated

an ‘Admiral Mentor’, who used their

Impact Hours to dedicate time to help

provide guidance and key advice to

their mentee.

On conclusion of the nine weeks’ course,

the entrepreneurs presented their

business ideas to a ‘Dragons Den’-style

panel. As a result of this partnership,

34 women were inspired to pursue

their business and entrepreneurial

goals. A total of 13 new businesses have

already started trading and growing

thanks to the support and intervention

of the Admiral 5-9 Club.

Empowering

Admiral Group plc Annual Report and Accounts 2023

Strategic Report

Sustainability

continued

External Engagement

Contributing to the UN Sustainable Development Goals

The Sustainable Development Goals (SDGs) are a set of 17 goals developed by the United Nations. The SDGs define sustainability

priorities and aspirations for the world to achieve by the year 2030. The goals encompass global societal and environmental concerns.

Admiral Group supports these important goals.

SDG 4: Quality Education

SDG 8: Decent Work and Economic Growth

SDG 9: Industry, Innovation and Infrastructure

Targ et

4.3: By 2030, ensure equal access for all women and men to

affordable and quality technical, vocational and tertiary education,

including university

4.4: By 2030, substantially increase the number of youth and adults

who have relevant skills, including technical and vocational skills,

for employment, decent jobs and entrepreneurship

4.5: By 2030, eliminate gender disparities in education and ensure

equal access to all levels of education and vocational training for

the vulnerable, including persons with disabilities, indigenous

peoples and children in vulnerable situations.

Targ et

8.2: Achieve higher levels of economic productivity through

diversification, technological upgrading and innovation

8.3: Promote development-oriented policies that support productive

activities, decent job creation, entrepreneurship, creativity and

innovation, and encourage growth of micro, small and medium-sized

enterprises, including through access to financial services

8.4: Improve progressively, through 2030, global resource efficiency

in consumption and production and endeavour to decouple economic

growth from environmental degradation, in accordance with the 10-year

framework of programmes on sustainable consumption and production,

with developed countries taking the lead.

Targ et

9.1: Develop quality, reliable, sustainable and resilient infrastructure,

including regional and transborder infrastructure, to support

economic development and human well-being, with a focus on

affordable and equitable access for all

9.2: Promote inclusive and sustainable industrialization and, by 2030,

significantly raise industry’s share of employment and gross domestic

product, in line with national circumstances, and double its share in

least developed countries

9.4: By 2030, upgrade infrastructure and retrofit industries to make

them sustainable, with increased resource-use efficiency and greater

adoption of clean and environmentally sound technologies and

industrial processes, with all countries taking action in accordance

with their respective capabilities.

Contribution

• We help eliminate gender disparities by supporting women

in business through internal programs such as ‘Get Discovered’

• Our Emerging Talent Programme develops vocational skills

and creates opportunity by encouraging internal mobility

• Our community investment helps those with vulnerable

characteristics achieve gainful employment. Examples include

our partnerships with Women Unlimited, Code First Girls, The

Princes Trust, Llamau and The Wallich. We helped >2000 people

into jobs in 2023. For more information please see page 66

‘Our Society’.

Contribution

• Diversification and innovation are integral to our strategy.

In 2023 we further expanded outside of our UK Motor insurance

operations by growing our Home, Pet and Travel Insurance

businesses, as well as our loans businesses. We supported

technological upgrades and innovation in mobility by becoming

a market-leading underwriter of electric vehicles. We support

decent job creation via our community investment, which

generates gainful employment as discussed under SDG4.

Contribution

• Our motor insurance product helps make vehicle use and

ownership safer and more financially accessible for more

people, ultimately mobilising them to have better access to

work, school, healthcare, and other essential parts of life which

promote wellbeing

• Our household insurance also helps to make housing financially

accessible for more people by lowering the risk

of home ownership

• With our newfound success as an underwriter of electric

vehicles in the UK, we support our customers as they adopt

more efficient and sustainable forms of transport, lowering the

barriers associated with upgrading to an electrical vehicle.

68 Strategic Report68

Admiral Group plc Annual Report and Accounts 2023

The UN and the World Bank consider insurance itself to be a product that underpins financial inclusion, contributing directly to

SDG 8 of Decent Work and Economic Growth and SDG 9 of Industry, Innovation, and Infrastructure. By protecting against risks,

insurance increases the capacity of individuals, households, and businesses to absorb financial shocks and continue participation in a

healthy, inclusive economy. In line with our purpose and our work to lower our impact on the environment, we contribute to several

other SDGs, as outlined in the table below.

SDG 10: Reduce Inequalities

SDG 11: Sustainable Cities and Communities

SDG 13: Climate Action

Targ et

10.2: By 2030, empower and promote the social, economic and

political inclusion of all, irrespective of age, sex, disability, race,

ethnicity, origin, religion or economic or other status

10.3: Ensure equal opportunity and reduce inequalities of outcome,

including by eliminating discriminatory laws, policies and practices

and promoting appropriate legislation, policies and action in

this regard

10.4: Adopt policies, especially fiscal, wage and social protection

policies, and progressively achieve greater equality.

Targ et

11.1: By 2030, ensure access for all to adequate, safe and affordable

housing and basic services and upgrade slums

11.5: By 2030, significantly reduce the number of deaths and the

number of people affected and substantially decrease the direct

economic losses relative to global gross domestic product caused

by disasters, including water-related disasters, with a focus on

protecting the poor and people in vulnerable situations

11.6: By 2030, reduce the adverse per capita environmental impact

of cities, including by paying special attention to air quality and

municipal and other waste management.

Targ et

13.1: Strengthen resilience and adaptive capacity to climate-related

hazards and natural disasters in all countries

13.3: Improve education, awareness-raising and human and

institutional capacity on climate change mitigation, adaptation,

impact reduction and early warning

13.b: Promote mechanisms for raising capacity for effective

climate change-related planning and management in least

developed countries and small island developing States, including

focusing on women, youth and local and marginalized communities.

Contribution

• Our workplace is a safe environment for colleagues to

be themselves, access what they need, and have equal

opportunities across our Group. In 2023, 94% of our colleagues

around the world stated that they believe Admiral Group is

a diverse and inclusive employer

• Internal programs that promote equality and a safe working

environment for all include our Get Discovered Programme for

women in business, our strong internal social mobility processes,

and our pledge to be a neurodiversity-friendly employer. For more

information on these initiatives see our 2023 Sustainability Report

• Our charity partners help those in economic need into

employment, as well as helping women into gainful employment

in industries which are historically excluded such as construction

and tech. For more information see ‘Our Society’ section on

page 66.

Contribution

• As mentioned under SDG 9, our home insurance product supports

access to housing through financial inclusion by lowering the

risk associated with home ownership, including ever-increasing

extreme weather events such as flooding and storms

• Our UK electric vehicle insurance product mentioned under

SDG 8 allows greater accessibility to more sustainable methods

of transport, which helps reduce the environmental impact of

transport on global climate and local air quality

• Our Global Emergency Fund has helped communities respond

to natural disasters. In February 2023, we donated £250,000 to

the DEC’s Turkey-Syria earthquake appeal, as well as £30,000

to help the Halifax wildfire response in May of 2023.

Contribution

• Greater adaptive capacity to climate-related hazards is gained

by our customers through our home insurance product lowering

the risk associated with home ownership. This includes initiatives

such as our Storm Hub, which educates and raises awareness of

these hazards by sending weather warnings and information,

so our customers are empowered to better react and take

proactive measures.

• We promote resilience to climate-related hazards through our

community initiatives, such as a Sustainable Land Management

and tree planting project in Boré, Kenya which also employed

women and local unemployed youth.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

We welcome independent

external assessment to a

range of Environmental,

Social, and Governance (ESG)

ratings providers. We do this

as a way to engage with the

wider industry and track

our performance on various

sustainability topics.

MSCI ESG rating

assessment

2023: AA

2022: AA

2021: A

CDP Climate Score

2023: B

2022: D

2021: C

Sustainalytics

ESG Risk Rating

2023: 24.3

2022: 22.3

2021: 21.0

31st percentile subindustry

ranking (2022: 21st)

ISS ESG performance

2023: C-

2022: C-

2021: C-

4th industry decile rank

(2022: 3rd)

Dow Jones

Sustainability Index

2023: 41/100

2022: 47/100

2021: 37/100

Tortoise

Responsibility100 index

2023: HALTED

2022: 63rd out of 100

2021: 21st out of 100

DISCLOSURE I NSIGHT ACTION

Sustainability

continued

Sustainability Ratings and Rankings

Our performance in 2023

In 2023, we maintained our AA ranking

on MSCI.

Our Sustainalytics score decreased

due to changes in ranking for Product

Governance and Data Protection

and Security.

We saw improvement on our

‘Environmental Dimensions’ scoring in the

Dow Jones Sustainability Index. However,

the overall Dow Jones score dropped

slightly compared to 2022. This was due

to stricter evidence requirements than

previous years.

While we have included previous scores

from the Tortoise Responsibility100

index, they have halted their scoring

as of 2023. As such, we will not include

it in future reports.

Restatements

In our 2022 Annual Report, we mistakenly

published our 2021 Sustainalytics rating

of ‘21’ as our 2022 rating, and our

2022 Sustainalytics rating of ‘22.3’ as

our 2021 rating. Also, the Dow Jones

Sustainability Index for 2022 should have

read ‘47/100’. We have amended these

in our 2023 report.

20 The use by Admiral Group of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship,

endorsement, recommendation, or promotion of Admiral Group by MSCI. MSCI services and data re the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty.

MSCI names and logos are trademarks or service marks of MSCI.

Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an

investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/

legal-disclaimers

22 A decile rank of 1 indicates high relative performance versus a decile rank of 10 which indicates poor relative performance.

70 Strategic Report70

Admiral Group plc Annual Report and Accounts 2023

Streamlined Energy and Carbon Reporting (SECR)

This statement has been

prepared in accordance with

our regulatory obligation

to report greenhouse gas

(GHG) emissions pursuant

to the Companies (Directors’

Report) and Limited Liability

Partnerships (Energy and

Carbon Report) Regulations

2018 which implement

the government’s policy

on Streamlined Energy

and Carbon Reporting.

Energy and carbon emissions

During the reporting period January

2023 to December 2023, our measured

Scope 1 and 2 emissions (market-based)

totalled 2,092 tCO

e. Reported figures

for 2022 and 2023 comprise of an

additional column omitting the one-off

event activation of a fire suppression

system which has impacted our footprint

and without it, would have resulted in

a market based 33% decrease in Scope

1 and 2 carbon emissions:

FY 2021 (Baseline)

Emissions (tCO

FY 2022

Emissions (tCO

FY 2023

Emissions (tCO

FY 2023

Emissions

(tCO

Rest of

world Total UK

Rest of

world Total UK

Rest of

world Total

Total

excluding

leak

Scope 1 917 12 929 553 7 560 1,465 42 1,507 519

Scope 2 – location-based 1,750 1,175 2,925 1,400 1,087 2,487 1,312 606 1,918 1,918

Scope 2 – market-based 14 1,175 1,189 13 1,087 1,100 0 585 585 585

Total Scope 1 & 2

(location-based) 2,667 1,187 3,854 1,953 1,094 3,047 2,777 648 3,425 2,436

Total Scope 1 & 2

(market-based) 932 1,187 2,119 566 1,094 1,660 1,467 627 2,092 1,104

Scope 1 & 2 intensity per FTE

– market-based 0.13 0.34 0.20 0.07 0.27 0.14 0.18 0.13 0.16 0.08

Scope 1 & 2 intensity per FTE

– location-based 0.37 0.34 0.36 0.26 0.27 0.26 0.33 0.14 0.26 0.19

Scope 1 & 2 intensity per

headcount

– market-based 0.12 0.32 0.19 0.07 0.26 0.14 0.17 0.13 0.15 0.08

Scope 1 & 2 intensity per

headcount – location-based 0.35 0.32 0.34 0.25 0.26 0.25 0.32 0.13 0.25 0.18

Scope 3 397 517 914 530 753 1,366 807 1,170 1,977 1,977

1 Restated SECR figures using 12 months data and evidence (previously reported Admiral Group SECR in 2022 annual report was based on 9 months data and evidence and 3 months modelled).

2 Adjusted to show the emissions without the Scope 1 fugitive gas leak (gas suppression activation).

3 We will be using headcount for our intensity ratio from 2023 onwards. Headcount refers to the numbers of individual employees. FTE refers to the “full time equivalent” of employees when taking

into consideration part time workers.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Explanation of movements

Admiral Group PLC report both Scope 2

market-based emissions and

Scope 2 location-based emissions.

A location-based method reflects the

average emissions intensity of grids on

which energy consumption occurs (using

mostly grid-average emission factor

data). A market-based method reflects

emissions from electricity that companies

have purposefully chosen (or their lack

of choice). Admiral report both figures

to demonstrate the variance between

the two reporting methods and to

report against Admiral’s science-based

target, baselined on Scope 2 Market-

based emissions.

Overall, our Scope 1 and 2 (market-based)

emissions have increased by 26% against

last year. Our Scope 1 and 2 (location-

based) emissions have increased by 12%

against last year. This was due to a fire

gas suppression system activation used

to protect data centres from business

impact and is reported under a fugitive

gas leakage during the year. This is the

last location to use this type of refrigerant

gas in the UK and will be replaced in

2024. The fire suppression fugitive gas

leak of 295kg of gas (type HFC-227ea)

and equalled 988.25 tCO

e. Without this

leak, our overall Scope 1 emissions would

have decreased by 7% to 519 tCO

For further context, without the fugitive

gas leak, our Scope 1 & 2 market-based

emissions would have decreased by 33%

to 1104 tCO

The Scope 1 increase was partially offset

by the inactivity of one office in the

USA and two offices in the UK. Due to

the pandemic and subsequent Return

To Office and hybrid working, we have

consolidated offices which were being

used into a more efficient portfolio that

has resulted in a reduction in numbers

of buildings and space. Though we have

maintained a hybrid work model, the

past year has seen an increase in staff

working in the office and subsequently

an increase in utilities consumption.

To mitigate the uplift in consumption,

we made efficiencies on the existing

building management system at

our two largest offices in Cardiff and

Swansea. The Building Management

System upgrade for the two offices

will be completed in H1 2024 and will

further optimise data, monitoring and

performance. In addition to improving the

controls and use of Scope 1 & 2 utilities,

we have been actively disposing of our

property portfolio which has further

contributed to the 33% decrease.

Another increase in Scope 1 is due to

elephant.com and EUI Halifax reporting

on Company cars from January 2023.

In September 2023, we removed leased

vehicles in the UK and intend to the same

in Halifax by the end of 2024.

In 2023 we purchased 77% of our

electricity from renewable sources, an

increase from 69% in 2022. Scope 2

(market-based) emissions for the UK have

reduced to zero due to purchasing 100%

of our electricity from renewable sources.

We have also had three buildings in the

portfolio move over to fully renewable

resources which has contributed to the

33% decrease in Scope 1 & 2 emissions

(excluding fugitive gas leak).

Our Scope 3 emissions are comprised of

business travel, waste, water, and Fuel

and Energy-Related Activities (FERA)

not included in Scope 1 or Scope 2.

Our measured Scope 3 emissions totalled

1,977 tCO

e, an increase of 54% from last

year due to a large increase in business

travel emissions.

During the year, our total fuel and

electricity consumption totalled

11,564,413 kWh, a decrease of 21% from

last year due to reduction in electricity

consumption. 77% of fuel and electricity

consumption was consumed in the UK.

The split between fuel and electricity

consumption is displayed below.

Methodology

We quantify and report our organisational

GHG emissions in alignment with the

World Resources Institute’s Greenhouse

Gas Protocol Corporate Accounting and

Reporting Standard (revised version) and

in alignment with the Scope 2 Guidance.

We consolidate our organisational

boundary according to the operational

control approach, which includes all

our operations and sites. The GHG

sources that constituted our operational

boundary for the year are:

• Scope 1:

– Natural gas combustion

– Diesel vehicle combustion

• Scope 2:

– Purchased electricity - standard

– Purchased electricity - renewable

• Scope 3:

– FERA

– Waste

– Water

– Business Travel

In some cases, where data is missing,

values have been estimated using either

extrapolation of available data or data

from the previous year as a proxy.

The Scope 2 Guidance requires that we

quantify and report Scope 2 emissions

according to two different methodologies

(“dual reporting”): (i) the location-based

method, using average emissions factors

for the country in which the reported

operations take place; and (ii) the market-

based method, which uses the actual

emissions factors of the energy procured.

Streamlined Energy and Carbon Reporting (SECR)

continued

FY 2022 FY 2023

Energy consumption (kWh) UK

Rest of

world Total UK

Rest of

world Total

Electricity 7,239,000 4,495,000 11,734,000 6,334,403 2,433,641 8,768,044

Fuels

2,856,000 30,000 2,886,000 2,604,942 191,428 2,796,370

1 Natural gas and transportation fuels (petrol and diesel).

72 Strategic Report72

Admiral Group plc Annual Report and Accounts 2023

Task Force on Climate-related

Financial Disclosures (TCFD)

Introduction

Recognising Admiral’s part

in tackling climate change,

Admiral has reported in line

with the FCA’s listing rule

LR 9.8.6R and included in

its annual ﬁnancial report

disclosures consistent with

recommendations of the

Task Force on Climate-related

Financial Disclosures (TCFD)

since 2019.

This has provided transparency around

the ways in which climate change impacts

the Group now and will do in the future.

In addition, Admiral also reports on the

Climate-related Financial Disclosure (CFD)

requirements – introduced in 2022 as part

of the UK Government’s Greening Finance

roadmap. The sections below therefore

involve Admiral making disclosures

consistent with all 11 recommendations

and recommended disclosures from

the TCFD framework, and with all eight

CFD requirements (as required under

the Companies (Strategic Report)

(Climate-related Financial Disclosure)

Regulations 2022 sections 414CA and

414CB of the Companies Act 2006).

During 2023 Admiral has made

improvements to comply with

recommendations and recommended

disclosures relating to TCFD Strategy

disclosure b – “describe the impact of

climate-related risks and opportunities

on the organization’s businesses,

strategy, and financial planning”,

and to Metrics and Targets disclosure

c – “describe the targets used by the

organization to manage climate-related

risks and opportunities and performance

against targets”.

• Various activities have been enhanced

to enable Admiral to better evidence

the objectives of TCFD Strategy

disclosure b. To quantify the impact of

climate-related risks and opportunities,

the Company has run climate-related

stress and scenario testing (SST), and

increased the extent to which physical

risks arising from climate-related events

are considered in the financial planning

process – with projected loss ratios for

Admiral’s Household business including

(an increased) allowance for weather

events with a combined target over

a five-year period. Indeed, in order to

meet the increased cost, frequency, and

severity of claims (including weather-

related events arising from climate

change) the Company has proactively

increased average premiums in UK

Car and UK Household business

during 2022 and 2023, and has also

implemented localised rate increases

in the US motor business. Work will

continue to be undertaken during

2024 to consider the potential impact

of additional climate-related metrics

and targets in the Company’s financial

planning and accounting activities.

Finally, the “Diversification” and

“Evolution of Motor” pillars of the Group

strategy, which could mitigate some

of the climate-risk faced by the Group

(and capture upside opportunities),

form a key part of the annual strategic

planning and dynamic business

planning processes.

• The submission of Admiral’s GHG

targets to the Science-based targets

initiative (SBTi) in September 2023

represents a clear development in

climate-related metrics and targets

consistent with cross-industry

standards, as required by the

recommended disclosures within

TCFD Metrics and Targets disclosure

c. This includes scope 1, 2, and 3 GHG

emissions (category 1-14 – supply chain

and category 15 – investments) with

intermediate performance targets

against a 2021 baseline. Such targets

represent the key environmental

performance indicators required to

assess Admiral’s progress against its

net zero ambitions. Other key metrics

already used to assess the performance

of Admiral’s products and services

against climate-related risks include

key inputs into pricing and reserving

decisions, and information on “weather-

related losses following natural

catastrophes” for the UK Household,

UK car, and US motor businesses.

Reinsurance programmes are in place to

mitigate these losses, and the adequacy

of Admiral’s reinsurance programme,

the evolution of losses due to natural

catastrophes, and the performance of

the Company’s pricing, reserving, and

claims management approaches, as well

as the metrics and targets mentioned

above, are all monitored and reported

to the Group Risk Committee (GRC) and

the Group Board in various reports.

Further discussion and information are

included in the relevant sections of the

report and are signposted as such.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

Board and Board Committees

The Admiral Group Board is responsible

for promoting the long-term

sustainable success of the Group and

has ultimate oversight of climate-

related risks and opportunities.

Responsibility for reviewing climate-

related risks is delegated to the GRC and

associated disclosures are reviewed at the

Group Audit Committee.

Climate-related risks are embedded

within the business as usual (BAU)

risk management approach, and any

developments are reported within

regular committee reports including the

Consolidated Risk Report (CRR) and the

CRO Report, as well as regularly scheduled

dedicated climate updates. In addition,

Boards and committees receive numerous

additional updates as part of other

presentations (e.g., ORSA Report) or

discussions on environmental, social and

governance (ESG) topics.

Admiral’s climate and sustainability

governance structure as well as roles and

responsibilities are summarised in the Table

1. Such arrangements are proportionate

to the nature, scale and complexity of the

Company’s operations and business.

Governance

Table 1. Board and Board Committees covering climate-related risks and opportunities.

Committees Roles and responsibilities Activity during 2023

Group Board

• The Group Board is ultimately responsible for

understanding the Group’s impact on the environment,

as well as the impact of a changing climate on the

Group, and for agreeing how this is considered in the

context of the Group’s governance structure, strategy,

risk management, and business outcomes, including

performance against business objectives

• The Group Board approves the Group ORSA Report,

which includes consideration of climate-related risks

and opportunities alongside SST.

• During 2023, there were seven scheduled Group Board

meetings and some ad hoc meetings. Specific focus was

given to climate-related change during four meetings.

For example, in April 2023, the Group Board received a

formal update on climate change including progress made

across several climate-related areas

• In 2023 the Board requested and oversaw the submission

of GHG targets to the SBTi for official approval

• The annual strategy review included a review of the

Company’s approach to sustainability including climate issues.

Group Risk

Committee

• The GRC has delegated authority from the Group

Board for overseeing risk management activities, and is

therefore responsible for reviewing climate-related risks

and opportunities

• Developments in relation to climate-related risks and

opportunities are included in the CRR and the CRO Report

where appropriate, which are both presented at each of

the five scheduled GRC meetings annually (as well as at

some ad hoc meetings)

• Dedicated agenda items allow a full update of climate-

related activities to be considered, including progress

towards goals and targets

• Climate change considerations are also reported within

the ORSA Report, which is reviewed by the GRC before

being recommended for approval by the Group Board.

• During 2023, the GRC met nine times (five scheduled and

four ad hoc meetings) to review, manage and monitor

all aspects of risk management. Specific focus was given

to climate-related risks and opportunities during three

meetings. For example, in June 2023, the Committee

reviewed the development of Admiral’s EV offering to

support the transition to a low carbon economy, and

of Admiral’s carbon offsetting strategy. In addition, the

Committee reviewed and challenged progress towards

Admiral’s GHG targets

• Throughout the year the Committee considered the impact

from named storms and other weather events (e.g., storms

Babet and Ciaran), as well as actions taken by Admiral to

mitigate and manage the impact.

Group Audit

Committee

• The Group Audit Committee is responsible for overseeing

climate-related financial disclosures under TCFD, and CFD,

as well as any climate-related audits (of which there was

one in 2023).

• In April 2023, the Committee reviewed the ‘Climate Risk’

audit report produced by the Internal Audit Team providing

an independent opinion on key processes and controls in

place to manage and report climate risk

• The Committee reviews and approves several climate

related disclosures, including this report, the Streamlined

Energy and Carbon Reporting Regulation (SECR) report and

the annual Sustainability Report.

Investment

Committee

• The Investment Committee is responsible for the

responsible investment strategy and support the

Company’s effort to achieve net zero by 2040.

• During 2023, the Investment Committee reviewed and

challenged several reports covering climate change

(e.g., four reports monitoring the performance of the

responsible investment strategy, one report proposing

to update the integration of ESG considerations into the

responsible investment strategy and one report on climate

solutions and natural capital).

74 Strategic Report74

Admiral Group plc Annual Report and Accounts 2023

Table 2. Management Committees covering climate-related risks and opportunities.

Committees Roles and responsibilities Activity during 2023

Group

Executive

Committee

• This Committee is comprised of the Group CEO, CRO, and

CFO, along with the EUI CEO and other senior managers

• The Committee is appraised of, and provides guidance on,

climate-related initiatives across the three focus areas of

operations and supply chain, investments, and products

and services.

• In 2023, this Committee continued to operate as the

executive-level forum covering climate-related initiatives

and propositions. For example, Admiral’s approach to

embedding sustainability, material weather events, and

the development of Admiral’s EV offering, were discussed

during the year.

Sustainability

Steering

Committee

• The SSC, which replaced the Climate Steering Group

and the Sustainability Working Group in 2023, provides

oversight, challenge, and guidance on the overall

programme of sustainability-related work (including

climate change) and ensures a joined-up approach across

all Group functions and Group entities

• It meets quarterly and covers discussions/outcomes

(including climate-related risks and opportunities) from

five Working Groups (covering operations, investments and

procurement, risk and compliance, customer and product,

people and communication) and developments from the

Sustainability Team.

• The establishment of the SSC was approved by the Group

Board in October 2023 and the first meeting was held in

Q1 2024

• Prior to establishing the SSC, guidance on the overall

programme of climate-related work, including discussion

of risks and opportunities, was provided by the Climate

Steering Group, which met quarterly, with oversight from

the Sustainability Working Group

• The SSC reports directly to the Group CEO, to whom any

key decisions are escalated and who provides updates to

the Group Board

• The SSC is chaired by the Group CRO and is supported by

five Working Groups which are attended by representatives

from businesses and functions from around the Group.

Management and

management committees

During 2023 the governance surrounding

sustainability (and therefore climate

change) was further enhanced and

embedded, not least by the appointment

of a Group Head of Sustainability in

charge of ESG approach, building up

the Sustainability Team, and setting

up the new sustainability governance

framework with the establishment of the

Sustainability Steering Committee (SSC),

superseding the existing Climate Steering

Group and Sustainability Working Group

(see Table 2). Discussions/outcomes from

the SSC are escalated to the Executive

Committee and to the Board and Board

Committees mentioned in Table 1 above.

The Group Head of Sustainability reports

ultimately to the Group CEO.

Senior management from across the

Group have various responsibilities

relating to climate-related issues, and

most sit on appropriate fora, such as

the SSC or its five Working Groups.

The reporting at each forum allows

management to be informed of

climate-related issues and to monitor

them closely.

The Group CEO is the accountable

sustainability representative for the

Group, with a remit that includes climate-

related risks and opportunities. The SSC

reports directly to the Group CEO.

The Group CRO has designated Senior

Manager and Certification Regime

(SMCR) responsibilities in relation to

climate change, chairs the SSC, and

is the day-to-day executive sponsor

of sustainability activities across the

Group. They are tasked with developing

Admiral’s Sustainability Team and ensuring

effective coverage of sustainability topics

across all lines of defence.

The Group CFO is responsible for

investments, including responsible

investment and climate change

considerations. They are also responsible

for the reinsurance programme which

increasingly considers excess of loss cover

for extreme weather events.

Climate-related risks and opportunities

are typically articulated at Group level,

although the materiality and potential

exposure of individual lines of business

are considered and actions relating to

operations, investments and products

are actually implemented at entity level.

The Group Enterprise Risk Management

(ERM) Team monitors emerging risks

and Principal Risks and Uncertainties

(PR&Us) and identifies and assesses

climate-related risks and opportunities.

The output is included in regular and

ad hoc Board and committee reporting.

The Group ERM Team, in conjunction

with the Sustainability Team, also

coordinates climate risk-related

work across the Group, including the

identification of climate-related risks,

their potential impact, and any resulting

opportunities. Management teams across

Admiral are responsible for managing

areas of the business which may affect

or be affected by climate change, and

for reporting progress to the SSC’s five

Working Groups and other committees.

They have a key role in identifying climate-

related risks in their respective areas.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

For further information see: Page

Sustainability Steering Committee 57

Board leadership and company purpose 125

The Group Risk Committee 168

Figure 1. Climate-related governance

Green Team

The Green Team is an internal staff-led working group in operation since 2018. It looks at green initiatives, such as increasing

recycling rates and engaging Admiral’s staff on all aspects of climate-change and environmental matters including the Cycle

Solution scheme. The group is responsible for organising green events within the Company, in association with partners such as

Stump Up for Trees and Size of Wales. In 2023, the group organised Admiral Green Week with film writer Paul Goodenough as a

guest speaker to present his book and the Rewriting Extinction project (a global collaboration to save species from extinction).

Admiral Group Board

Sustainability

Steering Committee

Group

Executive Committee

Board and Board

committees

Management and

management committee

Group Risk Committee Investment CommitteeGroup Audit Committee

Five working groups

76 Strategic Report76

Admiral Group plc Annual Report and Accounts 2023

assess the procurement category

of environmental risk, and will allow

Admiral to engage with key suppliers

to encourage them to reduce their

GHG emissions.

• Investments: ESG considerations

are embedded into the investment

approach, and since 2020 Admiral has

followed the Institutional Investors

Group on Climate Change (IIGCC) Net

Zero Framework to help guide the

decarbonisation of its investment

portfolio, set carbon reduction targets,

and monitor the performance of

Admiral’s investment metrics.

• Products and services: To manage the

transition to a low carbon economy,

the annual strategic planning and

business planning processes include

increased allowance for weather

events in projected loss ratios, as well

as the continued development of

the electric vehicle (EV) offering. The

“Diversification” pillar of the Group’s

strategy further supports the transition

to a low carbon economy by developing

and launching new products and

services. Pricing and reserving discipline

are key metrics used to mitigate

physical risks impacting Admiral’s

products and are considered in the SST

run by the company in 2023.

Outcomes from the analysis done on

climate-related risks and opportunities,

as well as from climate-related SST,

discussed in detail later, and additional

analysis from the strategic planning,

business planning and ORSA processes

confirm that the company’s business

model and strategy remain resilient

to potential climate-related impacts

over the periods considered (2023 to

2025): no climate-related risks (including

operational impacts) are assessed as

being catastrophic, the solvency position

remains robust, and some opportunities

offer significant upside. The potential

impact from climate-related litigations

(liability risk) is not presented in the

risk assessment below, as it is currently

assessed as not material.

Strategy

Consideration of the company’s impact on

the environment and on people’s futures

is integral to Admiral’s purpose to help

more people to look after their future.

Always striving for better, together.”

Admiral has therefore committed to

achieve net zero emission across all its

carbon footprint by 2040 and to achieve

net zero in operation emissions by 2030.

To consider the impact of climate change

on the Group, Admiral’s climate-related

efforts are aligned to three focus areas –

operations and supply chain, investments,

and products and services – each of

which are potentially exposed to the

three components of climate-related

risks (transition, physical, and liability)

and opportunities, as defined by the TCFD

framework. During 2023, as agreed by

the Group Board, Admiral’s sustainability

approach has been formally embedded

into the Group strategy. To guide efforts

towards achieving the company’s net zero

commitment, the plan to transition to

a low carbon economy includes:

• Operations and supply chain:

Investment has been made to increase

Admiral’s capacity and capability to

manage sustainability topics (e.g.,

building out the Sustainability Team),

improve Admiral’s governance of

climate- and sustainability-related

topics (e.g., implementing the SSC

and its five Working Groups), and align

business decisions to the company’s

net zero commitment. GHG targets

against a 2021 baseline were submitted

in Q3 2023 for validation by SBTi,

which will allow Admiral to track the

performance of its GHG emissions

reductions on an ongoing basis and

take tailored action as needed to

achieve these targets and, later, the

company’s net zero commitment.

Initiatives for further reducing the

Group’s operational footprint have

been identified (e.g., mechanical

and electrical (M&E) changes to

plant and building management

systems). The introduction of supply

chain risk controls in Admiral’s

contract management system has

allowed the company to better

When considering the

impacts of climate change,

Admiral recognises that

there are two components

(double materiality):

(i) its impact on the environment;

and

(ii) the impact of climate change

on the Group and all its lines of

business, on its revenues, costs

and via other non-financial risks.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

Time horizons and

assessment ratings

Admiral has defined the following time

horizons for climate-related risks and

opportunities: short-term (0-5 years);

medium-term (5-10 years); and long-term

(10+ years). This is shown graphically in

Figure 2. The short-term time horizon

corresponds with the business planning

horizon, and the medium-term horizon

coincides with the expected useful life of

buildings and infrastructure (depending

on the nature of the infrastructure).

Both transition risks and physical risks are

beginning to crystallise in the short-term,

however the worst physical effects from

changing weather and climatic patterns

may materialise in the medium- and

long-term if a smooth transition to a

low carbon economy is not achieved.

Liability risks are highly uncertain, in

scope and in outcome – the first cases are

currently being brought against oil, gas

and energy companies – therefore any

emergence and timing is less certain.

The potential impact is assessed

qualitatively using subject-matter

expert (SME) input and is cross-checked

against the scenario outputs. At present,

given the large uncertainty around

the likelihood and severity of climate-

related issues, only assumptions related

to changes to claims frequencies and

claims costs, and the associated impact

on loss ratios are incorporated into the

financial planning process, and when

monitoring financial performance and

financial position. Work will be undertaken

during 2024 to consider how Admiral

Group can add additional climate-

related assumptions and their potential

impacts in its financial planning and

accounting activities.

Figure 2. Time horizons for climate-related risks and opportunities

Short-term (ST): 0-5 years

Detailed five-year financial

projections are produced as part

of the business planning process,

using robust assumptions based

on current group structure and

business mix.

Medium-term (MT): 5-10 years

Strategic investments are being

made now in order to provide a

material contribution to Group

results in the medium-term.

Results are inherently subject to

more uncertainty, as customer

demands, consumer behaviour,

and the external operating

environment are all subject to

change, not least from the impact

from climate change.

Long-term (LT): 10+ years

Beyond ten years it is possible that

the Group will look considerably

different to today and will

potentially be operating within

a much-changed environment.

There is significant uncertainty

over long-term projections.

Risk ratings are defined as follows:

• Moderate/minor impact: relates to

a non-significant impact on revenue

or profit.

• Significant impact: relates to a

potential impact on revenue or profit

which exceeds normal month-to-

month variance.

• Severe impact: relates to a potential

impact on revenue or profits in excess

of typical annual variance.

Opportunity ratings are

defined as follows:

• Moderate: relates to a non-significant

impact on revenue or profit.

• Major: relates to a potential impact on

revenue or profit which exceeds normal

month-to-month variance.

• Transformative: relates to a potential

impact on revenue or profits in excess

of typical annual variance.

78 Strategic Report78

Admiral Group plc Annual Report and Accounts 2023

Transition risks

Admiral may be exposed to increased

capital and operating expenditures,

should legal or regulatory requirements

designed to reduce GHG emissions,

and/or increasing climate-related

expectations from shareholders,

customers, staff, or other stakeholders

require environmentally-friendly

changes to business operations,

products or focus.

Admiral has taken steps over a number

of years to reduce its environmental

impact, and any remaining operational

carbon footprint is offset via the

purchase of Gold Standard carbon

credits. Admiral’s purpose-built

Tŷ Admiral building complies with

BREEAM excellent standards and has

photovoltaics/solar panels fitted which

provide energy directly back into the

grid. Moreover, since 2021, Admiral has

been working with an external party,

Arup Group, to baseline its property

and facilities infrastructure in order

to consider possible carbon footprint

improvements. The identified strategic

initiatives are generally medium-term

commitments, such as M&E changes

to plant and building management

systems, which focus on more

economical use of utilities, water, and

waste, improving controls of the main

M&E plant and associated systems, and

end-of-life replacement of M&E plant

and machinery where a significant

carbon reduction can be achieved.

All such initiatives should be further

supported by on-going improvements

in the accuracy of data produced

throughout the property portfolio.

Business Impacted All

Impact

Moderate/Minor

Significant

Severe

Metrics Operational resilience; ESG score from key suppliers

Key management actions • An improvement of the company’s operational resilience is ongoing to better

manage and mitigate physical risks which could impact Admiral’s business

continuity, and ensure it is tailored to specific geographic conditions/exposures

of the company

• Admiral’s procurement framework was improved in 2022 to include ESG

performance of partners and suppliers

• Additional supply chain controls were introduced in 2023 in Admiral’s contract

management system to allow better assessment of environmental risks from

third parties. This work is still ongoing.

Physical risks

Both acute and chronic physical

risks could have a significant impact

on Admiral’s business continuity, by

restricting staff’s ability to commute to

the workplace, making Admiral offices

inaccessible or unsafe, or damaging

critical infrastructure such as data

centres, roads and buildings, or causing

damage to interconnected digital

technologies (e.g., cloud-based services

failing due to elevated temperatures

or floods). While the Group is better

prepared for such an eventuality

following the experience of responding

to Covid and subsequent hybrid-

working model, future climate-related

events may impact staff working from

home and/or critical IT infrastructure

or disrupt key suppliers in a way not

encountered during the pandemic.

To mitigate this risk, an improvement of

the company’s operational resilience is

ongoing. For example, migrating to the

latest, cloud-based claims management

software has included testing for

the capacity to rollback to an earlier

version that uses traditional in-house

data servers.

Admiral’s supply chain partners will

also, to a greater or lesser extent, be

exposed to the same risks from climate

change as the Group. Therefore, Admiral

is working with its largest suppliers on

assessing their exposure to physical risk

and reducing their carbon footprints.

During 2023 Admiral has begun to

account for sustainability factors in

its procurement process, such as by

including 16 questions related to the

environment

into the due diligence

questionnaire (48 questions in total).

The change to the questionnaire allows

Admiral to tailor questions dynamically

based on a supplier’s response, allowing

the response to be risk-assessed.

The introduction of supply chain

risk controls in Admiral’s contract

management system has allowed it to

better assess the procurement category

of environmental risk.

23 E.g., “Does your business hold ISO:14001 accreditation (Environmental Management Systems)?”, “Does your business have an Environmental Policy?”.

Business Impacted All

Impact

Moderate/Minor

Significant

Severe

Metrics Scope 1, 2 and 3 (categories 1-14)

Key management actions • The Company has set granular GHG emissions targets and submitted its

GHG targets to SBTi for approval.

Operations and supply chain

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Business Impacted All

Impact

Moderate

Major

Business Impacted All

Impact

Moderate/Minor

Significant

Metrics Scope 3 cat.15, SST and capital and liquidity forecast, Weighted average carbon

intensity (WACI), investment in green bonds or in firms with SBTs

Key management actions • Climate-related considerations are incorporated into investment decisions,

and the decision-making process is clearly documented to support investments

in renewable energy infrastructure, green bonds, and other corporate bonds

• The Company has set climate-related metrics for its investments with granular

targets regularly monitored.

Business Impacted All

Impact

Moderate/Minor

Significant

Metrics Scope 3 cat.15, SST and capital and liquidity forecast, WACI, investment in green

bonds or in firms with SBTs

Key management actions • Investments in new businesses and opportunities, (e.g., through the “Diversification”

pillar of the Group’s strategy) to help the company in its effort to move away from

less attractive type of assets or obsolete investments.

Opportunities

There are opportunities based around

city centre heating proposals and

geothermal technology in some

major cities, although these are

medium- to long-term in nature.

Tactical opportunities for carbon

footprint reduction are already in force,

including property downsizing and a

hybrid working model reflecting office

attendance habits in a post-Covid

business environment. There may also be

opportunities to lower costs and to seek

more favourable terms from suppliers

seeking climate-friendly partnerships.

Transition risks

Admiral’s investments will be exposed

to transition risks, as the move to a low

carbon future may lead to some assets

becoming less attractive. To mitigate

these risks, Admiral has set targets to

reduce the average carbon intensity

of its portfolio by 25% by 2025 from

a year-end 2020 baseline, in line with

the Group’s overall net zero target for

2040. In 2023, Admiral has re-baselined

its GHG emissions using a 2021 baseline

to be consistent with competitors

and submitted its GHG targets to SBTi

for verification (as part of the overall

Group submission). To date, climate

considerations have only had a limited

impact on the Group’s approach to

acquisitions and divestments, although

any potential mergers and acquisitions

(M&A) activity needs to align with the

Group’s overall strategy including climate

change. The acquisition of the UK direct

Home and Pet personal lines insurance

operations of RSA due in 2024, is in line

with Admiral’s overall strategy and will be

incorporated into the company’s net zero

commitment. Climate-related issues have

not had any adverse impact on access to

capital, and indeed the company’s strong

ESG ratings may actually be positive

for the availability and costs of funding.

Similarly, climate-related issues have not

adversely impacted Admiral’s investment

in research and development (R&D) but

have instead shaped areas of priority and

strategy such as the development of EVs.

Physical risks

Some of Admiral’s investments will be

exposed to physical risks, as changing

climatic conditions may negatively

impact the performance of investee

companies and cause assets to lose

value prematurely.

Effects may be company-specific

(e.g., capital and liquidity issues),

sector-specific, or may have an impact

on the broader economy and macro

environment, such as reduced economic

growth, higher unemployment or

changes in inflation.

24 Businesses impacted and metrics used for opportunities are the same as the ones used for climate-related risks (transition and physical) for each focus area (operations and supply chain,

investments and products and services).

Investments

Operations and supply chain continued

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

80 Strategic Report80

Admiral Group plc Annual Report and Accounts 2023

Opportunities

While climate change poses a risk to the

Group’s investments, the transition to a

low carbon economy should also present

investment opportunities – Admiral has

already invested in renewable energy

infrastructure, green bonds, and other

corporate bonds with credible transition

plans, and is considering approving other

investible asset classes. The company is

also seeking to secure a sustainability-

linked loan, which will be based on

hitting environmental and other

sustainability targets.

The company has targets to grow the

number of third parties which have a

credible plan to align emissions with a

2°C pathway, for example via SBTs. Also,

Admiral does not allow investments in

companies generating more than 10%

of their revenues from coal or tar sands

and restricts investment in companies

not aligned to a maximum of 2°C of

warming, or not subject to engagement

or stewardship actions. By 2025 the aim

is for portfolios to also have 5% green

bonds, with 35% of the portfolio with

Paris-aligned commitments.

Transition risks

The move away from personal petrol

and diesel vehicles is the most obvious

transition risk faced by the Group and is

one which presents a strategic challenge

to Admiral as the company may

experience an erosion of its traditional

competitive advantages in pricing and

claims handling. Initiatives to reduce

aggregate GHG emissions could see a

move from petrol and diesel vehicles

to EVs, and/or a concerted move away

from traditional models of transport

to a model of integrated and active

transport, based on EVs and alternatively

fuelled vehicles (AFVs). The pace of

transition towards such vehicles is

unclear, being driven by a number of

factors including customer preferences

and behaviour, the supply and cost of

EVs and associated infrastructure, and

crucially the stance of Government.

The UK Government’s 2030 ban on sales

of new petrol and diesel vehicles has

been postponed for five years to 2035,

the plug-in car grant scheme was ended

in June 2022, and the allocated funding

has been refocused towards extending

plug-in grants to boost sales of plug-in

taxis, motorcycles, vans and trucks and

wheelchair accessible vehicles.

Admiral monitors company-specific

and market-wide metrics which

are incorporated into the business

planning process, reported in monthly

management packs, and discussed at

relevant fora. Key data includes new

vehicle registrations, the proportion

of which are EVs, as well as internal

metrics capturing the attractiveness

and competitiveness of the EV

proposition, the claims experience,

and the broader customer experience

(e.g., times top, market share, loss

ratio – all of which would be considered

commercially sensitive). Such data helps

the Group continually assess whether

it is developing adequate capabilities

in these innovative technologies.

Business Impacted All

Impact

Moderate

Business Impacted UK car; Europe car

Impact

Significant

Severe

Metrics Risk selection; EVs offering

Key management actions • To further support climate-related risks and opportunities being considered in

key business decisions, work is being undertaken to further embed all aspects of

sustainability into the Group strategy and activities. This ensures that climate-

related risks and opportunities are consistently considered in the decision-making

process (e.g., use Admiral’s traditional competitive advantages to develop an EV

offering in line with the company’s net zero ambition and customers’ expectations)

• The development of an EV offering has become an explicit target in the Group’s

strategy and Admiral is already one of the leading insurers for EVs in the UK market.

Products and services

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Business Impacted UK household

Impact

Significant

Severe

Metrics Risk selection; Reinsurance arrangements; Loss ratios (Probable Maximum Loss (PML)

of insured products from weather related natural catastrophes).

Key management actions • The resilience of Admiral’s business model and strategy is assessed as part of SST,

which are considered within the annual Business Plan process and included in the

annual ORSA Report (including climate-related scenarios and their financial impacts)

• Pricing and reserving discipline is applied and regularly re-calibrated to ensure that

changes in claims frequency, severity, location and cost are appropriately reflected in

proposed rates, most notably in Motor and Household lines of business

• Reinsurance is used to mitigate large losses from natural catastrophes.

Opportunities

There are two types of opportunities

related to Admiral’s products

and services:

• The first relates to the development

of new climate-related products and

services. For example, aligned to the

third of the Group’s strategic pillars,

“Evolution of motor”, Admiral already

has a strong and competitive EV

offering, which will help counteract

the expected long-term decline in the

number of petrol and diesel vehicles

on the road. The offering, which is

continuously being developed and

expanded, is discussed further on

page 26. Related to the Household

offering, and due to the physical risk

impacting Admiral’s Household line

of business, in 2023 the company

released a Storm Hub website to

send timely weather warnings to

customers ensuring they are aware of

any extreme weather events that may

affect them.

• The second is aligned with the

second pillar of the Group’s strategy

– “Diversification” – and seeks to

develop and launch new products

and services in line with emerging

customer needs outside its core

business, and which may be less

emissions-intensive. These initiatives

may help counteract any long-term

move away from private vehicle

ownership to more integrated

transport solutions.

Taken together, these areas will help

support Admiral in the transition to a

low-carbon economy, by exploring new

opportunities as well as by shielding

Admiral from any contraction in its core

business. The loans business may also be

affected in the longer-term as increasing

demand of loans for Household

improvements could create additional

opportunities for the Company.

Business Impacted UK car; Europe car; UK household

Impact

Moderate

Major

Physical risks

Admiral is exposed to both acute and

chronic physical risks mainly impacting

its Household lines of business.

Climate change is causing sea levels to

rise and is also causing more frequent

and heavier rainfall, increasing the risk of

flooding. Changes in weather patterns

may also increase the incidence and

severity of storm and freeze events,

as well as hailstorms and subsidence.

Together these indicate that an

increase in the volume and value of

Household claims is likely. The Group

had experienced a surge in claims in

early 2023 due to the prolonged freeze

experienced in early December 2022 in

the UK. In addition, Admiral was exposed

to several storm events during 2023 –

although their impact was relatively low.

To mitigate and manage these risks,

Admiral takes a flexible, proactive, and

dynamic approach to risk selection and

pricing, ensuring that written business is

within risk appetite, and that projected

loss ratios and combined ratios lead to

profitability over the cycle.

Admiral also uses reinsurance

arrangements extensively, including

quota share and catastrophe cover

for Household lines. These are in place

to provide protection against an

accumulation of claims associated with a

weather catastrophe event.

Since launching the UK Household

business in 2012, Admiral has sought

to control its exposure to flood risk by

developing an understanding of the risk

at a granular geographical level, which

has been coupled with a conservative

appetite for underwriting such risk.

In order to support this, Admiral is

continually updating and improving

its risk modelling, including adopting

perils-based pricing which allows for

interrogation of specific concentrations

of risks. In the UK, Admiral takes part in

the Flood Re scheme, which is designed

to allow insurers to offer more affordable

insurance for homes built before

2009 in areas most at risk of flooding.

The volume and value of policies ceded

to Flood Re is monitored on an ongoing

basis. By participating in the Flood

Re scheme Admiral can underwrite

properties which are outside of its

acceptable flood criteria by ceding the

flood risk to Flood Re, while still offering

customers protection via underwriting

all other perils.

Products and services continued

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

82 Strategic Report82

Admiral Group plc Annual Report and Accounts 2023

Stress and Scenario Testing (SST)

While qualitative assessments of the impact from climate

change are useful, it is also important to quantify the

impact where possible to better understand the financial

cost of climate change. Stress and Scenario Testing (SST) is

conducted as part of the annual ORSA process to understand

the robustness of the Group’s business model and strategy

to the impact of various risks. In addition to the standard ORSA

scenarios, two climate change scenarios from the Network

for Greening the Financial System (NGFS)

2022 phase III were

performed this year.

The two scenarios examined were “disorderly – delayed

transition” and “hot house world – current policies”, both of

which were modified and recalibrated to be relevant and

applicable for Admiral’s climate risk exposure. The period

modelled is 2023-2025 as the current focus is on short-

term impact, as inherent uncertainty as well as developing

approaches to assessment mean there is less confidence in

medium-term and long-term impacts. As modelling capabilities

are further developed, Admiral will increasingly also focus on

medium- and long-term assessments.

The NGFS “disorderly – delayed transition” scenario assumes

that the implementation of policies needed to drive the

transition to net zero is delayed until 2030, and is then sudden

and disorderly, resulting in material short-term macroeconomic

disruption. Under this scenario, global warming is limited to

an increase of 1.6°C by 2050. This scenario has been applied to

Admiral by exploring the transition risks from climate change

relating to the transition of the UK motor book from petrol/

diesel vehicles to EVs, affecting the profitability of the business.

This scenario impacts Group, AIGL and AICL, and key

assumptions, linked to the erosion of Admiral’s traditional

competitive advantages in pricing and claims handling, are:

• Mispricing of EV risks by 15% each year.

• Two large losses per year through ordinary driving totalling

£30m.

• Fire catastrophe events caused by an EV in a multistorey car

park with £25m total losses.

The NGFS “hot house world – current policies” scenario assumes

that no action is taken on climate change so that global

temperature levels continue to increase, reaching 3°C above

pre-industrial levels by 2080. This scenario has been interpreted

as resulting in increased incidents of extreme weather events,

impacting the UK Household, Car, and Van books, impacting

Group, AIGL and AICL. Specifically, it has been assumed that a

catastrophic windstorm event (i.e., PRA General Insurance Stress

Test (GIST) 2022 – Scenario A3: UK windstorm and UK flood)

occurs each year in the UK.

For both scenarios, it is assumed that excess of loss reinsurance

would be in place, and the outputs are modelled for Group with

dividends set to the base capital plan at 90% of profits.

The scenarios performed give comfort that the Group’s business

model and strategy should remain resilient to potential climate-

related impacts over the period modelled. Under both scenarios,

the Group solvency ratio is projected to remain above the lower

trigger (150% on a dynamic capital add-on basis) throughout

the projection period. Both scenarios were also used to identify

possible management actions that the business could take

should similar events to the scenarios actually occur.

The risks presented by a transition to a low-carbon economy

are not currently considered substantial in the short term.

However, as Admiral’s strategy focuses on initiatives which

should mitigate these risks, Admiral’s activities are considered

to be aligned to a well-below 2°C world. In such a transition

scenario, the strategic focus will be to accelerate the Evolution

of Motor and Diversification pillars of the Group’s strategy.

For the transition risk scenario, the estimated financial impact

is a reduction in own funds each year, reducing by over £90m

in 2025 under the no management actions assumptions, due

to reduced profits from increased claims and reduced profit

commissions. Physical risks may have the greatest potential

impact on the Group’s Household insurance business in the

long-term – in such a hot house world, the focus will be on

ensuring robustness of the core business via pricing discipline

and appropriate reserving. For the physical risk scenario,

with no management actions, the overall financial impact

at YE25 is ~£150m for Group Solvency II own funds. In the

short term, the impact on the company’s financial positions

(own funds, SCR) is limited and management actions available

(e.g., dividend retention) further mitigates the financial impact

on the company.

The financial impact assessment of the scenarios does not

allow for Government/scientific responses or management

and mitigating actions (e.g., annual repricing of insurance

policies, greater or different use of reinsurance, changes

to asset allocation in the investment portfolio), except for

changes to dividends. However, potential mitigating actions

are discussed qualitatively.

The output of this scenario analysis has been used in discussions

at GRC, Group Audit Committee, and Group Board about future

strategic direction.

For further information see: Page

Our purpose-led approach 8

Our strategy 22

Evolution of Motor 26

Our environment 56

Responsible investment 65

25 NGFS Scenarios Portal, Data & Resources, NGFS.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Risk management

The four-step risk management process

for climate-related risks is the same

process as that employed for other

risks and is therefore embedded into

Admiral’s Enterprise Risk Management

Framework (ERMF). Climate-related

risks are captured in the emerging risk

horizon scanning process, are subject

to the same materiality assessments

as emerging risks, are represented on

the emerging risk radar, and have their

expected magnitudes assessed annually.

They are discussed at and reported in

the management and Board committees

described in the “Governance” section of

this disclosure.

Identification

The identification of potential climate-

related risks, as well as any opportunities,

is embedded into Admiral’s existing

three Lines of Defence model. It follows

a multi-stage process which incorporates

internal viewpoints and forecasts (e.g.,

from departmental expertise, insight

from working groups, committees, and

Boards) with those from external sources,

both insurance-specific and more broadly.

Management teams across Admiral,

whose business areas may affect or be

affected by climate change are a source

in identifying climate-related risks in their

respective areas, and act as an input to

work coordinated by the Sustainability

Team and the Group ERM Team, who

articulate risks and opportunities at

the Group level. Existing and emerging

regulatory requirements related to

climate change and sustainability are

also considered.

Materiality assessment

The nature, magnitude and timing

of climate-related risks are all highly

uncertain. As a result, such risks do not fit

naturally into standard risk assessment

approaches, and so a hybrid approach,

which comprises both qualitative and

quantitative components, is utilised.

The assessment is performed at Group

level considering transition, physical, and

liability risks, as well as microeconomic

and macroeconomic transmission

channels

applicable to each business

line. This allows the Group to identify

any potential impacts and opportunities

from climate change on all current and

potential future products and services,

as well as on operations and investments.

The impact of existing and emerging

regulatory requirements related to

climate change are also assessed.

Climate-related risks, and any resulting

opportunities, are initially evaluated

qualitatively. A risk matrix approach is

employed, whereby the potential impact

of the risk (scored between minor and

catastrophic) is considered alongside the

likelihood of impact (scored between

rare and almost certain), assessed across

short-, medium- and long-term horizons.

The “expected magnitude” is defined as

the product of magnitude of impact on

Admiral and the likelihood/plausibility

of impact.

Where appropriate, a quantitative

approach to assess climate-related risks

can also be taken, and two scenarios from

the NGFS were included as part of the SST

section of the 2023 Group’s ORSA report

(as shown in the box above).

Management and mitigation

The primary approach to risk mitigation

is the ongoing successful execution

of the Group strategy, which seeks to

diversify the Group’s revenue and profit

streams, thus reducing the Group’s

reliance on UK Car, which is exposed

to transition risk. Considerable efforts

have been made to mitigate the risk

of a transition to EVs, both via new and

existing businesses, which have invested

in developing and testing new products

and product features to meet developing

customer requirements. Regulatory and/

or reputation risks from climate change

is managed through efforts made to

reduce the Company’s GHG emissions and

by submitting GHG targets to SBTi for

official approval.

The Group’s approach to managing

the risk that climate change poses to

insurance book is similar to its approach

to managing other insurance risks:

disciplined pricing and assessment

of impact by peril, clear underwriting

criteria, regular assessment of the

reserving approach, and risk transfer

via reinsurance. Admiral uses industry-

standard flood and catastrophe models

to understand its underlying physical

underwriting risk, and hence what amount

of risk is accepted, what amount of risk is

mitigated, and the reinsurance protection

deemed appropriate for risk transfer.

Admiral’s approach to pricing is the key

tool for managing climate-related risks

but given its commercial sensitivity, the

approach is not disclosed.

Monitoring and reporting

Climate-related risks and opportunities

are monitored by the Group ERM Team

and are reported to the GRC via the

CRR and CRO Report, and annually

as part of the Group’s ORSA Report.

They are also reported to the Group

Board, management committees, and

to subsidiary Boards and committees as

required. This monitoring and reporting

ensures that the highest level of Company

Management is aware of the risks and

opportunities, can account for them in

future business planning and strategy

setting, and can devise management

actions to mitigate their effects or to

capture any resulting opportunities.

The Regulatory Compliance Team, part of

Group Compliance, monitors and reviews

publications and pronouncements from

various regulators, supervisors, and

transnational bodies, including but not

limited to the FCA, the PRA, the Bank

of England, and EIOPA. Summaries are

distributed to relevant stakeholders

as and when material is published, a

monthly round-up is distributed more

broadly across the Group, and regulatory

developments are discussed in the

SSC’s Risk, Compliance, and Reporting

Working Group.

26 The causal chains linking climate risks to the financial risks

faced (as per the PRA Climate Change Adaptation Report

for banks and insurers – Climate-related financial risk

management and the role of capital requirements.

For further information see: Page

Principal risks and uncertainties 98

Emerging risks 107

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

84 Strategic Report84

Admiral Group plc Annual Report and Accounts 2023

Metrics and targets

Substantial progress has been made in

2023 regarding the collection, verification,

and reporting of climate-related data.

Most notably, Admiral’s GHG targets for

Scope 1, 2 and Scope 3 emissions, which

support the achievement of Admiral’s

net zero ambitions across all of its

carbon footprint by 2040, were approved

by the Board and submitted to SBTi

for verification.

Metrics relevant to operations and supply

chain, investments, and products and

services disclosed in this section are

aligned to the risks and opportunities

presented above. However other

numerical values that may be considered

commercially sensitive are not included.

Other cross-industry climate-related

metrics are not disclosed in this report as

they are not considered to be materially

relevant to the Company’s performance –

given the nature, scale and the complexity

of its operations and business.

Operations and supply chain

As a global financial services Company,

Admiral has a low operational footprint

when compared to its complete carbon

footprint, including the supply chain

and investment portfolio. This has been

aided by the efforts made over the past

decade to mitigate the physical risk on its

operations and supply chain. Efforts have

led to improvements in the efficiency of

buildings, critical IT infrastructure, the

procurement process, and has helped

the strengthening of the evaluation and

monitoring of its energy consumption

with support from Accenture.

Since 2019 Admiral has offset its

remaining Scope 1 and 2 emissions, as

well as some Scope 3 emissions. However,

Admiral recognises that offsetting

emissions is not enough, and Admiral

should seek to further reduce its GHG

emissions. Therefore, Admiral is working

hard to reduce the absolute level of its

operational GHG emissions.

GHG emissions are quantified in

alignment with the World Resources

Institute’s Greenhouse Gas Protocol

Corporate Accounting and Reporting

Standard and are discussed further in the

SECR section of the annual report on page

71. Unverified emissions data, including

for 2023, as well as a description of the

methodology used to estimate metrics

if data is missing, is also included in that

section, as are further operational metrics.

Investments

As a financial services company, a

significant part of Admiral’s emissions are

category 15 emissions (part of Scope 3),

from the investment portfolio. Admiral has

therefore committed to achieving a

reduction in investment-related GHG

emissions of 25% by 2025, and of 50% by

2030, reaching net zero GHG emissions

by 2040 at the latest – aligned to the

overall target.

To mitigate the transition risk of having

an obsolete investment approach and/or

holding unattractive assets, and to ensure

that above targets are met, Admiral has

developed an investment proposal to

align its corporate bond mandates to the

Paris Agreement, following the Net zero

Investment Framework. This is a practical

blueprint for achieving net zero emissions

by 2050 which has been endorsed by the

UN’s Race to Zero campaign. The proposal

has several features, including reducing

emissions over time and increasing

investment in sustainable assets and

funds (green bonds and holdings with

confirmed SBTs, as per Admiral’s climate-

related investment metrics). There will not

be blanket divestment rules, but instead

Admiral’s investment managers are

expected to be engaging with companies

which could, as a last resort, possibly lead

to divestment and reinvestment in less

carbon-intensive names over time.

Several challenges should be noted:

sourcing reliable and consistent data;

avoiding unintentional consequences

such as under-diversification; and reliably

determining the expected risk and return

impact of such a strategy. However,

in order to guide and review progress

towards overall targets, a number of

metrics are tracked, shown in Table 3.

Investment metrics are calculated by

identifying in-scope non-cash assets and

applying MSCI ESG data on a per security

basis. Various metrics are subsequently

calculated at a whole portfolio level.

Weighted average carbon intensity (WACI)

is calculated by taking the most recently

available carbon emissions (Scope 1 and 2)

per million USD of revenue for all in-scope

securities, and weighting that by the

individual security’s market value relative

to the in-scope portfolio (in scope refers

to public corporate bonds as defined by

EIOPA’s Complementary Identification

Code (CIC)). The WACI shows how carbon

intense (how much carbon per million

USD of revenue) the average company

in which Admiral holds investments is

(of the in-scope investments); it is a

measure of Admiral’s exposure to carbon

intense companies.

∑

Figure 3. Weighted average carbon intensity (WACI) formula

Position Weight

Position Scope 1 & 2 Emissions

Position Revenue

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Task Force on Climate-related

Financial Disclosures (TCFD)

continued

Products and services

As discussed above, the effects of

climate change may impact all of

Admiral’s business lines. Physical risks,

which may be managed via risk selection

and reinsurance protection, might be

more prominent in Admiral’s Household

businesses, while transition risks may be

felt more keenly in the Motor businesses.

The “Diversification” pillar of the Group’s

strategy should mitigate such impacts

from physical and transition risks.

Admiral tracks a number of climate- and

diversification-related metrics in order

to assess its exposure to climate-related

risks, such as modelled burn cost per peril,

the number and value of weather-event-

related claims, or times top

and loss

ratios for the EV offering. However, in the

main, these are considered commercially

sensitive. Admiral is able to disclose the

metrics shown in table 4 opposite, as per

the Sustainability Accounting Standards

Board Standard.

Table 3. Climate-related investment metrics

Metric 2023 2022 2021

Weighted average carbon intensity (new methodology

) 58 tCO

e/$m revenue 71 tCO

e/$m revenue

77 tCO

e/$m revenue

Investment in holdings with confirmed SBTs N/A

£485m £422m

% Allocated to coal and oil sands 0% 0% 0%

Investment in Green bonds £146m £98m £73m

1 Prior year figures have changed as a result of changes to the calculation methodology following work done with Accenture as part of the SBT targets submission

2 55% portfolio coverage. 61 tCO

e/$m revenue for benchmark

3 67% portfolio coverage. 83 tCO

e/$m revenue for benchmark

4 The calculation methodology of Admiral’s investment in holdings with confirmed SBTs is currently being reviewed and updated with the support of Accenture. To avoid disclosing a number from a

non-finalised/non-approved calculation methodology, for 2023, Admiral will not disclose SBT numbers.

For further information see: Page

Our Society – Environment 66

SECR disclosure 71-72

Evolution of Motor 26

Description Metrics

Probable Maximum

Loss (PML) of

insured products

from weather

related natural

catastrophes

• Admiral utilises various methods and evaluations to make

underwriting and reinsurance decisions that manage the

Group’s exposure to catastrophic events. Across the Group’s

insurance book, the main weather-related risks pertain to

Admiral’s UK Household book, as well as the US Motor book

• Admiral’s Household excess of loss reinsurance provides

catastrophe cover with a limit above the estimated 1-in-200 loss.

As of January 2024, this was estimated to be £560-580 million

from floods and storms, etc. for the UK Household insurance

business. Admiral’s excess of loss deductible is £65 million, and

the 70% quota share leads to a net event loss of £19.5 million

• In relation to Admiral’s UK Car insurance business, the 1-in-200

estimated possible loss as of December 2022 was £90-115 million.

Admiral currently has up to £80 million of cover from the motor

excess of loss reinsurance and a further £6 million from the

property excess of loss reinsurance. Therefore, after the £12 million

deductible, Admiral is covered up to a £98 million single event

• In relation to the US Motor insurance business, the 1-in-200

estimated possible loss as of June 2023 was $22-26 million.

The US business has $21.5 million of cover from the motor excess

of loss reinsurance. Therefore, after the $3.5 million deductible,

the US business is covered up to a $25 million single event.

Total amount of

monetary losses

attributable to

insurance payouts

from

(1) modelled natural

catastrophes and

(2) non-modelled

natural catastrophes,

by type of event and

geographic segment

(net and gross

of reinsurance)

Admiral Group does not separately identify losses by modelled

and non-modelled catastrophes. However, the table below

provides some details on the weather-related losses following

natural catastrophes in relation to the UK Household book,

which represents the main weather-related risk from across

the Group’s operations. The table covers property catastrophe

losses above £5.0m across 2018-2023. The most notable change

compared to data disclosed in the 2022 TCFD report is for Storm

Eunice and the freeze event from 2022, which now have an

incurred cost of >£50m.

Table 4. Physical risk metrics

Period Perils Paid (£m) Incurred (£m)

2018 Freeze, flood, and storm 10.7 10.5

2019 Flood and storm 0.0 0.0

2020 Flood and storm 0.0 0.0

2021 Flood and storm 5.6 5.9

2022 Freeze, flood, and storm 37.6 51.6

2023 Flood and storm 0.0 5.8

27 Times top represent times when Admiral’s quote comes

out as the best price on a price comparison website.

86 Strategic Report86

Admiral Group plc Annual Report and Accounts 2023

Section 172 Statement

How the Board fulfils its

duties under s172

Our Directors and the Board collectively

are bound by the duties set out under

section 172(1) Companies Act 2006 and

are required to confirm in a statement

how these obligations have been fulfilled

during the year. Our s172 statement

detailed on page 87 explains how, during

the year, the Board has acted in a way

that it considers, in good faith, would

be most likely to promote the success

of the Company for the benefit of our

shareholders, whilst having due regard to

those stakeholders identified under s172.

The principal decisions taken by the Board

during the year, which take into account

s172 considerations, can be found on

page 128.

Understanding the requirements,

concerns and ambitions of Admiral’s

stakeholders is important to inform

the Board’s creation of an effective and

sustainable business strategy. The Board

takes into consideration the views of all

stakeholders both when formulating,

and also when implementing this strategy.

In doing this, in conjunction with our

values and our culture, the Board is

confident that it will ultimately fulfil

our purpose and drive the long-term

sustainable success of the Admiral Group.

The Board understands that relevant

stakeholder considerations should be

integral to Board discussions and its

decision-making process. It is mindful

in all its deliberations of the long-term

consequences of its decisions, as well

as the importance of the Admiral

Group maintaining its reputation for

high standards of business conduct.

Engagement with our stakeholders

is key to this process, allowing the

THE BOARD’S s172 DUTIES

TO ITS SHAREHOLDERS

AND STAKEHOLDERS

Fulfilling

Board to obtain comfort that relevant

stakeholders have been identified, their

positions considered and understood,

and that different stakeholder groups

have been treated fairly. The feedback

we receive through our engagement

with stakeholders is detailed in our Board

reports and forms a key part of Board

discussions, ensuring the Board can focus

on running the business for the benefit

of all our stakeholders for the long-term.

During 2023, the Board reviewed its

key stakeholder profiles and confirmed

that of the six groups identified within

s172; people, shareholders, customers,

suppliers and partners, community,

and the environment, all remained

material stakeholders for the Admiral

Group and continued to be strategically

important to the long-term success of

Admiral’s operations. As part of its 2023

review, the Board considered the current

approach to engagement with, and

governance around, each stakeholder

group. In addition, the internal stakeholder

relationship owners within the Admiral

Group provided detail to the Board

on existing engagement methods,

feedback processes and the activities

and plans for stakeholder engagement

for the year ahead.

Further information on wider stakeholder

engagement across the Admiral Group can

be found within the Sustainability Report

on page 56, and the Corporate Governance

Report on page 113. A description of the

principal decisions taken by the Board

during the year, taking into account s172

considerations, are set out on page 128.

Key stakeholder engagement channels

along with Board considerations and

decision-making outcomes in accordance

with s172 are set out overleaf.

In accordance with their duties under

s172(1) of the Companies Act 2006,

the Board of Directors individually

and collectively confirm that, during

the year under review, they have acted

in a way that they consider, in good

faith, is most likely to promote the

long-term success of the Company

for the benefit of its members as a

whole, whilst having due regard to the

matters set out in section 172(1)(a) to

(f) of the Companies Act 2006, being:

• a) the likely consequences of any

decision in the long-term;

• b) the interests of the

Company’s employees;

• c) the need to foster the Company’s

business relationships with

suppliers, customers and others;

• d) the impact of the Company’s

operations on the community

and environment;

• e) the desirability of the Company

maintaining a reputation for high

standards of business conduct; and

• f) the need to act fairly between

members of the Company.

Pages 87 and 128 set out how the

Admiral Board has met its obligations

under s172.

The Board balances the

occasionally conflicting

needs and priorities of

Admiral’s key stakeholders,

whilst ensuring all decisions

taken promote the long-term

success of the Group.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

The principal decisions taken by the Board during the year and how the requirements set out under s172 were taken into account

are set out in the Governance Report on page 128.

Defining Admiral group’s purpose, culture, values and strategy:

The Board has defined Admiral’s purpose and sets and monitors

the culture and values of the Group. Our purpose, culture and

values alongside engagement with, and an understanding of, the

requirements of our stakeholders, assist in guiding the strategic

direction and long-term interests of the Group, informing Board

discussion, and ensuring decisions are taken in line with the

agreed strategy, giving equal regard to all our stakeholders.

See pages 14 and 132 for further information.

Understanding the required Board skills, knowledge and

experience: Directors have wide ranging, relevant expertise

and experience that they are able to use to inform and guide

decision-making to ensure this is of the highest quality, whilst also

incorporating a balanced consideration of the expectations of

all relevant stakeholders. Significant time is spent inducting new

Board members along with annually assessing and implementing

educational programmes. This allows for educated and informed

decisions being made to promote the long-term sustainable

success of the Group in the best interests of all stakeholders.

See page 146 for further information.

Ensuring high quality Board meetings: Board and Board

Committee agenda planners set out matters to be considered

by the Board and Board Committees during the year. These are

regularly reviewed and updated during the year to ensure that

the Board continues to meet the evolving demands of the Group.

Standardised Board reporting templates are in place and training

has been provided to those producing Board papers to ensure

consistency, clarity and conciseness in approach. See pages 144

and 145 for further information.

Considering stakeholder interests and impact: Board papers

are accompanied by a covering document outlining; i) which

stakeholders could potentially be impacted by a Board decision,

ii) an explanation of how stakeholder interests have been

considered, iii) the likely consequences for those stakeholders,

and iv) how the impact on stakeholders could be monitored.

This process ensures the Board is aware of and gives due regard

to its s172 obligations during the Board discussion and decision-

making process. See pages 144 and 145 for further information.

Open Board discussion and decision-making process: Our

Board environment encourages an open, honest and accountable

decision-making culture, which is subject to rigorous risk

management and challenge to ensure any decision taken is of the

highest standard and supports the long-term sustainable success of

the Group. The Board is aware that in some situations stakeholder

interests may be conflicted and it may have to prioritise interests,

however the Board ensures that, as part of those considerations

evaluated through its decision-making process, all stakeholders are

taken into account and are treated fairly.

Effective Board review process: The Board is regularly updated

on the implementation and results of key decisions through the

Board and Committee reporting framework. This is carried out

through regular management reports and shareholder and wider

stakeholder feedback submitted to the Board as part of the

engagement process. The Board’s performance in its decision-

making processes are monitored and appraised through its

annual Board and Committee performance evaluation to ensure

it maintains the highest standard of conduct. Further details on

this process can be found on page 158.

The Board promotes the long-term success of the Admiral Group by ensuring the highest standards

of business conduct, understanding the long-term implications of its decisions, and ensuring all

stakeholders are treated fairly. It does this through:

Section 172 Statement

continued

88 Strategic Report88

Admiral Group plc Annual Report and Accounts 2023

Through our culture and

values, we are committed to

providing a diverse, inclusive

and supportive working

environment. During the year

Admiral has been recognised

as being one of the best places

to work in the UK, and in

the other countries in which

we operate.

Why engaging with our

employees is important

We believe that people who like what

they do, do it better. Our c.13,000

colleagues’ well-being and positive

engagement in their roles is essential

to the long-term success of Admiral.

Our team has always been a powerful

source of competitive advantage and,

as such, Admiral takes great pride in

looking after its employees and helping

them look after their future. The Board’s

engagement with the Admiral team

fosters a happier and more productive

workforce, supports operational

excellence, and ultimately shapes

better outcomes for our customers

and other stakeholders. In 2023, 95% of

our colleagues around the world stated

their belief that the Admiral Group

was a diverse and inclusive employer.

How the business engages

with our employees

Admiral employees are encouraged to

engage across multiple channels, virtually

and face-to-face. Examples of this include:

• Regular communication through a

variety of internal channels and social

communication tools

• UK and International employee

consultation groups providing an

employee voice and input into how

the business operates

• Employee surveys capturing feedback

and engagement across the business

• A wide variety of employee forums

and working groups around diversity

and inclusion – see page 56 for

further information

• One to ones with managers and regular

development meetings

• Feedback schemes such as ‘Ask Milena’

and ‘Have your say’

• Regular employee education and

compliance courses

• Whistleblowing channels.

Further examples of how we engage with

our colleagues can be found on page 132.

How the Board engages

with employees

The Board recognises the importance

of engaging with its workforce and does

so through a combination of formal

and informal channels. The Board has

established a UK Employee Consultation

Group (ECG) and an International

Employee Consultation Group (IECG).

Board Directors are invited to participate

in these meetings. The Chairs of the

employee forums report directly to

the Board on key areas discussed to

give an ‘employee voice’ at the Board

table, and subsequently report back to

the employee forums with updates on

Board discussions. The Board also regularly

meets employees through visits to office

sites, presentations at Board meetings,

and is regularly updated by management

on people matters, employee

engagement, survey results and culture.

Outcomes and impact of

Board decision-making

The Board discussed the output received

from several ECG and IECG engagement

sessions during the year for the purposes

of understanding those issues that were

of interest or concern to employees.

Significant topics addressed included the

impact of the increased cost of living,

working practices and sustainability/

ESG issues. The Board also received and

considered reports and updates from the

Head of People Services and subsidiary

boards. The Board discussed financial

measures to support employees and,

as a result, were supportive of a five

percent pay increase to all UK based

employees, approved by the EUI Board, to

help mitigate the impact of inflationary

costs. In addition, the Board confirmed

a share award to employees to ensure

a sense of shared ownership in the

success of the business. As a result of the

Board’s approval of the acquisition of

the More Than home and pet personal

lines insurance operations from RSA,

Admiral is delighted to welcome c.300

new colleagues to the Admiral Group.

The Board was pleased that the significant

work ongoing around the building of

a diverse and inclusive culture was

recognised through the results of the

Great Place To Work Survey with 87%

of employees believing Admiral was a

great place to work. This was further

demonstrated through several awards

received during the year including the

best big company to work for at the Best

Company Awards. The Board ensured that

the significant activity streams already in

place would continue and evolve, and that

the Group would continue to focus on

building its unique culture through these

multiple channels.

For further information see: Page

Employee consultation 137

Diversity and inclusion 62, 154

Principal decisions 128

Culture 132

Awards 13

People

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Section 172 Statement

continued

We aim to protect and manage

our shareholder capital in a

responsible and accountable

manner, whilst generating

long-term sustainable value

for the Group.

Why engaging with our

shareholders is important

Shareholder engagement fosters an

alignment of interests between the

owners of the business and the Board.

It allows the Board to explain the rationale

behind business and strategic decisions

whilst providing opportunities for

shareholders to comment and challenge

business priorities.

How the business engages

with shareholders

Admiral aims to have regular and

constructive engagement with our

shareholders through a varied number

of channels, examples of which include:

• Investor site visits, conference calls

and meetings

• Market disclosures, including interim

and full year results announcements

and presentations

• The Annual Report and

Sustainability Report

• Investor and analyst presentations,

roadshows (in person and remotely)

and corporate governance meetings,

for example, to discuss the Directors’

Remuneration Policy

• Regular analyst engagement, including

ad hoc sessions on topical issues, for

example the implementation of the

IFRS 17 accounting standard

• The 2023 Annual General Meeting

• Admiral’s corporate website, which

is regularly updated and contains all

relevant shareholder information.

How the Board engages

with shareholders

The Board enjoys long-standing

relationships with Admiral’s largest

shareholders, including the founders of

the Group, and receives regular updates

on the activities of the Investor Relations

team as well as meetings with investors

held with the Board and management

team. The Board also receives investor

feedback (post roadshows results/

conferences) and uses this to help shape

its approach to corporate governance

and strategy, ensuring that any issues or

concerns raised are considered during

Board discussions. During 2023, there

were over 80 separate engagements held

with institutional shareholders, including

significant engagement with shareholders

regarding the Remuneration Policy to

be voted on by shareholders at the 2024

AGM. The Board also receives regular

updates on market dynamics, share price

performance and share register changes.

The Board engages with Admiral’s retail

shareholders through the AGM process.

Outcomes and impact of

Board decision-making

As part of the new Chair’s induction

process, Mike Rogers met with significant

shareholders to understand their views

on various aspects of the business,

including Admiral’s strategy and corporate

governance. This engagement assisted

the new Chair in shaping the direction

of Board discussion and decision-

making processes. The Remuneration

Committee incorporated feedback

received through direct engagement

with significant shareholders to assist

in formulating a revised Remuneration

Policy, ensuring there was an alignment

of interests. The Board considered the

views received through its shareholder

engagement programme, which fed into

its Board strategy sessions and assisted

in formulating the framework for Group

strategy. The Board’s engagement

with stakeholders regarding Admiral’s

£250 million Tier 2 bond issue along with

a tender for the existing £200 million

5.5% subordinated Tier 2 notes ensured

this process was concluded without issue.

The Board also considered feedback

from shareholders as part of its process

when considering interim and final

dividend approval.

For further information see: Page

Governance Report 113

Stakeholder engagement 87, 136, 137

Business model 8

Remuneration Policy 176

Shareholders

90 Strategic Report90

Admiral Group plc Annual Report and Accounts 2023

We aim to provide a great

customer experience.

Why engaging with our

customers is important

Our customers are at the heart of

our business and the focus of our

purpose to ‘help more people to look

after their future. Always striving for

better together’. As a customer-centric

organisation, we seek to provide more

people with the opportunity to access

good financial services products.

The needs of our customers shape the

products we deliver, and their feedback

and expectations inform the design

of our customer distribution channels

and platforms.

In 2023, we implemented the new

Consumer Duty regulation with the

goal of monitoring and evidencing

good customer outcomes and making

enhancements, where required, to drive

even better outcomes. We continue to

use data and insights to inform these

processes thinking seriously about the

outcomes we deliver for our customers

and continually making improvements to

our products and services where needed.

For more information see pages 60, 111

and 130.

How the business engages

with our customers

There are opportunities for the business

to communicate and engage with our

customers, and vice versa, throughout the

different points in the customer life cycle.

Some of these mechanisms include:

• Discussions with our customer

service teams, new business and

renewals teams, claims teams, and

complaints teams

• Online customer portals: During 2023,

we built more functionality into the UK

customer portal to make services easier

for customers to access

• Live chats with agents and ‘Admiral App’

messages

• Social media: In 2023, we increased

engagement through simplified

wording and website updates

• Customer feedback through comment

forms, surveys, SMS, along with

customer focus groups and panels

• Perception studies: Frequently

reviewing the engagement

mechanisms across our customer base,

particularly throughout digital journeys,

allows us to understand what is most

important to our customers and helps

us to continually refine and improve our

service to customers.

How the Board engages

with our customers

Whilst not having significant direct

exposure to customers, the Board

continues to receive updates from

management on the treatment of its

existing customers and the various

processes that are designed to ensure

fair outcomes throughout the customer

journey. Customer satisfaction levels

are fed into Board discussions which

ultimately helps shape strategic decision

making, including plans related to

digital investment and future product

diversification. The Board receives annual

feedback on the conduct risk framework

through the Group Risk Committee.

Board members also took part in call

listening in the customer claims area as

part of this year’s Board strategy meeting.

Outcomes and impact of Board

decision-making

During the year the Board, through

its reporting framework, oversaw the

implementation of the new Consumer

Duty regulations within the Group’s

relevant regulated subsidiary entities,

and received detailed updates as to

the progression against agreed plans.

The FCA were invited to the April 2023

Board meeting, where constructive

discussions were held around the

FCA’s expectations in terms of the

implementation of the new Consumer

Duty regime and how Admiral’s plans

met with these expectations. The Board

ensured that mechanisms were in place

to monitor the treatment of, along with

the outcomes for, our customers, and

oversee that appropriate changes in

products and services would be made

where required. The Board was able to

oversee the further alignment of Admiral’s

processes as a result of its engagement

with the FCA and feedback through

customer surveys. The Board oversaw the

successful migration of over 6.5 million

customer policies to a new policy and

billing centre on Guidewire during the

year, which will integrate technological

improvements with enhanced security

measures, providing an improved

customer experience. The Board approved

the acquisition of the More Than direct

Home and Pet personal lines insurance

business from RSA in December 2023.

Once completed this will both support the

Board’s objective of diversification, whilst

offering existing and new customers a

strong multi product proposition.

For further information see: Page

Strategic Report 14

Principal decisions 128

Consumer duty 60, 111, 130

Business model 8

Customers

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Section 172 Statement

continued

We aim to ensure that

Admiral’s impact on society

is positive.

Why engaging with our

communities is important

Giving back to our communities is an

integral part of Admiral’s culture. As a

large employer across several countries,

we believe it is our responsibility to

provide employment opportunities for

those in the local areas whilst at the same

time, training and developing our people.

We are committed to recognising and

promoting diversity both within Admiral

and within the communities in which

we operate. Issues identified through

engagement with our communities

include employability, social mobility,

educational opportunities, financial

inclusion, and support for sports, arts,

and culture. By addressing these, we

demonstrate a genuine commitment

to the well-being of our community

stakeholders. This strategic engagement

not only reflects our values, but also

positions us as a responsible corporate

citizen, who contributes to long-term

positive change both within and beyond

the Group.

How the business engages

with our communities

Our engagement with communities

is driven by our people, who actively

participate in nominating and selecting

initiatives that align with local community

needs. This culture of giving and shared

responsibility is embedded across our

entire Group. Our approach to community

engagement includes:

• Colleague volunteering:

Through initiatives like our ‘Impact

Hours’ scheme, where our colleagues

contribute their time and skills to

support various community projects

• Charity initiatives: We are involved

in a range of charity initiatives,

demonstrating our commitment

to financial and resource-

based contributions

• Partnerships: We foster partnerships

with organisations across the

world, recognising the importance

of collaboration in addressing key

community issues

• Sponsorship and fundraising:

We support community events

through sponsorships, fundraising

efforts, and the funding of projects

via our Community Fund and Match

Fund processes.

To manage risks and capitalise on

opportunities as they evolve, our

Community Strategy is continuously

reviewed and adapted. Monitoring the

impact of our actions is integral to our

approach, with feedback mechanisms

from our partners, our people, our

communities, and external entities

such as the Welsh Government.

This comprehensive system of monitoring

ensures that our community engagement

remains effective, responsive, and

aligned with our strategic goals.

This objective will be further enhanced

going forward by moves to combine our

programmes to support community and

environmental issues.

How the Board engages with

our communities

The Board believes Admiral should be seen

as a force for good within its communities

and has oversight over the implementation

of initiatives in line with this ambition

and receives updates as to their progress.

Locally, through our UK charitable giving,

the Board oversaw Admiral volunteering

14,000+ impact hours during 2023 and has

set the ambitious target of volunteering

25,000 impact hours in 2024 – see

page 66. Alongside this are numerous

community and sponsorship initiatives,

further details of which can be found

at www.admiral.com/community-and-

sponsorship. Further afield, internationally

our Global Emergency Fund, supported

by the Board, has enabled Admiral to

make fast donations when people and

organisations need it most, for example,

significant donations were made to assist

charities involved in the Turkey-Syria

earthquake appeal, the Canadian wildfires

and flooding in Italy. In 2023, Admiral

donated over £400,000 to a number

of urgent appeals through our Global

Emergency Fund – see pages 21 and 66

for further information.

Outcomes and impact of Board

decision-making

The Board received updates on key

community initiatives across the Group,

providing strategic direction and

approving innovative programs such as

our Community Investment Strategy

discussed on page 66. The Board reviewed

progress on the ‘Together for Better’

programme, Admiral’s commitment

to transforming futures in the local

community. This programme pledged,

over a five-year period, a percentage of

Group profit as a financial commitment

to enable our Community Investment

Strategy to focus on helping local people

obtain employment, filling gaps in the

labour market, and an ambitious target

to cumulatively complete 100,000

volunteering hours in our communities.

For further information see: Page

Strategic Report 14

Business Model 8

Sustainability 56

Communities

92 Strategic Report92

Admiral Group plc Annual Report and Accounts 2023

We are committed to

achieving net zero greenhouse

gas emissions by 2040,

across all three scopes of

emissions, and to cut these

emissions in half by 2030

Why engaging with environmental

issues is important

Engaging with environmental issues is

strategically important to Admiral and

reflects our commitment to responsible

business behaviour and our recognition

of the importance of addressing climate

challenges. It also aligns with our purpose

of ‘helping more people to look after

their futures; always striving for better,

together’. This commitment is driven by

several key stakeholder considerations:

• Our people seek assurance that

they are part of a Company

that actively contributes to the

protection of the natural world and

addresses the climate emergency.

Demonstrating responsibility

towards the environment is integral

to maintaining a motivated and

engaged workforce

• Our customers not only expect

protection for their property but

also want assurance that we are

safeguarding their future by adopting

environmentally responsible practices.

This builds trust and enhances

our reputation

• Our shareholders and regulators

are increasingly concerned with how

businesses respond to environmental

challenges – both how the environment

impacts the business and how the

business impacts the environment.

Demonstrating resilience to

climate-related events and seizing

opportunities aligns with their

expectations and contributes to the

Group’s overall robustness

• Our commitment is to minimise our

direct environmental impact, including

reducing our carbon footprint, and

also support our customers with the

transition to a greener society. This not

only aligns with regulatory and societal

expectations but positions us well

for changes in markets and customer

expectations and also highlights

Admiral as a conscientious and forward-

thinking organisation.

How the business engages with

environmental issues

Our engagement with environmental

issues is multifaceted and reflects

a proactive approach to increasing

awareness and taking concrete actions.

Key initiatives include:

• Sustainability Steering Committee:

To support a more holistic and co-

ordinated approach to sustainability

issues, the former Sustainability

Working Group and Climate Change

Steering Committee were replaced

in 2023 by the Sustainability Steering

Committee (SSC) in Q4 2023.

Supported by five working groups,

the SSC is a management committee

that provides guidance on the overall

programme of sustainability-related

work and ensures a joined-up approach

across all Group functions and Group

entities. This includes environmental

issues such as climate change

• Operational sustainability: Admiral is

a carbon neutral entity. Key initiatives

to achieve this milestone included

investments in solar panels on our

headquarters in Cardiff, purchasing of

energy from 100% renewable sources

(in the UK), and purchasing of Gold

Standard carbon credits since 2019

to offset its operational emissions.

This covers Scope 1 and 2 emissions,

and partially covers Scope 3

• Net zero ambition: We have formally

committed to achieving net zero

greenhouse gas emissions by 2040

at the latest, across all three scopes

of emissions, and to cut these emissions

in half by 2030.

We are currently in

the process of securing verified

science-based targets that will enable

us to hit both targets.

Environment

• Green Team initiatives: Our internal

Green Team is a working group

dedicated to green initiatives.

Regular internal updates from this

team drive awareness and action to

lessen the impact of climate change

– both within the business and within

employees’ own lifestyle choices

• Internal promotion: Special events

such as Green Week and Earth Day,

promoted internally, serve to raise

awareness and engage employees in

environmentally responsible practices

• Employee engagement: We actively

engage with employees through

forums, CEO updates, and various

recycling initiatives across our offices.

This ensures that our commitment

to environmental responsibility is

embedded within our Group culture

• Monitoring and reporting: We

recognise that environmental

disclosures are increasingly requested

by investors, shareholders, customers,

regulators and other stakeholders.

For 2023, Admiral made disclosures

consistent with the Task Force on

Climate-related Financial Disclosures

(TCFD), against the Streamlined

Energy and Carbon Reporting

Framework (SECR) and against the

Sustainability Accounting Standards

Board (SASB) Standards. In addition,

Admiral also reports on the Climate-

related Financial Disclosure (CFD)

requirements introduced in 2022 as

part of the UK Government’s Greening

Finance roadmap.

To read more on how the business

engages with environment issues see

our Sustainability Report on page 56, our

SECR disclosures on page 71, and

our TCFD disclosures on page 73.

28 Proposed baseline year for emissions cuts is 2021,

still to be verified by SBTi.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Section 172 Statement

continued

How the Board engages with

environmental issues

The Board is the principal governing body

overseeing sustainability-related issues

and takes ownership of sustainability and

climate-related topics and associated

stakeholder engagement. The Board

approves the Group’s sustainability

approach and our Environmental, Social

and Governance (ESG) ambitions which

can have a material impact on Admiral.

Milena Mondini, Group CEO, is the

accountable sustainability representative

on the Group Board. The Board receives

regular updates on climate and wider ESG-

related topics, providing feedback, and

ensuring alignment with our Responsible

Investment Policy.

Outcomes and impact of

Board decision-making

The Board reaffirmed the Group’s

sustainability agenda as part of a

2023 strategy refresh, overseeing the

appointment of a new Group Head of

Sustainability and enhancements to

the sustainability governance structure.

The Board also confirmed Admiral’s

commitment to achieving net zero

greenhouse gas emissions by 2040, across all

three scopes of emissions, and to cut these

emissions in half by 2030, and reviewed

progress in relation to these ambitions.

Updates were received on requirements

from regulators and government initiatives

with regards to sustainability and climate

change. This included a review of the

PRA’s position on climate change and

the financial system. The PRA notified

businesses that climate change presented

an increasing, material risk to firms and

the financial system and confirmed that it

was taking a more active role in supervising

firms in relation to its expectations on

climate change. To address the increasing

sustainability agenda, the Board oversaw

the introduction of the Sustainability

Steering Committee in October 2023

to provide a joined-up approach across

all Group functions. More information

on how the Board assesses climate

related risks and opportunities along

with the implementation of climate and

sustainability initiatives is included in our

climate-related disclosure section on

page 71.

For further information see: Page

Business model 8

Sustainability 56

SECR and TCFD disclosures 71, 73

Risk management 98, 168

94 Strategic Report94

Admiral Group plc Annual Report and Accounts 2023

We aim to build strong,

mutually beneﬁcial working

relationships with our

partners and suppliers.

Why engaging with our partners

and suppliers is important

Our partners and suppliers comprise a

mix of financial partners, reinsurance

partners, IT hosting, distribution, claims

management and services partners, and

many others. It is crucial that the Group

manages these relationships effectively

to mitigate the associated third-party

risks across the supply chain. Our partners

and suppliers are considered strategically

important to us either because (i) the

supplier is a material outsourcer, (ii) the

supplier or partner is integral to achieving

future strategic goals, (iii) there are

particularly preferential rates or terms in

place, or (iv) another factor which makes

the relationship hard to replicate or

replace. Admiral’s supply chain supports

our global operations in delivering services

to our customers and involves over 1,100

contracted suppliers.

We act responsibly when dealing with

our suppliers, choosing to support local

and regional providers where possible.

We also choose and encourage an ethical

and environmentally friendly supply chain

and also making sure we pay in a timely

manner to support the financial resilience

of our suppliers.

How the business engages with

our partners and suppliers

To ensure strong third-party supplier

management there are dedicated

processes across the Group to govern

end-to-end relationships. Key business

units have internal relationship managers

responsible for ongoing performance

management, which would include

ensuring active contract renewals,

negotiations, business reviews and service

improvement. Business continuity and

exit plans are in place and are actively

managed. Admiral uses a dedicated

contract management system to

monitor and support the governance

of procurement, provide tender

management, contract management,

supplier management and due diligence

under a single platform. The Group’s

dedicated regulatory relationship teams

maintain channels of communication

with the FCA and PRA in the UK, and

the Group’s international regulated

intermediaries and insurers have similar

teams in place.

How the Board engages with

our partners and suppliers

Whilst not having direct engagement with

partners and suppliers, the Board receives

updates from management on:

• All proportional risk-sharing

agreements, including co-insurance

and reinsurance contracts

• Relationships with key partners and

procurement, including Admiral’s

payment policies and practices

• Matters relating to partnerships

and opportunities

• Customer-facing suppliers

• Third-party risk management

regulatory, technological and

consumer trends

• Modern slavery risks in the supply chain.

The Board takes all updates into account

when considering the long-term

consequences of its strategies and

business plan. The CFO provides updates

on the activities related to the renewal

of the Group’s co-insurance, reinsurance

and quota share contracts, including

maintaining Admiral’s ongoing strategic

relationship with Munich Re.

Outcomes and impact of

Board decision-making

The Board received updates on the

performance of our business partners

and suppliers through reporting from

management and the risk function, it also

reviewed supplier payment metrics in line

with the Prompt Payment Code of which

Admiral is a signatory. The Board had

oversight of the monitoring of Modern

Slavery provisions with key suppliers.

The Board also oversaw training rolled out

for relevant employees on conduct with

suppliers/partners including anti-bribery

and corruption and modern slavery.

The Board approved Admiral’s Modern

Slavery Statement for 2023 which sets

out the business’ zero tolerance approach

to modern slavery in all its forms. This is

enacted through our policies, training

and risk management – for more details

around how we do this, our Modern

Slavery Statement is set out in full on

our website.

For further information see:

Page

Business model 8

Sustainability 56

Principal decisions 128

SECR and TCFD disclosures 71

Partners and Suppliers

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

The non-ﬁnancial and sustainability reporting requirements contained in sections 414CA and

414CB of the Companies Act 2006 are addressed within this section by means of cross reference,

to indicate where they are located within the strategic narrative and to avoid duplication.

Non-Financial and Sustainability Information Statement

Our business Page

Business model See page 8

Strategy See page 22

Financial stability See page 11

Key Performance Indicators See page 31

Climate disclosure Page

Task Force on Climate-related Financial Disclosures See page 73

Streamlined Energy and Carbon Reporting See page 71

Governance Page

Risk See page 98

Governance See page 113

Sustainability Page

Our approach to sustainability See page 56

Culture and values See page 11

Employees Diversity and Inclusion See page 62

Community engagement See page 66

Responsible investments See page 64

96 Strategic Report96

Admiral Group plc Annual Report and Accounts 2023

Group policies

The policies in the table below can be located on our website www.admiralgroup.co.uk

Policy Description

Code of Conduct Our Code of Conduct outlines the standards of behaviour that all colleagues must adhere

to regardless of their role. Colleagues are expected to abide by these policies and act with

integrity, due skill, care and diligence.

Health and Safety Our Health and Safety policy outlines our commitment to ensuring the health and safety of

staff and anyone affected by our business activities, and our commitment to providing a safe

environment for those attending our premises.

Equality, Diversity and

Dignity at Work

Our Equality, Diversity and Dignity at Work policy outlines that Admiral is committed to

ensuring that any type of discrimination is not accepted. This policy outlines the standards of

behaviour that are expected from all employees to ensure that everyone at Admiral is treated

with dignity and respect. This policy explains that all managers should be alert to potential

discrimination and harassment and actively prevent this from occurring, communicate this

policy to all employees, and be responsive and supportive to anyone who makes a complaint.

Modern Slavery Our Anti-Slavery, Exploitation and Human Trafficking policy confirms Admiral’s zero tolerance

approach to modern slavery, outlines our ongoing commitment to eliminating unethical

working practices, and provides guidance to employees on reporting any problems identified

at work or in the community. We release an annual Modern Slavery Statement in line with the

Modern Slavery Act 2015.

Procurement and Outsourcing Our Group Procurement and Outsourcing policy states that all employees who engage in

procurement activity must enhance and protect the standing of the business, maintain the

highest standard of integrity in all business relationships, promote the eradication of unethical

business practices including modern slavery, and ensure full compliance with laws and

regulations whilst continuing to drive the de-carbonisation agenda across Admiral’s critical,

strategic and key suppliers. This is enforced through strict controls and monitoring.

Whistleblowing Our Whistleblowing policy encourages and enables employees to raise any concerns they

have about serious malpractice or wrongdoing. The policy is designed to ensure that an

employee can raise their concerns without fear of victimisation, subsequent discrimination,

disadvantage, or dismissal. This policy details internal and external reporting lines for any

employee concerns.

Financial Crime Our Financial Crime policy ensures that robust systems and controls are in place to detect,

prevent and deter financial crime across the Group and ensures we remain compliant with

applicable laws and regulations in our operational jurisdictions. All areas of financial crime

are captured by this policy, including money laundering, market abuse and insider trading,

sanctions regime, modern slavery, tax evasion and bribery and corruption.

Anti-Bribery and Corruption Our Anti-Bribery policy strictly prohibits the solicitation or acceptance of any bribe, to or from

any person or company, by an individual employee, Board member, agent or other person or

body on Admiral’s behalf, in order to gain any commercial, contractual, or regulatory advantage

for Admiral in an unethical way or to gain any personal advantage for the individual or anyone

connected with the individual.

Gifts and Gratuities Our Gifts and Gratuities policy recognises that sometimes customers, suppliers or business

associates offer gifts or gratuities to staff and confirms that all such gifts must be made and

received openly and fairly, must not include cash, must be reported and be in line with the policy.

Tax Our Tax Strategy policy documents our approach to taxation. The policy confirms that the

Group’s primary objective is to be compliant with all tax legislation requirements in all the

territories in which we operate.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Principal Risks and Uncertainties

The Board, with support from

the Group Risk Committee

and the Group Risk Function,

undertakes a regular and

robust assessment of the

principal and emerging

risks facing the Group

alongside engaging with the

management team on the

Group Strategy. These risks

have been summarised as

those which would threaten

its business model, future

performance, solvency or

liquidity, and reputation.

The table below sets out the principal

risks and uncertainties (PR&U) which

Admiral has identified through its

Enterprise Risk Management Framework

(ERMF). The impact of those risks,

development of the risks during 2023,

and actions taken to mitigate them

are explained below. This section also

includes a description of Admiral’s

approach to identify, manage, and govern

emerging risks.

Risk appetite: The Admiral Group

risk strategy contains strategic risk

statements for the relevant risks which

help deliver the Group’s business

objectives. The Group risk appetite is

owned and approved by the Admiral

Group Board. The responsibility for the

Group risk appetite is delegated to the

Group Risk Committee which reviews all

components prior to Board approval and

monitors the performance of the business

against the approved Group risk appetite

through the consolidated risk report and

other risk reporting.

Principal risks (A–L)

Insurance Risk:

Reserving risk

Premium risk and catastrophe risk

Reduced availability of co-insurance

and reinsurance arrangements

Potential diminution of

other revenue

Group Risk:

Erosion of competitive advantage

in UK Car insurance

Failure of geographic and/or

product expansion

Reliance on price comparison

distribution channel

Credit Risk:

Credit risk

Market Risk:

Market risk

Non-Financial Risk:

Legal and regulatory risk

Operational risk

Reputation risk

Principal risks and uncertainties reflect

the main risks faced by the Company

in achieving its strategic objectives.

The strategic objectives have been

listed with the links to the strategy

noted against each principal risk and

uncertainty (for more information on

the strategy refer to page 22).

Strategic objectives:

Admiral 2.0: Continuing to build on historical strengths whilst becoming

even more agile, digital and technology-focused. Admiral 2.0 puts the

customer first and leverages data and advanced analytics to constantly

be more efficient to improve their overall experience

Diversification: Building a sustainable and resilient business.

Admiral’s approach is to leverage the capabilities and knowledge from

the established businesses to build future successful propositions

Motor Evolution: Evolving the proposition for changes in mobility.

Identiﬁcation of risks

98 Strategic Report98

Admiral Group plc Annual Report and Accounts 2023

Insurance Risk

Reserving risk

Possible impact

on the strategic

initiatives

Risk

Admiral is exposed to reserving risk through its underwriting

of Motor, Household and other insurance policies.

Claims reserves in the ﬁnancial statements may prove

inadequate to cover the ultimate cost of claims which are by

nature uncertain.

This is a particular risk for motor insurance liabilities, where

the estimated amount payable for bodily injury claims

(particularly large claims) can change signiﬁcantly during

lifetime of the claim as a result of various factors including

external risks such as changes in Ogden rates (expected in

2024), impacts of increased levels of Periodical Payment

Orders (PPOs) and claims inflation.

During this period, increased uncertainty in forecasting both

the level and duration of the impact of higher inflation rates

on claims reserves may lead to adverse development and

higher claims costs than projected.

PPO claims are capital intensive owing to increased

uncertainty of the cost of these claims over a longer term.

There is therefore a risk of higher claims costs and loss ratios,

resulting in reduced proﬁts or underwriting losses.

Risk development in 2023

The risk has reduced during the year as the uncertainty

caused by the inflationary environment has fallen, in

particular during the second half of the year, and more

favourable expectations with respect to the future Ogden

rate have emerged.

Mitigating factors

The Group continues to reserve conservatively, setting

its IFRS 17 risk adjustment in the ﬁnancial statements

between the 85th and 95th percentiles which is aligned

to Group risk appetite.

Best estimate reserves are estimated both internally

and externally by independent actuaries.

For very large claims Admiral purchases excess of loss

reinsurance, which mitigates a portion of the loss.

Regular reviews of both settled and potential PPO cases

are undertaken by the Claims and Actuarial teams, with

independent actuarial analysis provided as part of the

external reserving process.

Admiral’s investment strategy is the result of a structured,

disciplined and transparent investment process. Long-

dated inflation linked assets are held to partly hedge the

risks associated with PPO claims.

Strategic Report

Admiral Group plc Annual Report and Accounts 2023

Principal Risks and Uncertainties

continued

Insurance Risk continued

Premium risk and catastrophe risk

Possible impact

on the strategic

initiatives

Risk

The Group is exposed to the risk that inappropriate

premiums are charged for its insurance products leading

to either insuﬃcient premiums to cover claims costs or

uncompetitive rates leading to reduced business volumes.

This risk is increased during periods of high inflation

leading to greater market uncertainty.

The risk of increased claims costs and/or reduced

business volumes could be driven by potential economic,

social, environmental, regulatory or political change

such as the slowdown in China or the Russia-Ukraine and

Israel-Hamas conflicts, impacting supply chains and inflation,

or new entrants to the market.

Admiral is exposed to the risk of higher losses

than anticipated due to the occurrence of

manmade catastrophes or natural weather events,

potentially increased in frequency and severity due

to climate change.

Acute physical climate risks include changes in the

frequency of both large catastrophe events and severe

weather events, where trends are diﬃcult to identify,

and which have large claims costs associated with them.

Impact

Higher claims costs, reduced business volumes and/

or higher loss ratios, resulting in reduced proﬁts or

underwriting losses.

A large flood or windstorm, causing extensive property

damage (both Motor and Household) to a signiﬁcant

proportion of the portfolio, could lead to a larger than

anticipated total claims cost.

Risk development in 2023

The risk has trended broadly stable in 2023 as Admiral has

continued to manage the challenging external environment

with a disciplined, long-term approach to pricing and

growth, with a focus on building the business for the long

term. The risk remains subject to increased volatility in

weather patterns, as demonstrated by the ten named

UK storms experienced between September 2023 and

January 2024.

Mitigating factors

There are a number of aspects which contribute to

Admiral’s strong UK underwriting results, including:

• Experienced and focused senior management and

teams in key business areas including pricing and

claims management.

• Highly data-driven and analytical approach

to the regular monitoring of claims and

underwriting performance.

• Capability to identify and resolve underperformance

promptly through rapid and dynamic changes to key

performance drivers, particularly pricing.

• Continuous appraisal of and investment in employees,

systems and processes.

• Monitoring the impact arising from climate change

risks, covering both physical and transitional risks,

as well as other Emerging Risks which may impact

premium or catastrophe drivers.

Admiral purchases excess of loss reinsurance, which is

designed to mitigate the impact of very large individual

or catastrophe event claims.

100 Strategic Report100

Admiral Group plc Annual Report and Accounts 2023

Insurance Risk continued

Reduced availability of co-insurance and reinsurance arrangements

Possible impact

on the strategic

initiatives

Risk

Admiral uses proportional co-insurance and reinsurance

across its insurance businesses to optimise the use of

capital, to increase the return on the capital it does hold,

and to mitigate the cost and risk of establishing new

operations. There is a risk that co- and/or reinsurance

cover will not be available or that it will be available at

an uneconomical price in the future if the results and/

or prospects of either the UK businesses or other less-

established operations are not satisfactory to the co-

and/or reinsurers.

Inflationary uncertainty and other factors could result

in a change in reinsurer appetite and an increased cost

of reinsurance protection for insurers. Climate change

and the increased frequency and severity of extreme

weather events, as well as increased chronic physical

risks, could adversely impact the availability and cost

of reinsurance protection for insurers.

Impact

A potential need to raise additional capital to support

an increased underwriting share. Return on capital

might reduce compared to current levels.

Unavailability of co- and/or reinsurance or at an

uneconomical price may mean that Admiral does not

co- and/or reinsure all the desired risks, leading to

increased costs should an adverse event arise.

Risk development in 2023

The risk has increased during the year with reduced

appetite of reinsurers in some areas leading to a

hardening market. The recent January UK motor

reinsurance renewal was positive, however, but pressure

is likely to remain on other product lines in 2024.

Mitigating factors

Admiral mitigates the risk to its reinsurance arrangements

by ensuring that it has a diverse range of ﬁnancially secure

partners, and that contract maturities are staggered to

prevent a cliﬀ-edge ending of a large reinsurance cover.

Admiral continues to enjoy a long-term relationship with

several diﬀerent co- and reinsurers, some of which are

amongst the world’s largest.

Quota share and co-insurance arrangements are contracted

over a number of underwriting years. These long-term

arrangements are in place throughout the UK and

international businesses.

Potential diminution of other revenue

Possible impact

on the strategic

initiatives

Risk

Admiral earns other revenue from a portfolio of products

and services in addition to the core insurance products.

The level of this revenue could diminish due to political,

regulatory, legal, social/customer behaviour, strategic,

market or economic changes.

Impact

Lower proﬁts from business operations and lower return

on capital.

Risk development in 2023

The risk has trended broadly stable and within appetite

for the year. The risk has the potential to increase going

into 2024 due to a heightening market-wide regulatory

focus on ancillary and premium ﬁnance products.

Mitigating factors

Admiral continuously assesses the value to its customer

of the products it oﬀers and makes changes to ensure

the products continue to meet customer needs and oﬀer

good value.

Admiral seeks to minimise reliance on any single source

by earning revenue from a range of products. This would

mitigate the impact of regulatory or market changes,

or changes in consumer behaviour, which might aﬀect

a particular product or income stream.

Admiral works closely with its regulators and other key

industry bodies to understand potential developments.

Strategic Report

101

Admiral Group plc Annual Report and Accounts 2023

Group Risk

Erosion of competitive advantage in UK Car insurance

Possible impact

on the strategic

initiatives

Risk

Admiral typically maintains a signiﬁcant combined ratio

advantage over the UK Car market. This advantage and/

or the level of underwriting proﬁt (and associated proﬁt

commission) could be eroded by unfavourable loss or

expense ratio results, irrational competitor pricing, new

competitors or technologies used within the insurance

market and/or regulatory intervention.

Impact

A worse insurance result and lower return on

capital employed.

A sustained and uncorrected erosion of competitive

advantage could aﬀect the ability of Admiral to

maintain its customer base, proﬁtability and reinsurance

arrangements, which might in turn require Admiral to

hold more capital.

Risk development in 2023

The risk has reduced during the year as Admiral’s

competitiveness has increased despite making

signiﬁcant price increases.

Mitigating factors

Admiral’s focus remains on the wide range of factors that

contribute to Admiral’s combined ratio outperformance of

the UK Car market. Some are set out earlier in the Strategic

Report, but other factors include:

• A track record of innovation and ability to react quickly to

market conditions and developments.

• A focus on maintaining a low-cost infrastructure, efficient

acquisition costs, and strong expense controls.

• An experienced and focused management team.

• A robust and agile pricing discipline to ensure

prudent behaviour to try and protect Admiral’s

competitive advantage.

• A strong Admiral brand and customer orientated culture

to attract and retain customers.

Failure of geographic and/or product expansion

Possible impact

on the strategic

initiatives

Risk

In line with the Group’s diversiﬁcation strategy, Admiral

continues to develop its UK insurance businesses, UK

non-insurance businesses such as Admiral Money, and its

international businesses. Admiral Pioneer is the vehicle

for the development and launching of new products and

services, other than those already covered by existing

established Group businesses.

One or more of the operations could fail to become

a sustainable, proﬁtable long-term business, with the

result that the businesses do not collectively deliver the

proﬁt diversiﬁcation required.

Product expansion into new areas or expansion through

M&A activity could lead to unproﬁtable business, could

increase regulatory risk, and may introduce new risks

into the Group.

Growth in developing businesses could exceed the scale

of infrastructure of the operation.

Impact

Higher than planned losses and potentially closure costs,

and distraction of key management.

A collective failure of these businesses could threaten

Admiral’s objective to diversify its earnings by expanding

into new markets and products, though the failure of a

single product or geography is expected to be tolerable.

Risk development in 2023

The risk has reduced during the year, noting the strong

results from Admiral Money and improved performances

in most overseas markets. In addition, the acquisition

of the UK direct Home and Pet personal lines insurance

operations of RSA due in 2024 is expected to accelerate

diversiﬁcation going forward.

Mitigating factors

Admiral’s approach to expansion and product development

remains conservative, applying the test-and-learn philosophy

that has proven successful for previous operations.

International insurance businesses have generally executed

cautious launch strategies and are usually backed by

proportional reinsurance support which provides substantial

mitigation against start-up losses in the early years.

The Group has developed a capital allocation framework

which seeks to allocate funding to those businesses most

likely to add to the diversiﬁcation of proﬁts or contribute to

the strategic objectives of the Group.

The Directors are mindful of management stretch and any

other key interdependencies that may strain the business,

regularly assessing the suitability of the infrastructure

in place for Admiral’s UK and international operations,

alongside oversight and challenge from appropriate boards

and committees.

The Group has established a suﬃciently large and diverse

portfolio to mitigate the risk of failure of individual

new operations.

Principal Risks and Uncertainties

continued

102 Strategic Report102

Admiral Group plc Annual Report and Accounts 2023

Group Risk continued

Reliance on price comparison distribution channel

Possible impact

on the strategic

initiatives

Risk

Admiral utilises comparison websites as an important

source of new business and growth. Growth in this

distribution channel could slow, cease or reverse, or

Admiral could lose one or more of the websites as a

source of customers.

Impact

A potentially material reduction in UK insurance new

business volumes, in particular for UK Motor.

Less proﬁtable new business or slower growth in Europe.

However, a more competitive market might beneﬁt the

insurance businesses through lower acquisition costs.

Risk development in 2023

The risk has trended broadly stable during the year

with no material movement in the share of new business

coming from aggregators.

Mitigating factors

Admiral contributes materially to the revenues of all four

major UK comparison businesses, and has a strong brand

presence, and therefore it is not considered probable that

a material source of new business would be lost.

Admiral continues to grow its MultiCover and MultiCar

products which promotes retention. It also has a direct

oﬀering to new and existing customers, with continuing

investment made to improve its online/digital oﬀering.

Admiral continually looks to improve its customer experience

and business optimisation by sharing comparison distribution

learnings throughout the Group, leveraging applicable

experiences with brokers, and implementing additional

controls to enhance selection and underwriting criteria.

Distribution channels other than price comparison are

explored and used as and when deemed necessary.

Credit Risk

Credit risk

Possible impact

on the strategic

initiatives

Risk

Admiral is primarily exposed to institutional credit risk in

the form of: (a) reinsurance counterparty credit risk; (b)

banking counterparty credit risk and/or (c) the credit risk

of the investment portfolios.

One or more counterparties could suﬀer signiﬁcant

losses leading to a credit default and the loss of

reinsurance cover or banking deposits, while a

downgrade or default of investments could erode

their value.

In addition, Admiral Money’s loan portfolio exposes

the Group to retail credit risk in relation to customer

defaults on its unsecured personal loan and secured car

ﬁnance business.

Impact

The impact of a major credit event could be realised

losses and reduced capital, dependent on its nature

and severity.

Admiral would also need to ensure that it continues to

have suﬃcient liquid assets to meet its claims and other

liabilities as they fell due.

Increased defaults could impact future proﬁtably and

lending capabilities.

Risk development in 2023

The risk has trended broadly stable during the year

with no material movement in the credit quality of

signiﬁcant counterparties.

Mitigating factors

Admiral monitors the credit quality of its reinsurance and

banking counterparties within Board approved limits.

The Group reinsurance policy is to contract with reinsurers

that are rated ‘A-‘ or above (taking the highest rating from

any applicable external rating agency such as S&P, AM Best

or Fitch), though there are circumstances where a lower

rating could be tolerated. In addition, major reinsurance

contracts are operated on a funds withheld basis, which

substantially reduces credit risk, as Admiral holds the cash

received from policyholders as collateral.

The credit risk in Admiral’s investment portfolio is managed

through diversiﬁcation and appointing high-quality third-

party asset managers. Limits on counterparties and certain

credit ratings ensure that credit risk is managed within

risk appetite, and produces a high quality credit portfolio.

The Group invests in a range of liquidity funds which hold

a wide range of short duration, high quality securities, and

in ﬁxed income funds holding primarily investment grade

assets. Cash balances and deposits are placed only with

highly rated counterparties. Most long-term investments are

held in Government bonds to further mitigate the exposure

to credit risk.

Admiral considers counterparty exposure frequently

and in signiﬁcant detail, and has in place appropriate

triggers and limits to mitigate exposure to individual

investment counterparties.

Admiral Money’s credit risk appetite is set to ensure that

the risk taken is commensurate to the expected returns

whilst also considering customer aﬀordability. Admiral Money

continuously monitors its criteria for new business pricing

and the performance of its portfolio.

Strategic Report

103

Admiral Group plc Annual Report and Accounts 2023

Market Risk

Market risk

Possible impact

on the strategic

initiatives

Risk

Market risk arises due to developments in economic

and ﬁnancial market conditions that result in

movements in interest rates, credit spreads and foreign

exchange rates, or regulatory/legislative changes to the

basis of internal assumptions or methodologies.

Impact

Market volatility (notably signiﬁcant changes in risk free

interest rates or material increases in credit spreads)

can adversely impact the value of the Group’s assets.

The Group’s solvency can also be adversely impacted

due to an increased regulatory valuation of claims

liabilities, in particular in relation to longer-dated

potential PPO claims.

Continued growth of the Group’s businesses outside the

UK has altered the exposure to net assets and liabilities

in currencies other than pounds sterling, increasing the

Group’s exposure to Euros and Dollars in particular.

Risk development in 2023

The risk has trended broadly stable over the course

of the year, despite the market volatility seen early

on, following the collapse of SVB and the takeover of

Credit Suisse. As observed with these banking failures

and increased geopolitical instability, event risk remains

heightened, however.

Mitigating factors

A dedicated Investment Committee, a Group Management

Committee, advises each Subsidiary Board and oversees

the investment management of funds as well as advising

on eﬀective treasury and foreign currency exposure

management of the Group and each entity’s non-

invested funds.

The Group policy relating to the managing of cash and

invested assets supports the Group’s compliance with the

Solvency II Prudent Person Principle and PRA expectations.

The investment strategy focuses on preservation of

the amount invested, low volatility of returns, matching

duration and currency of liabilities, and strong liquidity.

The majority of the portfolio is invested in high quality ﬁxed

income and other debt securities, and money market funds

and other similar funds in order to achieve these objectives.

The Group’s mitigation for interest rate risk resulting from

long duration PPO liabilities includes reinsurance cover and

a continuing focus on appropriate investment strategies,

such as asset/liability matching, hedging options for

these liabilities, including of certain risks associated with

PPO claims.

Principal Risks and Uncertainties

continued

104 Strategic Report104

Admiral Group plc Annual Report and Accounts 2023

Non-Financial Risk

Legal and regulatory risk

Possible impact

on the strategic

initiatives

Risk

As Admiral operates globally, across various business lines

and products, it is exposed to diﬀering political regimes,

legal jurisdictions, regulatory expectations and tax systems.

Legal and regulatory risk may arise where Admiral fails

to identify, interpret, or fully comply with legal, tax

and/or regulatory requirements, in a timely manner.

Current examples include interpretation and compliance

with General Insurance Pricing Practices, the FCA’s

Consumer Duty regulations, updates to the Corporate

Governance Code by the Financial Reporting Council,

mandatory climate-related ﬁnancial disclosures, and the

EU Whistleblowing Directive. This risk may also arise where

previous industry, tax, regulatory and/or legal compliance

standards are revisited with negative consequences and

applied retrospectively, for the industry and/or the Group.

Failing to meet increasing expectations from regulators,

legislators, and shareholders around climate change and

broader environmental, social and governance matters

could potentially lead to exposure to legal and regulatory

risk and potentially adversely impact other stakeholders’

perceptions.

A legal and regulatory risk could arise through incorrect

or delayed regulatory reporting.

Impact

Exposure to regulatory intervention, censure and/or

enforcement action through ﬁnes and other sanctions.

Potential criminal and/or civil enforcement action.

Possible customer detriment, as well as negative

reputational and brand impacts.

Risk development in 2023

The risk has increased during the year due to the

heightened regulatory environment, for example via the

implementation of the FCA Consumer Duty regulation.

Mitigating factors

Ongoing line one, two and three monitoring of the Group’s

compliance with current and proposed requirements.

Interaction with regulators and consultation with internal

and external subject matter experts by Executive

Management and the Board.

Assurance gained through external reviews and

benchmarking exercises ensuring compliance with legal and

regulatory requirements.

Strong change governance is a key control in managing

regulatory change.

Operational risk

Possible impact

on the strategic

initiatives

Risk

Operational risk arises within all areas of the business.

The principal categories of operational risk for Admiral

are conduct risk, change risk, people risk, technology

risk, business continuity and operational resilience, data

governance risk, information security/cyber risk, process

risk, and outsourcing and procurement risk.

Impact

The following are a limited number of examples of the

potential impacts of operational risks:

Customer detriment, customer dissatisfaction, regulatory

censure/enforcement, and/or reputational damage as

a result of Admiral’s action or inaction.

Being unable to service customers with the level of

distinction associated with the Admiral brand.

Mitigating factors

Admiral operates a three lines of defence model, and

internal controls are in place and are monitored to mitigate

risks. The control framework is regularly reviewed, and the

Internal Audit function has an agreed cycle of testing of

the adequacy and eﬀectiveness of controls. The following

are a limited number of examples of how operational risks

are mitigated:

• Conduct: Monitoring, managing and reporting on

customer outcomes, including the ongoing enhancement

of Admiral Group Customer Outcomes MI; robust project

governance around legislative and regulatory change

such as Consumer Duty implementation and monitoring;

attracting, retaining and motivating quality employees

to deliver superior customer service and to achieve

business objectives.

• Change: Employing change governance and oversight at

a Group and Entity level; with external specialist support,

review and assurance utilised where required.

Strategic Report

105

Admiral Group plc Annual Report and Accounts 2023

Non-Financial Risk

Operational risk continued

Possible impact

on the strategic

initiatives

Impact continued

The move to a hybrid working world poses risks to

the culture that has underpinned Admiral’s historical

successes, both by increasing labour mobility and

reducing the oﬃce-based activity that has been a

cornerstone of Admiral’s historic ways of working.

Making poor business decisions due to lack of system

availability and data integrity and/or data conﬁdentiality.

Cyber events leading to loss of service, loss of data and

potential ransom demands.

Reductions in earnings and/or value, through ﬁnancial

or reputational loss, from inadequate or failed internal/

outsourced projects, processes and systems, or from

people related, hybrid working or external events.

Risk development in 2023

The risk has reduced during the year as hybrid working

has been further embedded and large change projects

have been navigated successfully.

Mitigating factors continued

• People: Employing targeted recruitment and identifying

potential leaders through internal development, talent

management and retention processes for the purposes

of succession planning; an ongoing commitment to

diversity and inclusion.

• Culture: Admiral has embraced more flexible ways of

working to hire, motivate and retain employees and is

evolving hybrid working practices in ways that support

and maintain the unique culture.

• Technology: Continuous investment in the Group’s

IT infrastructure, coupled with regular Executive

Management and Board review of effectiveness given

the strategic importance of technology in improving

the customer journey and enhancing business

decision making.

• Information security/cyber: Ongoing enhancement

of the control environment to protect the Group from

the continuously evolving cyber threat landscape.

Significant investment continues to be made in ensuring

that people, processes, and technologies are resilient

to the wide-ranging tactics, techniques and procedures

employed by threat actors. Focus is also given to ensuring

there are robust mitigation plans in place to effectively

handle any incident, with simulations completed to

ensure prompt and effective response, containment,

and recovery.

• Business continuity and operational resilience: Staffing

a Line-1 major incident team within IT which is tasked

with maintaining system availability; business continuity

and disaster recovery plans are in place and are regularly

tested, alongside completion of an operational resilience

work stream; data is regularly backed-up to allow for its

recovery in the event of corruption.

• Data Governance: The Group is enhancing and further

embedding its approach to data ownership, the ongoing

review of data quality including responding to issues

when they are identified, as well as having a consistent

approach to the recording of data definitions and lineage

so that the data is better understood.

• Process: Admiral’s internal control framework is regularly

monitored and reviewed within the three lines of

defence model.

• Outsourcing and Procurement: Strategic reviews

are periodically undertaken to align procurement and

outsourcing arrangements with the wider business

strategy and also in response to ongoing macroeconomic

challenges; monitoring outsourced activities through

ongoing supplier relationship and performance

management and regular due diligence reviews.

Admiral also purchases a range of insurance covers to

mitigate the impact of a number of operational risks;

including Cyber Liability insurance subject to market

capacity, Civil Liability insurance, and Employers’

Liability insurance.

Principal Risks and Uncertainties

continued

106 Strategic Report106

Admiral Group plc Annual Report and Accounts 2023

Non-Financial Risk continued

Reputation risk

Possible impact

on the strategic

initiatives

Risk

Admiral could be exposed to an erosion in trust as a result

of decisions, associations, actions or inactions, such that

Admiral does not meet stakeholder expectations.

A negative reputation could have a signiﬁcant impact

on customer trust, the share price and brand value,

which can be diﬃcult to recover from.

Reputational risk can be a secondary impact caused

by failures in any part of the Group such as operational

events. However it can also be a primary risk should the

ﬁrm’s perceived behaviours or communications not meet

stakeholder expectations. In either case, a reputation

event could impact Admiral’s standing with customers,

regulators, employees, suppliers and other stakeholders

and could reduce proﬁtability and investor support.

Impact

The impact can be wide ranging and reputational risk can

impact customers, employees, shareholders, suppliers,

regulatory bodies and/or the community and media.

Depending on the type of reputational risk event, the

impact could include reduced sales, reduced proﬁtability,

a decline in share price, diﬃculty in recruiting and

retaining talent, and increased regulatory focus.

Risk development in 2023

The risk has trended broadly stable during the year with

no notable issues having a discernible impact.

Mitigating factors

Admiral has in place risk appetite statements that set out

the level of risk the Group is willing to accept for each key

risk, and the Group monitors associated metrics that inform

reputational risk analysis for diﬀerent stakeholder groups.

This analysis includes social media metrics, staﬀ surveys,

and investor relation reports.

The Executive Management team is experienced, and

reputational impact is considered across key decisions and

major external events.

Given the breadth of events that could impact on Admiral’s

reputation, a number of the mitigating factors captured

in the other principal risks and uncertainties would also

mitigate reputational risk.

Admiral has a crisis response and communications plan that

seeks to minimise the reputational and other impacts of an

event once it has materialised.

Emerging Risks

The management of emerging risks is

a key element of Admiral’s strategic risk

management, and emerging risks and

opportunities continued to be reviewed

throughout 2023.

Admiral Group identifies and monitors

emerging risks, issues which may be

potentially significant, but may not be

fully foreseen, assessed or allowed for in

insurance terms and conditions, pricing,

reserving or capital setting, or strategic

and business decisions. By their very

nature, emerging risks are many and

varied, with a high degree of uncertainty

around the likelihood of occurrence,

severity and/or timing. The broad analysis

of a wide range of emerging risks and

opportunities may lead to a change in

strategy, management behaviour, ways

of working or risk management and

in turn, to a stronger and more robust

business which better delivers on its

commitments to customers, employees,

and other stakeholders.

Emerging risks are identified via horizon

scanning. This involves an extensive

literature review, consultations with

internal working groups, and interviews

with internal stakeholders, subject

matter experts, and external specialists.

Emerging risks are assessed using an

internally-developed framework, which

includes qualitative and quantitative

analysis to grade each emerging risk

on a scale designed to be comparable

across entities and compatible with

management of operationalised risks.

Evaluation of the potential impact to

Admiral includes consideration of how

the risk may interact with existing

principal risks and uncertainties (PR&Us),

as well as any new risks that could

arise. It also covers the precautionary

deployment of management actions and

mitigating controls.

Admiral’s Emerging Risk Radar captures

an assessment of potential impact and

time to crystallisation for emerging risks.

It categorises each risk into four broad risk

segments: (a) social, political & economic,

(b) legal & regulatory, (c) technology and

(d) environmental. Plotting emerging risks

in this way can shed light on the macro

trends with common drivers and effects.

Reporting on emerging risks and

opportunities is provided to the GRC and

relevant Boards, is incorporated into the

Group ORSA Report, and is discussed

with the senior management and entity

risk teams.

Strategic Report

107

Admiral Group plc Annual Report and Accounts 2023

Hola! I’ve been in the Admiral

Group for 12 years and spent the

last 8 of those years as CEO of

our Spanish insurance business –

Admiral Seguros.

As CEO of Admiral Seguros, I oversee a

fantastic team of people, based mostly

in Seville. We serve our 440k Spanish

customers through the Qualitas Auto,

Qualitas Classic and Balumba brands.

I originally joined Admiral as a Business

Development Manager, reporting into

Henry Engelhardt. Previous to Admiral

I had been a senior manager in PwC

Madrid, also completing an MBA at

INSEAD. In my first day on the job Henry

asked me if I would mind delaying my

training and flying to the US, to support

a team investigating what would later

become Compare.com. Thus started an

intense but fun-packed three years during

which I worked closely with both Henry

and David Stevens, running group projects

and launching the UK telematics product.

In 2014 I had the chance to move to Paris

and support the in-sourcing of our French

operation, L´olivier. From there I moved to

Seville and transitioned into leadership

of the Admiral Seguros team at the time

Cristina Nestares moved to the UK.

What struck me about Admiral when I

first joined was its open culture, combined

with a strong willingness to do things

differently and to trust in people as a

driver of results. I’m pleased to say that 12

years on, the Admiral culture is still very

much prevalent across the Group.

It’s been great to reflect during 2023 on

everything the Group has achieved in the

last 30 years. I look forward to continuing

to build together on this success.

ON INTERNAL

MOBILITY AT ADMIRAL

Reflecting

“What struck me

about Admiral when

I ﬁrst joined was its open

culture, combined

with a strong willingness

to do things diﬀerently

and to trust in people as

a driver of results.

I’m pleased to say that

12 years on, the Admiral

culture is still very

much prevalent across

the Group.”

Sarah Harris

CEO, Admiral Seguros

Paris

USA

Cardiff

Seville

108 Strategic Report108

Admiral Group plc Annual Report and Accounts 2023

In accordance with

provision 31 of the 2018

UK Corporate Governance

Code, the Directors have

assessed the prospects of the

Company over a three-year

period, having referenced

the Group’s Own Risk and

Solvency Assessment (ORSA),

the Capital Plan, risk strategy,

risk appetite, principal risks

and uncertainties, key risk

drivers, and ongoing risk

management activities.

As per provision 31, Admiral considers

three years to be a period of assessment

over which it has a reasonable degree of

confidence. Although the Group reviews

financial projections that extend beyond

the three-year time horizon covering the

years up to 2028, Admiral considers that

there is an inherent risk and uncertainty

in projecting beyond this three-year

period, as the degree of certainty in

the impact of internal and external

developments reduces greatly due to

the nature of Admiral’s primary business

(one-year insurance policies). However,

these financial projections contain no

information which would cause different

conclusions to be reached over the long-

term viability of the Group.

At least annually, the Group produces an

ORSA report, which is one of the sources

of evidence used by the Board to assess

viability. The ORSA report sets out a

detailed consideration of the principal

risks and uncertainties facing the Group

and considers current and projected levels

of solvency and liquidity over the short to

medium term.

In addition to the ORSA, the Board utilises

other relevant reporting, some of which

is longer term in nature. Notably these

include five-year financial projections

reviewed twice a year, three-year solvency

projections reviewed at least twice a year,

and a one-year financial budget for the

forthcoming 12 months approved on an

annual basis.

Another source of evidence is the

alignment of the financial and business

planning process and the solvency

assessment, referred to within Admiral

as the capital plan. This makes sure that

Admiral is appropriately capitalised at

a fixed point in time as well as over the

future planning time horizon, given

Admiral’s principal risks and uncertainties

and a plausible range of potential stressed

conditions. The capital plan is a key

consideration for Group and Subsidiary

Boards in assessing and approving the

business strategy, business/financial

plan, capacity to pay dividends, and

key business decisions.

The quantitative assessment considers

how the regulatory capital requirements,

economic capital needs, own funds

and solvency position of the Group are

projected to change over the three-year

horizon, with a requirement to maintain

a solvency ratio above the approved

capital risk appetite buffer throughout

the projection.

As part of the ORSA process, a series

of sensitivity, stress and scenario tests

(S&STs) and reverse stress tests (RSTs)

are examined and quantified based

on the regulatory capital basis (which

is the standard formula method with

adjustments tailored to reflect Admiral’s

risk profile) to understand the potential

impact on the Group’s solvency, liquidity

and profitability over a three-year period.

In addition to these Group tests, there are

also entity-specific scenarios, considered

of lower materiality to the Group, that are

performed by each subsidiary insurance

entity as part of their ORSA processes.

The results of the stress tests form part

of the process to set the Group’s capital

risk appetite, which seeks to hold a buffer

on top of the Group’s regulatory capital

requirement that is sufficient to protect

its regulatory capital position against a

range of significant but plausible potential

shocks and stresses.

Key strategic decisions, including the

setting of dividend payments, consider

the solvency impact against the Board-

approved capital risk appetite of 150%,

which is a key criterion for the Board in

assessing viability. Refer to the Strategic

Report (page 54) for information on

sensitivities to the reported 2023 solvency

ratio position.

To assess the robustness of the Group

to the impact of various risks, 13 S&STs

and two RSTs have been quantified to

understand the potential impact on the

Group’s solvency ratio. In 2023 a range of

scenarios have been performed, capturing

insurance risk, market/credit risk, strategic

risk, natural catastrophe, climate change

and cyber/operational risk.

The results provide comfort that Admiral

has sufficient capital to withstand the

extreme scenarios. Whilst the 150% lower

trigger is breached in five instances –

three severe inflation-based scenarios, a

US banking crisis scenario and a liquidity

stress, should such scenarios actually

occur there are a number of management

actions, including adjustments to

shareholder dividends, that would be

called on to alleviate capital pressures and

improve the solvency ratio to bring it back

above the 150% buffer. Another exception

is an extreme RST, combining severe

and extreme insurance and market

risk scenario combinations with credit

and liquidity risk. In the absence of

management actions, this would result

in a breach of the 100% solvency ratio

but, as is the intention of the RST, it is

considered to be an extremely remote

outcome, being well in excess of a

1-in-200-year event. Overall, the Group

is likely to remain adequately capitalised

and liquid in future, given the results of

the S&STs.

Viability Statement

Strategic Report

109

Admiral Group plc Annual Report and Accounts 2023

Risk management is an essential part of

Admiral’s operations, and successful risk

taking is key to the Group achieving its

business objectives. Risk management

is therefore a key consideration when

setting the Group’s strategy, managing

performance, and rewarding success.

The current risks that are faced by the

Group are captured in the Risk Universe,

with the most notable risks captured

in the Group’s principal risks and

uncertainties (page 98)

. In addition to

these principal risks and uncertainties,

the Group also considers a range of

emerging risks that could impact the

Group to varying degrees in the future,

but which are not yet fully understood,

including those related to climate change

(page 107).

The Admiral Group Risk Strategy is

considered and approved by the Board.

The strategy is directly linked to the

business plan and seeks to ensure that

all risks are managed effectively to

allow the Group to meet its strategic

aims (page 22). Supporting this is the

Admiral Group Risk Management Policy,

which sets out Admiral’s approach to risk

management, as well as the governance

of risk management across the Group.

This approach ensures that there is

appropriate oversight of the Group’s risk

profile, and that the Group remains within

risk appetite in all its operations.

While each of Admiral’s principal risks

and uncertainties could have potentially

impacted the Group’s performance,

during 2023 the following key risk drivers

were seen to be of notable importance:

changing economic outlook, geopolitical

instability, technology, cyber and

operational resilience, Consumer Duty,

and climate change.

Changing economic outlook:

Admiral has reviewed and continues

to monitor the Group’s solvency and

liquidity positions in response to market

volatility and wider economic uncertainty,

considering factors such as sustained high

inflation, banking uncertainties resulting

from the collapse of regional US banks

and the UBS rescue of Credit Suisse,

the wider impact of continued supply

chain disruption, high energy prices,

high interest rates, and the pressures

on individual Household finances which

have led to a cost of living crisis in many

countries. Some of the current trends

in risks most impacted by the changing

economic outlook are highlighted below:

Premium Risk and Catastrophe

Risk: Global uncertainties, supply

chain pressures and increasing vehicle

repair and replacement costs have

all contributed to claims inflation.

While labour shortages have generally

eased, wages have also grown quickly

to keep up with inflation, impacting large

bodily injury claims. In most insurance

markets, motor claims frequency has

increased but is still noticeably below

pre-pandemic levels. Admiral continues

to manage these challenges with a

disciplined, long-term approach to

pricing and growth, with a focus on

building the business for the long term.

Credit Risk: Cost of living pressure has

seen growing demand for the “essentials”

insurance product and a modest increase

in the number of loan customers

falling into arrears. Controls are in place

to identify and support vulnerable

customers on a case-by-case basis.

Within Admiral Money, the screening

process has been adjusted to include

stricter creditworthiness and affordability

checks to ensure that customers are

resilient to ongoing inflation. The loan

portfolio is subject to regular stress tests

and the risk adjusted returns achieved

indicate a resilient portfolio.

29 Please also see note 6 to the financial statements which sets out the Group’s objectives, policies and procedures for managing financial assets and liabilities.

Viability Statement

continued

Reserve Risk: The Group has a prudent

approach to reserving, which helps to

minimise the impact of inflation and helps

build strong, resilient businesses for the

long term. Provision has been made for

the impact of inflation on unsettled bodily

injury (BI) claims, for which cost of care is

the primary driver, ensuring that reserves

capture excess inflation for all large BI

heads of damage exposed to inflation,

but particularly for wage inflation over

the average time it takes for BI claims to

settle. This continues to be reviewed, with

best-estimates of these impacts being

reflected in the reserves recognised as at

the balance sheet date.

Operational Risk: While 2023 has seen

the relative normalisation of working

conditions following the pandemic-era,

the business has continued to review

the impacts and level of operational

risk in the context of a modern, hybrid

workforce. Admiral received real living

wage accreditation in the UK in July which

helped to support colleagues through

cost of living concerns.

Geopolitical instability:

The escalation of geopolitical risk

following the Russian invasion of Ukraine

led to a review of potential exposure

across the Group’s PR&Us. At that time,

both market risk and insurance risk were

flagged as key areas to monitor.

Market Risk: The initial investment

spread shock was of brief duration

and there was very limited indirect

exposure across the investment portfolio.

Market risks are reviewed by the

investments team and asset managers

to ensure Admiral is adequately positioned

in this rapidly changing environment.

Insurance Risk: The risk of reduced

availability of co-insurance/reinsurance

arrangements remains heightened due

to tensions between Russia-Ukraine and

an anticipated Ogden rate change in 2024,

however monitoring is being undertaken

to adequately react to any scenario.

More recently, Admiral reviewed its

exposure to geopolitical conflict in

response to the outbreak of the 2023

Israel-Hamas war. Initial analysis suggests

there is no reason to believe Admiral will

be materially impacted as a result of the

conflict. The position is being monitored.

110 Strategic Report110

Admiral Group plc Annual Report and Accounts 2023

Cyber and operational resilience:

Admiral’s strategy to drive continuous

delivery of good customer outcomes

includes effective and safe usage of

technology and data. In support of this

the Group Risk function has specialist

staff which:

• Complete oversight, challenge

and escalation of Technology and

Information Security risks through

regular engagement with each of the

businesses within the Admiral Group;

• Monitor the risk position through

setting and review of specific KRIs,

with reporting and, where appropriate,

escalation through to Committees;

• Ensure that there is an embedded

Group Cyber Crisis management

plan which includes all necessary

stakeholders to ensure the effective

response to a cyber crisis; and

• Work with the businesses to undertake

deep-dive reviews of specific topics

highlighted through threat intelligence

and the key cyber risks facing

the Group.

Consumer Duty:

The FCA’s Consumer Duty came into

effect on 31 July 2023. The Duty

introduces higher and clearer standards

of consumer protection across financial

services and requires firms to focus on

customer outcomes. This aligns with

the Group purpose and commitment to

delivering good customer outcomes for

all customers. Admiral has worked hard to

review critical customer communications

and interactions, products and services,

and customer journeys to align with the

requirements of the Consumer Duty.

Admiral has also had close engagement

with external third parties and the FCA

throughout the year on the Consumer

Duty implementation and requirements.

There is an ongoing focus to ensure that

the Consumer Duty is fully embedded

within the business and Admiral

continue to monitor this to ensure that

good outcomes are being delivered

to customers.

Climate change:

Admiral remains committed to

recognising and understanding the

risks and opportunities posed by

climate change to the Group, as

well as to mitigate its impact on the

environment. Climate-related risks can

impact on all of Admiral’s business lines,

operations, investments, and reinsurance

arrangements. Admiral Group recognises

that while there are risks from delayed

action, there are also opportunities from

considering the challenges, including

the potential to accelerate the Group’s

transformation, to build resilience, and to

gain competitive advantage in new and

existing markets.

As part of this work there is an ongoing

Group focus on:

• Ensuring full compliance with

existing and emerging regulatory and

disclosure requirements

• Researching climate-change trends and

assessing the risks and opportunities

arising from climate change

• Incorporating climate-related risks into

business-as-usual risk management

and financial planning, such as

enhancing Admiral’s climate scenario

testing capabilities, linking climate-

related targets and achievements

against the directors’ remuneration,

and better reflecting climate change

considerations in projections from the

Business Plan and

• Continuing efforts to further reduce the

Group’s carbon footprint.

Admiral Group’s strategy linked to climate

change is discussed in more detail in the

Task Force on Climate-related Financial

Disclosures disclosure (page 73).

Based on the results of this analysis, the

Directors have a reasonable expectation

that the Group will be able to continue in

operation and meet its liabilities as they

fall due, for the period up to and including

December 2026.

Strategic Report Approval

The Strategic Report is approved for issue

by the Board of Directors, and signed on

behalf of the Board:

Milena Mondini de Focatiis

Group Chief Executive Oﬃcer

6 March 2024

Strategic Report

111

Admiral Group plc Annual Report and Accounts 2023

We love to celebrate when our

colleagues go the extra mile for

a customer, to ensure we recognise

and reward exceptional service.

Every month our UK CEO Cristina

selects a customer champion, a

colleague that has gone above and

beyond for a customer.

Nancy from our Canadian operation

was awarded this title for her amazing

service to a customer who had been in

an accident. The customer was still on the

roadside with a car that couldn’t be driven

and feeling very shaken up. The initial

contact with our customers is usually

a brief call to get them and their car

home safely.

However, in this instance the customer

had no one else to call for comfort so

Nancy called the customer back after

their initial call. She stayed on the line

with the customer for 30 minutes

supporting them until the recovery

vehicle arrived.

We understand that customers can be

in a state of anxiety or shock when they

initially contact us, we accompany them

on some of their worst days, which is why

we always try to help make the process

easier with a friendly voice at the end of

the phone.

ADMIRAL’S CUSTOMER

CHAMPIONS

Celebrating

112 Strategic Report112

Admiral Group plc Annual Report and Accounts 2023

In this section

114 Chair’s Introduction to Governance

116 Q&A with the Chair

118 Board of Directors

125 Board Leadership and Company Purpose

140 Division of Responsibilities

146 Nomination and Governance Committee Report

161 Audit Committee Report

168 Group Risk Committee Report

172 Remuneration Committee Report

174 Remuneration at a Glance

176 Director’s Remuneration Policy

185 Annual Report on Remuneration

198 Directors’ Report

CORPORATE

GOVERNANCE

Corporate Governance

113

Admiral Group plc Annual Report and Accounts 2023

Chair’s Introduction to Governance

Dear Shareholder,

On behalf of the Board, I am pleased

to present Admiral’s Governance Report

for the financial year ended 31 December

2023, my first as Chair of the Board.

Through the course of my first year,

I have been impressed with the focus

that Admiral places on ensuring that

an effective governance framework

complements its unique culture and

that both are embedded throughout

the Group. This report describes the

framework in place to ensure our Board

and its Committees are operating

effectively by supporting and challenging

management to maintain high standards

of governance across the Group as we

continue to drive long-term value for

all our stakeholders.

Board changes

2023 has been a year of considerable

change for the Board of Admiral. I was

honoured to take over the responsibility

of Chair of the Board following Annette

Court stepping down as Chair at the 2023

Annual General Meeting. You can find a full

description of my appointment process

in last year’s Annual Report. Following the

announcement of my appointment in

January 2023, I went through a bespoke

and comprehensive induction, details

of this process are set out on page 151.

Again, I would like to express my gratitude

to Annette for her exemplary leadership

of the Board. I can confirm that my fellow

Board members and the wider Admiral

Team are equally grateful for Annette’s

dedication and thoughtful guidance.

Jean Park retired from the Board and all

her Admiral commitments with effect

from 20 January 2023, having spent nine

years on the Board. As I have previously

mentioned, it was with great sadness

we learnt that Jean had passed away

in May 2023. Whilst Jean left prior to

my joining the Board, I am well aware

of the invaluable contribution she made

to Admiral and the Board throughout her

nine years’ service, as well as the esteem

within which she was held by her fellow

Board Directors and our colleagues across

the business.

Sadly, we also learned that our former

Board colleague Keith James passed

away in May 2023 after a short illness.

Keith joined the Board in 2002 and served

until 2012 overseeing huge growth and

change across the Group. Following his

resignation from the Board, Keith chaired

and served on a number of subsidiary

boards until he retired as a director in

2019. Keith then continued to undertake

mentoring roles to many of the Admiral

management team until shortly before

his untimely death. Keith was universally

liked, respected and admired by so

many across South Wales and beyond

and will be deeply missed by the whole

Admiral community.

We were delighted to welcome Fiona

Muldoon who joined the Board on

2 October 2023. Fiona was appointed

as a new independent Non-Executive

Director and member of the Audit

Committee. Fiona’s biography can be

found on page 123. A description of the

appointment process undertaken to find

and recruit Fiona is set out on page 149.

People and culture

One of the most significant and enduring

observations from my first year as Chair

is the sheer quality of people we have

at Admiral and the passion they show

for the business, this is demonstrated

every day in the work they do. There is a

special culture embedded throughout

the Group, which I believe is unique to

Admiral. We build our culture through

our purpose and our values, these are not

just words on paper, they are lived daily

by our teams and integrated through

everything we do as a business. On behalf

of the Board, I would like to thank all our

employees for the hard work, dedication

and enthusiasm they have shown

throughout the year. Our people and our

culture are what sets us apart from other

companies and are the reason why in

2023, Admiral was acknowledged as the

best large Company to work for in the UK,

and our Chief Executive Officer, Milena

“The Board is focused on

delivering Admiral’s

purpose and building its

culture through a

framework of good

governance and established

values which, in turn,

will deliver long-term,

sustainable returns

to our shareholders.”

Mike Rogers

Group Chair

A DIVERSIFIED BUSINESS

WITHIN AN EFFECTIVE

GOVERNANCE FRAMEWORK

Building

114 Corporate Governance114

Admiral Group plc Annual Report and Accounts 2023

Mondini de Focatiis, was recognised as

the best leader of a big Company at the

Best Companies to work for awards, see

more at www.b.co.uk. You can find out

more about our culture and why Admiral is

considered a great employer throughout

this report.

ESG and sustainability

ESG and sustainability considerations form

part of the narrative to every decision

we take as a Board and are integral

to the formation of our wider Group

Strategy. During the year, the Board

considered the effects of the cost of living

situation and, amongst other financial

and non-financial measures taken to

keep employees healthy, motivated

and productive, declared a 5% salary

increase for all our UK based employees.

Further information on this can be found

on page 129.

With regards to diversity, I am pleased to

report that the Admiral Board exceeds

the FTSE Women Leaders Review targets,

with a range of 45% to 55% female Board

representation during the year. We have

a female CEO and Senior Independent

Director and have met The Parker Review

target for Director ethnicity at Group

Board level. Whilst this is positive, we

cannot rest on our laurels, there is still

Governance at a glance

Board independence

2 Non-Independent

8 Independent

1 Chair*

1 Asian /Asian British

10 White British or other White

(including white minority groups

)

Board ethnicity

5 Women

6 Men

Board gender

4 2–4

ears

2 0–2 years

2 6+

ears

3 4–6 years

Board tenure

Finance

ESG/Sustainability

Remuneration/People

Small /Medium Enterprise

Lending

Entrepreneurial

Operations

Tech/Digital/Data

International

City

M&A

Marketing/Retail

Executive Strategic Leadership

Insurance

Risk

Board Director skills

0 2 4 6 8 10 12

* Independent on appointment

much work we can do to ensure a fully

inclusive environment sits alongside

a diverse pipeline of talent to drive

the business forwards. You can read

more about our diversity and inclusion

initiatives on pages 62 and 154.

Climate change and the wider

environment are important considerations

we take into account as a Board. You can

read about how Admiral has taken steps

to meet its environmental obligations

through its TCFD and SECR reporting

disclosures set out on pages 71 and 73.

As Chair, I am conscious that the Board

is accountable to all our shareholders

and wider stakeholders such as our

employees, customers, partners,

suppliers, communities and the

environment. We maintain an active

dialogue with our shareholders and have

regular interaction with all our wider

stakeholders. How we do this is set out

in our section 172 statement on page 87

along with further details on page 136.

Effectiveness

The Board conducted an evaluation

of its own performance and those of

its committees in December 2023.

In line with its three-year cycle, this

review was conducted internally by

the Company Secretary in conjunction

with myself. The findings from the

2023 evaluation along with an update

on the progress made against those

recommendations from the previous

year’s external review process can be

found on page 158. This process gives

a clear focus on what we can do as a

Board to improve during the forthcoming

year, however it did confirm that the

Board and its committees are working

effectively in ensuring the business

is managed for the long-term benefit

of all our stakeholders.

I would like to thank my fellow Board

members for their insight and support

during my first year as Chair. I look

forward to our 2024 AGM, which will

once again be held in person on 25 April

2024. Further details will be published

in the Notice of Annual General Meeting,

which will be sent or made available to

shareholders on the Company’s website.

Mike Rogers

Chair

6 March 2024

Corporate Governance

115

Admiral Group plc Annual Report and Accounts 2023

Q&A with the Chair

We asked Mike Rogers

to share some of his

initial impressions and

observations from his ﬁrst

year as Chair of Admiral.

How valuable did you find your

induction process in preparing

you for your role as Chair?

My induction process was incredibly

helpful and insightful. One of my

overwhelming impressions of Admiral is

how knowledgeable and collaborative

colleagues are across the UK and beyond.

Admiral staff generally have a very long

tenure and therefore the knowledge

that they build up and are able to share

is incredibly valuable. I believe that the

way that Admiral colleagues collaborate

so closely really adds to the overall

competitive advantage that Admiral has

been able to maintain for so many years.

Meeting with management during my

induction process has really reinforced

this in my mind. On top of meeting

management, I have also spent time

listening to customer calls as well as

spending time in a number of call centres

with our front-line staff. Everyone I have

met has been generous with their time

and it is clear that people at Admiral love

working here.

See page 151 for further information

What does effective governance

mean to you and how is this

demonstrated at Admiral?

Throughout my career I have seen how

embracing effective governance, initiated

at the most senior levels of a Company

and cascaded down through the business,

builds a culture where integrity and

values are put at the very heart of how

that business operates. This in turn allows

trust to be built through accountability

and transparency, which encourages

investment and the building of

stakeholder relationships with confidence

and mutual respect. At Admiral, I have

seen this integrity demonstrated through

a strong sense of purpose and values, led

by an effective Board who understand

and espouse the benefits that effective

governance can have on building a positive

workplace culture and, ultimately, on the

performance of the business. Whilst this in

itself cannot guarantee Admiral’s success,

it certainly can create a strong base from

which the Company is given the best

opportunity to flourish.

See page 113 for further information

What have been your initial

impressions of Admiral’s culture

during your first year?

Before I joined as Chair, I was aware of

Admiral’s reputation for its unique culture,

this was a factor in guiding my decision

to join the Company. Having spent my

first year visiting all areas of the business

and meeting a large cross-section of our

colleagues, I can honestly say that I have

not been disappointed. I believe I can sum

up Admiral’s culture with the following

words: engaging, innovative, collaborative,

inclusive, focused, conscientious and

fun. The Board and senior management

team view our culture as the heart of

what Admiral is, and what it stands for as

a business. Admiral’s culture is key to why

the Company has been so successful in

growing over the past 30 years to where

we are today and, for this reason, should be

protected at all costs. Amongst the many

awards received which reflect our culture,

we were delighted to be named Best Large

Company to work for in 2023 and our CEO,

Milena, was awarded Best Leader of a Big

Company at the Best Companies Awards.

See page 132 for further information

How much consideration should

the Board give to Admiral’s

purpose and values during its

decision-making process?

On joining the business, Admiral’s

philosophy was explained to me in simple

terms, we want to help people to look

after their future, always striving for

better together. This is our purpose,

and in my relatively short time with the

business I’ve been impressed in seeing

how our colleagues embody this purpose

every day through our values. With every

discussion and decision we take as a

Board, our purpose and values are at

the forefront of our minds. Simply put,

if the Board believes something does

not measure up to the high bar we have

set ourselves then it will be rejected.

Our values are embraced through an open

and inclusive workplace, where people can

have fun, work hard, and be rewarded for

their achievements. The Board and our

senior management team lead from the

front, truly believing that people who like

what they do, do it better, and it is our

customers and wider stakeholders who

benefit as a result.

See page 132 for further information

PEOPLE LOOK AFTER

THEIR FUTURE

Helping

116 Corporate Governance116

Admiral Group plc Annual Report and Accounts 2023

How important is diversity

and inclusion to the success

of the business?

Embracing people from all areas of society

and walks of life brings with it different

experiences, skills and perspectives. This in

turn delivers a stronger, more creative

and capable workforce. Inclusive and

diverse workplaces foster a keen sense

of belonging and create an environment

where employees feel their contributions

are valued and respected, this enhances

the culture of the Company. High quality

candidates are attracted to diverse and

inclusive companies and employees feel

more comfortable and satisfied within

inclusive environments, creating loyalty

and reducing attrition. Equality is one of

the four pillars of Admiral’s culture and

I’ve been impressed with the seriousness

and focus the Group gives to ensuring

diversity and inclusion, from the Board

through to all levels within the Company.

We have many forums throughout

Admiral which focus on all aspects of

diversity and inclusion, this is key to

enhancing our culture and ultimately the

success of our business. The team is proud

of its diverse working culture – it’s what

makes us Admiral.

See page 154 for further information

Why is stakeholder engagement

important to Admiral?

Stakeholder engagement is a key

responsibility for the Board, we value

all our stakeholders and through

understanding their individual needs

the Board is able to create a balanced

and fair approach to their varying,

sometimes conflicting, interests.

Engagement through effective

communication builds trust, credibility

and confidence, and we take into account

our various stakeholder views and

opinions to build a shared vision for the

future. Engagement also brings clarity

and alignment as to what the business

wants to achieve and consensus as to how

it should do this. Our stakeholders have

a huge wealth of relevant knowledge

and experience which we are able to tap

into to help Admiral be more impactful,

sustainable and successful, whilst at the

same time assist in mitigating potential

risks, conflicts and resistance to change.

The Board understands the importance

of these relationships and Admiral has

an in depth understanding of who our

stakeholders are and how best to engage

with them for the benefit of the Company

in the long-term.

See pages 56, 87 and 136 for

further information

ee pages 56, 87 an

136

er inform

tio

What does being a sustainable

business mean to the Admiral Board?

As a Board we understand that having

an understandable, transparent and

sustainable approach to business has

environmental, economic and social

benefits, not just for our stakeholders but

for society as a whole. We have a duty to

promote sustainable working practices

and, where possible, to mitigate the

negative aspects of any impact we have

on our environment. Everyone benefits

from working in a more sustainable

environment and by doing our best to

reduce emissions and promote equality,

as a couple of examples amongst

many, we can do our small part to help

secure and build a society for future

generations. As a Board, we understand

that the perception from our stakeholders

around Admiral’s commitment to being

a sustainable business has a bearing on

our reputation, our customer loyalty,

employee engagement and investment

decisions. By continuing to integrate and

embed sustainability and ESG practices

throughout our business we are ensuring

Admiral’s success and resilience over the

longer-term.

See page 56 for further information

Corporate Governance

117

Admiral Group plc Annual Report and Accounts 2023

Board of Directors

Our aim is to accelerate

the evolution of our

core businesses toward

what we call Admiral

2.0, an organisation that

leverages on Admiral’s

historical strengths whilst

being even more agile

and technology focused.

Mike Rogers

Chair

Appointed

Appointed as Chair of the Board on 27 April 2023.

Current appointments

• Chair of Experian plc

Background and experience

Mike was Group Chief Executive Officer of LV= Group from

2006 until 2016, during which time he grew the organisation

into a signiﬁcant player in the life and general insurance

market. Before that, Mike was with Barclays plc for more

than 20 years, holding a number of senior roles, most recently

as Managing Director, UK Retail Banking. Mike was previously

a Non-Executive Director of NatWest Group plc (where he

Chaired its Group Sustainable Banking Committee and sat

on the Group Performance and Remuneration Committee).

He was also previously a Non-Executive Director of the

Association of British Insurers.

Contributions and reasons for appointment

Mike was appointed as Chair of the Board based on his wide

business, insurance and financial services knowledge and

on him being someone who would make a strong strategic

impact on the future of Admiral. Mike has over 30 years

of international financial services experience holding the

senior positions described above. Mike also has a wealth

of Board experience, he is currently Chair of Experian plc,

and stepped down as Non-Executive Director of NatWest

Group plc immediately prior to joining Admiral and as Chair

of Aegon UK on 22 January 2024. Mike’s recent and relevant

background and experience, and the skills he has developed

over his significant and distinguished career made him the

ideal choice as Chair to lead the Admiral Board and business

through the next stage of its evolution.

Skills

Key

Board skills matrix

Finance

Insurance

Marketing/Retail

City

Technology/Digital/Data

Entrepreneurial

Remuneration/People

Risk

Executive/Strategic Leadership

M&A

International

Operations

Lending

ESG/Sustainability

Small/Medium Enterprise

Committee Membership

Audit Committee member

Remuneration Committee member

Group Risk Committee member

Nomination and Governance

Committee member

Committee Chair

Senior Independent Director

118 Corporate Governance118

Admiral Group plc Annual Report and Accounts 2023

Milena Mondini de Focatiis

Chief Executive Oﬃcer (CEO)

Appointed

Appointed to the Board in August 2020 and became

CEO on 1 January 2021.

Current appointments

• Admiral Insurance Company Limited member

(an Admiral Group subsidiary)

• Able Insurance Services Limited Board member

(an Admiral Group subsidiary)

• Mentor for A-Road, Growth Capital

Background and experience

Milena joined Admiral in 2007 and was appointed CEO

in January 2021. She has been a member of the leadership

team throughout her time at Admiral, has extensive

experience of the Group’s operations and has attended

and actively contributed at Board meetings as an observer

since 2011. Her previous roles included being Head of UK

and European Insurance and CEO of ConTe, Admiral’s Italian

insurance business which she founded in 2008. Before joining

Admiral, Milena worked as a consultant for Bain & Co and

Accenture. She holds an MBA from INSEAD and a degree

in Telecommunication Engineering from Università degli

Studi di Napoli Federico II.

Contributions and reasons for appointment

Milena leads a very strong and experienced management

team and is an effective CEO who continues to build an

even stronger Admiral for the future. In 2023 Milena was

awarded the Best Leader of a Big Company at the 2023

Best Companies Awards.

Skills

Geraint Jones

Chief Financial Oﬃcer (CFO)

Appointed

Appointed in August 2014.

Current appointments

• Admiral Financial Services Limited Board member

(an Admiral Group subsidiary)

• Admiral Insurance (Gibraltar) Limited Board member

(an Admiral Group subsidiary)

• Admiral Insurance Company Limited Board member

(an Admiral Group subsidiary)

• Trustee and Chair of the Finance and Audit Committee

of the Wales Millennium Centre

• Finance, Audit and Risk Committee member at the

Football Association of Wales

Background and experience

Geraint joined Admiral in 2002 and held several senior finance

positions including Head of Finance, before being promoted

to Deputy CFO in January 2012 and CFO in August 2014.

Geraint is responsible for finance, investments and investor

relations. A Fellow of the Institute of Chartered Accountants

in England and Wales, Geraint spent the early part of his

career as an external auditor at Ernst & Young and KPMG.

Contributions and reasons for appointment

Geraint has worked for Admiral for over 20 years and

has been Group CFO for nearly 10 years. He has a deep

understanding of the Group’s businesses and strategy,

which, together with his significant financial and accounting

experience and broad range of skills and commercial

expertise, makes him a valuable contributor both to the

Board and the wider Group. Geraint is also able to use his

financial and accounting experience to provide insight

into the Group’s financial reporting and risk management

reporting processes.

Skills

Corporate Governance

119

Admiral Group plc Annual Report and Accounts 2023

Board of Directors

continued

Michael Brierley

Non-Executive Director

Appointed

Appointed in October 2018.

Current appointments

• Chair of Admiral Financial Services Limited (Admiral Money)

(an Admiral Group subsidiary)

• Director, Trustee and Chair of Finance and Risk Committee

of the Rose Theatre Trust

• Non-Executive Director and Chair of Audit Committee

and Risk and Compliance Committee at Alpha Bank

London Limited

Background and experience

Michael was CFO of Metro Bank Plc between 2009 and 2018,

helping lead the business from start-up to profitability and

listing on the FTSE. He spent seven years at Capital One

Europe in various roles including CFO Europe, CFO UK and

Chief Risk Officer Europe. He has also served as CFO for

Royal Trust Bank, Financial Controller at Industrial Bank of

Japan (London Branch), Director Business Risk at Barclaycard

and was co-founder, Deputy Managing Director and CFO

of Gentra Limited. Michael is a Fellow of the Institute of

Chartered Accountants in England and Wales.

Contributions and reasons for appointment

Michael brings a depth of knowledge from working at

senior levels across multiple financial services sectors,

jurisdictions and markets. As a result of his extensive financial

and commercial experience, Michael is able to contribute

effectively as a Non-Executive Director, and in his role as

a member of the Audit and Remuneration Committees.

Through his recent and relevant financial experience, he is

able to effectively challenge management on the financial

reporting and internal control matters that come before the

Audit Committee. Michael demonstrates full commitment

to the responsibilities that go with his Board and Committee

roles and offers appropriate challenge and guidance in

respect of the matters considered in these forums.

Skills

Karen Green

Non-Executive Director

Appointed

Appointed in December 2018.

Current appointments

• Non-Executive Director, Senior Independent Director

and Chair of the Sustainability Committee, member

of the Nominations and Remuneration Committees,

Phoenix Group Holdings plc

• Non-Executive Director, member of the Audit, Nomination

and Remuneration Committees, Great Portland

Estates PLC

• Non-Executive Director, and Risk and Audit Committee

Chair and member of the Remuneration Committee of

Miller Insurance Services LLP

• Non-Executive Director, Chair of the Risk Committee

and member of the Remuneration Committee, Asta

Managing Agency Ltd

• Advisor role for Insurtech, Cytora Limited

• Supervisory Board member and Audit Chair for the

TMF Group

• Charity Trusteeship, Wellbeing of Women

Background and experience

Karen Green is the former CEO of Aspen UK. Other senior

Aspen positions included Group Head of Strategy, Corporate

Development, Office of the Group CEO and she was a

member of the Group Executive Committee for 12 years.

Prior to that, she held various corporate finance, M&A and

private equity roles at GE Capital Europe and Stone Point

Capital having started her career in investment banking

at Baring Brothers and Schroders.

Contributions and reasons for appointment

Karen has substantial financial services experience and

has a deep understanding of insurance and reinsurance.

Karen also has a strong background in strategic planning

and corporate development and the relevant financial and

industry expertise to be Chair of the Audit Committee.

She demonstrates the commitment required to discharge

effectively the responsibilities attached to this role and to

challenge management on the Group’s financial reporting

and risk management processes.

Skills

120 Corporate Governance120

Admiral Group plc Annual Report and Accounts 2023

Justine Roberts, CBE

Non-Executive Director

Appointed

Appointed in June 2016.

Current appointments

• CEO and Founder, Mumsnet.com and Gransnet.com

• Non-Executive Director of The Open Data Institute

• Non-Executive Director of Boring Money

• Non-Executive Director and Chair of Remuneration

Committee of the English Football League

Background and experience

Justine founded Mumsnet in 2000 and is responsible for

creation, strategic direction and overall leadership. In May

2011, Justine founded Gransnet, a sister site to Mumsnet,

for the over-50s. Before that Justine was a freelance football

and cricket journalist for the Times and Daily Telegraph, after

working for Warburgs and Deutsche Bank as an economist,

strategist and head of South African Equities in New York.

Contributions and reasons for appointment

As CEO of the successful Mumsnet and Gransnet brands,

Justine has strong digital and customer experience insights

that she is able to bring to the Board decision-making

process. Justine also has a strong background in driving

change through digital capabilities and brings a fresh and

insightful perspective to the matters for consideration

by the Board. Justine is also an effective member of the

Nomination and Governance Committee and demonstrates

full commitment to the role as well as performing the role

of Senior Independent Director.

Skills

Andy Crossley

Non-Executive Director

Appointed

Appointed in February 2018.

Current appointments

• Chair of EUI Limited (an Admiral Group subsidiary)

• Non-Executive Director, member of Remuneration

Committee, Risk Committee and Chair of Audit Committee

at Vitality Health Ltd (Vitality Health Ltd, Vitality Life Ltd,

Vitality Corporate Services Ltd) and Senior Independent

Director of Vitality Life Ltd.

Background and experience

Andy was CFO at Domestic & General Group from 2014

to 2017. He spent 14 years at Prudential Plc from 2000 as

Director, Group Finance; Group Chief Risk Officer, and CFO and

Deputy Chief Executive of Prudential UK. He previously held

senior manager roles at Legal & General Group Plc, where he

was Group Financial Controller, and Lloyds Bank Plc. Andy is a

Fellow of the Institute of Chartered Accountants in England

and Wales.

Contributions and reasons for appointment

Andy has held a variety of senior roles relating to financial

planning, strategy and risk across UK financial services.

He has a wealth of accounting and financial experience

and provides progressive insights to the matters that come

before the Board. Andy is a valuable contributor to the Board

and as a member of the Audit Committee and Chair of the

Group Risk Committee. Through his recent and relevant

financial experience, he is able to effectively challenge

management on the financial reporting matters that come

before the Audit Committee.

Skills

* Ceased to be a member of the Audit Committee on 7 March 2024.

Corporate Governance

121

Admiral Group plc Annual Report and Accounts 2023

Board of Directors

continued

Jayaprakasa Rangaswami

Non-Executive Director

Appointed

Appointed in April 2020.

Current appointments

• Non-Executive Director and member of Remuneration

Committee (joint with both Allfunds entities) of Allfunds

Bank SA and Allfunds Group Plc

• Non-Executive Director and member of Remuneration and

Nominations, Audit and Risk Committees at Daily Mail and

General Trust Plc (DMGT)

• Board Member and Chair Quarterly Security Forum of

Harmsworth Media

• Non-Executive Director and member of Audit Committee,

Human Resources and Remuneration Committee and

Chair, Sustainability, and Innovation Committee of National

Bank of Greece S.A.

• Member and Chair, Business Development Committee,

Board of Trustees, Cumberland Lodge

• Member, Board of Trustees, Web Science Trust

Background and experience

Jayaprakasa Rangaswami (JP) has a wealth of large-scale IT

operational experience gained through his roles as Chief

Information Officer (CIO) with Dresdner Kleinwort (2001 to

2006) and Managing Director/Chief Scientist at BT Group

(2006 to 2010). JP has also been Chief Scientist with Salesforce

(a US cloud-based software Company) (2010 to 2014) and was

Chief Data Officer (CDO) and Group Head of Innovation with

Deutsche Bank (2015 to 2018).

JP is also a former global CIO of the Year as well as European

Innovator of the Year.

Contributions and reasons for appointment

JP brings a wide range of technology and digital experience

which helps to complement and enhance the existing

skills around the Board table. He has operated in financial

services for over ten years and understands the challenges

of working in a regulated environment. He is also able to

effectively contribute to the Board debate and demonstrates

full commitment to the role. JP is also a member of the

Group Risk Committee, a role for which he has the relevant

experience and capability.

Skills

Evelyn Bourke

Non-Executive Director

Appointed

Appointed in April 2021.

Current appointments

• Non-Executive Director, Chair of the Audit and Risk

Committee and member of the Nomination Committee

at Marks and Spencer Group Plc

• Non-Executive Director, member of the Nominations

Committee, Sustainability Committee, Remuneration

Committee and Workforce engagement NED at Bank of

Ireland Group plc.

• Non-Executive Director, Senior Independent Director,

member of Audit Committee, Risk and Compliance

Committee and Nominations Committee at AJ Bell Plc

Background and experience

Evelyn was Bupa Group’s CFO between 2012 and 2016,

before becoming Bupa’s Group Chief Executive Officer from

2016 to 2020. Evelyn has held several senior leadership roles

during her career including Chief Commercial Officer at

Friends Life UK (2011 - 2012), CFO at Friends Provident

(2009 – 2010), CFO at Standard Life Assurance (2006 -2008),

and CEO at Chase de Vere (2004). Evelyn is a qualified actuary

and holds an MBA from London Business School.

Contributions and reasons for appointment

Evelyn brings valuable general management, finance

and strategy experience from life and health insurance,

internationally. She complements and enhances the range

of skills currently on the Board. Evelyn has held several

leadership positions in financial services organisations

and has the appropriate skills, knowledge and experience

to perform her roles as Non-Executive Director and Chair

of the Remuneration Committee.

Skills

122 Corporate Governance122

Admiral Group plc Annual Report and Accounts 2023

Bill Roberts

Non-Executive Director

Appointed

Appointed in June 2021.

Current appointments

• Advisor at Hi Marley

• Independent Non-Executive Director Elephant Insurance

Company (EIC) (an Admiral Group subsidiary)

Background and experience

Bill Roberts has a wealth of insurance, underwriting and

marketing experience gained during his time at US insurer,

GEICO, which he joined in 1984. Whilst at GEICO, Bill held

several Executive appointments, including COO and President

and CEO for all GEICO Insurance Companies, a position he

held from 2018 until he was promoted to Vice Chairman,

GEICO Insurance Companies in 2020. Bill held this role until

he retired from GEICO in December 2020.

Contributions and reasons for appointment

Bill brings valuable insurance experience and insight on the

US insurance market having held several senior executive

positions with US insurer, GEICO. Bill contributes and

challenges effectively on the matters that come before the

Board. His extensive US insurance experience and insight

is of specific value to the Group’s US business as it seeks to

continue to develop and grow. Bill does not currently have

any other Executive or Non-Executive Director commitments

that would impact the time commitment requirements for

his Admiral Non-Executive Director role and member of the

Nomination and Governance Committee and has capacity

to fulfil the duties and responsibilities for these roles.

Skills

Fiona Muldoon

Non-Executive Director

Appointed

Appointed in October 2023.

Current appointments

• Non-Executive Director, Chair of the Risk Committee

and member of the Audit Committee at Beazley plc

• Chair of Sretaw PE DAC

Background and experience

Fiona has thirty years’ experience in the insurance industry.

Fiona was the CEO of FBD Holdings plc, a listed general

insurer in Ireland, from 2015 to 2020. Prior to that Fiona was

Director of Credit Institutions and Insurance Supervision at

the Central Bank of Ireland, the Irish regulator. Fiona spent

17 years of her career with XL Group in various progressively

senior finance and general management positions, in Dublin,

London, and Bermuda. She is a Fellow of the Institute of

Chartered Accountants in Ireland.

Contributions and reasons for appointment

Fiona has acquired extensive experience of the insurance

sector during her 30+ years’ career in financial services.

Fiona has built a compelling portfolio in the financial services

sector, demonstrating an ability to leverage her financial

and commercial skills to make a useful contribution to board

discussions. Fiona was a Non-Executive Director of Bank of

Ireland Group for eight years, also sitting on the board of

New Ireland Assurance Company, the bank’s wholly owned life

insurance, pension and investment business. She additionally

serves on the board of Beazley; a FTSE 100 specialist insurer

and she chairs the board of Sretaw DAC a private equity

Company based in Ireland.

Skills

Corporate Governance

123

Admiral Group plc Annual Report and Accounts 2023

Dan Caunt

Group Company Secretary

and General Counsel

Appointed

Appointed in May 2022.

Background and experience

Dan trained at Field Fisher where he qualified into the IP

disputes team in 2005. Dan relocated to Cardiff in 2008.

He spent two years in the IP/commercial litigation team at

Osborne Clarke before joining Admiral’s in-house legal team

in September 2010. Dan became Group Company Secretary

and General Counsel at Admiral in May 2022 and leads

the in-house Group Legal and Company Secretarial teams

within the business. Dan is secretary to the Admiral Group

Board and all Group Board Committees.

Our Culture

Engagement

Best Big Company to Work for in the UK

Voted the best big Company to work for in the UK in 2023

by the Best Companies to Work For awards.

www.b.co.uk

Diversity

95%

of our employees believe Admiral is

a diverse and inclusive employer.

GPTW Survey

Our Culture

87%

of our colleagues are proud to tell others

that they work for Admiral.

GPTW Survey

Community

88%

of employees feel good about how Admiral

contributes to the community.

GPTW Survey

Equality

Admiral was recognised as the 3rd best workplace

for women in the UK by Great Places to Work.

www.greatplacetowork.co.uk

Board of Directors

continued

124 Corporate Governance124

Admiral Group plc Annual Report and Accounts 2023

“As Company Secretary

of Admiral Group PLC, my role

is focused on ensuring

that the Group conforms to

the highest standards of

corporate governance practice

as well as ensuring compliance

with all of its legal and

regulatory requirements.”

Dan Caunt

Group Company Secretary

and General Counsel

Board Leadership and Company Purpose

UK Corporate Governance Code

The UK Corporate Governance Code

(‘the Code’) available at www.frc.org.uk,

applied to Admiral throughout the year

ended 31 December 2023. At the heart

of the Code is a set of principles which

emphasise the value that good corporate

governance can have on the long-

term sustainable success of a business.

By applying the principles, and following

the more detailed provisions of the Code,

the Board can demonstrate to Admiral’s

stakeholders how the creation of an

effective, transparent and accountable

corporate governance framework,

aligned to the purpose and values of the

Company, assists the Board in building our

special Admiral culture and delivering the

business strategy within the relevant legal

and regulatory landscapes in which the

Group operates.

Compliance with Corporate Governance Code Principles

1 Board leadership and Company purpose Pages

A Effective Board 118

B Purpose, values and culture 8, 132

C Governance framework 113

D Stakeholder engagement 56, 87, 136

E Workforce policies and practices 96, 132

2 Division of Responsibilities

F Board roles and responsibilities 118, 140

G Independence 118, 152

H External commitments and conflicts of interest 143, 154

I Board resources 144

3 Composition, Succession and Evaluation

J Appointments to the Board 118, 146

K Board skills, experience and knowledge 153

L Annual Board evaluation 158

4 Audit, Risk and Internal Control

M External Auditor and Internal Auditor 163

N Fair, balanced and understandable review 161, 201

O Internal financial controls and risk management 98, 161, 168

5 Remuneration

P Linking remuneration to purpose and strategy 172

Q Remuneration policy review 176

R Performance outcomes 2023 185

Admiral is required to report to

shareholders on how it has applied the

principles and provisions of the Code

during the year and, where we have not,

the reasons for not doing so. The Board

confirms that Admiral has complied

with all of the provisions set out in the

Code for the year ended 31 December

2023, with the exception of Provision 19.

This is explained in further detail below.

Details on how Admiral has applied the

principles set out in the Code and how

governance operates throughout the

Group have been summarised throughout

this Governance section and elsewhere

in this Annual Report and are set out in

the table below.

Provision 19 of the Code states that

‘The chair should not be in post beyond

nine years from the date of their first

appointment to the Board.’ Annette

Court was appointed as Board Chair

in April 2017, having spent five years as

a Non-Executive Director of the Board.

Annette reached her nine-year tenure

as Non-Executive Director on the Board

in March 2021. As reported in the 2021

Annual Report, the Board considered and

agreed, having consulted shareholders,

that Annette should remain in post to

facilitate an effective succession process

for both CEO in 2021 and Chair in 2023.

Mike Rogers was appointed Chair at

Admiral’s AGM held on 27 April 2023,

at which time Annette stood down from

the Board.

Provision 19 of the Code states that ‘To facilitate effective succession planning and the development of a diverse board, this period can

be extended for a limited time.’ Annette’s re-election was supported by shareholders at the 2022 AGM (99.3% votes in favour) and her

2022 performance review, led by the Senior Independent Director, concluded that she continued to perform effectively as Board Chair,

continued to exercise objective judgement and promoted constructive challenge amongst Board members. Following Annette stepping

down and the appointment of Mike Rogers as the new Chair in April 2023, Admiral has been in full compliance with the Code.

Corporate Governance

125

Admiral Group plc Annual Report and Accounts 2023

Board Leadership and Company Purpose

continued

Principal areas of focus

How the Board spent

its time during 2023.

In 2023, the Board held seven scheduled

meetings, in addition there were a

number of ad hoc Board meetings to deal

with significant matters that were unable

to wait until the next scheduled meeting.

A Board planner is in place which sets out

those items to be reviewed on an annual

basis at scheduled Board meetings in

accordance with the Matters Reserved for

the Board Schedule. The items below are

not exhaustive but demonstrate some of

the key areas of the Board’s focus during

the year ended 31 December 2023.

Strategy and business plan

• Received regular updates around

key areas of business strategy across

the Group including progress against

current plan and strategic priorities

for the business going forward

• A two-day Board strategy meeting

took place at Admiral’s Swansea office

in October where the Group’s business

strategy, 5-year plan, Admiral 2.0,

capital allocations and diversification

were discussed

• Consideration of individual business

strategies within the Group business

presented by divisional CEOs, evaluating

how these tied into the wider

Group strategy

• Approval of acquisitions and disposals

including disposal of Compare.com

to Insurify, Inc., and the acquisition

due to complete in 2024 of UK direct

home and pet personal lines insurance

operations of RSA, review of M&A

processes and lessons learnt – see

principal decision page 128

• Review of ESG, sustainability and

community strategies and how these

are integrated throughout the wider

business strategy

• Brand, technology and digital

programme updates.

Operational performance,

financial and risk management

• Review of the operational performance

of the business through regular reports

from the CEO and presentations from

CEOs and senior management from

across business divisions

• Regular updates from the CFO on

the Group’s financial performance

against strategic objectives, business

plans, capital allocation and budgets,

tax planning and international tax

considerations, planning liquidity and

adequacy of solvency thresholds and

prudential buffers considering market

conditions, analyst forecasts and

financial and non-financial KPIs

• Approval of significant debt refinance -

see principal decision page 129

• Review and approval of the half year

and full year results and consideration

and approval of interim and

final dividends

• Consideration of fair, balanced and

understandable requirements in the

half and full year financial reports,

along with going concern and viability

statements following review by the

Audit Committee

• Reviewed and approval of risk

framework, policy and appetite

for the Group through the Group

Risk Committee

• Integration of new technology -

see principal decision page 130

• Oversight of internal control

environment and framework through

updates from Audit Committee and

Risk Committee including Cyber

Risk, ORSA, Solvency II and Group

Governance framework.

Culture and stakeholders

• Consideration of how the Group

purpose and values have been

imbedded throughout the business

• Review of how Admiral’s culture

continued to develop including analysis

of feedback from Great Place To Work®

(GPTW) survey results, working groups,

culture scorecard and Diversity and

Inclusion Policy review - see more on

pages 56 and 132.

• Consideration of stakeholder map

and respective stakeholder updates

throughout the year, including

engagement mechanisms - see more

on pages 56, 87 and 136

• Employee welfare review and

considerations including cost of living

analysis and hybrid and remote working

practice considerations - see pages 129

and 132

• Presentations and discussion from

the Chairs of the UK and Overseas

Employee Consultation Groups -

see page 138

• Overview of Group reward strategy

including review of share-based awards

and approval of Directors Remuneration

Policy through the Remuneration

Committee – see page 172

• Talent management and succession

planning throughout the Group

• Review of Investor Relations reports

• Group health and safety updates.

Society, environment

and sustainability

• Oversight of Group ESG and

sustainability strategy to ensure

alignment with the Group’s wider

strategic objectives and culture –

see page 79

• Review of climate change strategy,

related activities and risk management

including progress towards climate

commitments and understanding the

evolving expectations of stakeholders

• Updates on progress against

sustainability targets

• Analysis of suppliers and partners

and the communities within which

Admiral operates

• Updates on volunteering and charity

propositions within the Group as part of

a wider community outreach strategy

including sponsorship of community

events, charitable giving, volunteering

and fundraising

• Updates on the customer journey,

customer engagement and ensuring

fair and reasonable claim outcomes for

all customers with special consideration

of vulnerable and disadvantaged groups

within society

126 Corporate Governance126

Admiral Group plc Annual Report and Accounts 2023

full days each year

to focus on strategy

Governance and Regulatory

• Received regular reports from the

Chairs of the Audit, Risk, Nomination

and Governance and the Remuneration

Committee’s

• Consideration of the work of the

Nomination and Governance

Committee on Board composition

and succession planning, including

approval of the appointments of Mike

Rogers as Chair and Fiona Muldoon as

Independent Non-Executive Director

• Regular updates and consideration of

new regulatory requirements including

implementation mechanisms for

the new Consumer Duty regulation

and oversight and education on

the integration of IFRS 17 reporting

framework - see page 131

• The fostering of good relations and

open and constructive dialogue

with regulators

• Discussions around conclusions of

the external Board evaluation findings

and agreed areas of focus and Board

objectives for 2023

• Consideration of skills, experience and

time requirements for Directors and

recommendations to shareholders

regarding their reappointment

• Discussions around The Parker

Review disclosure requirements

for senior management ethnicity

through Nomination and Governance

Committee and the implications for

succession planning

• Review and approval of Group policies

including Board members’ potential

Conflicts of Interest, Modern Slavery

and Anti-Bribery considerations

and approval of Admiral’s Modern

Slavery Statement

• Considered and approved the Notice

of 2023 Annual General Meeting (AGM)

for issue to shareholders

• Reviewed matters reserved for the

Board and the committees’ respective

terms of reference.

Principal areas of focus for

the Board for 2024

• Continued focus on accelerating the

evolution of Admiral’s core business

and competencies toward ‘Admiral

2.0’, leveraging the Group’s historical

strengths whilst being even more agile

and technology focused

• Oversight of progress of the Group’s

diversification strategy to ensure

long-term resilience within the

business whilst strengthening

and complementing existing

customer propositions

• Monitoring the ongoing embedding

of culture and values throughout the

business, including closely monitoring

the effects of hybrid working to ensure

that the uniqueness of Admiral’s culture

is maintained and developed

• To continue focus in relation to the

Admiral internal model, supporting a

planned regulatory pre-application and

subsequent full regulatory application

• Provide steering and oversight for

capital management and reinsurance

• Embedding the Group’s sustainability

strategy ensuring that it continues

to be integral to the Group’s

wider strategy

• Focus on Board composition and skills

in conjunction with Nomination and

Governance Committee along with

executive team succession planning

• Ensure diversity and inclusion objectives

are embedded throughout the Group

and continued progress is made in

respect of ethnic diversity

• Monitoring progress against

key pledges for climate change

and community

• Continued deepening of the Board’s

understanding of external risk factors

• Ongoing oversight of FCA’s Consumer

Duty regime implementation across

the business.

THINKING AT

ADMIRAL

Whilst a significant proportion of

the Board’s time is focused towards

addressing the short to medium term

business considerations required in

managing a business such as Admiral,

it is also important that the Board is

allowed the opportunity to take a step

back and assess the bigger picture,

to promote discussion and strategic

planning over the medium to long term

in order to identify and address those

significant opportunities and risks

that may present themselves. As well

as being part of every Board meeting,

Admiral annually dedicates two full days

to focus on its strategy. In 2023, the

Board was taken to Admiral’s Swansea

office for their annual strategy meeting,

at this meeting the following items are

examples of some of those issues the

Board addressed.

• Group-wide strategy and objectives

• Admiral 2.0

• Diversification strategy

• Motor evolution strategy

• UK insurance strategy

• Organic versus inorganic growth

• International business strategy

• Five-year plan

• Strategic opportunities

• Organisational requirements.

Strategic

127

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Board Leadership and Company Purpose

continued

s172 Principal

decisions

Our section 172 statement, set out

on page 87, highlights how the Board

considers those matters set out under

s172. On the pages that follow are

examples of some of the key discussions

and decisions taken by the Board during

the year along with details around how

those considerations set out under

s172 were taken into account during

the Board’s decision-making process.

Principal decision 1

Acquisitions

and disposals

The strategic objectives the Board

considers when evaluating potential

acquisitions and disposals are:

1. To accelerate Admiral’s diversification

strategy: to increase the pace of

growth of non-motor products, such as

Household, Pet and Travel in the UK

2. To build new capabilities: acquiring

knowledge in fields where Admiral

has not yet developed the

required competencies

3. A path to scale: opportunities

identified where Admiral is able to drive

incremental value through pricing

and claims expertise and driving

cost efficiencies

4. To divest from non-attractive markets:

generating value from adjusting the

portfolio to focus on markets where we

see long-term growth potential.

In alignment with Admiral’s strategy of

diversification of its product offering

into insurance products beyond Motor,

the Board was pleased to announce

the acquisition of the More Than direct

Home and Pet personal lines insurance

business from RSA in December 2023.

This transaction will see Admiral welcome

c.300 new colleagues as well as the

transfer of the renewal rights and the

‘More Than’ brand.

The proposal to engage in the process to

acquire the More Than business was first

presented to the Board in September

2023, and then on a number of occasions

at milestone points throughout the

process. Board deliberations focused on:

• Strategic fit: The Board concurred with

management that the acquisition

represented a strong strategic fit and

achieved the objective of diversification

in the UK by accelerating the scale and

market share of both Admiral’s Home

and Pet products

• Impact on core business: The Board

considered the impact on the core/

existing business, particularly in terms

of management time, and felt that

this could be mitigated by a properly

structured, funded and resourced

integration team

• Comparison of organic versus inorganic

growth: An alternative approach

of investing in organic growth was

considered. The Board agreed that

there was no alternative opportunity

equivalent to the increase in scale for

the Home and Pet businesses which

would be achieved by this acquisition

• Brand reach: The Board agreed to

offer RSA customers an Admiral

Home product and discontinue the

More Than brand for home insurance.

Admiral would continue to offer

the More Than brand to RSA Pet

customers at renewal and to sell new

business under this brand, whilst also

maintaining the Admiral brand.

A key consideration for the Board in

respect of the More Than acquisition was

the impact on all stakeholders in the short

and the longer terms. This was factored

into the Board’s evaluation and decision-

making process. In such situations,

key stakeholders will be identified, for

example, employees, customers and

shareholders, and analysis is undertaken

to understand any relevant issues specific

to each stakeholder group. The Board will

balance the often-conflicting interests

of stakeholders whilst, at the same

time, ensuring all receive equitable

treatment. In the case of the More Than

business, after in-depth analysis the

Board agreed that this was a strategic

fit with the existing Admiral business

and its stakeholders, and approved the

acquisition as being in the long-term best

interests of the Admiral Group.

During the year, Admiral said goodbye

to our colleagues at Compare.com in

the US, as the final step in our exit from

the comparison market. The sale of

Compare.com Insurance Agency LLC to

Insurify, Inc., a US-based virtual insurance

agent, was completed in March 2023 and

demonstrated the Boards divestment

strategy to focus on markets Admiral

has identified as having the potential for

longer term growth.

Key s172 criteria considered

Relevant stakeholders considered

Key

Key: Board considerations as

defined under s172:

Long-term impact

Interests of employees

Fostering business relationships

Impact on community

and environment

Maintaining reputation for high

standards of business conduct

Treating stakeholders fairly

Customer

Partners/

Suppliers

Shareholders

Communities

People

128 Corporate Governance128

Admiral Group plc Annual Report and Accounts 2023

Principal decision 2

Liquidity/

Reﬁnancing of

subordinated debt

In June 2023, Admiral Group successfully

priced a GBP £250 million 10.5-year Tier

2 bond issue, this was the second bond

issue in its history. The bond issue was

accompanied by a tender for Admiral’s

existing £200 million 5.5% subordinated

Tier 2 notes, due to mature in July 2024,

which attracted participation in line

with expectations.

The Board considered the Tier 2 bond

issue to be an important part of the

Company’s active management of its

debt profile and capital base and took

the opportunity to refinance, prudently

well ahead of the maturity date in July

2024. The proceeds of the new notes

were to be used to fund general business

and commercial activities of the Group

and to allow the Group to refinance

its existing notes well in advance of

maturity. The success of the new bond

issue, which was oversubscribed, and the

refinancing demonstrated the strength of

Admiral’s credit and investor confidence in

the Group.

The Board sought external advice as

to the most opportune timing for the

proposed new issue and tender given

the maturity date of the existing Tier 2

notes. The Board approved the refinance

of the notes in June 2023 subject to

favourable market conditions and pricing,

given inflationary pressures and an

uncertain global economic backdrop, in

the best interests of the business and

its stakeholders.

Key s172 criteria considered

Relevant stakeholders considered

Principal decision 3

Employee

welfare and the

cost of living

Admiral takes great pride in looking

after its colleagues by helping them to

look after their future, this is especially

important in challenging economic times.

In 2023 the Board continued its focus

on maintaining a workforce which was

healthy, motivated and productive, whilst

also ensuring that the required talent

and skills were built on to equip Admiral

for the future. During the year, the Board

oversaw investment in multiple initiatives

to build on pre-existing employee

engagement, believing that employees

who feel supported during uncertain

times, were better equipped to deal

with them.

In H1 2023, conscious of the ongoing cost

of living situation in the UK, the Board

oversaw a one-off maximum salary uplift

of 5% to all directly employed UK based

colleagues. In addition, the timing of

this increase was accelerated to ensure

colleagues received benefit from the

uplift for the majority of the year rather

than awaiting the annual pay review

date. Admiral also committed to paying

the Real Living Wage for all of UK roles,

to continue to support those impacted

by the ongoing increased cost of living.

This rate was paid from March 2023 and

Admiral will be making the increase to

£12, effective from 1 March 2024. This was

approved at the EUI Board, the main UK

trading business.

In addition to multiple health, wellbeing,

diversity and inclusion and career

initiatives - see pages 62 and 132,

examples of additional initiatives overseen

by the Board to specifically assist

employees with the cost of living have

included a canteen subsidy of 50% for

food and drink covering approximately

2000 people a day and a car park subsidy

resulting in 743 free parking spaces.

The Board also approved a free share

award to employees to ensure a sense

of shared ownership in the success of

the business. As a result of these and

multiple other initiatives overseen by

the Board, attrition rates continued to

see improvements, overall absenteeism

continued to see small reductions

and recruitment performed well with

increases in application volumes and

strong acceptance of offers. The Board

was also pleased to see an increase in

the hiring of internal candidates for

senior positions.

Employees were able to feedback

to the Board through the Employee

Consultation Group (ECG), where topics

such as the cost of living, employee

engagement and morale were discussed.

Engagement scores across the Group

remained strong, signposting areas for

continued focus. Pleasing results were

noted around inclusion, bolstered by

external recognition and accreditation

across several areas such as the

government’s Disability Confident Leader

and the gold Corporate Health Standard.

The Board was delighted that the work

carried out by the team during the year

was recognised with Admiral achieving

multiple awards for its workplace culture -

see page 13.

Key s172 criteria considered

Relevant stakeholders considered

Corporate Governance

129

Admiral Group plc Annual Report and Accounts 2023

Board Leadership and Company Purpose

continued

Principal decision 4

New technology

A strategic priority for the Board is to

accelerate the evolution of Admiral’s

core business and competencies toward

‘Admiral 2.0’, leveraging the Group’s

historical strengths whilst being even

more agile and technology focused

to ensure that it continues to put the

customer first. To support the journey to

Admiral 2.0 the Board is overseeing the

building of next generation architecture,

leveraging cloud, data, analytics and

digital to continually improve the

customer experience.

Following the implementation of the

Guidewire Claims Centre platform in 2022,

this year the Guidewire Policy Centre and

Billing Centre were migrated to the cloud

and at the same time updated to the

latest version. Policy Centre and Billing

Centre has been used by Admiral in the

UK since 2016 but the cloud deployment

and updates to the latest version allows

the business to benefit from new features,

mitigate technology and security risk,

further improve the speed of release by

shifting to an ‘environments on-demand’

model, and reduce the overall total cost

of ownership of the estate. There were

also improvements in customer contact,

supported by the scaled deployment

across the business of a new cloud contact

centre platform which allows Admiral

to utilise new technologies to enhance

the customer telephony experience.

In addition to telephony, Admiral is also

modernising the customers’ digital

experience through a new web portal

and mobile applications. Work has also

commenced on the implementation of a

new customer master database, which will

provide a single customer view across the

Admiral Group.

Moving to Admiral 2.0 is a strategic

priority for the Board. Board oversight

around the introduction of new

technology and the migration of systems

to the cloud will assist the business

in meeting this objective. The roll out

of new technologies brings modern,

capable platforms that allow Admiral to

create great features and experiences

for customers, a faster time to

market, improved scalability, stability

and resilience, whilst also assisting in

addressing the increasing risks around

the protection of customer data and

cyber security. The Board received

updates and presentations from the

business in addition to oversight of

project milestones and agreed targets.

As a result of the changes made as part

of this transformation journey, Admiral

aims to become a much more digitally

diverse business both to customers and

employees and the changes will also help

in meeting sustainability targets.

Key s172 criteria considered

Relevant stakeholders considered

130 Corporate Governance130

Admiral Group plc Annual Report and Accounts 2023

Principal decision 5

Regulatory

decisions

IFRS 17

IFRS 17, the new insurance contracts

accounting standard, which establishes

the principles for the recognition,

measurement, presentation and

disclosure of insurance contracts,

including information about a Company’s

financial position and enhanced

disclosures in respect of claims reserves,

was effective from 1 January 2023.

The new standard applies to the Group

and its insurance subsidiaries in the UK

and Gibraltar.

During 2023, the Group Board continued

to closely monitor the implementation

of IFRS 17 and discuss and approve key

information including accounting policy

decisions, the impact on the transition

balance sheet, 2022 comparatives,

and projected future results, proposed

revisions to key performance indicators.

In August 2023 the Board, in conjunction

with the Audit Committee oversaw the

successful conclusion of the IFRS 17

implementation programme, delivering

the first external reporting under IFRS

17 as part of Admiral’s interim results.

Given the significance of the changes in

reporting, external stakeholders were

provided with supplementary information

within the presentation, and additional

opportunities to discuss the results

in order to clarify the impact of the

reporting changes.

Consumer Duty

The FCA’s Consumer Duty regime came

into effect on 31 July 2023. The Duty

introduced higher and clearer standards

of consumer protection across financial

services and required firms to focus

on customer outcomes. This new

requirement aligned with Admiral’s wider

Group purpose and commitment to

delivering good customer outcomes for

all our customers.

The Board oversaw the implementation

of the Consumer Duty regime through its

relevant regulated subsidiary entities who

fell under the scope of the new regime.

Subsidiary board Non-Executive Directors

were appointed as Consumer Duty

“champions” in their respective businesses

and implementation plans were approved.

The FCA attended a Group Board

meeting in April 2023 where constructive

discussions were held around Consumer

Duty implementation expectations,

which were then fed back to the relevant

subsidiary boards. The Group Board

attained oversight and assurance through

reports from the Group Risk Committee,

Group Compliance Committee and

Consumer Duty Steering Committee that

appropriate implementation plans were in

place to ensure the Group would meet its

obligations which came into effect in July

2023, and that monitoring processes were

in place to ensure effective embedding

within the business and the continued

delivery of requirements to customers in

line with the Group’s purpose and values.

Internal model

The Board along with the Group Risk

Committee continued its focus on the

Admiral internal model during the year,

receiving regular reporting to help drive

key discussions and decisions in relation

to the model. The Board oversaw the

updating of the UK Car model in 2023

to address limitations identified during

prior independent validation reviews.

This will help to ensure that the model

is well placed to support a regulatory

pre-application – see pages 33 and 169 for

further information.

Key s172 criteria considered

Relevant stakeholders considered

Corporate Governance

131

Admiral Group plc Annual Report and Accounts 2023

Board Leadership and Company Purpose

continued

Culture

An important part of the Board’s role is

to lead from the front in promoting and

safeguarding Admiral’s unique culture.

This is achieved through establishing

purpose and values and is especially

important in times where there may be

significant challenges and changes to how

the business operates.

Fun

84% of employees perceive

Admiral as being a fun place

to work and 93% of employees

believe that they work

in a friendly environment.

Communication

90% of employees believe their managers are

approachable and easy to talk to and 85% believe they

are kept informed on important issues and changes.

Equality

95% of employees

believe Admiral is a diverse

and inclusive employer

and 96% believe that

Admiral’s culture is open

to different sensibilities

and backgrounds.

Recognition and reward

85% of employees believe that good work and

extra effort is appreciated. All colleagues in

the business will receive up to the equivalent of

£3,600 of shares in Admiral during the year.

Implementing our purpose through our four pillars of culture

Fun

We want our people to look

forward to coming to work,

to celebrate who they are,

and to feel happy and supported

enough to give that little

bit extra.

What makes Admiral a fun

place to work can be found

throughout our Strategic Report

on page 14 and in our Corporate

Governance Report on page 132.

The Code emphasises the importance of

the role of the Board regarding culture,

with specific recommendations that the

Board assesses and monitors culture, and

ensures that workforce policies, practices

and behaviours are aligned with the

Company’s purpose, values and strategy.

At Admiral we believe that our culture

is the real essence of what our business

is; how we act, what makes us different,

our character and personality, and how

we treat our employees, customers and

other key stakeholders. Our culture is a

culmination of the implementation of our

purpose through our values. The Board

sets the tone and leads by example, this

permeates through the business and

creates a culture lived daily by colleagues

as well as our wider stakeholders.

We strongly believe that Admiral’s culture

is unique as we aim to demonstrate

throughout this report. It is fundamentally

important that Admiral’s culture evolves

Communication

We encourage eﬀective and

transparent communication

at all levels. This is aided by

accessible management and

opportunities to encourage

feedback across the Group.

Further information on our

channels of communication can

be found on pages 89 and 136.

Equality

We work hard to promote a

sense of fairness and equality.

Everyone has the opportunity

to succeed, backed up by

multiple focus and working

groups supporting diversity,

inclusion and social mobility.

Further information as to how

we do this can be found in our

Strategic Report on page 62 and

the Nomination and Governance

Committee Report on page 154.

Recognition and reward

A job well done should be

appropriately rewarded. At the

heart of this pillar is our share

ownership scheme, which

rewards employees with a stake

in the Company. The Group’s

approach to investing in and

rewarding its workforce can be

found in our Strategic Report on

pages 17, 89, 129 and 172.

Our Purpose

“Help more people to

look after their future.

Always striving for

better, together.”

At Admiral we implement

our purpose through our

unique workplace culture.

This is reinforced by our

values – the ‘Four Pillars

of our Culture’.

132 Corporate Governance132

Admiral Group plc Annual Report and Accounts 2023

and adapts as the business environment

changes. It is even more critical that those

parts of our culture that we see as our

competitive advantage and a key driver of

our success to date, are fiercely protected,

especially during continuing periods

of change.

Aligning our culture with our

purpose, values, strategy,

policies and practices

Admiral’s culture is strongly aligned to

our purpose to ‘Help more people to

look after their future. Always striving for

better, together’. Providing customers

with great products and services, whilst

caring for our people and other important

stakeholders is key to what we do.

Our Four Pillars of Culture are built into

the fabric of our training, communication,

policies and the way we do business.

During the year, the Board received

assurance from management that

the Group purpose continued to be

Admiral’s cultural initiatives

Fun and inclusive activities: Our 30th

anniversary celebrations included,

amongst other things, an all-

employee ‘Admiral Olympics’ and

staff music festival called ‘MultiFest’

Flexible working arrangements.

Empowering teams to define their own

optimum working blueprint and self-organise in

the most effect way, whilst coming together to

share key moments

Department and team away days

including spending allocated time

giving back to the community

A compensation and promotion structure based

on meritocracy, including a 5% increase in

salary to all UK employees during the year and

excellent employee benefit offers

Employee induction workshops

focusing on Admiral’s culture

Star lunches where colleagues are recognised

for their performance and are invited to attend a

lunch with a senior manager

Diversity and inclusion working

groups and initiatives

Excellent opportunities for career development

throughout the business leading to high

retainment of employees

Group Top 10 competition:

departments compete in a Group-

wide competition which includes

a presentation to a panel of senior

managers on a different subject each

year in order to be awarded

the best department

Health and wellbeing initiatives to encourage

employees to speak up if they needed support,

a weekly health and wellbeing bulletin, yoga

and meditation classes, choirs, running clubs,

webinars and art classes, amongst many

other things

Annual manager awards Local reward and recognition programmes

Encouraging use of training

opportunities for work and

personal development

High five feedback programmes, where

employees can submit feedback on colleagues

across departments who have given great service

The Ministry of Fun organises

events and entertainment

throughout the Group.

Regular Group-wide updates on business

performance and matters of importance from

Executive Directors and senior management.

TO BE A

)4'#6Ì2.#%'

TO WORK

OUR

EXPERIENCES

Admiral has been recognised as the

best big Company to work for in the

UK in 2023 by the Best Companies

awards, as well as being in the top 15

best multinational companies to work

for in Europe by ‘Great Places to Work’

a global authority on workplace culture.

In October 2023, Jayaprakasa

Rangaswami (JP), our Group

Non-Executive Director, held an

all-employee forum on diversity and

inclusion along with a question-and-

answer session at our head office in

Cardiff. This included his experiences

growing up from an ethnically diverse

background and the challenges and

opportunities he faced throughout his

career. This session was well attended

by colleagues across the business, both

in-person and online.

embedded within the operational process

and policies and that there continued

to be alignment with its rewards and

incentives. Maintaining culture was a

key part of Admiral’s Board discussion

throughout the year and will continue to

be at the forefront of its decision-making

rationale through the year to come.

Guiding and promoting culture

Our Board has the responsibility to act

with integrity, to lead by example and to

promote the desired culture. The Board

does this through its governance

framework, its decision-making processes

and its everyday interactions. We also

ensure that any policies which apply

to Directors are consistent with those

equivalent policies for the workforce.

Many initiatives take place during the

year to promote Admiral’s unique culture,

examples of these are shown below:

Striving

Sharing

133

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

How the Board monitors

and assesses culture

People and culture scorecard

The people and culture scorecard

continues to provide a good analysis

of the key people and culture metrics

in order to help management and the

Board’s assessments of the overall health

of the Group’s culture. It also supports

the identification of any trends in the

evolution of the Group’s workforce and

culture, including any associated risks

which could impact the execution and

support of the Group’s strategy.

The Group continues to view the following

people and culture metrics that are

derived from the annual Great Place

To Work® (GPTW) survey and Admiral’s

regular internal pulse surveys as the

lead indicators for people and culture at

Admiral. The GPTW survey is an external

survey which collates anonymised

question responses from all colleagues

to provide an overall result, as well as

departmental results.

Board Leadership and Company Purpose

continued

Index Score

GPTW Trust Index:

The Trust Index comprises 60 questions from

the GPTW survey, which are stable over time,

benchmarked against the best companies in each

market, and highly representative of the overall

people sentiment of a positive culture.

85%

2022: 84%

GPTW Engagement Index:

The Engagement Index is a specific measure

comprising nine questions from the GPTW

survey relating to willingness to go the extra mile,

intention to stay with the business and likelihood

of being an employer brand promoter. It is also

benchmarked and stable over time and has a proven

correlation with business performance. According

to the GPTW institute research, the drivers that are

most correlated to higher engagement scores are:

(i) teamwork, (ii) career development, (iii) values

and ethics, (iv) empowerment and accountability,

and (v) innovation.

83%

2022: 82%

GPTW Culture Index:

The Culture Index is a specific measure comprising

of eight questions from the GPTW survey relating

to employee perception of the workplace as friendly,

fun and welcoming.

87%

2022: 89%

Pulse surveys:

Pulse surveys are undertaken four times a year

and ask the same questions of our people to

enable management to track any trends.

Pulse survey results in 2023 demonstrated that

colleagues at Admiral continued to feel well

supported by their managers. Hybrid working

arrangements were welcomed by employees

and communication was scored highly.

87%

of our people feel they are well

supported by their manager

2022: 86%

84%

of our people think we are

truly customer focused

2022: 86%

88%

of our people think that

important knowledge and

information is shared with

them by their manager

2022: 88%

92%

of our people believe

Admiral Group is a diverse

and inclusive employer

2022: 92%

Other people metrics:

Recruitment, gender balance, headcount,

absence, attrition.

* Q3 2023 Pulse survey results

** Q3 2022 Pulse survey results

134 Corporate Governance134

Admiral Group plc Annual Report and Accounts 2023

Scores pertaining to culture continue

to be very high across the Group

demonstrating the strength and impact

of the Admiral culture. During the year

Admiral was recognised as the best big

Company to work for in the UK in 2023

by the Best Companies awards, as well

as being in the top 15 best multinational

companies to work for in Europe by

‘Great Places to Work’ a global authority

on workplace culture. Admiral was also

placed 3rd in the UK’s Best Workplaces for

Women award in 2023.

The Board received an update on the

people and culture scorecard metrics

during the year, this included a review as

to how hybrid and remote working were

impacting on Admiral’s unique culture and

how this potential risk to the Company’s

culture should be managed. This oversight

was achieved by focusing on several

key metrics across the Group, including

recruitment, engagement, productivity,

absence and attrition trends, which

were closely associated with the risks to

culture heightened by a move to a more

permanent model of hybrid working.

The Board agreed that a hybrid working

model was an effective working model for

Admiral in the current climate, however

close attention should be maintained as

to the effects that this was having on the

culture of the business, and more ‘office

based moments’ should be encouraged

whilst, at the same time, empowering

teams to set their own blueprint for

working patterns and avoiding mandated

days in the office.

How Admiral retains its unique

culture whilst offering flexibility

in working practices

For a Company of Admiral’s size there

can be no ‘one size fits all’ solution

to working practices. The Board

understands that a post Covid world

has increased the opportunity and

expectation for greater flexibility

within the working environment, with

a hybrid working model becoming

more common practice. At Admiral,

individual business functions and

departments are empowered to define

their own blueprint and self organise

their teams in a manner which they

believe creates maximum benefit for

the business, whilst, at the same time,

ensuring that our special culture is

retained and enhanced. For example,

at a Group level a guide as to where

and when colleagues should be

spending time together is driven by

our ‘Admiral Moments’ model, these

are key moments when it matters for

colleagues to be together in-person.

The Board enables each business

division to interpret these principles in

their own way to maximise workplace

efficiencies and enhance culture

throughout the Group.

Charity

contribution

Feedback

and appraisal

moments

Brainstorming

and innovating

Team building

activities

Connections &

networking

Onboarding new

starters and

learning activities

Awards &

celebrations

Admiral Moments

Admiral promotes a hybrid working model, empowering business functions and

departments to organise their own working arrangements in a manner that creates

maximum benefit for the Group. However, our ‘Admiral Moments’ model below

sets out examples where we encourage in-person or ‘face to face’ engagement

amongst our teams, to ensure that Admiral’s unique culture is retained

and enhanced.

Corporate Governance

135

Admiral Group plc Annual Report and Accounts 2023

Other tools

In addition to employee participation in

regular monthly surveys and the annual

GPTW survey, there are several other

mechanisms used by the Group and the

Board to monitor and assess culture.

For example, culture audits conducted

by the internal audit function; ‘Meet

the Manager’ meetings; the ‘Ask Milena’

scheme; regular online manager chats;

ECG and IECG meetings (see page 137),

mandatory training completion rates;

health and safety data; whistleblowing

and grievances; and customer net

promoter score (NPS). All are felt to be

valuable methods of capturing the mood

of our people and to gauge the health of

our culture.

The Board Committees also help the

Board monitor and assess culture through

their respective responsibilities, some

examples of which are highlighted below.

Nomination and Governance Committee

– Succession and talent management

strategies, along with a diversity and

inclusion strategy and policies and

progress against targets to ensure

alignment with the Group’s strategy

and values.

Remuneration Committee – Monitoring

of alignment of workforce remuneration

policies to culture and strategy, risk

events reported to it by the Risk

Committee under the malus and claw

back framework.

Audit Committee – Whistleblowing,

Internal Audit, Group Minimum Standards.

Group Risk Committee – Risk events that

would impact remuneration from a malus

and claw back perspective, financial crime

and misconduct risks.

As well as receiving updates on the

Group’s culture at Board meetings,

Directors utilise other mechanisms

to assess and monitor culture, such

as attending meetings of the UK ECG,

subsidiary boards and performing site

visits across the different entities within

the Group which, during their discussions

with a cross-section of colleagues, enables

the Directors to gauge the culture for

themselves. In 2023, Mike Rogers, the

Board Chair visited L’olivier offices in

Paris and Lille, the Admiral Seguros office

in Seville and Madrid, and the Admiral

Europe Compañía de Seguros S.A.U.

(AECS) in Rome for meetings with the

management team and employees.

Whistleblowing

The Board has in place arrangements by

which employees can raise concerns in

confidence and, if necessary, anonymously.

During the year, the Board received an

update on the Group’s whistleblowing

arrangements from the management

team. The Audit Committee, chaired

by the Group’s Whistleblowing

Champion, Karen Green, was satisfied

that the update was proportionate for

independent internal investigation of the

matters raised and supported an ethical

business culture where colleagues felt

safe raising concerns. In addition, and on

an exceptions basis, the Board is updated

in respect of reports arising from matters

that have been raised by employees

under the Policy. The Audit Committee

receives more regular updates in respect

of whistleblowing matters, see page 161

for further information.

Shareholder engagement

The Board has continued to focus

on effective engagement with its

stakeholders during the year, to ensure

that their interests are taken into

account in its decision-making processes.

Detailed information is set out in the

Strategic Report on pages 56 and 87

outlining how the Board has discharged

its duties under s172(1) of the Companies

Act, including further information on

the ECG and IECG see page 137, which

constitute formal workforce advisory

panels under the Code.

Communication and interaction with

shareholders remains very important

and engagement occurs on a regular

basis. Open and frequent dialogue

enables shareholders to fully understand

the Group’s strategy, objectives and

governance processes. The Investor

Relations team has day-to-day

primary responsibility for managing

communications with institutional

shareholders through a combination of

briefings to analysts and institutional

shareholders, both at the half-year and

full-year results and on other occasions

such as roadshows and conferences.

Meetings, briefings and conferences

with investors have taken place both

in-person and virtually, with investor

visits generally taking place twice a year.

In addition, the Chair, CEO and Chair of the

Remuneration Committee held meetings

during the year with major shareholders

to understand their views on governance,

for example the proposed Remuneration

Policy, and also Admiral’s performance

against strategy and reported to the

Board on any significant issues raised

with them. During 2023, there were over

80 separate engagements held with

institutional shareholders.

Board Leadership and Company Purpose

continued

136 Corporate Governance136

Admiral Group plc Annual Report and Accounts 2023

Meetings with investors are

supplemented by regular feedback to

the Board. The Investor Relations team

produces a report on their activities in

the previous quarter which is circulated

to the Board for their consideration.

The report contains an analysis of share

price performance, a summary of analyst

reports received during the month, and

of meetings that have been held with

investors and analysts, together with

details of any significant changes to the

shareholders’ register.

The Senior Independent Director has

specific responsibility to be available to

investors who have any issues or concerns,

and in cases where contact with the Chair,

Chief Executive Officer and Chief Financial

Officer has either failed to resolve their

concerns, or where such contact is

inappropriate. No such concerns have

been raised in the year under review.

All shareholders are invited to attend the

Company’s Annual General Meeting (AGM)

in person. The 2023 AGM was held on

27 April 2023 with the required quorum.

Shareholders were able to vote on the

important customary annual business

and encouraged to submit questions

to the Board in advance of the AGM.

The Chairs of the Audit, Remuneration,

Nomination and Governance, and Group

Risk Committees attend the AGM along

with the other Directors and are available

to answer shareholders’ questions on

the activities of the Committees they

chair. Shareholders are also invited to ask

questions during the meeting and have an

opportunity to meet with Directors after

the formal business of the meeting has

been concluded. Details of proxy voting by

shareholders, including votes withheld, are

made available on request and are placed

on the Company’s website following

the meeting.

The Group maintains a corporate website

(www.admiralgroup.co.uk) containing

a wide range of information of interest

to institutional and private investors.

The major shareholders of the Company

are listed in the Directors’ Report on

page 199.

The regular channels of communication

with both the Financial Conduct Authority

(FCA) and Prudential Regulation Authority

(PRA) that existed throughout the year

were supplemented by the regulators

being invited to attend Board meetings.

The FCA attended the Board remotely

in April 2023, which gave the Board an

opportunity to directly hear their views

on specific areas such as Consumer Duty,

as well as wider market issues. The PRA

had previously attended a meeting of

the Board in December 2022. The Board

is also kept up to date with the regular

communications between the Admiral

Insurance (Gibraltar) Limited Board

and the Gibraltar Financial Services

Commission as well as contact between

the Group’s other insurance subsidiaries

and respective regulators.

Employee Consultation Group

Purpose

The Board recognises the importance of

engaging with its workforce and does

so through a combination of formal and

informal channels. To ensure a two-

way communication platform and an

effective means by which the views of

the workforce can be heard, the Board

established a UK Employee Consultation

Group (ECG) in 2019 with the aim of

enhancing and formalising its pre-existing

employee engagement arrangements.

For the purposes of Provision 5 of the

Code, the ECG is a formal workforce

advisory panel.

Membership and attendance

Membership of the UK ECG comprises

elected colleague representatives and

the remit of the ECG is to act as a forum

for employee consultation, gathering

colleague opinion and fostering a safe

environment to raise matters of interest

and generate ideas. There is a democratic

member election process and members

are provided with an induction to ensure

that there is clarity about the role and

remit of the ECG, as well as their role

as members.

Non-Executive Directors are invited to

attend ECG meetings on a rotational basis

and report back to the Board on matters

discussed, as well as actions agreed at

the ECG meeting. Taking this approach

ensures that each of the Non-Executive

Directors can engage with the workforce

directly and hear first-hand the issues and

matters that are affecting the workforce.

To ensure that the meetings remain a

two-way mechanism, Non-Executive

Directors are also asked to comment on

any insights from ECG meetings at the

following Board meeting and the Chair of

the UK ECG is regularly invited to attend

Board meetings to report on matters

discussed by the ECG and highlight any

areas of concern. Minutes of the ECG

meetings are also published on the

intranet for all employees to view. Non-

Executive Directors also provide an update

at ECG meetings on recent matters

discussed by the Board.

Corporate Governance

137

Admiral Group plc Annual Report and Accounts 2023

Board Leadership and Company Purpose

continued

Areas of focus for the Employee Consultation Group

During 2023, the Employee Consultation Group (ECG) forum remained focused on important issues for employees, such as hybrid

and remote working, remuneration and the cost of living, the performance management and appraisal processes, ideas on how to

improve engagement, employee morale, attrition and absence, proposals to support mental health and wellbeing, staff survey results

and improving diversity. There were four scheduled ECG meetings during 2023, with a wide range of topics discussed. There were also

a number of ad hoc meetings where important one-off items were brought to the ECG’s attention that required an ‘employee voice’

prior to being presented to the Board. Presentations on the following topics were given to the ECG during the year, the results of these

discussions were presented to the Board by the ECG Chair:

Meeting Main presentations and key topics discussed Outcome/impact

February 2023 Group strategy refresh The Group CEO attended the meeting to discuss Group strategy,

diversification, investments, technological advancements and elements of

the international business. Members were able to direct questions to the

CEO to gain a greater understanding of how business strategy was aligned

with Admiral’s purpose and values.

Director remuneration The Chair of the Remuneration Committee took the meeting through

the current Director’s Remuneration Policy to ensure the ECG had full

transparency around executive reward structure. Questions were asked

around alignment with the wider workforce.

May 2023 UK Insurance, customer outcomes The ECG was updated on the steps Admiral was taking to deliver first class

customer outcomes and experience, how these were benchmarked, and

measures taken to ensure the customer was always treated fairly.

Operational resilience A discussion was held around Admiral’s ability to prevent, adapt, respond

to, and learn from operational disruptions in line with FCA and PRA

requirements. Admiral’s important business services were identified

together with what the priorities were for the remainder of the year.

September 2023 New representative orientation New employee appointed representatives were welcomed and inducted to

the ECG.

Share dividends A presentation and discussion was held around share dividends and how

new tax treatment may impact employees, along with focus on Admiral’s

dividend reinvestment scheme.

October 2023* Hybrid working The ECG discussed the impact of hybrid working on the business and

actions being taken to preserve the Admiral culture in an evolving

working environment.

November 2023* Remuneration Policy A presentation was made on the proposed amended Remuneration Policy

to be put to shareholders at the 2024 AGM for approval.

December 2023 Climate change update A presentation was made on the increasing expectations and regulatory

reporting requirements for banks and insurers on climate change, the

ambitious targets Admiral had set itself on net zero and the initiatives

being rolled out to meet these targets.

Group sustainability The meeting discussed how Admiral had a long track record of delivering

on key sustainability and ESG issues. A new Group wide approach was

being embedded into the core strategy and governance framework of the

business led by a recently appointed new Group Head of Sustainability.

* Ad hoc ECG meetings to address important one-off items that required an ‘employee voice’ prior to being presented to the Board.

Whilst recognising that this engagement mechanism will evolve over time, the Board continues to believe that the operation of the

ECG has been, and continues to be, an effective means of engaging with the workforce, to help the Board understand matters that

concern the workforce and their specific interests, whilst having regard to these matters in the discussions and decisions that take place

at the Board. The Board will ensure that the ECG continues to develop as an effective, formal workforce advisory panel and that regular

interaction between the Board and the ECG is maintained.

138 Corporate Governance138

Admiral Group plc Annual Report and Accounts 2023

International Employee Consultation Group (IECG)

The International Employee Consultation Group has been formally meeting since 2022, and is Chaired by Costantino Moretti, Head of

International Insurance.

This year, five IECG meetings took place in-person across the international offices of ConTe, L’olivier, Admiral Seguros together with

Admiral Tech, AECS and Elephant alongside the Admiral Europe Compañía de Seguros (AECS) Board meetings. The meetings were

attended by candidates chosen on a voluntary basis, with an agenda created to incorporate employee interests, questions and proposals.

Entity/Meeting Topics discussed Outcome/Impact

AECS –

February 2023

Insurance market developments Discussions were held around how the insurance market had developed

in recent years through advancements in technology, new competitors

entering the market, and new regulatory requirements.

Challenges faced by employees Concerns were shared regarding challenges being experienced

by employees and potential improvements that could be made

were discussed.

Talent and opportunities Members discussed the opportunities Admiral offered in terms of

professional development, for example taking temporary opportunities in

other Group entities.

L ’olivier –

March 2023

Admiral culture Members shared their views on Admiral’s culture and how this was evolving

with changing working practices.

L’olivier growth over the year Discussions took place around the progress and growth of the business

over the year when compared to the other European countries. It was

confirmed that much had been achieved already, however development

and improvements were still required.

Product diversification Members discussed how the insurance market had changed in recent years,

and how, through a strategy of expanding into different products, Admiral

continued to evolve to meet future consumer requirements.

The importance of being eco-friendly It was agreed that social and ecological issues were of growing importance

for brands and customers, in step with this was an increasing demand

for transparency and accountability. Admiral’s initiatives in this area

were discussed.

Admiral Seguros

and Admiral Tech –

September 2023

Main challenges for the future A discussion was held around what members regarded to be the three main

challenges for the businesses over the next few years and how these should

be addressed.

ConTe –

November 2023

ESG and sustainability The meeting discussed how the evolving Group strategy was incorporating

ESG and sustainability trends.

EU collaboration Members agreed that greater collaboration between businesses in EU

countries could add value to the Admiral Group.

Diversification The meeting discussed how a key element of the Group strategy was

focused on the diversification of products and channels.

New technologies and hybrid working The new technologies introduced to both improve the customer

experience and also assist in the work life balance of employees were

highlighted. Members confirmed that employees had benefitted from the

versatility that came from a hybrid working model.

Elephant –

November 2023

Strong culture and working practices Members agreed that there was a strong culture within the business,

where they felt valued, listened to and trusted by management.

Flexibility in working arrangements was viewed positively and assisted in

easing concerns around cost of living.

Corporate Governance

139

Admiral Group plc Annual Report and Accounts 2023

Division of Responsibilities

Through the strong governance framework that it has in place, the Board is able to deliver on its

strategy and, in doing so, provide strong, sustainable financial and operational performance for

our shareholders and wider stakeholders.

Board and Committee framework

Our Board and Committee framework supports the development of the highest standards of governance practices across the Group

which is integral to the successful delivery of our strategy.

Shareholders

Admiral Business

Divisional CEO’s, Subsidiary Boards and Committees,

Management Committees and Senior Management

Group Board Management Committees

CEO

Principal Board Committees

Audit Committee

Responsible for

overseeing the

Company’s systems for

internal financial control,

risk management and

financial reporting,

and monitoring

the integrity of the

financial statements.

See page 161

Group

Reserving

Committee

Group Model

Governance

Committee

Group Assets

and Liabilities

Committee

Group

Investments

Committee

Group

Disclosure

Committee

Nomination

and Governance

Committee

Reviews the composition

of the Board, considers

succession planning at

both Board and senior

management level and

leads the process of

appointments to

the Board.

See page 146

Remuneration

Committee

Responsible for

remuneration policy,

performance-related

pay schemes and share-

based incentive plans.

See page 172

Group Risk

Committee

Assists with the

oversight of the

Group’s risk appetite,

tolerance and strategy.

Monitors current

and potential risk

exposures and the

effectiveness of the risk

management framework

See page 168

The Board

The Board is collectively responsible for establishing the purpose, values and strategy of the Group and for promoting

the long-term success of Admiral for the benefit of our shareholders and stakeholders.

140

Corporate Governance

140

Admiral Group plc Annual Report and Accounts 2023

Board roles and responsibilities

The Chair is primarily responsible for

leading the Board, setting its agenda,

promoting a culture of openness and

debate and monitoring its effectiveness.

The Chair is supported by the Senior

Independent Director, who acts as

a sounding board and serves as an

intermediary for the other Directors

if required. Neither are involved in the

day-to-day management of the Group.

Save for the matters reserved for the

Board, the Chief Executive Officer

(with the support of the Chief Financial

Officer and the senior executives) is

responsible for proposing the strategy

to be adopted by the Group, running the

business in accordance with the strategy

agreed by the Board and implementing

Board decisions.

It is the Non-Executive Directors’ role to

provide constructive challenge, strategic

guidance, offer their respective specialist

advice and hold management to account.

It is the role of the Company Secretary

to support the Chair and administer the

workings of the Board and Committees,

ensuring Directors have precise and

timely information to enable an effective

decision-making process, whilst providing

governance, legal and statutory advice

and ensuring a record of decisions and

actions is clear and attributable.

The Board has approved a statement

that sets out the clear division of

responsibilities between the Chair,

Chief Executive Officer and SID. This and

Matters Reserved for Decision by the

Board are reviewed annually and are

available to review on Admiral’s website

at www.admiralgroup.co.uk.

Chair

• Runs the Board and sets its agenda, with an emphasis on strategic issues.

• Ensures the Board has effective decision-making processes, demonstrating

objective judgement and applying sufficient challenge to proposals.

• Facilitates constructive Board relations, including effective contributions from

Non-Executive Directors.

• Ensures the Board has an appropriate balance of skills, knowledge, experience

and diversity.

• Leads the induction and development plans for new and existing Board members.

• Communicates with major shareholders and ensures the Board understands

their views.

• Ensures the Board receives accurate, timely and clear information.

• Leads the annual Board evaluation.

Senior Independent Director

• Supports the Chair in the delivery of their objectives.

• Acts as a sounding board for the Chair and serves as an intermediary

for the other Directors.

• Available to shareholders if they have concerns that cannot be resolved

through the normal channels.

• Works with the Chair and other Directors/shareholders to resolve significant issues

where necessary.

• Leads the annual performance evaluation of the Chair.

• Leads the Chair appointment process.

Chief Executive Officer

• Runs the Group’s business and delivers its commercial objectives.

• Proposes and develops the Group’s strategy, in close consultation with the

Group’s senior management, the Chair and the Board.

• Implements the decisions of the Board and its Committees.

• Ensures operational policies and practices drive appropriate behaviour, in line

with the Group’s culture.

• Leads the communication programme with key stakeholders, including employees.

• Ensures management provides the Board with appropriate information and

necessary resources.

Our CEO, Milena Mondini de Focatiis

was awarded the Best Leader of

a Big Company at the 2023 Best

Companies Awards. You can find out

more at www.b.co.uk

Corporate Governance

141

Admiral Group plc Annual Report and Accounts 2023

Role of the Board

The Board is responsible for promoting

the long-term, sustainable success of the

Group, generating value for shareholders,

taking into consideration all of its

stakeholders and contributing to the

wider society in which Admiral operates

its business. The Board is the principal

decision-making forum for the Group,

providing entrepreneurial leadership, both

directly and through its committees, and

delegating authority to the Executive

Directors and the senior management

team for the day-to-day operation of

the business.

The Board has determined the Group’s

purpose, to ‘help more people to look

after their future. Always striving for

better, together’. This is embedded in

the culture of the business through our

aligned values and strategy. Part of the

Board’s role is to promote the Group’s

culture and, in particular, ensure that its

uniqueness is safeguarded. This has been

especially important in recent years where

there have been significant challenges to

how the business operates and its culture,

such as the recent Covid-19 pandemic

(see page 132).

The Board is responsible for organising

and directing the affairs of the Group in

a manner that generates and preserves

value over the long-term. Through the

strong governance framework that it has

in place, the Board is able to deliver on its

strategy of providing strong sustainable

financial and operational performance.

The Board is also accountable for ensuring

that in carrying out its duties, the Group’s

legal and regulatory obligations are being

met; and for ensuring that it operates

within appropriate risk parameters.

The Group’s UK-regulated entities are

accountable to the Financial Conduct

Authority (FCA) and the Prudential

Regulatory Authority (PRA) for ensuring

compliance with the Group’s UK

regulatory obligations and that dealings

with the FCA and PRA are handled

in a constructive, co-operative and

transparent manner. Similar provisions

apply in respect of the Group’s

international businesses with regard

to the relevant regulatory authorities,

such as the Gibraltar Financial Services

Commission and Dirección General de

Seguros y Fondos de Pensiones in Spain.

Board and Committee meetings

Directors are expected to attend all

meetings of the Board and the Board

committees on which they serve and to

devote sufficient time to the Group to

perform their duties. Where Directors are

unable to attend meetings, they receive

papers for that meeting, giving them

the opportunity to raise any issues with

the Chair in advance of the meeting.

The number of scheduled Board and

Board committee meetings attended by

each Director during 2023 is provided in

the table below.

In addition to the scheduled meetings

of the Board set out in the table

below, the Board also held a number of

additional late notice, ad hoc meetings

to discuss matters that were of sufficient

importance that they could not wait until

the following scheduled Board meeting.

All Directors are invited to participate in

such meetings which, by their nature,

are arranged at short notice. Where they

are unable to do so due to pre-existing

commitments, Directors are given the

opportunity to contribute their views to

the Chair prior to the meeting. The Board

also delegates authority to a Board

sub-committee for the approval of final

drafts of announcements and proposals

which had already been considered by the

Board or its committees. The Board met

in-person for all seven of its scheduled

meetings held during the year, including

its strategy meeting (and October Board)

which was held over two days in the UK.

Division of Responsibilities

continued

Board and Committee meeting attendance Board Audit Committee

Group Risk

Committee

Nomination

and Governance

Committee

Remuneration

Committee

Mike Rogers

(Chair) 4/4 – – 4/4 –

Milena Mondini de Focatiis (Chief Executive Officer) 7/7––––

Geraint Jones (Chief Financial Officer) 7/7––––

Karen Green 7/7 8/8 8/8 – 1/1

Justine Roberts 7/7 – – 6/6 5/7

Andy Crossley 7/7 7/8

8/8––

Michael Brierley 7/7 8/8 – – 7/7

Jayaprakasa (JP) Rangaswami 7/7 – 8/8 – –

Evelyn Bourke 7/7–––7/7

William (Bill) Roberts 7/7 – – 6/6 –

Fiona Muldoon

2/22/2–––

Annette Court

3/3 – – 2/2 –

Jean Park

1/1 – 1/1 1/1 –

1 Mike Rogers joined the Board on 27 April 2023.

2 Karen Green was appointed to the Remuneration Committee on 2 October 2023.

3 Justine Roberts joined the Remuneration Committee on 31 January 2023, she missed two Committee meetings due to pre-existing engagements made prior to her joining the Committee.

4 Andy Crossley missed one meeting of the Audit Committee due to a pre-existing engagement.

5 Fiona Muldoon joined the Board and Audit Committee on 2 October 2023.

6 Annette Court stepped down from the Board on 27 April 2023.

7 Jean Park stepped down from the Board on 20 January 2023.

142 Corporate Governance142

Admiral Group plc Annual Report and Accounts 2023

Matters reserved for the Board

The Board has adopted a formal schedule

of matters reserved for the Board’s

consideration. This is monitored by the

Company Secretary and reviewed by the

Board on an annual basis. Specific matters

reserved to the Board include the

approval of:

• The Group’s long-term objectives and

corporate strategy

• Operating and capital budgets, financial

results, and any significant changes to

accounting practices or policies

• The Group’s capital structure

• Results and financial reporting

• The system of internal control and

risk management

• The Group’s overall risk appetite

• Changes to the structure, size and

composition of the Board, including

new appointments

• Succession plans for the Board and

senior management

• Dividend policy and proposals for

dividend payments

• Major acquisitions, disposals, and other

transactions outside delegated limits

• The annual review of its own

performance and that of its

Board Committees

• Annual review of selected

Group policies

• The review of the Group’s overall

corporate governance arrangements.

Board Committees

The Board has delegated authority

to several permanent committees to

deal with matters in accordance with

written Terms of Reference. The principal

committees of the Board – the Audit,

Remuneration, Risk, and Nomination and

Governance Committees all comply with

the requirements of the Code.

All committees are chaired by an

independent Non-Executive Director,

except for the Nomination and

Governance Committee, which is chaired

by the Chair of the Board, and comprise a

majority of independent Non-Executive

Directors. In accordance with the Code,

all members of the Audit Committee are

independent Non-Executive Directors.

Appointments to the Committees are

made on the recommendation of the

Nomination and Governance Committee

and are for a period of up to three

years, which may be extended for two

further three-year periods, provided

the Director remains independent and

they are annually reappointed to the

Board by shareholders. The committees

are constituted with written Terms of

Reference that are reviewed annually

to ensure that they remain appropriate

and reflect any changes in good

practice and governance. These Terms

of Reference are available on request

from the Company Secretary and can

also be found on the Company’s website:

www.admiralgroup.co.uk.

Directors are fully informed of all

committee matters by the committee

Chairs who report on the proceedings

of their committee at the subsequent

Board meeting. Copies of committee

minutes are also distributed to the

Board. Committees are authorised

to obtain outside legal or other

independent professional advice if they

consider it necessary. The Chair of each

committee attends the Annual General

Meeting to respond to any shareholder

questions that might be raised on the

committee’s activities. An evaluation

of the performance of each committee

against the duties set out in each Terms of

Reference is carried out annually.

Group conflicts of interest

In compliance with the requirements

of the Companies Act 2006 regarding

Directors’ duties in relation to conflicts

of interest, the Group’s Articles of

Association allow the Board to authorise

potential conflicts of interest that may

arise and to impose such limits as it

thinks fit. The Group has a Conflicts of

Interest Policy which deals with conflicts

of interest, and this was reviewed and

approved by the Board in October 2023.

The Policy sets out the process and

procedure by which the Board manages

potential conflicts of interest that

may arise at Board level, within Board

Committees, and within the Group’s

Subsidiary Boards. Following this review,

the Board concluded that the process

continued to operate effectively.

In addition, each Board member is asked

to complete, annually, a conflicts of

interest questionnaire that sets out any

situation in which they, or their connected

persons, have, or could have, a direct or

indirect interest that could conflict with

the interests of the Company. Any current

directorships that they, or their

connected persons hold, any advisory

roles or trusteeships held, together with

any companies in which they hold more

than 1% of the issued share capital are

also disclosed. The Board is satisfied that

none of the Directors had any potential

conflicts of interest during the year which

could not be authorised by the Board.

Corporate Governance

143

Admiral Group plc Annual Report and Accounts 2023

The Chair will meet with Executive Directors and

Non-Executive Directors ahead of the meeting to

ascertain any areas of particular concern or focus.

Standardised Board reporting

templates and report cover

sheets are in place and

training has been given to

those producing Board and

Committee reports to ensure

there is consistency, clarity and

conciseness in approach.

The Company Secretary manages a yearly planner

of scheduled agenda items for the Board and

Board Committees.

The Company Secretary liaises with the Chair,

Executive Directors, committee Chairs and key

members of senior management in advance

of each respective meeting to confirm agenda

items and required attendees.

Board and committee papers are drafted

by relevant authors throughout the business

and are subject to an established

review process ahead of submission.

Board and committee papers are circulated

electronically at least one week prior to the meeting.

Board and Board committee meeting preparation process

Division of Responsibilities

continued

Information flows to

and from the Board

Agendas and papers

Agendas and papers are circulated to

the Board electronically in a secure

manner in preparation for Board and

Board committee meetings. The Board

agenda is structured by the Chair

in consultation with the Company

Secretary and CEO. An annual schedule

of agenda items is reviewed and updated

regularly to ensure that items are

considered at the appropriate point

in the financial and regulatory cycle.

Meetings are structured so as to allow for

consideration and debate of all matters.

Routine Board papers are supplemented

by information specifically requested by

the Directors from time to time.

At each scheduled meeting, the Board

receives updates from the Chair, the

CEO and CFO as to the financial and

operational performance of the Group

and any specific developments of which

the Board should be aware. In addition,

there is an update provided at each Board

on the matters discussed and considered

at each of the Group’s principal subsidiary

Board meetings. Additional meetings

are called as and when required and

there is contact between the Board,

Board committees, subsidiary boards

and management, where necessary,

to progress the Group’s business.

144 Corporate Governance144

Admiral Group plc Annual Report and Accounts 2023

Attendees

The CEO of UK Insurance (Cristina

Nestares), together with the Chief Risk

and Compliance Officer (Keith Davies),

the Head of International Insurance

(Costantino Moretti) and the CEO of

Admiral Money (Scott Cargill) are invited

to attend every Board meeting and

regular Board dinners. This has proved

an effective means of ensuring that

senior managers below Board level have

exposure to and gain experience of the

operation of the Board.

Dynamics

All Board and committee meetings during

the year were held in an open atmosphere

conducive to robust and constructive

challenge and debate. All Directors have

therefore been able to bring independent

judgement to bear on issues such as

strategy, risk management, performance,

and resources.

Cross-committee membership

As shown on pages 118 and 142,

committee membership is composed

in a way that ensures that there is

cross-committee membership, which

allows items of importance to be flagged

from committee to committee in a

timely manner. This complements the

committee briefings that the Board

receives on the key points of discussion

following each committee.

Advice

All the Directors have access to the advice

and services of the Company Secretary,

who has responsibility for ensuring that

Board procedures are followed and for

advising the Board, through the Chair,

on governance matters. The Company

Secretary provides updates to the Board

on regulatory and corporate governance

issues, new legislation, and Directors’

duties and obligations. The appointment

and removal of the Company Secretary

is one of the matters reserved for the

Board. Dan Caunt has held the position

of Company Secretary since 1 May 2022,

his biography can be found on page 124.

The Directors are also given access

to independent professional advice

at the Group’s expense, should

they deem it necessary to carry out

their responsibilities.

Other information flows

The Board Chair met with a wide range

of Admiral colleagues and visited various

parts of the business during 2023 as

part of his induction process. The Non-

Executive Directors are invited to visit

areas of the business for in-person on

site visits to meet employees and review

business functions.

As referenced within the commentary

on employee consultation on page

137, the Non-Executive Directors are

invited to attend ECG meetings and

participate in the two-way engagement

with employees.

The Non-Executive Directors met

in-person during the year without the

Executive Directors being present.

From April 2023, Non-Executive Directors

individually met with the Chair for

discussion ahead of each Board meeting

and also met with the CEO for a debrief

at the conclusion of each scheduled

Board meeting.

The Chair holds one-to-one meetings

with members of the Group’s senior

management team either in-person

or on a virtual basis. Members of the

senior management team were invited

to join Board dinners which allows the

opportunity for informal interaction

between Directors and the senior

management team.

Training and professional

development

The development and training of Directors

is an ongoing process and is considered

throughout the year. The Directors are

regularly updated on the Group’s business;

legal matters concerning their roles and

duties; the competitive environments

in which the Group operates; and any

other significant changes affecting the

Group and the industry of which it is a

part. During the year, the Board received

deep dive updates, briefings and training

on the following topics: Admiral internal

model (AIM), IFRS 17, Chat GPT education

session (Large Language Models), Pioneer

Toolbox SME Market overview, Consumer

Duty training provided by KPMG, amongst

several business deep dives.

Corporate Governance

145

Admiral Group plc Annual Report and Accounts 2023

Nomination and Governance Committee Report

OUR BOARD

COMPOSITION

Dear Shareholder,

On behalf of the Board,

I am pleased to present my

ﬁrst report as Chair of the

Nomination and Governance

Committee (the Committee).

The Committee plays a key

role in overseeing Admiral’s

Board composition, ensuring

it has the optimum balance

of skills, experience and

knowledge, as well as ensuring

diversity in the broadest sense

on the Board and all of its

committees. The Committee

also ensures that the

Group operates within

a robust and transparent

governance framework.

This report sets out the

Committee’s main activities,

along with how it has

discharged its responsibilities

throughout the year ended

31 December 2023.

Succession planning was a key focus

for the Committee during 2023.

As I discussed on page 114, I succeeded

Annette Court as Chair following the

2023 AGM in April. My induction process,

which began following the announcement

of my appointment in January 2023,

was bespoke and comprehensive.

Further details on this are set out on

page 151. In addition to myself as

Chair, the Board, on recommendation

from the Committee, also appointed

Fiona Muldoon as a new Non-Executive

Director in October 2023. The full search

and recruitment process for Fiona’s

appointment is set out on page 149.

As a Committee, we have continued

our focus on the composition, skills

and experience present on the Board

and Board committees to ensure these

reflect the current requirements of

the Admiral business and meet the

expectations of our stakeholders.

To effectively oversee this process, the

Committee has maintained and refined

a skills matrix which maps those skills

currently present on the Board and those

required to ensure the effective delivery

of our business strategy. Where gaps

in skills and experience are identified

these are reviewed and addressed by

the Committee and the necessary

recommendations are made to the Board.

Diversity and inclusion were key topics for

Committee discussion during the year.

The Committee ensured that the Board

continued to meet the FTSE Women

Leaders Review target that 40% of the

Board should be female, in addition to

The Parker Review’s target that the

Board should include at least one director

from an ethnic minority background by

2024. The evolving requirements of The

Parker Review at a senior management

level were discussed in detail, and the

Committee ensured that the Group’s

Six committee

meetings

held in 2023.

Overseeing

As a Committee, we have

continued our focus on

the composition, skills and

experience of the Board

and Board committees

to ensure these reflect the

current requirements of the

Admiral business and meet

the expectations

of our stakeholders.

146 Corporate Governance146

Admiral Group plc Annual Report and Accounts 2023

Committee meetings

held during the year

The Committee meets at least twice

per year, in accordance with its Terms of

Reference, and at such other times as

the Chair may require. During 2023, the

Committee held six formal scheduled

meetings. The Committee Chair agrees

the meeting agendas for each meeting

with the Company Secretary, items

covered during the year are linked

to an agenda planner covering the

responsibilities of the Committee.

Attendees at Committee meetings

The above table shows the attendance

of Committee members at meetings

during 2023. The Company Secretary

acts as Secretary to the Committee.

Other individuals, such as the Chief

Executive Officer, the Group Head of

People Experience and representatives

of different parts of the Group, may

be invited to attend all or part of any

meeting, as and when appropriate.

Role and responsibilities

of the Committee

The Committee reviews the leadership

and succession needs of the Board and

ensures appropriate procedures are

in place for nominating, training and

evaluating Directors. It also oversees the

governance of the Group to ensure the

business is operating within a transparent

and accountable framework.

Committee Membership

and Meeting Attendance

The Committee is chaired by

Mike Rogers, in addition to Mike,

the Committee comprises two

independent Non-Executive Directors:

Justine Roberts and Bill Roberts.

Individual meeting attendance and

changes to membership during the

year are detailed below.

Member Attendance

Mike Rogers

4/4

Justine Roberts 6/6

Bill Roberts 6/6

Annette Court

2/2

Jean Park

1/1

1 Scheduled meetings only, additional ad hoc

Committee meetings took place during the year.

2 Mike Rogers joined the Committee as Chair on

27 April 2023.

3 Annette Court retired from the Board and all of her

committee memberships following the 2023 AGM

on 27 April 2023.

4 Jean Park retired from the Board and all of her

committee memberships on 20 January 2023.

Composition

The Committee met formally six times

during the year. The membership of

the Committee at the year-end was

Mike Rogers (Chair), Justine Roberts

and Bill Roberts. Mike Rogers was

appointed as Chair of the Committee

following the 2023 AGM on 27 April

2023, replacing Annette Court who

stood down from the Committee

and the Board at this time. Jean Park

retired from the Committee and

the Board on 20 January 2023.

Justine Roberts and Bill Roberts are

independent Non-Executive members

of the Committee, in accordance

with the Code which requires that

the majority of members should be

independent Non-Executive Directors.

policy on diversity and inclusion was

reviewed during the year and continued

to be embedded throughout the

Group. Where necessary, changes were

implemented to the appointment

and succession processes to ensure

that evolving diversity considerations

were key to discussions during these

processes. More details on this and wider

considerations around diversity and

inclusion in the workplace are set out on

page 154.

Following an external review of the Board

and Board Committee’s effectiveness

in 2022, the 2023 annual review of the

Committee’s effectiveness, which took

place in December, was carried out by

way of an internal review led by myself

in conjunction with the Company

Secretary. This review concluded that,

overall, the Board and its committees

remained effective but noted some areas

for improvement for 2024. These are

outlined on page 160 of this report, along

with progress against the previous year’s

recommendations set out on page 159.

In line with the requirements of Solvency

II, the Senior Insurance Manager Regime,

and in accordance with the Group’s Senior

Managers & Certification Regime Policy,

I have also carried out the process of

assessment for the Group CEO, Group

Non-Executive Directors, and the Chairs

of the Group’s material, regulated

subsidiaries; EUI Limited, Admiral

Insurance Company Limited, Admiral

Insurance (Gibraltar) Limited, and Admiral

Financial Services Limited (Admiral

Money), Able Insurance Services Limited

(Admiral Pioneer), Elephant Insurance

Company (USA), and Admiral Europe

Compania de Seguros - AECS (Europe) to

ensure they meet the requirements in

terms of qualifications, capability, honesty

and integrity.

The rest of this Report sets out in more

detail the activities of the Committee

during 2023. I would like to thank the

Committee members for their continued

contributions and support throughout

the year.

Mike Rogers

Chair of the Nomination and

Governance Committee

6 March 2024

Corporate Governance

147

Admiral Group plc Annual Report and Accounts 2023

Nomination and Governance Committee Report

continued

The Nomination and Governance Committee is primarily responsible for:

Reviewing the structure size and composition of the Board as a whole, along with consideration of the balance of skills, knowledge,

experience, time commitment and diversity of the Board and its committees.

Succession planning for Executive Directors and Non-Executive Directors and leading the process for Board appointments by making

recommendations regarding Board vacancies.

Make recommendations to the Board on refreshing the membership of the Board’s principal committees.

Overview of succession planning at executive and senior management level throughout the Admiral Group, ensuring there is an

experienced and diverse pipeline for succession.

Devising the selection criteria for the role, skills, capabilities and experience required for a particular appointment and engagement

with independent, third-party recruitment experts.

Consideration of results of the Board evaluation and consideration of the proposed annual re-election of Directors to the Board

at the AGM.

Review of Admiral’s governance framework to ensure transparency and accountability, and to consider developing corporate governance

matters to bring to the attention of the Board where necessary.

Consideration of the Committee’s draft report for inclusion in the Annual Report and Accounts.

The Committee is regularly updated on proposed senior appointments and governance changes across the Group, as well as key

developments within the corporate governance landscape. The terms of reference of the Committee include all the relevant matters set

out under the UK Corporate Governance Code, they are reviewed annually by the Committee and are available to view on the Company

website in the investor relations section.

Key activities of the Committee during the year

A description of the activities the Committee has focused on during the year ended 31 December 2023 is outlined under the

following headings:

Non-Executive Director appointment process and appointments made during 2023

Appointments to the Board are the responsibility of the Board as a whole, acting on the advice and recommendations of the Nomination

and Governance Committee. The Committee seeks to balance the retirement and recruitment of Non-Executive Directors well ahead

of relevant deadlines so as to avoid a dislocation of Board process by losing experience and skills. The Committee is mindful of the need

to promote diversity and inclusion in appointments to the Board and throughout the Group. Appointments are made on merit and

against objective criteria, having due regard to the benefits of diversity, and with a view to ensuring the Board has the appropriate mix of

personalities, skills and experience.

The policy on Board appointments involves the Committee developing an appropriate job specification that identifies the required skills

and experience for the role and, in most instances, engaging external recruitment consultants, to lead the search process and identify

suitable candidates. Interviews of the shortlisted candidates are held with the Chair and members of the Committee. After consideration

by the Committee, a recommendation is made to the Board to appoint a preferred candidate. Further details of how this process

worked effectively during the year are set out below. The Committee is satisfied that this constitutes a formal, rigorous and transparent

process for the appointment of new Directors to the Board and its subsidiaries, embracing a full evaluation of the skills, knowledge and

experience required of new Directors.

Mike Rogers, Chair: Appointed 27 April 2023. Mike Rogers joined the Board as Chair following the 2023 AGM. Mike was also appointed

as Chair of the Nomination and Governance Committee at this time. The search and recruitment process for Mike was set out in detail

in the Committee Report in the 2022 Annual Report and Accounts. Annette Court, the Board and Committee Chair until the 2023

AGM, played no part in the recruitment process of the replacement Board Chair. This process was led by Justine Roberts, the then

Interim Senior Independent Director. Justine was appointed as the Senior Independent Director on a permanent basis with effect from

31 January 2023.

Fiona Muldoon, Non-Executive Director: Appointed 2 October 2023. Fiona Muldoon joined the Board as Non-Executive Director and,

having specific and relevant financial experience, became a member of the Audit Committee on 2 October 2023. A summary of the

recruitment process for Fiona is set out below.

External Recruitment Consultant

Heidrick and Struggles (‘H&S’) was engaged as the external independent recruitment search consultant in the appointments of both

Mike Rogers and Fiona Muldoon. H&S is committed to promoting diversity in the candidates that it presents on an annual, global

and cumulative basis and this was reflected in the candidates it identified for the appointments of Mike and Fiona. H&S has no other

connection with the Admiral Group or its Board Directors.

148 Corporate Governance148

Admiral Group plc Annual Report and Accounts 2023

Fiona Muldoon

Non-Executive Director search and recruitment process

Candidate criteria and search

January – February 2023

Shortlist and interview

March – June 2023

Approval and appointment

July – October 2023

STEP 1

Identification of role

requirements

The Committee, led by the Chair,

gave consideration as to the skills,

experience, knowledge and diversity

of the Board and those required

for optimal Board and Committee

composition. During this process

the Committee canvased the views

of the Board and senior Admiral

management. From this, Non-

Executive Director (NED) candidate

criteria requirements were agreed

at the Committee meeting in

January 2023.

STEP 4

Shortlisting candidates

H&S prepared an initial longlist of

candidates which was presented

to the Committee in March 2023.

Shortlisted candidates were then

reviewed at the Committee meeting

held in April 2023. Following the

meeting, shortlisted candidates were

contacted to establish interest and

an initial interview was undertaken

by H&S.

STEP 6

Committee recommendation

and Board approval

Following the satisfactory receipt of

references, the Committee met to

discuss a proposal to recommend

to the Board the appointment of

Fiona Muldoon as Non-Executive

Director and member of the Audit

Committee. The Board considered

and accepted the recommendation

of the Committee. A formal offer was

put to, and accepted by, Fiona.

STEP 5

Interview process

Following further discussions, the

leading three candidates were

interviewed by the sub-committee

and two additionally met the CFO.

The merits and suitability of the

candidates were scrutinised at

each stage during this process

against the candidate specification.

Fiona Muldoon emerged as being

the Committee’s preferred candidate

given her strong and relevant skills

and experience, including relevant

financial experience. It was agreed

that she would be a good cultural fit,

and had the capability to contribute

effectively to the Group Board.

Fiona subsequently met with the

Group CEO.

STEP 7

Appointment

Fiona was appointed to the Admiral

Board and as a member of the

Audit Committee with effect from

2 October 2023. Fiona immediately

embarked on a personalised

and in-depth induction process.

Her appointment will be put before

shareholders for approval at the

2024 AGM.

STEP 2

Engagement of third party

advisor

Heidrick and Struggles (‘H&S’),

experts in the field of search and

recruitment, were engaged by the

Committee to assist with the search

for potential NED candidates. H&S

was asked to ensure the search

identified candidates from a diverse

range of backgrounds and industries.

Alongside the Committee, H&S

prepared the Admiral Group plc Non-

Executive Director role specification,

this included a requirement for

relevant financial experience to allow

the candidate to be considered for

membership to the Audit Committee.

STEP 3

Initial search process

A sub-committee of the Committee

was formulated consisting of the

Chair, Non-Executive Directors and

the Head of People Experience to

oversee the recruitment process.

H&S commenced a wide-ranging

search process and regular updates

on progress were given to the

sub-committee.

Corporate Governance

149

Admiral Group plc Annual Report and Accounts 2023

Non-Executive Director induction

Upon appointment, our Non-Executive Directors embark on a bespoke and comprehensive induction programme, comprising common

elements for all Non-Executive Directors, as well as elements tailored to the individual depending on their role, skills, knowledge and

experience. The induction process, led by the Company Secretary, covers topics such as the role of a Non-Executive Director and their

responsibilities, the workings of the Board and the Group’s subsidiary boards, and the Company’s operations. Non-Executive Directors are

provided with a suite of background reading materials before induction sessions are arranged with individuals from each of the Group

businesses, again, depending on the individual’s induction requirements. Ongoing professional development needs of newly appointed

Non-Executive Directors are then monitored via annual individual Director evaluations and the Committee’s oversight of the Non-

Executive Director skills matrix.

Inductions took place for both Mike Rogers, Chair, and Fiona Muldoon, Non-Executive Director, during the year. Outlined opposite is

a summary of Mike Rogers’ induction process at Admiral. Fiona also received a comprehensive and bespoke induction similar to that

outlined opposite.

Board Committee changes, term extensions and internal appointments addressed by the Committee during 2023

The Board, on recommendation from the Committee, agreed to the following proposals/changes during the year:

• Jean Park retired from the Board including all of her committee memberships on 20 January 2023

• The appointment of Justine Roberts as permanent Senior Independent Director and permanent member of the Remuneration

Committee was made effective from 31 January 2023

• Annette Court retired as Chair of the Board including all of her committee memberships following the 2023 AGM held on 27 April 2023

• Mike Rogers was appointed as a Chair of the Company and Chair of the Committee effective from 27 April 2023

• The extension of JP Rangaswami’s three-year term as Non-Executive Director became effective on 29 April 2023

• Fiona Muldoon was appointed as a Non-Executive Director and member of the Audit Committee effective 2 October 2023

• Karen Green was appointed as a member of the Remuneration Committee effective 2 October 2023

• The appointment of Andy Crossley as Chair of the Group Risk Committee was made permanent on 23 October 2023

• Approval of internal senior subsidiary board and non-executive appointments

• Approval of additional external appointments for existing Board Directors

• Consideration of and recommendation for reappointment of all Directors at 2023 AGM.

Annual re-election

As set out in the Group’s Articles of Association, all Directors should retire and offer themselves for re-election at each AGM, in accordance

with the UK Corporate Governance Code (the Code) and the Company’s current practice. Therefore, all Directors will be submitting

themselves for election or re-election by shareholders at the forthcoming AGM.

Following a full review and evaluation during the year, the Board is satisfied that all Directors are properly qualified for their election or

re-election by virtue of their skills and experience and their contribution to the Board and its committees. Further details of why each

Director’s contribution is, and continues to be, important to the Company’s long-term sustainable success is provided on page 118 and

within the notes to the Notice of the 2024 Annual General Meeting.

Nomination and Governance Committee Report

continued

150 Corporate Governance150

Admiral Group plc Annual Report and Accounts 2023

Mike Rogers

Chair induction process

Company Secretary

Dan Caunt, spent time with Mike

explaining the Group governance

framework; this included all

operational aspects of the Board

and its committees as well as

engagement with stakeholders,

Admiral’s AGM process, Director

duties, UK Corporate Governance

Code requirements, Board policies,

the results of the most recent Board

evaluation and areas of Board focus

for the coming year.

Senior management

Mike met with key members of

Admiral’s senior management team

including the Chief Executives of

each of our UK and overseas business

divisions along with the department

heads of Investor Relations,

Compliance, Finance & Actuarial,

Risk Management, Internal Audit,

IT, Pricing, IT Security and People

Services to understand these key

areas of businesses.

Senior Independent Director

As Senior Independent Director,

Justine Roberts works closely with

the Chair providing a sounding board

and additional perspective into Board

matters. Justine was able to give Mike

the benefit of her seven years of

service on the Admiral Board.

Significant shareholders

Mike has met with a number of

Admiral’s significant shareholders,

including the founders of the

Company, Henry Engelhardt and

David Stevens, to understand their

views on the business. Mike regularly

meets with employee shareholders

throughout the business and the

opportunity for individual retail

shareholders to meet the Chair takes

place annually at the AGM.

Site visits

Mike undertook various site visits

during his first year and met with

management and colleagues across

the business as part of his induction

process, this included our UK sites in

South Wales, as well as L’olivier offices

in Paris and Lille, the Admiral Seguros

office in Seville, AECS in Madrid and

ConTe in Rome.

CFO

Geraint Jones briefed Mike on all

Group finance matters including;

financial performance and

projections, investor feedback,

market analysis, investments, capital

management, budgets, reporting and

control processes.

CEO

Mike and Milena Mondini de Focatiis

met frequently to discuss key areas

of focus for the Company and the

Board. Milena briefed Mike on Group

matters including an overview of

Group strategy, operations, risks,

people and culture, markets and

succession planning.

Previous Chair

Prior to Annette Court stepping

down as Chair, she met with Mike to

facilitate the smooth transition of

the responsibilities of Chair. She gave

an overview as to the workings of

the Board and its committees, her

key thoughts from a cultural and

governance perspective, and the

challenges and opportunities facing

Admiral. This also included her work

as Chair of the Committee.

External advisors

Mike met with many of Admiral’s

key external advisers including our

external auditor, lawyers and brokers

to obtain external perspectives of

the business.

Non-Executive Directors

Mike met and has continued to

meet individually with each of the

Non-Executive Directors who gave

their insight into Board dynamics,

culture and governance as well as

highlighting their backgrounds and

areas of expertise. Mike also met

with the Chairs of our subsidiary

Boards and overseas businesses.

Board Committee Chairs brought

Mike up to speed on their respective

Committee’s business.

Information and educational

materials

A comprehensive suite of educational

materials was provided to Mike by

the Company Secretary including,

for example; Admiral’s business

plan and strategy, key roles and

responsibilities of the Board, its

committees, Directors, guidelines

and policies for a UK Listed insurance

Company regulated by the FCA and

PRA, minutes of meetings, terms of

reference etc.

Mike Rogers

Chair Mike joined Admiral as Chair

following the 2023 AGM held on

27 April 2023. Mike was subject to a

comprehensive and bespoke induction

programme designed to provide him

with the necessary information to

effectively take on the role as Chair,

this process began following the

announcement of his appointment

on 31 January 2023.

Corporate Governance

151

Admiral Group plc Annual Report and Accounts 2023

Our Board composition and how we plan for succession

The composition of the Board is kept under constant review by the Committee. As at 31 December 2023, the Board comprised 11

Directors: The Chair (who was independent on appointment), two Executive Directors, and eight independent Non-Executive Directors –

see page 118.

The Committee carefully considers the independence, composition and balance of skills and knowledge of the Board. As a result,

the requirement to refresh Board and committee memberships in an orderly manner is continually monitored so as to maintain the

continuity of Board process and the strength of personal interaction which underlies the effectiveness of the Board.

Balance of skills,

knowledge and

experience

Annual Board

evaluation and

individual

director appraisals

Time

committment

and external

appointments

Board

diversity

Non-Executive

tenure and

independence

Board

composition

and succession

planning

Tenure and independence

The table below details the length of service of the Chair and each of the current Directors. It illustrates the balance between experience

and bringing in fresh perspective, as well as the independence of each of the Non-Executive Directors.

Board tenure

Director Date of appointment

Length of service as a Director

as at 31 December 2023 Independence

Non-Executive Directors

Mike Rogers (Chair) 27 April 2023 8 months On appointment

Justine Roberts 17 June 2016 7 years 6 months Independent

Andy Crossley 27 February 2018 5 years 10 months Independent

Michael Brierley 5 October 2018 5 years 3 months Independent

Karen Green 14 December 2018 5 years Independent

JP Rangaswami 29 April 2020 3 years 8 months Independent

Evelyn Bourke 30 April 2021 2 years 8 months Independent

Bill Roberts 11 June 2021 2 years 6 months Independent

Fiona Muldoon 2 October 2023 3 months Independent

Executive Directors

Milena Mondini de Focatiis Director – 11 August 2020

CEO – 1 January 2021

3 years 4 months Executive Director

Geraint Jones 13 August 2014 9 years 4 months Executive Director

Our Board has a

broad range of

skills and experience

which it uses to

bring independent

judgement to bear

on issues of strategy,

performance,

risk management,

resources and

standards of conduct

which are integral

to the success of

the Group.

Nomination and Governance Committee Report

continued

152 Corporate Governance152

Admiral Group plc Annual Report and Accounts 2023

The Chair, Senior Independent Director and independent Non-Executive Directors are currently appointed for fixed periods of three

years, subject to election by shareholders. The initial three-year period may be extended for two further three-year periods subject

to performance review and annual re-election by shareholders. JP Rangaswami’s term of appointment as Non-Executive Director was

extended by a further three-year period during the year, subject to annual re-election by shareholders. Letters of appointment may be

inspected at the Company’s registered office or can be obtained on request from the Company Secretary.

The tenure of the previous Group Board Chair, Annette Court, came to an end at the 2023 AGM held on 27 April 2023. Annette had no

involvement in the recruitment of her successor, Mike Rogers, as Chair. An explanation as to why Annette’s tenure extended beyond

the nine years recommended by the Code is provided on page 125. Mike Rogers appointment as Chair of the Board became effective

following the AGM held on 27 April 2023. On appointment, the Board considered that Mike met the independence criteria set out in

provisions 9 and 10 of the Code. The Chair’s biography can be found on page 118.

The independence of each Non-Executive Director has been assessed during the year, in line with the independence criteria contained

within provision 10 of the Code. The Board has identified on page 152 which Directors it considers to be independent. The Board

considered all the Non-Executive Directors to be independent during the year. For the year ended 31 December 2023, 80% of the Board,

excluding the Chair, were considered independent Non-Executive Directors. The number of independent Non-Executive Directors meets

the requirements set out under provision 11 of the Code which requires that at least half of the Board, excluding the Chair, should be

Non-Executive Directors whom the Board considers to be independent.

Balance of skills, knowledge and experience

The Directors have a broad range of skills, knowledge and experience and can bring independent judgement to bear on issues of strategy,

performance, risk management, resources and standards of conduct which are integral to the success of the Group.

The Committee understands that a wide range of complementary skills on the Board will assist in the meeting of Board objectives and

the delivery of Company strategy. The Committee regularly reviews the Board skills matrix, particularly in the context of succession

planning and skills that are potentially lost at the end of a Director’s tenure on the Board. The current skills and experience on the

Board are outlined below and an explanation regarding how this feeds into succession planning follows later in this report.

Director

Finance

Risk

Insurance

Executive/Strategic

Leadership

Marketing/Retail

M&A

City

International

Tech/Digital/Data

Operations

Entrepreneurial

Lending

Small/Medium

Enterprise

Remuneration/

People

ESG/Sustainability

Non-Executive Directors

Mike Rogers (Chair)

Justine Roberts

Andy Crossley

Michael Brierley

Karen Green

JP Rangaswami

Evelyn Bourke

Bill Roberts

Fiona Muldoon

Executive Directors

Milena Mondini de Focatiis

Geraint Jones

Corporate Governance

153

Admiral Group plc Annual Report and Accounts 2023

Time commitment and external appointments

On appointment, all Directors are advised of, and requested to make, the necessary time commitment required to discharge their

responsibilities effectively. This time commitment is also outlined in the letters of appointment issued to the Chair and Non-Executive

Directors. When making new appointments, the Committee takes into account other demands on the Directors’ time. Prior to

appointment, significant commitments are disclosed by Directors to the Committee and the Board.

As part of the annual performance evaluation each Director is appraised on their time commitment dedicated to the Company.

The Committee also reviews the time commitment required of all Non-Executive Directors at least annually to consider whether the

guidance on time commitment of certain roles needs to be extended due to market or responsibility changes. The Board is satisfied that

all Directors have dedicated the required amount of time to the Company to effectively fulfil their roles, and that the Company has given

the Non-Executive Directors sufficient time to perform the duties required of them.

As well as considering the demands of a Director’s time upon appointment, as required under provision 15 of the Code, there is in

place a formal procedure for the approval of additional external appointments for Directors through the Committee and the Board.

The Committee and the Board are satisfied that the external commitments of all the Non-Executive Directors do not conflict with their

duties and commitments as Directors of the Company.

Overall assessment of composition

The Board, through ongoing assessment and annual performance review, remains satisfied that it has the appropriate balance of skills,

experience, independence and knowledge of the Group to enable it and its committees to discharge their duties and responsibilities

effectively, as required by the Code. In addition, the Directors are aware of their legal duties under s172 of the Companies Act 2006 to act

in a way they consider, in good faith, will be most likely to promote the success of the Company for its shareholders, as well as considering

the interests of wider stakeholders. Further details of how the Board fulfils its duty in this regard are outlined on page 87.

Board and senior management diversity and inclusion

The Listing Rules and Disclosure Guidance and Transparency Rules were amended to include new disclosure requirements for listed

companies for financial years starting on or after 1 April 2022. As required under the amended requirements, a table setting out gender

and ethnicity diversity at Board and senior management level is included on page 156. The Board diversity targets, which are in-line with

the targets set by the FTSE Women Leader’s Review and the Parker Review, are: at least 40% of the board are women; at least one of

the senior board positions (Chair, SID, CEO and CFO) is held by a woman; and at least one member of the Board is from a minority ethnic

background. As set out below, the Committee is content that Admiral meets the targets set out in the Listing Rules and Disclosure

Guidance and Transparency Rules 9.8.6(9)(a).

Gender diversity

Diversity and inclusion and the variety of perspectives that it brings has been proven in studies to increase innovation and creativity, and,

as a result, improves performance. It also has other positive impacts, such as providing greater awareness, widens the talent pool and

challenges the views or practices that may have become embedded over time. Admiral depends on all of the above, which are enhanced

through having a diverse workforce, to successfully implement its business strategy.

During the year, the Committee reviewed the Board Diversity and Inclusion Policy and discussed the appropriateness of the measurable

targets to increase diversity and inclusion at Board, Subsidiary board and senior management level. The wording of our policy has been

updated to increase the breadth of diversity we aim to see in our business, this includes wording explicitly referencing additional diversity

aspects such as “ethnicity, sexual orientation, disability and socio-economic background (in addition to the aspects of age, gender

or educational and professional backgrounds)” and “approach, skills and experience, race, age, gender, educational and professional

background and other relevant personal attributes”. The Committee seeks to ensure that a clear recruitment strategy for Board and

senior management appointments is in place and is aligned to this policy.

Measures that are covered under the Policy, including progress updates against each, include:

(i) Having one member of the senior executive team who is responsible and accountable for gender diversity and inclusion at Group

level. Cristina Nestares (EUI CEO) is the accountable executive for gender diversity

(ii) Setting internal targets for gender diversity in senior management. Progress against the Group’s target of 40% of women in senior

management by 2023 is detailed below

(iii) Publishing progress annually against these targets in reports on the Group’s website. Progress updates on the UK business’ progress

against the HM Treasury’s Women in Finance Charter commitments are provided on an annual basis on the Group’s website

(iv) Linking the pay of the EUI CEO to the progress made against internal targets on gender diversity. The Remuneration Committee has

also approved the linkage of progress against the Women in Finance target within the non-financial performance measures of the EUI

CEO, Cristina Nestares.

Nomination and Governance Committee Report

continued

154 Corporate Governance154

Admiral Group plc Annual Report and Accounts 2023

Women on the Board represented five (46%) of its 11 Director membership as at 31 December 2023, compared with six (55%) as

at 31 December 2022. Admiral continues to be one of only a few FTSE 100 companies where the Board positions of CEO and Senior

Independent Director are held by women, demonstrating Admiral’s continued strong support for the progression of women in senior

leadership roles. Official data published by the FTSE Women Leaders (succeeding the Women on Boards Report and Hampton Alexander

Review), issued in February 2023, reported that the percentage of women on FTSE 100 Boards was 40.5% improving from 39.1% in 2022,

this demonstrates Admiral’s outperformance when compared with the average of the FTSE 100.

As a result of the continued progress to balance gender diversity at Board level and to align with the Women in Finance Charter’s aim of

increasing female representation at the UK senior executive level to 40% by the end of 2023, and the FTSE Women Leaders target of

40% representation by 2025, the Committee has aligned the annual target of women in senior management positions at 40%. The aim

is to achieve this level of gender diversity at an aggregate level across the subsidiary boards too. As at 31 December 2023, women

represented 33% of all of the subsidiary board appointments. Focus will continue to improve gender diversity at this level during 2024.

Female representation was 40% of our Senior Executives (Executive Committee equivalent) and 34.4% of their direct reports. Admiral is

working to ensure it continues to achieve the 40% target by the end of 2025. As at 31 December 2023, the gender diversity split across

the Admiral Group was 50% female / 49% male. The remaining 1% included non-binary and other genders, and colleagues who’d prefer

not to say.

Ethnic diversity

The Committee continues to monitor the requirements of The Parker Review’s report on ethnic diversity in the context of the

composition of its Board and the new reporting requirements for senior management. It also monitors the initiatives that are being

implemented across the Group to increase diversity, along with consideration as to how measures to develop a diverse pipeline of talent

for Board and senior management appointments should be developed and monitored. The Board includes one Director from an ethnic

minority background, which meets one of The Parker Review’s key recommendations for FTSE 100 companies, as well as Listing Rules

and Disclosure Guidance and Transparency Rule 9.8.6(9)(a). Further information on how the Group is developing a pipeline of ethnically

diverse candidates is outlined below.

The Group remains strongly supportive of the principle of boardroom diversity, of which gender and ethnicity are important, but not the

only, aspects. What is also important is diversity of thought, experience and approach and each new appointment must complement

what already exists around the Board table.

Ethnic diversity amongst senior management and the wider workforce is something that Admiral continued to focus on throughout

2023. Admiral produced its first ethnicity pay gap report in the UK during the year, further demonstrating its commitment to ethnic

diversity in the workplace. Whilst the Committee recognises that the workforce is not always comfortable with voluntarily sharing such

personal information, there have been initiatives introduced to encourage more people to make such voluntary disclosures. As a result,

we have seen an increase this year to 84% disclosure in the UK. As set out in the table below, the percentage of ethnic diversity at senior

management levels is 3%. The Committee has discussed The Parker Review recommendations to implement a target for ethnic diversity

representation at senior management level within the Group by 2027 and will be updating shareholders in this regard in due course.

Board diversity

Nationality

Non-British 4

British 7

Age

50s 5

40s 2

70s 1

60s 3

Ethnicity

Asian/Asian British 1

White British or other

White (including white

minority groups) 10

Gender

Female 5

Male 6

Corporate Governance

155

Admiral Group plc Annual Report and Accounts 2023

Activity to improve diversity and inclusion in the talent pipeline

Examples of the work Admiral has undertaken to improve its diversity pipeline during the year are set out below, for further information

see pages 62 and 132.

Admiral’s recruitment strategy

aims to increase the number of

candidates from ethnically diverse

backgrounds and women onto

shortlists for leadership roles.

The ‘Get Discovered’ programme

focuses on developing talented

women within the Group to become

the leaders of tomorrow.

Admiral is designing a talent

and development program, in

partnership with McKinsey which

focuses on finding talented

employees from ethnically diverse

backgrounds at different levels and

supporting these employees into

leadership roles.

Admiral has signed several pledges

such as the Menopause Pledge,

Endometriosis Friendly Employer,

Neurodiversity Friendly Employer

and continued a commitment to the

Race at Work Charter by signing up

to their extended initiatives.

Admiral’s focus on culture and

inclusion was demonstrated by

winning the best UK Company

at the 2023 Best Companies

awards, being named the 6th best

super large workplace (1,001+

employees) in the UK by the Great

Place To Work® Institute, the global

authority on workplace culture.

Admiral also placed 3rd in the UK’s

Best Workplaces for Women award

in 2023.

Admiral has partnered with a global

diversity and talent consultancy

called Green Park to undertake an

in-depth ‘Culture and Inclusion’

audit, focused on Equality, Diversity

and Inclusion (EDI).

Admiral has completed its third year

of the Admiral Aspire Programme,

an internship aimed at offering

students from ethnically diverse

backgrounds and Women in STEM

(Science, Technology, Engineering

and Mathematics) valuable work

experience over 12 weeks.

Admiral remains committed to providing equal opportunities, eliminating discrimination, and encouraging diversity amongst its

employees both in the UK and overseas. A breakdown of the gender and ethnicity of Directors and senior employees at the end of the

financial year together with details of the Group’s Equality, Diversity and Dignity at Work Policy are set out in the tables below.

Gender

Number of Board

members

Percentage of the

Board

Number of senior

positions on

the Board

(CEO, CFO, SID,

and Chair)

Number in executive

management

Percentage

of executive

management

Men 6 55% 2 48 65%

Women 5 45% 2 26 35%

Other Category –––––

Not specified/prefer not to say –––––

Ethnicity

Number of Board

members

Percentage of the

Board

Number of senior

positions on

the Board

(CEO, CFO, SID,

and Chair)

Number in executive

management

Percentage

of executive

management

White British or other White (including

minority white groups) 10 91% 4 72 97%

Mixed/Multiple Ethnic Groups –––––

Asian/Asian British 1 9% – 2 3%

Black/African/Caribbean/Black British –––––

Other Ethnic group, including Arab –––––

Not specified/prefer not to say –––––

Nomination and Governance Committee Report

continued

156 Corporate Governance156

Admiral Group plc Annual Report and Accounts 2023

Succession planning

The Committee oversees the succession planning strategy and appointment procedure for new Director’s on behalf of the Board.

The Committee reviews those skills present on the Board in order to understand where there are strengths and potential weaknesses,

and where there may be the opportunity to bring in complementary skills to improve the functionality and depth of experience

of the Board. These requirements are then fed through to an independent consultant who will seek out candidates matching the

skillset provided and draw up a diverse shortlist of candidates for the Committee to review. The Committee will also consider senior

management appointments on behalf of the Board and consider where these appointments fit in with established Board succession

planning strategy. Any new recruitment process for the Board is based on merit and assessed against objective criteria. The Committee

considers diversity in all of its forms as a central consideration to this process. Further information around Admiral Board’s recruitment

process can be found in the appointment process for Fiona Muldoon set out on page 149.

Non-Executive Directors

Non-Executive Director succession planning is split into short, medium and longer-term horizons to ensure that all eventualities, as far as

possible, are planned for.

Horizon: Emergency cover

Description

There are emergency succession plans to ensure that there is sufficient short-term cover or a plan in place for key roles of the Board,

namely, the Chair, the SID, committee Chairs and, in turn, Committee members if a Committee Chair’s absence is longer than expected.

These plans take account of any requirements under the respective Committee’s Terms of Reference, as well as any Code requirements.

Horizon: Medium term (3–6 year tenure)

Description

The Committee’s medium-term succession planning involves considering the replacement of Non-Executive Directors over time to

refresh the Board. The Committee considers (i) each Director’s period of tenure and aims to have staggered departure dates, (ii) the

skills and experience gaps that will be created as each Director’s tenure comes to an end, and (iii) the diversity gaps that might also

become present.

Horizon: Longer term (6–9 year tenure)

Description

The Committee’s longer-term succession planning involves the consideration of the skills, experience, and diversity that the Board

will need over the longer-term, taking into account the Group’s strategy and the main trends and factors that are likely to affect the

Group’s long-term success.

The regular review of these succession plans provides an opportunity for the Committee to discuss the insights provided by the data

in order to inform the desired mix of skills, experience and diversity that the Board needs now and in the future, in the context of the

Group’s strategic objectives.

Executive Directors and senior management

The responsibility for making appointments within senior management rests with the CEO, with direction from the Committee.

Talent management continues to be a key area of focus for the Committee to ensure that there is a diverse pipeline of talent for senior

management and Executive Director succession.

During 2023, the Committee considered progress in improving talent management and succession planning within the Group.

The Committee strongly believes that an effective internal talent management process will ensure the preservation of Admiral’s unique

culture as far as possible. During the year, the Committee received an update on the succession planning framework which is used across

the Group. This framework encourages more structured thinking about opportunities across departments and internationally, even in

circumstances where this is a well embedded practice already within Admiral. Discussions on success profiles have also helped to visualise

how success will look in the future for the critical senior management roles, whilst also providing future talent with visibility on what

future development might look like for them.

Corporate Governance

157

Admiral Group plc Annual Report and Accounts 2023

The review of succession planning undertaken during the year concluded that there was a healthy pipeline of talent across the Group,

with no immediate risk in respect of leadership continuity, and the right level of talent to execute our ‘internally grown leaders’ strategy.

The Group continues to work to ensure that all areas of the business are working to achieve Admiral’s commitment to diversity at

all levels in all its forms. The Committee will continue to monitor levels of diversity across the business through 2024 and will work

to improve the ethnic diversity of entities located in geographies where such diversity should be better represented. For further

information as to what the Company is doing in relation to diversity see page pages 62 and 154.

The Committee remains satisfied that effective succession plans for Directors and senior management are in place to ensure the

continued ability of the Group to implement strategy and compete effectively in the markets in which it operates.

Governance

The Committee also regularly reviews the Group’s governance arrangements, including any changes to the subsidiary board or

committee structure, changes to the UK Corporate Governance Code and FCA Listing Rules, as well as oversight of the regulatory

applications made under the Senior Managers Regime.

Committee effectiveness review

The Committee’s 2023 annual review was conducted by way of a self-assessment, overseen by the Company Secretary, this involved

completion of a wide-ranging questionnaire. The questionnaire asked a set of questions designed to provide objective assessment of the

Committee’s performance, including its effectiveness in monitoring Board composition, consideration of Executive and Non-Executive

Director succession, overseeing talent management, senior management succession planning and developing directors’ knowledge.

The Committee discussed the output from this performance review at its meeting in December 2023 and concluded that, overall,

the Committee had performed effectively during the year under review. Areas of focus for the Committee in 2024 were identified,

this included ensuring effective governance around Admiral’s subsidiary board structure and further oversight in the areas of talent

management and executive succession planning.

2020

Internal Board

Evaluation

2021

Internal Board

Evaluation

2022

External Board

Evaluation

2023

Internal Board

Evaluation

Evaluation of the effectiveness of the Board, Board committees and individual Directors

How we assess our Board’s effectiveness

Each year Admiral conducts an evaluation to assess the skills, experience, independence and knowledge of the Board to confirm

it has been able to discharge its duties and responsibilities effectively. The composition and diversity of the Board and its

committees and how well the Directors are working together is considered, as well as the individual performance of the Directors

and the Chair. In line with the provisions of the Code, Admiral undertakes an externally facilitated evaluation every three years.

In the two intervening years, internal reviews of the Board, its committees and individual Directors are carried out. This year the

process was facilitated internally by way of questionnaire led by the Chair in conjunction with the Company Secretary. The 2022

Board evaluation was conducted by way of external evaluation by Bvalco Ltd. Progress against the Board objectives that stemmed

from the 2022 Board evaluation process are set out opposite.

Nomination and Governance Committee Report

continued

158 Corporate Governance158

Admiral Group plc Annual Report and Accounts 2023

Progress against 2022 Board evaluation recommendations

In December 2022, the Board undertook an externally facilitated Board, Board Committee and individual Director evaluation of its

performance for the year ended 31 December 2022, carried out by Bvalco Ltd. Bvalco Ltd had no other connections with the Group or its

Directors. The results of the evaluation were discussed at the Board meeting in January 2023, they demonstrated a Board that appeared

to be functioning well, with some identified opportunities for improvement. The recommendations from the Board evaluation fed into

the Board’s agreed objectives for 2023 and were detailed in the 2022 Annual Report as “Principal areas of focus for the Board in 2023”.

At the June 2023 Board meeting, the Board received a six-month update on progress against these agreed areas for focus. The Board

discussed the 2022 Board evaluation recommendations at their meeting in December 2023 and agreed good progress had been made

against all recommendations during the year. This progress is set out in the table below. It was agreed that, where appropriate, the Board

would continue to focus on these recommendations during 2024 to ensure these were fully implemented and embedded.

Areas of focus during 2023 Progress update

To review the quality of information

presented to the Board to ensure

improved decision-making processes.

The overall quality of information presented to the Board in terms of clarity and

context continued to improve throughout the year enabling improved Board

discussions and effective challenge around key items of business resulting in better

decision-making processes.

Review the balance of allocated

Board agenda time between strategy

and governance/regulatory matters.

Agenda planners for the Board and Board committees were reviewed and redrafted

during the year to ensure that the balance between strategic and governance/

regulatory matters was appropriate. Terms of reference were reviewed and updated

to allow for further delegation of non-strategic matters to Board committees and

subsidiary boards where appropriate.

To ensure Non-Executive Directors have

opportunities to meet together outside

of scheduled Board time and also with

executive management.

Non-Executive Directors have the opportunity to meet with the CEO following each

Board meeting and also have a separate Non-Executive Director only debrief session.

Board members and other senior management are invited to attend Board dinners,

this allows for informal conversations to take place outside of normal Board activities.

A Non-Executive Director session on mobility took place during the year. Opportunities

for further engagement continue to be considered.

Review the value of Board strategy

sessions and ensure the Board has early

involvement in the development of

strategic proposals.

The October Board strategy session was well received with Directors having the

opportunity for early involvement in the strategic planning process along with the

option to contribute to the development of the specific proposals. The Board provided

constructive feedback on individual presentations and topics. The format of Board

strategy sessions will continue to be reviewed and updated to ensure alignment with

the requirements of the business.

Ensure required metrics and milestones

are present to allow the Board to hold

executives to account on strategic

implementation.

The Capital Allocation Framework alongside budgets and the five-year plan were

presented to the Board and discussed in detail during the year to enable the

measurement of the implementation of strategy against plan and ensure management

was held to account.

Consideration of the value of an

overarching approach to ESG initiatives.

A new Group Head of Sustainability was recruited during the year to ensure the

co-ordination of ESG initiatives. Significant focus was given to ESG through strategy

discussions, reporting and risk management which will continue throughout 2024.

The executive team should be canvased

on key skills required when considering

Board appointments.

Executive management’s views had been canvassed in respect of the key skills required

when considering all new Group Non-Executive Director appointments and senior

management hires during the year.

Review how hybrid meeting arrangements

could be improved to allow the full

participation of all participants in

meetings.

Scheduled Board and Board committee meetings generally take place in person,

therefore it is rare for Board members to attend virtually. However, where this is

necessary, for example where ad hoc, late notice meetings are required, updates to

technology allow for effective attendance and participation where a member cannot

attend in person. Where Board members were unable to attend meetings, they were

able to submit questions and comments in advance to the Chair.

Contributors to Board agenda items to

be reminded of the guidelines as to form,

content and paper submission deadlines.

The Company Secretary and his team continued to drive improvements in the content

and delivery of Board papers throughout the year. Improvements in the Board and

committee meeting preparation process were acknowledged by the Board.

Corporate Governance

159

Admiral Group plc Annual Report and Accounts 2023

2023 Board evaluation

Having carried out an external Board evaluation in 2022 in accordance with the Code requirement that FTSE 350 companies should

carry out an externally facilitated evaluation of the Board at least every three years, the 2023 Board evaluation process was facilitated

internally, led by the Chair with the support of the Company Secretary. The evaluation used a questionnaire developed by the external

consultancy Independent Audit, who has no other connection with the Group or its Directors. The online questionnaire was used to

evaluate the Board’s performance and dynamics throughout 2023 and was sent to all Board members as well as regular Board attendees

in November 2023, it considered:

• Board dynamics and the interaction between the Chair, Non-Executive Directors and executive management to achieve the

Board’s objectives

• Leadership and succession planning, including the oversight of the Group’s processes for managing, developing and retaining talent

• Understanding by the Board of the prevailing culture within the Group

• Quality, timeliness of delivery and presentation of Board papers and Board support

• Time management and operational performance of Board and Committee meetings

• Risk management and the effectiveness of the Board in considering the Group’s risk management framework and internal controls

• The effectiveness of the Board’s strategic and operational oversight

• Priorities for change that would enhance Board performance.

The results of the evaluation were collated by the Company Secretary and discussed at the December 2023 Board meeting. The overall

impression from the evaluation process was that the Admiral Board and its committees continued to be performing strongly and

function effectively. The Board was open and inclusive and supported the culture of the Admiral Group with some opportunities for

improvement identified. A summary of the main recommendations resulting from the 2023 Board evaluation process are set out in the

table below. Recommendations have fed into the Board’s agreed objectives for 2024 and are detailed under the ‘Principal areas of focus

for the Board in 2024’ section on page 127.

Outcomes and areas of focus for 2024

Culture To improve understanding around the impact of hybrid working on the Group’s culture

and the associated risks.

ESG Focus on environmental, social and governance considerations, including ensuring the

Board has the correct information to monitor ESG performance, and the setting of ESG

targets that reflect the Group’s values.

Control framework Review of control framework to ensure appropriate focus on compliance and changes

to the regulatory risk outlook and associated risks.

Board reporting To ensure standard reporting templates are rolled out across all committees and

subsidiary Boards for consistency of approach.

Informal Board interactions Consideration of further opportunities for informal Board and management interactions

to ensure management was able to benefit from Non-Executive Director insight and

experience. Group Board Non-Executive Directors to have further engagement with

subsidiary Board Non-Executive Director’s to ensure sharing of knowledge and experience.

2023 Board Committee effectiveness reviews

Further information on each of the Board Committee’s evaluations of their own performance can be found within the respective Board

Committee reports.

Individual Director evaluation

The performance of the CFO is appraised annually by the CEO, to whom he reports. The Chair, taking into account the views of the other

Directors, reviews the performance of the CEO. The Chair also carries out the performance assessments of each of the Non-Executive

Directors. Each of the Directors were determined to have continued to effectively contribute to the work of the Board in 2023.

The performance of the Chair is reviewed by the Board led by the Senior Independent Director. The latest review took place in December

2023 and was reported to the December Board. The Senior Independent Director considered and discussed with the Chair the comments

and feedback that had been received from the Directors as part of the Chair’s evaluation questionnaire and was able to confirm that the

performance of the Chair from his time of appointment in April 2023 was effective.

Nomination and Governance Committee Report

continued

160 Corporate Governance160

Admiral Group plc Annual Report and Accounts 2023

Audit Committee Report

“The Committee

dedicated a signiﬁcant

amount of time to

understanding and

assessing the impact

of IFRS 17 on the

Group’s results.”

Karen Green

Chair of the Audit Committee

Eight

meetings

in 2023

Members Attendance

Member Attendance

Karen Green (Chair) 8/8

Andy Crossley

7/8

Michael Brierley 8/8

Fiona Muldoon 2/2

1 Based on scheduled meetings.

2 Andy Crossley missed one meeting due

to a pre-existing arrangement.

THE IMPLEMENTATION

OF IFRS 17

Overseeing

Dear Shareholder,

I am pleased to set out

in this report an update

on the main activities of

the Committee in 2023.

Areas of focus in the

reporting period

The Committee considered the economic

backdrop facing the Group, including

the geopolitical backdrop and supply

chain challenges. It gave particular

consideration to current UK inflationary

pressures and the impact on the key

accounting and actuarial judgements

made by management in relation to the

valuation of insurance contract liabilities

and credit loss provisions, as well as the

potential impact on going concern and

viability assumptions. The Committee

also dedicated a significant amount of

time to understanding and assessing the

impact of the new IFRS 17 (Insurance

Contracts) accounting standard on the

Group’s financial results and ensuring

appropriate disclosure in the financial

statements. The Committee monitored

the continued effectiveness of the

Group’s key internal controls in a hybrid

working environment, in particular given

the implementation of various new

important systems.

Significant financial reporting issues

The setting of insurance contract

liabilities in accordance with the Group’s

agreed reserving methodology is a key

accounting judgement in the Group’s

financial statements (as set out in

note 2 to the financial statements),

and the Committee continues to

place considerable focus on this area.

The Committee challenged the key

reserving assumptions and judgements,

movements, emerging trends and

analysis of uncertainties underlying

the analysis of outstanding claims for

the UK Car Insurance business proposed

by management alongside that of the

Group’s external independent actuarial

advisers. In 2023, this included the

impact of inflation on the claims reserves

as set out in more detail below, future

scenarios for the Ogden discount rate

and ensuring the accuracy of claims data

following the transition to the new claims

management system. It also focused on

management’s selection of a confidence

level for the IFRS 17 risk adjustment held

within the liability for incurred claims.

The Committee also received reports on

the claims reserving processes performed

for insurance businesses other than UK

Car and recommended to the Board the

aggregate claims reserves for inclusion

in the Group’s financial statements.

In addition to claims reserving, the

Committee spent time reviewing

management’s support for a number

of other significant financial reporting

matters including the expected credit

loss provision held in relation to the Loans

receivable balance held by the Group’s

consumer lending business Admiral

Money, other potential provisions and

contingent liabilities, and the results

of impairment testing performed in

relation to the Group Parent Company’s

investments in Group subsidiaries.

Corporate Governance

161

Admiral Group plc Annual Report and Accounts 2023

IFRS 17 (Insurance Contracts)

The Group successfully implemented

the new IFRS 17 (Insurance Contracts)

accounting standard ahead of the

1 January 2023 implementation date.

Given the fundamental changes to

the Group’s financial statements, the

Committee dedicated a significant

amount of time to understanding

and assessing the impact of the

standard on the Group’s financial

results. The Committee reviewed

and challenged key judgements and

accounting considerations, as well as

the financial statement disclosures on

the impact of the new standard required

by IAS 8 (Accounting Policies, Changes

in Accounting Estimates and Errors)

and related accounting disclosures.

Corporate governance and

reporting changes

The Committee was kept informed

of the Group’s engagement with the

Department for Business, Energy &

Industrial Strategy (BEIS) consultation on

‘Restoring trust in audit and corporate

governance: proposals on reforms’

during 2023 including the proposed

changes to the UK Corporate Governance

Code and will continue to monitor

developments in this area. The Committee

also oversaw, in conjunction with the

Group Risk Committee, the Group’s

progress in further aligning reporting

with the Taskforce on Climate-related

Financial Disclosures (TCFD) published

recommendations. The Committee

received a report from the Group’s

external auditor on TCFD and other

climate-related reporting and trends in

the market.

Internal controls

The Committee has continued to review

the effectiveness of the internal control

systems across the Group, in particular

given the implementation of various

system changes, including areas of

potential weakness highlighted through

audit and other assurance reports.

I hope you find the above summary, and

the more detailed report, both useful

and informative.

Karen Green

Chair of the Audit Committee

6 March 2024

How the Committee operates

Membership

Membership of the Committee at the

end of the year was: Karen Green (Chair),

Andy Crossley, Michael Brierley and

Fiona Muldoon.

Two of the Committee’s members are

Fellows of the Institute of Chartered

Accountants in England and Wales,

and one is a Fellow of the Institute

of Chartered Accountants in Ireland.

Given the insurance and financial services

experience of the members of the

Committee, the Board considers that they

have a broad range of skills, experience

and knowledge of the insurance and

financial services sector, which represents

the principal market in which the Group

operates, and also the area of consumer

lending in which the Group has a growing

business, such that they are able to

effectively analyse, challenge and debate

the issues that fall within the Committee’s

remit. The Board is satisfied that the

Committee as a whole has competence

relevant to the sectors in which the Group

operates and further considers that a

number of its members have recent and

relevant financial experience.

Attendance at meetings

The Company Secretary acts as Secretary

to the Committee. The Group Chief

Financial Officer, Group Chief Risk Officer,

Director of Group Finance & Chief

Actuary and Group Head of Internal Audit

routinely attend all Committee meetings

(other than certain private sessions).

Other individuals, such as the Chair of the

Board, Chief Executive Officer, Head of

Group Compliance, and representatives

of different parts of the Group, may be

invited to attend all or part of any meeting

as and when appropriate. The Chairs of

the Audit Committees of the Group’s

European insurer and US subsidiary also

attend at least one meeting each year to

present on their activities.

The external auditor was invited to

attend all of the Committee’s meetings

held in 2023, except in respect of those

agenda items when its own performance,

reappointment and fees were reviewed

and discussed, or where any other conflict

was identified.

Meetings held

The Committee meets at least six times

per year and has an agenda planner linked

to events in the Company’s financial

calendar and other significant issues that

arise throughout the year, which fall for

consideration by the Committee under its

remit. The Chair of the Audit Committee

agrees the agenda for each meeting.

There were eight scheduled Committee

meetings held during the year (with

two of these meetings focused on

reserving matters in conjunction with

the half year and full year reporting and

another on the approval of the Group’s

Solvency and Financial Condition Report).

Two additional meetings were held during

the year, focused on various matters

relevant to the Committee’s remit.

Details of member attendance at the

Committee meetings held during the year

are outlined on page 162.

How the Committee

keeps up to date

The Committee is kept up to date with

changes to Accounting Standards and

relevant developments in financial

reporting, Company law, and the

various regulatory frameworks through

presentations from the Group’s external

auditor, Group Chief Financial Officer,

Group Chief Actuary and Group Company

Secretary. In addition, all members

attend relevant seminars, briefings and

conferences provided by external bodies.

The Committee also receives tailored

reports from management and the

Group’s external auditors from time to

time. Topics included the Task Force on

TCFD and other climate-related reporting

proposed changes to the UK Corporate

Governance Code in 2023.

The Terms of Reference of the audit

Committee include all the matters

required under the Code and are reviewed

annually by the Committee.

The Chair of the Audit Committee meets

with the Group Head of Internal Audit,

Group Chief Financial Officer, Director

of Group Finance & Chief Actuary, Head

of Reserving, the external auditors and

UK Head of People Services (who has

overall responsibility for coordinating the

Group’s whistleblowing arrangements) on

a regular basis. The Committee also held

(i) two private meetings with the Group

Head of Internal Audit, (ii) one private

meeting with the Chief Financial Officer,

and (iii) two private meetings with the

external auditor during the year.

omm

ttee Report

continued

162 Corporate Governance162

Admiral Group plc Annual Report and Accounts 2023

Role and responsibilities

of the Committee

The Audit Committee’s primary

responsibilities are to:

Financial reporting

• Monitor the integrity of the Group’s

financial statements and any

formal announcement relating to

the Group’s financial performance,

including the Group’s Solvency and

Financial Condition Report, reviewing

any significant financial reporting

judgements which they contain,

including that of the Group’s Going

concern status

• Provide advice (where requested by the

Board) on whether the Annual Report

and Accounts, taken as a whole, is fair,

balanced and understandable, and

provides the information necessary

for shareholders to assess the Group’s

position and performance, business

model and strategy

• Oversee the Group Risk Committee’s

work on climate-related

financial disclosures.

Internal controls and internal audit

• Keep under review the effectiveness

of the Company’s internal financial

controls, internal control and risk

management systems

• Monitor and assess the role and

effectiveness of the Group’s internal

audit functions in the context of the

Group’s overall internal control and risk

management systems.

External audit

• Make recommendations to the Board,

to be put to shareholders for their

approval at the Annual General Meeting

(AGM), in relation to the appointment,

reappointment and removal of the

Group’s external auditor

• Approve the remuneration and

terms of engagement of the Group’s

external auditor

• Review and monitor the Group external

auditor’s independence and objectivity,

and the effectiveness of the audit

process, taking into consideration

relevant UK professional and

regulatory requirements

• Review the policy on the engagement

of the Group external auditor to provide

non-audit services, ensuring that there

is prior approval of non-audit services,

considering the impact this may have

on independence and taking into

account the relevant ethical guidance

in this regard.

Other

• Oversee the Group’s procedures

for handling allegations

from whistleblowers

• Report to the Board on how it has

discharged its responsibilities.

Summary of key activities

during 2023

During the year the Committee reviewed

the following:

Financial reporting

• The Group Annual Report and interim

results announcement, including key

accounting judgements and disclosures

• Parent Company financial statements

(both annual and interim), and related

key accounting judgements and

disclosures, including impairment

testing of the Parent Company’s

investments in subsidiaries

• Reports from the Chair of the Group

Risk Committee on the principal

risks faced by the Group and the

work undertaken by the Group

Risk Committee to ensure risk is

appropriately managed

• Reports from the Chair of the Admiral

Insurance Company Limited (AICL) and

Admiral Insurance (Gibraltar) Limited

(AIGL) Audit Committees on the

financial statements for AICL and AIGL

at HY 2023, including key accounting

judgements and disclosures

• The Group Solvency and Financial

Condition Report, including disclosures

specific to AICL and AIGL

• Presentations from the Group’s

actuarial reserving team and

independent external actuarial

experts to assist the Committee in

concluding on the adequacy of the

Group’s IFRS reserves and Solvency II

technical provisions

• Information supporting the Group’s

Going concern assumption

• Information prepared by management

demonstrating risk transfer within

reinsurance contracts in line

with the requirements of IFRS 17

(Insurance Contracts)

• Updates from the Group’s consumer

lending business on the IFRS 9

(Financial Instruments) expected credit

loss provision

• Reports assessing the accounting and

disclosure impacts of risk events arising

across the Group

• Information supporting the accounting

treatment of a historic Italian

tax matter

• The financial statement disclosures

on the impact of the new standard

required by IAS 8 (Accounting Policies,

Changes in Accounting Estimates

and Errors) (further detail on the

Committee’s work in relation to IFRS 17

is set out below)

• The Group’s disclosures relating

to climate risk, including those

disclosures required by the TCFD

and CFD, and received a report from

the external auditor on regulatory

developments in climate-related

disclosure requirements.

Internal audit and internal controls

• Reports from the internal audit

functions within the Group on the

effectiveness of the Group’s risk

management and internal control

procedures and progress against the

2023 Audit Plan, approval of changes

requested to the 2023 Plan and the

Audit Plan for 2024 including resourcing

levels, details of key audit findings,

and actions taken by management to

manage and reduce the impact of the

risks identified

• Performance and effectiveness of the

Internal Audit function

• A summary of the key findings from all

reports from Internal Audit, including

management responses to the

conclusions set out in the reports

• Reports on the controls in place,

including significant breaches or

incidents, across the Group and its

overseas subsidiaries

• European insurance internal audit

updates, including an update from the

Chair of the European Audit Committee

(of the Group’s subsidiary Admiral

Europe Compañía de Seguros, S.A.,

(AECS) which underwrites the Group’s

European insurance businesses) on the

activities of that Committee

Corporate Governance

163

Admiral Group plc Annual Report and Accounts 2023

• US insurance internal audit updates,

including an update from the Chair of

the Audit Committee of the Group’s US

subsidiary Elephant, on the activities of

that Committee

• Reports on the output of the

assessments of adherence to and

embedding of the Group Minimum

Control Standards’ framework and

planned developments in relation to

that framework

• Reports on the various improvements

underway to the Group’s control

environment including regular updates

on work to strengthen the Group’s IT

access control management and plans

to further enhance the Group’s Fraud

and Financial Crime Framework.

External audit

• Reports from the external auditor

highlighting system and control

recommendations, key accounting and

audit issues and conclusions on the half

year and full year reporting

• Confirmation of the external

auditor’s independence

• Reports from Deloitte, the external

auditor, on their proposed audit scope

and plan

• Proposed external audit fee and the

drivers of the year-on-year increase.

Other

• Updates on tax matters supporting the

Group Tax Strategy which is available at

www.admiralgroup.co.uk

• Progress updates on the BEIS

consultation relating to audit and

corporate governance reforms,

including updates received from the

external auditor

• The effectiveness of the Group’s

Whistleblowing Policy, which sets

out the arrangements for raising

and handling allegations from

whistleblowers, and receiving regular

reports on instances of whistleblowing

that have been raised

• The Committee’s terms of reference

• The Committee’s effectiveness.

Significant issues considered

by the Committee

After discussion with both management

and the external auditor, the Audit

Committee determined that the key risks

of misstatement of the Group’s financial

statements, as in prior years, related

to the valuation of insurance contract

liabilities under IFRS 17. This key risk of

misstatement can be separated into

the best estimate of future cashflows

required to fulfil insurance contracts,

and the methodology and measurement

of the risk adjustment for non-financial

risk. In addition, given the inflationary

environment referenced above, a specific

significant risk was agreed in relation to

inflation assumptions applied to UK Car

bodily injury claims reserves given the

long-tail nature of the claims and the

current higher inflationary environment.

The implementation of IFRS 17 in

the period also gives rise to a key

audit matter given that the standard

introduces a number of new key

accounting judgements.

Furthermore, the IFRS 9 provision for

expected credit losses in relation to

the Group’s lending business, Admiral

Money, and the impairment testing

exercise performed in relation to the

Group Parent Company investments

in Group subsidiaries were significant

financial reporting issues considered by

the Committee.

These significant issues were discussed

with management during the year and

with the external auditor at the time

the Committee reviewed and agreed

the external auditor’s Group audit plan,

when the external auditor reviewed

the interim financial statements in

August 2023 and also at the conclusion

of the external audit of these full year

financial statements.

Valuation of insurance

contract liabilities

The Committee continued to spend

significant time reviewing and challenging

the approach, methodology and key

assumptions adopted by management

in setting reserves for insurance liabilities

in the financial statements to ensure

consistency with the Group’s stated

accounting policies, which have been

updated following the implementation

of IFRS 17.

In this context, the Committee challenged

management on the important

judgements and assumptions used in

estimating the best estimate of future

claims cashflows, including specific

focus on inflation assumptions applied in

relation to UK Car bodily injury claims, and

the measurement of the risk adjustment

for non-financial risk. Further information

is set out in more detail in the critical

accounting estimates section of note 2 to

the financial statements.

As in previous periods, the Committee

held meetings specifically focused on

reserving, receiving presentations on UK

Car Insurance reserves from the internal

actuarial reserving and finance teams, as

well as the independent external actuarial

advisors. At these meetings management

provided further information on the

projected best estimate claims reserves,

as well as payment patterns used to

estimate the resulting future claims

cashflows. Management also presented

to the Committee on the measurement

of the risk adjustment for non-financial

risk including the methods used to

estimate the reserve risk probability

distribution and the selection of the

confidence level in line with the Group’s

stated 85th – 95th percentile accounting

policy. The Committee also received

presentations from the external actuarial

firm that performed independent

validation of the best estimate claims

reserves and the external Big Four

firm that performed independent

validation of the reserve risk distribution

and the appropriateness of the risk

adjustment at the target confidence

level. Management were challenged by

the Committee on the key assumptions

and judgements made in these processes

and justification for the movement

in confidence level since the start of

the year.

The Committee reviewed and discussed

the effects of inflationary pressures on

claims reserves in relation to both damage

and bodily injury claims. In addition,

the move to a new claims system was

considered as well as scenarios in relation

to the future Ogden rate and updates

regarding the FCA’s multi-firm review of

motor total loss claims. The Committee

also reviewed management’s assessment

of the level of uncertainty inherent in

the claims reserves, and changes to that

assessment from previous periods as well

as the results of management’s reserve

stress and scenario testing.

omm

ttee Report

continued

164 Corporate Governance164

Admiral Group plc Annual Report and Accounts 2023

The Committee also received updates

from the Group’s external auditor,

Deloitte, on its work in relation to this

significant audit risk. This included

reviewing management’s actuarial data

quality assessments, best estimate

reserve projections and the risk

adjustment for non-financial risk, as well

as assessing management’s qualitative

and quantitative support for gross

insurance contract liabilities included

in the financial statements. Based on

this work, the auditor was satisfied that

the financial statement reserves remain

appropriate and consistent with the

Group’s accounting policy.

The Committee also received reports on

the reserving processes for the Group’s

insurance businesses other than UK Car

Insurance. Management presented an

overview of the claims reserving processes

and resulting recommendations for

the UK Household and UK Van lines of

business as well as European and US

motor businesses, including the results

of actuarial best estimate reserving

processes and justification for the risk

adjustment for non-financial risk for

each business.

Whilst acknowledging that the setting

of reserves for claims which will settle in

the future is a complex and judgemental

area and having had the opportunity

to challenge management’s proposal

in respect of both best estimate

reserves and risk adjustment held above

best estimate to cover unforeseen

deteriorations in the best estimate,

the Committee is comfortable that an

appropriate process has been followed,

and that there has been sufficient

scrutiny, challenge and debate to give

confidence that the reserving levels set

incorporate a risk adjustment for the

uncertainty in the best estimate which is

consistent with the Group’s stated IFRS 17

accounting policies.

Inflation assumptions applied

within valuation of UK motor

bodily injury claims reserves

The Committee placed focus during the

year on reviewing and challenging the

approach, data inputs, methodology

and key assumptions adopted by

management in determining an

allowance for excess inflation on

bodily injury claims, included in claims

reserves. Whilst acknowledging that

ultimate outcome is highly uncertain,

the Committee had the opportunity to

challenge management’s judgements

in respect of selected projections of

inflation, in particular future wage

inflation as well as the elements of

bodily injury claims that will be subject

to this excess inflation. The Committee

concluded that the data and underlying

methodology used in calculating excess

inflation was reasonable, and in line with

market practice and that the inflation

assumptions adopted were appropriate.

Other financial reporting issues

IFRS 17 implementation

IFRS 17 is the new insurance accounting

standard that came into effect from

1 January 2023. Given the fundamental

changes to the Group’s financial

statements and systems and processes

that have arisen because of the new

standard, the Committee dedicated

a significant amount of time during

previous financial reporting periods

to understanding and assessing the

impact of the standard on the Group’s

financial reporting process and the

progress of implementation of chosen

software solutions.

In 2023, the Group presented interim

and full year financial statements under

the new standard, including a transition

balance sheet as at 1 January 2022, a full

restatement of 2022 primary financial

statements and related notes to the

financial statements as well as revised

accounting policies and other disclosures.

Throughout the year the Committee

continued to dedicate significant time to

the subject and received regular updates

on implementation activities, as well

as reviewing and approving accounting

policies, methodologies and judgements

relating to the new standard. Activities of

the Committee included:

• Regular updates as to the programme

status, ahead of the first reporting

under IFRS 17 in the Group’s interim

financial statements including

progress against plans for individual

workstreams and other issues such as

resourcing levels

• Review and approval of the Group’s

transition balance sheet as at 1 January

2022, including the work of the

external auditor Deloitte in respect of

the transition

• Review and approval of the Group’s

restated 2022 interim and full year

financial statements under IFRS 17,

including the work of the external

auditor Deloitte in respect of

the restatement

• Review and approval of all IFRS 17

related policies including accounting

policies and those related to accounting

judgements and materiality

• Review and approval of the Group’s

revised methodology for estimating

co-insurance profit commission, which

is recognised under the accounting

standard for revenue, IFRS 15.

Whilst not directly impacted by IFRS 17,

the loss ratio inputs to the calculation

were amended to ensure consistency

with the new standard

• Reports setting out management’s

assessment of key technical accounting

matters as part of the review of 2023

interim and final financial statements,

including the status of the work of the

external auditor Deloitte in respect of

those technical issues

• Updates from the Group’s external

auditor on their audit of the Group’s

IFRS 17 work and IFRS 17 developments

in the market generally.

The critical accounting judgements

reviewed by the Committee in relation

to IFRS 17 included management’s

justification for the use of the simplified

‘Premium Allocation Approach’, the

lowest unit of account under IFRS 17

and the classification and presentation

of reinsurance contracts under the

standard. The Committee, having

reviewed management’s supporting

papers and hearing from external auditor

Deloitte on the matters, concluded

that the judgements were reasonable

and appropriate.

The Committee was pleased to note the

positive findings of the FRC’s thematic

review of companies’ disclosures relating

to IFRS 17 ‘Insurance Contracts’ in the

interim accounts, which highlighted the

Group’s disclosures as an example of

better practice.

Corporate Governance

165

Admiral Group plc Annual Report and Accounts 2023

IFRS 9 provision for

expected credit losses

During the year, the Committee has

continued to review and challenge the

IFRS 9 provision for expected credit loss

arising through the Group’s loans business,

Admiral Money. Areas of focus included

the potential impact of UK inflationary

pressures and the increase in UK market

interest rates on default experience,

the assessment of circumstances

indicating a significant increase in credit

risk and underlying forward-looking

economic assumptions.

Further information on the provision and

key assumptions are found in note 7 to

the financial statements.

On the basis of the work performed and

having had the opportunity to challenge

management’s proposal in respect of

the provision for expected credit losses,

the Committee was comfortable that an

appropriate process has been followed,

noting the continued enhancements

made to the provisioning methodology

reflecting the increasing maturity of

the business, and that there has been

sufficient scrutiny and challenge to give

confidence that the provision has been

set in line with the IFRS 9 requirements

and included appropriate allowance for

uncertainties arising from the current

macro-economic environment.

Impairment testing for the Group’s

investment in subsidiaries

During the year, the Committee considered

management’s work in relation to the

Group Parent’s investment in subsidiary

entities. Under the relevant accounting

standard, IAS 36 ‘Impairment of Assets’

management identified entities with

indicators of impairment and performed

detailed impairment testing in relation to

those investments, calculating recoverable

amounts primarily through the use of

discounted cashflow calculations.

Management proposed the recognition

of non-cash impairment losses in

respect of investments in Elephant, the

Group’s US insurer, as well as subsidiary

entities supporting the Group’s newer

growth businesses in the UK and in

Italy. The impairment charge relating

to Elephant followed a similar approach

to previous periods and was the more

material of the impairment losses,

reflecting the reduction in net assets

of the business (used as a proxy for fair

value less costs to sell) arising from losses

incurred during 2023.

The Committee challenged

management’s proposal for recognition

of impairment losses as well as

conclusions for other subsidiary entities

where indicators for impairment were

present but no impairment was deemed

necessary as a result of recoverable

amounts being in excess of the carrying

value of investments.

Misstatements

No material unadjusted audit differences

were reported by the external auditor.

The Committee confirms that it is

satisfied that the auditor has fulfilled

its responsibilities with diligence and

appropriate professional scepticism.

After reviewing the presentations

and reports from management and

consulting, where necessary, with the

auditor, the Committee is satisfied that

the financial statements appropriately

address the critical judgements and key

sources of estimation uncertainty (both

in respect to the amounts reported and

the disclosures). The Committee is also

satisfied that the significant assumptions

used for determining the value of assets

and liabilities have been appropriately

scrutinised, challenged and are

sufficiently robust.

External audit

External auditor appointment

The Group last completed an audit

tender during 2020/21 when, following

the completion of a transparent and

independent audit tender process,

Deloitte LLP were recommended to

shareholders as the Group’s auditor at

the Annual General Meeting (AGM) in

April 2021 and a resolution was passed

to that effect. Deloitte LLP’s overall tenure

up to and including the 2023 financial

year is eight years. The Committee

confirms it is in compliance with the

provisions of the Statutory Audit

Services for Large Companies Market

Investigation Order 2014.

On the recommendation of the

Committee, the Board approved that

Deloitte should be recommended

to shareholders for reappointment

as the Group’s auditors at the 2024

AGM. A resolution to that effect will be

proposed at the AGM.

Audit fee

During 2023, the Committee reviewed

and approved the audit fee proposal

for the 2023 year end Group audit.

The agreed fee for the audit and other

assurance related services for 2023 is

£3.48 million (2022: £2.76 million), with

the increase reflecting inflation in line

with market increases, the impact on

ongoing audit work required relating

to IFRS 17 (Insurance Contracts) and

the impact on audit work required

in relation to new financial systems.

The Committee approved the fee increase

having discussed with the auditor the

rationale for the proposal.

In addition to the agreed fee for 2023,

the Group incurred a one-off audit fee

during 2023 of £0.83 million relating

to the transition to IFRS 17 and the re-

presentation of the Group’s 2022 financial

statements under the new standard.

Safeguarding the external auditor’s

independence and objectivity

The Committee reviewed and approved

its policy on non-audit services in February

2023 and was satisfied that it continued

to align with current regulatory guidance.

Under the policy, the Group’s statutory

auditor will only be engaged to carry

out non-audit services in prescribed

circumstances or where there is a

regulatory request, and where agreed

by the Committee. This is to ensure that

the independence and objectivity of

the external auditor is safeguarded.

The Committee will continue to monitor

regulatory developments in this area to

ensure that its policy on non-audit fees

adheres to current guidance.

omm

ttee Report

continued

166 Corporate Governance166

Admiral Group plc Annual Report and Accounts 2023

Effectiveness of the external

audit process

The Committee undertakes an annual

review to assess the independence and

objectivity of the external auditor and the

effectiveness of the audit process, taking

into consideration relevant professional

and regulatory requirements, the progress

achieved against the agreed audit plan,

and the competence with which the

auditor handled the key accounting and

audit judgements.

As part of its review, the Committee

considered, among other things,

the following: submissions by the

external auditor relating to their

continued independence, the output

of a questionnaire completed by all

Committee members and relevant

members of the Group’s Finance and

Internal Audit functions and the findings

of the FRC Audit Quality Reviews (AQR)

published in July 2023. Following this

review, the Committee concluded that

the external auditor, Deloitte LLP,

remained independent and that the

external audit process remained effective.

Internal audit

The Group Head of Internal Audit

attended all Audit Committee meetings

and provided a range of presentations

and papers to the Committee, through

which the Committee monitored the

effectiveness of the Group’s material

internal controls, including financial,

operational and compliance controls on

behalf of the Board.

The Group Head of Internal Audit also

carries out an annual review of the

effectiveness of the Group’s systems of

internal control and risk management

and reports on the outcome of this review

to the Committee. In February 2024, the

Group Head of Internal Audit reported

an adequate level of assurance in relation

to the Group’s arrangements for risk

management, control infrastructure,

governance and fraud prevention controls.

This was supported by a summary of the

assurance activity performed by the Line

2 Risk and Compliance functions and an

annual assessment of internal controls

by Line 2.

The Committee reviewed and approved

the Group Internal Audit Policy, which

includes the Group Internal Audit Terms of

Reference setting out the role, objectives,

reporting lines and accountability,

authority, independence, and objectivity

of the Internal Audit function.

The Committee also monitored and

discussed the evolution and development

of the Internal Audit function, and

considered the role, competence and

effectiveness of each internal audit

function across the Group. The Group

Head of Internal Audit continues to have

responsibility to ensure the quality of the

internal audit activities in the Group’s

overseas locations. The Chairs of the

European and US Audit Committees

each updated the Committee on their

respective activities during the year.

Members of the Committee also

receive all issued internal audit reports,

enabling them to challenge the reports’

content, including the rating, and related

recommendations. The Committee

approves the internal audit plan at the

start of each calendar year and any

inflight amendments to that plan, whilst

the effectiveness and workload of the

internal audit functions and the adequacy

of available resources are monitored

throughout the year.

The European operations in Spain, Italy

and France have a dedicated internal

audit team and the US business also has

its own locally based team. All reports

are evaluated by the Group Head of

Internal Audit to ensure the quality and

effectiveness of the reported findings,

and a summary of the key findings of

each completed audit is provided to the

Committee as part of the Group Head

of Internal Audit’s regular Committee

update. In addition, the UK internal audit

function carries out high-level governance

reviews of all foreign operations, assessing

the internal control frameworks and

system of risk management.

Committee effectiveness review

As part of the Committee’s annual review

of its own performance and processes,

each Committee member completed a

comprehensive questionnaire designed

to provide objective assessment of the

Committee’s performance, including its

effectiveness in monitoring internal and

external audit.

The Committee discussed the results of

the review at its meeting in December

2023 and concluded that the Committee

continued to operate effectively and

within its remit. There were a number of

areas identified for further improvement,

such as ensuring that issues and

risks were prominently presented in

Committee papers.

Priorities for the Committee for 2024

include ensuring that the Committee

is appropriately briefed on the UK

Corporate Governance Code change and

climate-related reporting, requesting the

relevant business managers to attend

Committee meetings to answer questions

on significant internal audit reports and

reinforcing the use of more effective

summaries to highlight the issues and

risks that the Committee needs to

focus on.

Whistleblowing

On behalf of the Board, the Committee

considered and reviewed the

Group’s whistleblowing policy and

received quarterly updates on the

use and effectiveness of the policy,

whistleblowing metrics and the

instances of whistleblowing that had

been raised across the Group during the

year. During the year, the Committee

concluded that the Group’s current

whistleblowing arrangements were an

appropriate means by which employees

could raise concerns in confidence

and anonymously.

Corporate Governance

167

Admiral Group plc Annual Report and Accounts 2023

RISK EFFECTIVELY

Managing

Dear Shareholder,

As Chair of the Group Risk

Committee, I am pleased

to present the Committee’s

report for 2023.

The Committee has received updates

on each of the Group businesses as

part of the Group’s Enterprise Risk

Management Framework (ERMF).

Developments considered by the

Committee throughout the year included:

• Admiral’s risk strategy and approach

to risk management including regular

reviews of the Group’s risk strategy and

risk appetite, monitoring a suite of

Key Risk Indicators, and oversight of the

management of material risk events

• Ongoing risk assessment and

monitoring of the impact of inflation,

market volatility, and economic outlook

on capital and liquidity risks across the

Admiral Group

• The implementation of Consumer Duty

• Oversight of work required to ensure

Admiral is prepared to meet the

challenges of climate change

• Oversight of material projects and

change programmes

• Oversight of Admiral’s technology and

Information Security work, including

the future technology strategy

• Discussions on people risk and

risk culture

• The continuing development of the

Admiral internal model.

“The Group Board is of

the view that the Group’s

risk management and

internal control systems

have operated eﬀectively

during the year.”

Andy Crossley

Chair of the Group Risk Committee

Group Risk Committee Report

Eight

meetings

in 2023

Risk strategy and approach to risk

management: During the year the

Committee has discussed and considered

proposals to enhance the risk strategy

and the approach to risk management

in order to continue supporting the

effective and efficient delivery of the

Group’s overall strategy. The Committee

continues to monitor a suite of Key Risk

Indicators with associated triggers and

limits against the Group risk appetite.

The ongoing focus on monitoring and

reporting customer outcome risks

continues with the Committee reviewing

the Group Conduct Risk Framework

(aligned with the ERMF). The Committee

also received updates on the Group

Minimum Standards which continue

to be enhanced and embedded.

The Committee has spent time on

key risks that affect the Group as well

as reviewing the management and

outcomes of notable risk events reported

during the year.

Capital management: The Committee

has reviewed the Group’s proposed

dividend level, capital plan and capital

buffer in line with the Capital Policy.

The review considered the expected

impact on the Group’s solvency ratio

due to a range of different sensitivities,

and stress and scenario tests. The Group

continues to make use of Undertaking

Specific Parameters (USPs) in Admiral

Insurance (Gibraltar) Limited (AIGL) and

the Volatility Adjustment (VA) in AIGL and

its UK insurance entity, Admiral Insurance

Company Limited (AICL). The Committee

discussed the capital add-on, and received

updates on the process and outcome

during the year.

Committee members

Members Attendance

Andy Crossley (Chair) 8/8

JP Rangaswami 8/8

Cristina Nestares

7/8

Karen Green 8/8

Jean Park

1/1

1 Cristina Nestares missed one meeting due to a

preexisting arrangement.

2 Jean Park retired from the Board and all of her Committee

memberships on 20 January 2023.

The Committee held eight scheduled

meetings, with an additional meeting also

taking place.

168 Corporate Governance168

Admiral Group plc Annual Report and Accounts 2023

Economic uncertainty: The Committee

has reviewed and continues to monitor

the Group’s solvency and liquidity

positions in response to market volatility

and wider economic uncertainty,

considering factors such as changes in

inflation, the wider impact of supply chain

disruption, banking events, high interest

rates, and the pressures on individual

household finances.

Consumer Duty: The Committee received

regular updates on the delivery of

Consumer Duty implementation during

2023. Since the Duty came into effect in

July 2023, the Committee has continued

to receive regular updates, focusing on

how the Duty is embedding and on the

delivery of good customer outcomes.

Climate change: The Committee has

received updates on the work being

undertaken relating to climate change to

ensure that Admiral is meeting current

requirements and is appropriately

preparing to meet future challenges.

These updates include commentary

on risk management, ongoing climate-

related strategic developments, and

the changes that may be necessary for

compliance with emerging regulatory

requirements. This is further described

in the Viability Statement (page 109),

and additional information on Admiral’s

approach to climate change can be found

in the Task Force on Climate-related

Financial Disclosures (page 73).

Geopolitical instability: The Committee

has been apprised of geopolitical

developments over the course of the

year. In particular, the Committee has

considered the effects of the 2022 Russian

invasion of Ukraine, which continues

to drive cost of living pressures and

put supply chains under strain, and the

added uncertainty from the more recent

Israel-Hamas conflict. The Committee

has also considered potential exposure to

disruption in the global electric vehicle

(EV) manufacturing industry, which is

dominated by China, if a geopolitical

conflict were to develop between China

and Taiwan or the United States.

Material projects and change

programmes: As a result of the

Committee’s oversight of individual

Group entities, combined with the

oversight afforded by the Group’s project

governance framework, the Committee

has considered and challenged updates

relating to material projects and change

programmes within the Group, including

those designed to accelerate existing

products. The Guidewire migrations in

the Group have been the topic of focused

sessions at GRC, in particular to ensure

consideration of the published lessons

learnt from an incident at a peer.

Technology and information security:

The level of oversight of technology

risks including operational resilience has

continued to increase over the year with

regular reporting and discussion of the

risk position at GRC. The Committee

has received regular updates on

relevant topics including the future

technology strategy.

People risk and risk culture: The

Committee has considered the potential

impact on people and culture when

reviewing strategic decisions. In addition,

a number of the Key Risk Indicators and

supporting commentary are focused on

people risk.

Progress of Admiral internal model

(AIM): The Group Risk Committee and

Board have maintained their focus in

relation to the Admiral internal model

during 2023, and have continued to

receive regular reporting to help drive

key decisions in relation to the model.

The UK Car model has been updated in

2023 to address limitations identified

during prior independent validation

reviews. This will help to ensure that the

model is well placed to support a planned

regulatory pre-application. The new UK

Car model will be subject to another

cycle of independent validation to ensure

that the updates have been successfully

implemented prior to the pre-application

regulatory submission. In parallel, the

project is continuing a programme to

expand the model to produce Solvency

Capital Requirements for Admiral Group,

AIGL and AICL and to expand its scope

to include UK Household, UK Van,

Travel and Pet products. This expanded

scope partial internal model will be the

basis of a regulatory full application.

Regular communications with the PRA

and GFSC are being held both at senior

management and project levels to align

delivery for the pre-application and full-

application regulatory reviews.

Andy Crossley

Chair of the Group Risk Committee

6 March 2024

Duties and responsibilities

of the Group Risk Committee

The duties and responsibilities of the

Committee are set out in the Committee’s

Terms of Reference, and were reviewed

and approved by the Admiral Group Board.

The main responsibilities of the

Committee are:

• Overseeing the development,

implementation and maintenance of

the Group’s overall Risk Management

Framework and ensuring that it is

in line with emerging regulatory,

corporate governance and best

practice guidelines

• Considering and recommending to

the Board for approval the Group’s risk

appetite, as well as ongoing monitoring

and review of the Group’s risk exposures

• Monitoring the Group’s prudential

risk exposure, which includes ensuring

that the Group’s capital resources and

liquidity profile are appropriate to

its needs, whilst meeting minimum

regulatory requirements, including

overseeing and challenging the design

and execution of the Group’s stress and

scenario testing

• Reviewing the Group’s capacity to pay

interim and final dividends

• Reviewing the annual Group ORSA

Report and any required interim ORSA

Reports, with recommendations being

provided to the Board for approval

• Reviewing and approving the Solvency

II Actuarial Function Reports on

Risk Management, Reinsurance and

Underwriting each year

• Reviewing the Group’s progress towards

approval of the Group’s internal

capital model

• Monitoring the adequacy and

effectiveness of the Group’s Risk and

Compliance functions

• Approving the annual plans and

resourcing for the Group Risk and

Compliance functions which include

reviewing regulatory developments and

any planned meetings between the

PRA and FCA and the business

• Reviewing any significant risk issues

that have a material impact on the

customers of the business and/or

concern the regulator

Corporate Governance

169

Admiral Group plc Annual Report and Accounts 2023

• Ensuring the adequacy and

effectiveness of the Group’s systems

and controls for the prevention of

financial crime, and data protection

systems and controls

• Reviewing the Group’s compliance with

Solvency II

• Annually reviewing and approving the

Group Minimum Standards Framework

and required standards

• Reviewing compliance with Group

policies, including the Group’s

Reinsurance Policy, Group ORSA Policy,

and Group Underwriting Policy

• Reviewing the proposed risk-based

adjustments to remuneration for senior

managers and making subsequent

recommendations for approval to

the Group Remuneration Committee,

as well as providing feedback on the

Directors Remuneration Policy, and

commenting on remuneration metrics

to help ensure there is no conflict with

risk management objectives

• Reviewing reports from the Group

Risk, Group Compliance, Group Data

Protection and Privacy, and Group

Internal Audit functions

• Formally reporting to the Group

Audit Committee to facilitate their

recommendation of the Annual Report

and Accounts to the Board on the

following key areas and disclosures;

principal risks and uncertainties, risk

management and internal control,

viability, risks associated with material

transactions and/or strategic proposals,

and the Taskforce on Climate-related

Financial Disclosures.

The Committee Chair reports formally

to the Board on the Committee’s

proceedings after each meeting,

on all matters within its duties and

responsibilities, as set out in previously

circulated minutes to the Board.

The Committee Chair also reports on the

activities of the Committee in a formal

written report that is submitted to and

discussed by the Board annually.

The work of the Committee is supported

by more detailed work undertaken by

subsidiary Boards and/or executive

Risk Management Committees in each

of the Group’s operational entities.

At each meeting, the Risk Management

Committees consider notable:

movements in the operation’s risk

profile; risk events; and emerging risks.

Risk Management Committees also assess

and monitor regulatory issues, ensuring

that their resolution and the actions

taken are appropriately recorded. The Risk

Management Committees receive

regular information on Conduct Risk,

such as complaint handling reports and

other related management information.

The Group Risk Management function

reviews and collates information from

across the Group for consideration by

the Committee.

In addition, to ensure that the Committee

is operating effectively, it conducts a

periodic review of its performance (last

reviewed in November 2023) and at

least annually reviews its constitution

and terms of reference (last reviewed

in December 2023). Any changes it

considers necessary are recommended

to the Group Board for approval. As part

of the Committee’s annual review of

its own performance and processes,

all Committee members and regular

attendees were invited to complete an

online evaluation designed to provide

objective assessment of the Committee’s

performance, including its effectiveness.

The Committee discussed the results

of the review at its meeting in January

2024 and concluded that, overall, the

Committee remained effective with

feedback from the Committee being

largely positive. Areas of focus and

improvement for the Committee in 2024

included greater focus on change risk

and further examination of the business’s

ability to manage key/strategic risks.

Summary of key Group Risk

Committee activities in 2023

During the year the Committee:

• Reviewed the Group’s updated risk

strategy, and ongoing enhancements

to the risk appetite framework in

the context of the Group’s agreed

strategic objectives

• Recommended the 2023 Group ORSA

Report and ORSA Policy for Board

approval prior to submission of the

report to the regulator

• Reviewed the Group’s capacity to pay

dividends, capital plan and capital

buffer in line with the Capital Policy

• Received updates on the Group’s

regulatory capital add-on review as part

of the Solvency II capital requirements

• Received regular updates on customer

outcome risk, the Group Minimum

Standards, and Policy Framework

• Received in-depth updates of

individual Group entities, Admiral

Europe Compañia de Seguros (AECS),

EUI, Admiral Money (AFSL), Elephant

and Able

• Considered in-depth analysis of a

number of the Group’s most significant

risk areas, via stress and scenario testing

and reverse stress testing

• Considered the adequacy of risk

mitigation measures and contingency

planning including a review of the

Group’s reinsurance provisions

• Dedicated a significant amount of time

to developing the Admiral internal

model, receiving regular updates on the

progress of the project and providing

challenge to key project work streams

• Monitored climate change-related

initiatives, including continued

progress to reduce Scope 1 and 2

emissions, progress to validating Scope

3 emissions, and submitting science-

based targets

• Received regular risk monitoring

reports on performance of Key Risk

Indicators within the overall risk

management framework

• Received updates on the impact of

notable risk events throughout 2023

• Received regular updates in relation

to key programmes of work including

Identity and Access Management,

Guidewire Upgrade and Consumer

Duty, as part of the Group’s project

governance framework

• Considered the annual renewal of the

Group’s corporate insurance coverage

• Assisted the Group Board in its

oversight of M&A opportunities,

including the acquisition due in 2024 of

the UK direct Home and Pet personal

lines insurance operations of RSA.

Principal risks and uncertainties

The Board of Directors confirms that it

has performed a robust assessment of

the Group’s principal and emerging risks.

These risks, along with explanations

of how they are being managed and

mitigated, are included in the Strategic

Report, page 98.

Information on how key risk drivers have

impacted on the Group’s principal risks

has been included within the Viability

Statement, page 109.

Group Risk Committee Report

continued

170 Corporate Governance170

Admiral Group plc Annual Report and Accounts 2023

Risk management and internal

control systems

The system of risk management and

internal control over Admiral’s insurance,

operational, market, credit and group

risk is designed to manage rather than

eliminate the risk of failure to achieve

business objectives and breaches of

risk appetites.

Furthermore, risk management can only

provide reasonable and not absolute

assurance against material misstatement

or loss. The Group Board is ultimately

responsible for the Group’s system of

risk management and internal control

and the Group Audit Committee (GAC)

has reviewed the effectiveness of this

system (a summary of GAC duties and

responsibilities, as well as key GAC

activities in 2023 is available on page 161.

The Group Board is of the view: that there

is an ongoing process for identifying,

evaluating and managing the Group’s risks

and internal controls; that it has been in

place for the year ended 31 December

2023 and that it has operated effectively;

and that, up to the date of approval of the

Annual Report and Accounts, it is regularly

reviewed by the Group Board and accords

with the internal control guidance

for Directors provided in the 2018 UK

Corporate Governance Code.

The Group Board confirms that it has

performed a robust assessment of the

Group’s principal and emerging risks.

These risks, along with explanations

of how they are being managed and

mitigated, are included in the strategic

report on page 98, with key risk drivers

impacting Admiral’s principal risks and

uncertainties being further discussed

in the Viability Statement on page

109. The Group Board is responsible for

determining the nature and extent of

the principal risks it is willing to take

in achieving its strategic objectives.

This assessment supports the Group

Board in monitoring the integrity of the

Group’s reported financial statements.

The Group Board meets at least seven

times a year to discuss the direction of

the Group and to provide oversight of the

Group’s risk management and internal

control systems.

The Group Board has delegated the

development, implementation and

maintenance of the Group’s overall risk

management framework to the Group

Risk Committee (GRC). The GRC reports

on its activities to the Group Board and

the GAC, supporting the overall opinion

provided by the GAC that the Group’s

internal control, risk management

and compliance systems continue to

operate effectively.

The Group Board has delegated to the

GAC the review of the adequacy and

effectiveness of the Company’s internal

financial controls, and internal control and

risk management systems.

The Group operates a “three lines

of defence” approach to Risk and

Internal Control.

1st Line of Defence: The Group

Board recognises that the day-to-day

responsibility for implementing policies

for risk identification, assessment

and management lies with the senior

management, whose operational

decisions must take into account risk and

how it can be controlled effectively.

2nd Line of Defence: The “second line of

defence” is led by the Group Chief Risk

and Compliance Officer and comprises

the Corporate Governance functions and

Committees that are in place to provide

oversight of the effective operation of the

internal control framework. The Corporate

Governance functions facilitate the

oversight and operation of the Group

Policy Framework and Group Minimum

Standards, covering risk management and

controls for all notable risks to the Group.

The Corporate Governance functions

perform second line reviews, including

reviews of the capital modelling and

business planning processes to support

the Group Board’s assessment of the

Group’s ongoing viability. Regular reviews

of risks are undertaken in conjunction

with senior management, with the

results of these reviews recorded in risk

registers and reported to the appropriate

governance forums and Boards.

3rd Line of Defence: The “third line of

defence” comprises the independent

assurance provided by the Group Internal

Audit function, overseen by the GAC.

Internal Audit undertakes a programme

of risk-based audits covering all aspects

of both the first and second lines of

defence. The findings from these

audits are reported to all three lines, i.e.

Management, the Executive and oversight

Committees, and the GAC.

The Subsidiary Boards, GRC, and entity

Risk Committees receive reports setting

out key performance and risk indicators

and consider possible control issues

brought to their attention by early

warning mechanisms that are embedded

within the operational units. They,

together with the GAC, also receive

regular reports from the Internal Audit

function, which include recommendations

for improvement of the control and

operational environments.

The Chair of the GRC provides a written

report to the Group Board of the activities

carried out by the Committee on an

annual basis (a summary of GRC duties

and responsibilities, as well as key GRC

activities in 2023 is available on page 168).

In addition, the Group Board receives

regular reports throughout the year from

the Chairs of the GRC and GAC as to their

activities, together with copies of the

minutes from Subsidiary Board meetings,

the GRC and the GAC.

The GAC’s ability to provide an opinion

to the Group Board depends on the

provision of periodic and independent

confirmation, primarily by Group Internal

Audit, that the controls established by

Management are operating effectively

and where necessary provides a high-

level challenge to the steps being

taken by the GRC to implement the risk

management strategy.

Corporate Governance

171

Admiral Group plc Annual Report and Accounts 2023

Seven

meetings

in 2023

OUR PEOPLE

ARE SUPPORTED

Ensuring

Committee members

Member Attendance

Evelyn Bourke (Chair) 7/7

Michael Brierley 7/7

Justine Roberts 5/7

Karen Green 1/1

Dear Shareholder,

On behalf of the

Remuneration Committee,

I am delighted to present

the Directors’ Remuneration

Report for the year ended

31 December 2023.

I would like to thank shareholders for

supporting Admiral’s Annual Report

on Remuneration at the April 2023 AGM

with a vote of 88.5%. I look forward

to welcoming you at our AGM in 2024

and to your continued support.

2023 business context

2023 has been a landmark year for

the Group, celebrating thirty years

in business, however, it has not

been without its challenges – both

macroeconomic and geopolitical.

As Milena has made clear in her statement

this year, we have continued to deliver

the right products and service to our

customers. This is evidenced in 6% growth

in customer numbers and profit of £443m,

a solid performance given the challenging

context. We have been able to deliver

this performance due to reacting quickly

and navigating the changing market

conditions well.

During 2023 we have continued to ensure

that our people are supported through

the ongoing cost-of-living challenges.

We are clear that the continuing success

of Admiral is possible due to the hard work

and dedication of the people who work

for us, and we will continue to ensure they

are supported for the year ahead.

“We are recommending

policy changes which

we believe make

the Executive Directors’

packages more competitive,

while reinforcing the

strong alignment with

shareholders’ interests and

maintaining fairness of

reward approach to reinforce

Admiral’s unique culture.”

Evelyn Bourke

Chair of the Remuneration Committee

Remuneration for 2023

Taking into account the approved

remuneration structure and Admiral’s

business performance, the Committee

made the following decisions during 2023.

2021–23 Discretionary Free Shares

Scheme (DFSS)

Based on our performance for the period

2021-2023, 43.76% and 43.73% of the

DFSS award granted in 2021 will vest to

Milena Mondini de Focatiis and Geraint

Jones, respectively. This is the lowest

vesting performance in recent times.

As the 2021 DFSS awards were granted

during the pandemic period, we needed

to consider whether windfall gains have

occurred, as this was a period where share

prices were generally lower than prior

years for most companies. The Committee

is satisfied that no such windfall occurred

on the basis that the share price at

the end of the performance period is

materially lower than the grant price,

and that DFSS awards are allocated as a

fixed number of shares, as opposed to a

percentage of salary.

The full details of the vesting outcomes

are on page 187.

2023 DFSS bonus

Milena Mondini de Focatiis and Geraint

Jones will receive a DFSS bonus of

£296,071 and £172,676 respectively.

This bonus is equivalent to dividends

which would have been paid during

the year on all outstanding DFSS and

salary shares awarded, but not yet

vested, plus a 6.43% adjustment for

performance against a scorecard of

Non-Financial Metrics. In addition, the

DFSS bonus is subject to a potential

downward adjustment to take account

of any risk events considered to have a

material customer, regulatory or financial

impact. For this year there were no such

risk adjustments. The full details of the

DFSS bonus calculations are on page 189.

1. Justine Roberts joined the Remuneration Committee on

31 January 2023, she missed two meetings to pre-existing

engagements made prior to her joining the Committee.

2. Karen Green was appointed to the Remuneration

Committee on 2 October 2023.

172 Corporate Governance172

Admiral Group plc Annual Report and Accounts 2023

Remuneration Committee Report

begins to address the competitiveness

of his base pay relative to the lower

quartile of the market. The Remuneration

Committee intends to increase his salary

to the lower quartile of the market by the

end of this policy period, in increments.

The Remuneration Committee will review

his increase each year to ensure it is

appropriate and moves his positioning

as intended. This means that the increase

for Geraint may be ahead of those

generally given to colleagues for the

duration of the policy.

We propose that Milena Mondini de

Focatiis be granted an award of 95,000

shares and Geraint Jones be granted

an award of 55,000 shares under the

DFSS for 2024. The Committee will review

these awards prior to the September

grant date to ensure the quantum

remains appropriate.

The Committee reviewed the metrics

that will apply to DFSS and Annual Bonus

awards for 2024. Further details are shown

on page 191.

In summary

The proposed Remuneration Policy will

be put to shareholders at the AGM in

2024 and is subject to a binding vote.

Both the Committee and the Board

strongly believe that the proposed

Remuneration Policy will continue to

serve the Group’s strategic ambitions and

incentivise executives to create value for

our shareholders. The Annual Report on

Remuneration (subject to an advisory

vote) will also be put to a shareholder vote

at the AGM. The Committee and I hope

that you vote in favour of both the report

and policy. I am happy to discuss our

Remuneration Policy and Annual Report

on Remuneration with shareholders.

Evelyn Bourke

Chair of the Remuneration Committee

6 March 2024

2023 DFSS award

On 28 September 2023, Milena Mondini

de Focatiis was granted an award of

90,000 shares and Geraint Jones was

granted an award of 52,500 shares

under the DFSS. Using the share price

on the date of the grant of £23.72,

this is the equivalent to £2,134,800

or 290% of Milena’s base salary and

£1,245,300 or 287% of Geraint’s base

salary respectively.

The awards will vest based on:

• EPS - 26.67% weighting;

• TSR vs. FTSE 350 (excluding investment

companies) – 26.67% weighting;

• RoE – 26.67% weighting; and

• the average outcomes of the scorecards

of Non-Financial Metrics used to assess

DFSS bonus adjustments over the

performance period – 20% weighting.

There will also be the potential for

downwards adjustment subject to an

assessment which will take account of

risk events considered to have a material

customer, regulatory or financial impact

over the course of the performance

period. Further details can be found

on page 187.

2024 Remuneration Policy review

The Remuneration Policy was last

approved by shareholders at the 2021

AGM, effective for a maximum of three

years. Consequently, the Committee is

seeking shareholder support for a revised

Remuneration Policy at the 2024 AGM.

In arriving at the planned changes to

the Remuneration Policy the Committee

sought to maintain the positioning of

fixed pay towards the lower end of the

market while ensuring that the variable

elements would deliver significant extra

reward for outperformance. The Chair

of the Committee consulted extensively

with shareholders, who were generally

very supportive of the changes.

There are three proposed changes

to highlight:

• Annual bonus – we propose to remove

the DFSS Cash bonus in favour of an

annual bonus plan. The maximum

bonus potential for the Executive

Directors is proposed to be 200% of

base pay, with 40% of any bonus earned

being deferred into shares for a period

of three years. Bonus payments will

be subject to potential downwards

adjustments to take account of risk

events, and are subject to malus

and clawback provisions, in line with

the Group’s Malus and Clawback

Framework. Full details of the plan can

be found on page 193.

• Pension – there is no change proposed

to the contribution rate (which is

consistent with that available to UK

employees), but we propose the

removal of the absolute cap on the

amount of Company contributions.

• Dividend equivalent on unvested

DFSS and invested annual bonus

share awards – we propose to give

the Committee the flexibility to apply

dividend equivalent shares to the

Executive Directors’ unvested awards.

This would only be deployed for

Executive Directors if it were also being

applied across the whole population

who receive DFSS awards.

2024 remuneration arrangements

Executive Director remuneration

arrangements for 2024 will operate in

line with the 2024 Remuneration Policy,

subject to shareholder vote.

We propose to increase Milena Mondini

de Focatiis’ salary by 4.97% to £774,000

and Geraint Jones’ salary by 7.27% to

£465,000, effective from 1 January 2024.

For Milena, this increase is in line with

the proposed base pay changes across

the UK workforce of the Group, where

we anticipate the average increase for

colleagues to be of the order of 5% as we

continue to support our people through

the impact of the high inflationary

environment. For Geraint, the increase

Corporate Governance

173

Admiral Group plc Annual Report and Accounts 2023

How are remuneration outcomes linked to Group Purpose and Strategy?

The table below details how each of the performance measures link to our Group Purpose and Strategy.

Overview of the Directors’ Remuneration Policy

The following chart shows the operation of the key

elements of the Directors’ Remuneration Policy for

the 2023 performance year:

Group Purpose Strategy

Performance measures

Great

Customer

Experiences

Successful

Business

Positive

impact on

society

Great place

to work

Accelerating

towards

Admiral 2.0 Diversification

Evolution

of Motor

Financial

performance

EPS

ROE

TSR

Non-financial

performance

Strategic Assessment

Customer Feedback

Customer Outcomes

Trust Index

Diversity

Inclusion

The Committee is committed to ensuring remuneration outcomes for the Executive Directors are commensurate with performance

and are aligned to the Group purpose, strategic priorities, and shareholders’ interests. Variable pay is subject to stretching

performance outcomes and is delivered primarily through shares to ensure a long-term focus and alignment with shareholders.

Y1 Y2 Y3 Y4 Y5

Base salary

Pension, Benefits & Share

Incentive Plan (SIP)

Discretionary Free Share

Scheme (DFSS) Bonus

DFSS

Performance period

Holding period

“I would like to thank shareholders

for supporting the Annual Report

on Remuneration at the April 2023

AGM with a vote of 88.5%.”

Evelyn Bourke

Chair of the Remuneration Committee

How did we perform during 2023?

Proﬁt

£443m

2022: £469m

2022 restated IFRS17: £361m

Earnings per share (pence)

111. 2 p

2022: 124.3p

2022 restated IFRS17: 95.4p

Return on equity (%)

36%

2022: 35%

2022 restated IFRS17: 29%

Full year dividend per share (pence)

103.0 p 2022: 112.0p

1 year TSR

33.1% 2022: -26%

174 Corporate Governance174

Admiral Group plc Annual Report and Accounts 2023

Remuneration at a Glance

Milena Mondini

de Focatiis

Geraint

Jones

Non-financial performance

(20% weighting)

69.98% 69.83%

Milena Mondini

de Focatiis

Geraint

Jones

Total financial performance

vesting at 80% weighting

29.76% 29.76%

Total non-financial performance

vesting at 20% weighting

14.00% 13.97%

Overall Vesting 43.76% 43.73%

How was performance determined in 2023?

DFSS awards vesting on performance to 31 December 2023

A summary of the outcomes for the Executive Directors in respect of the 2021 DFSS award:

What did our Executive Directors earn in 2023?

• Pension, benefits and SIP include the

2023 pension contribution of £15,000

for the CEO and CFO, respectively.

• DFSS bonus of £296,017 and £172,676 for

the CEO and CFO, including an adjustment

for performance against the scorecard of

non-financial measures.

• DFSS value for the CEO and CFO relates

to 43.76% and 43.73% of their 2021

DFSS awards vesting, respectively.

SalaryKey

Pension, benefits & SIP DFSS Bonus

DFSS Shares

£737,326 £296,017

£1,011,775

£19,060

CEO

£433,472

£19,060

£172,676

£589,791

CFO

Performance range

Vesting

Contribution

Financial

Performance measure Threshold Maximum Actual outturn

Outcome as %

of maximum

EPS growth (33.33%) 0.50% 36% -37.70% 0.00% 0.00%

TSR vs. FTSE 350 (33.33%) Median Upper quartile 56th percentile 45.20% 15.07%

Return on Equity (33.33%) 25% 55% 41.50% 66.40% 22.13%

Vesting 37.20%

DFSS bonus in respect of 2023

A summary of the 2023 NFM outcomes and associated cash bonus outcomes for the Executive Directors:

Strategy

Customer feedback

Customer outcomes

People (Trust index)

Female representation

at senior level

Inclusion survey results

To tal

Overall scorecard

multiplier

16.50%

8.50%

9.00%

3.75%

100.00%

33.00%

17.00%

18.00%

7.50%

120.00%

25.30%

Outcome

5.63%

7.50%

9.98% (H1)9.44% (H2)

69.29% (H2)62.86% (H1)

107.72% (H2)105.14% (H1)

12.42%(H2)5.46% (H1)

* The Committee did not apply discretion to the outcome of the performance measures.

MaximumCategory Target

9.00%

Corporate Governance

175

Admiral Group plc Annual Report and Accounts 2023

Compliance Statement

This Remuneration Report has been prepared according to the requirements of the Companies Act 2006 (the Act), Regulation 11

and Schedule 8 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2018, the

Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 and other relevant requirements

of the FCA Listing Rules. In addition, the Board has adopted the principles of good corporate governance set out in the UK Corporate

Governance Code (the Code) and the guidelines issued by its leading shareholders and bodies such as ISS, the Investment Association,

and the Pensions and Lifetime Savings Association.

Unless otherwise stated, information contained within this Remuneration Report is unaudited.

The following Remuneration Policy (the “2024 Policy”) will come into effect, subject to shareholder approval, from the April 2024 AGM.

The policy table below summarises the changes from the Remuneration Policy approved at the 2021 AGM (the 2021 Policy).

Key Principles of Admiral Remuneration Arrangements

The Group is committed to maximising shareholder value over time in a way that also promotes effective risk management, excellent

customer outcomes while ensuring that there is a strong link between performance and reward. This is reflected in the Group’s stated

Remuneration Policy of paying competitive, performance-linked and shareholder-aligned total remuneration packages. These comprise

basic salaries coupled with participation in performance-based share schemes to generate competitive total reward packages for

superior performance.

This policy has been reviewed in 2023 as part of the usual three-year cycle and will be put to a shareholder vote at the 2024 AGM.

The Board is satisfied that this revised policy continues to meet the objectives of attracting and retaining high quality executives

across the Group.

The Committee reviews the remuneration framework and packages of the Executive Directors and senior managers and recognises the

need to ensure that the Remuneration Policy is firmly linked to the Group’s strategy, including its risk management approach. In setting

the Policy and making remuneration decisions, the Committee takes into account pay and conditions elsewhere in the Group. The main

principles underlying the Remuneration Policy are:

• Competitive total package – the Group aims to deliver total remuneration packages that are market-competitive, taking into account

the role, job size, responsibility, and the individual’s performance and effectiveness. Prevailing market and economic conditions

and developments in governance are also considered, as are general salary levels throughout the organisation. There is sufficient

opportunity within the variable pay of Executive Directors to reward outstanding levels of performance, taking into account the

market context, with upper quartile remuneration outcomes;

• Significantly share-based – our base salaries are typically targeted towards the lower end of market but are combined with

meaningful annual share awards that vest on long-term performance to ensure strong alignment with shareholders and the

long-term interests of the Group. Executives are also encouraged to build up significant shareholdings in the Group to maximise

shareholder alignment;

• Long-term perspective – a significant part of senior executives’ remuneration is based on the achievement of appropriate but

stretching performance targets that support the delivery of the Group’s strategy and shareholder value. The extended performance

and vesting horizons promote a long-term perspective that is appropriate to the insurance sector;

• Effective risk management – incentives are designed to ensure they do not encourage excessive risk-taking. They are aligned with the

delivery of positive customer outcomes and reinforce the Group’s risk policy;

• Open and honest culture – the Group has a strong culture of focussing on collective success, whilst recognising individual contribution

to the Group’s performance, and this is reflected in our remuneration structure across the business; and

• Transparency for stakeholders – the remuneration structure is designed to be easy to understand, and all aspects are openly

communicated to employees, shareholders, and regulators.

176 Corporate Governance176

Admiral Group plc Annual Report and Accounts 2023

Directors’ Remuneration Policy

Remuneration Policy table

This table describes the key components of the remuneration arrangements for Executive Directors.

Purpose and link to strategy Operation Opportunity and performance metrics Changes

Base Salary

To attract and retain

talent by setting

base salaries at levels

appropriate for the

business.

Salaries are reviewed annually or

following a significant change

in responsibilities.

Salary levels/increases take account of:

• Scope and responsibility of

the position.

• Individual performance and

effectiveness, and experience of the

individual in the role.

• Average increase awarded across

the Group.

Any salary increases are applied in line with

the outcome of the review.

For current Executive Directors, that

increases in cash salary will not normally

exceed the increase for the general

employee population over the term of this

Policy. More significant increases may be

awarded in certain circumstances including,

but not limited to: where there has been a

significant increase in role size or complexity,

to apply salary progression for a newly

appointed Executive Director, or where

the Executive Director’s salary has fallen

significantly behind market.

Where increases are awarded in excess of

that for the general employee population,

the Committee will provide the rationale

in the relevant year’s Annual Report on

Remuneration.

No changes.

Pension

To provide retirement

benefits.

The Group operates a Personal Pension

Plan, a Defined Contribution Scheme.

This is available to all employees

following completion of their

probationary period.

Executive Directors may receive an employer

contribution consistent with that received

by UK employees (currently matched

contribution up to 6% of base salary)

or the equivalent value in cash. Base salary

is the only element of remuneration that

is pensionable.

The pension provision and rules are the same

for Executive Directors and the main body

of UK staff.

No change to

contribution rate

(which is consistent

with that available

to UK employees)

but the absolute

GBP cap has

been removed.

Other Benefits

To provide competitive

benefits.

Includes (but not limited to):

• Death in service scheme

• Private medical cover

• Permanent health insurance

• Relocation, at the

Committee’s discretion

All benefits are non-pensionable

Benefits may vary by role.

None of the existing Executive Directors

received total taxable benefits exceeding

5% of base salary during the most recent

financial year, and it is not anticipated that

the cost of benefits provided will exceed this

level over the term of this Policy.

The Committee retains the discretion

to approve a higher cost in exceptional

circumstances (e.g., relocation), or in

circumstances driven by factors outside the

Company’s control (e.g., material increases in

healthcare insurance premiums).

No changes.

Corporate Governance

177

Admiral Group plc Annual Report and Accounts 2023

Purpose and link to strategy Operation Opportunity and performance metrics Changes

Annual Bonus

To motivate and

reward the delivery of

stretching near-term

financial and non-

financial targets

based on the

business strategy.

Bonus payments are determined after

the year end and will be based on

performance achieved against targets

over the financial year.

40% of any bonus will be deferred into

shares for a period of three years, with

the remaining portion paid in cash.

Any bonus earned is non-pensionable.

Where any bonus is deferred, dividend

equivalent shares may be accrued on

awards during the deferral period, only

receivable on shares which vest at the

end of the period.

Bonus payouts are subject to a

potential downwards adjustment

based on an assessment of risk events

considered to have a significant

customer, regulatory or financial

impact over the course of the

performance period.

Bonus payouts are subject to malus

and clawback provisions, i.e., forfeiture

or reduction of unvested awards and

recovery of vested awards. Events

which may lead to the application

of malus and clawback are set out

in the Group’s Malus and Clawback

Framework and include material

financial misstatement, responsibility

for conduct which results in

significant losses, material failure

of risk management, misconduct,

reputational damage and

corporate failure.

The Remuneration Committee has

discretion to adjust the formulaic

vesting outcome to ensure the final

outcome is a fair and true reflection

of underlying business performance,

both financial and non-financial.

Maximum annual bonus potential for

Executive Directors is 200% of base salary.

For a Threshold level of performance,

a bonus of 25% of the maximum

potential award is payable and for target

performance 50% of maximum is payable.

Bonuses will be based on a combination of

financial and non-financial performance

targets. The Committee has the ability to

determine the relevant metrics, weightings

and targets each year based on evolving

business priorities.

The annual bonus is

a new arrangement

which will replace

the previous

DFFS Bonus

arrangement.

178 Corporate Governance

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Directors’ Remuneration Policy

continued

Corporate Governance

Purpose and link to strategy Operation Opportunity and performance metrics Changes

Discretionary Free

Share Scheme (DFSS)

To motivate and

reward longer term

performance, aid

long term retention

of key executive

talent, use capital

efficiently, grow profits

sustainably and

further strengthen

the alignment of

the interests of

shareholders and staff.

Executive Directors may be granted

awards annually at the discretion of

the Committee.

Awards may be in the form of nil or

nominal priced options or conditional

shares. Awards are normally granted

on an annual basis and vest after a

minimum of three years subject to

Group performance and continued

employment.

A two-year holding period applies

to vested awards, during which time

Executive Directors may not sell

the vested awards except to cover

tax liabilities.

Awards are subject to a potential

downwards adjustment based on an

assessment of risk events considered

to have a material customer, regulatory

or financial impact over the course of

the performance period.

Awards are subject to malus and

clawback provisions, i.e., forfeiture or

reduction of unvested awards and

recovery of vested awards. Events

which may lead to the application

of malus and clawback are set out

in the Group’s Malus and Clawback

Framework and include material

financial misstatement, responsibility

for conduct which results in significant

losses, material failure of risk

management, misconduct, reputational

damage, and corporate failure.

The Remuneration Committee has

discretion to adjust the formulaic

vesting outcome to ensure the final

outcome is a fair and true reflection of

underlying business performance, both

financial and non-financial.

Dividend equivalent shares may be

accrued on awards during the vesting

period, only receivable on shares which

vest at the end of the period.

Maximum opportunity: A maximum face

value on award of 500% of base salary

applies. Threshold performance will result

in vesting of up to 25% of the maximum

award.

DFSS shares are granted as a fixed number

of shares (subject to the quantum limits of

the plan, as described above). The number

granted is reviewed and may be adjusted

by the Committee, for example, if there

has been a significant change in share price.

Vesting of DFSS awards is subject to the

Group’s performance over a three-year

performance period. The performance

measures may include EPS growth, ROE,

relative TSR and a scorecard of non-financial

metrics selected by the Committee.

Details of the measures, weightings and

performance targets used for specific DFSS

grants are included in the relevant year’s

Annual Report on Remuneration.

No changes other

than providing

flexibility for

dividend equivalent

shares to be

provided.

Approved Free Share

Incentive Plan (SIP)

To encourage share

ownership across all

employees, using HMRC

approved schemes for

eligible UK employees.

All eligible UK employees participate

in the SIP after completing a minimum

of 12 months’ service. Grants are

made twice a year based on the

results of each half year and vest after

three years subject to continued

employment.

The SIP is an all-employee scheme and

Executive Directors participate on the same

terms as other employees. The acquisition

of shares is therefore not subject to the

satisfaction of a performance target.

Maximum opportunity is in line with

HMRC limits.

No changes.

179

Admiral Group plc Annual Report and Accounts 2023Admiral Group plc Annual Report and Accounts 2023

Purpose and link to strategy Operation Opportunity and performance metrics Changes

In-employment

Shareholding

Requirement

To align interests of

Executive Directors

with shareholders.

Guideline to be met within five years

of the later of the introduction of the

guidelines and an Executive Director’s

appointment.

400% of base salary. No changes.

Post-termination

Shareholding

Requirement

To further align the

interests of Executive

Directors with

shareholders and

encourage a focus on

long-term sustainable

performance.

Shareholding required to be maintained

at the in-employment requirement

(or number of shares held at time of

termination, if lower) for a period of

two years post termination.

400% of base salary (or number of shares

held at time of termination, if lower).

No changes.

The Committee is satisfied that the above Remuneration Policy is in the best interests of shareholders and does not promote excessive

risk-taking. The Committee retains discretion to make changes required to satisfy legal or regulatory requirements and other non-

significant changes to the Remuneration Policy without reverting to shareholders.

Notes to the Remuneration Policy table

Payments from Existing Awards

Executive Directors are eligible to receive payment from any award made prior to the approval and implementation of the 2024

Remuneration Policy. This includes all outstanding awards under the previous 2018 and 2021 Remuneration Policies, or any awards made

prior to appointment to the Board. Details of any such payments will be set out in the Annual Report on Remuneration as they arise.

Selection of Performance Measures

Vesting under the DFSS is linked to the following financial measures: EPS growth, ROE, and relative TSR.

EPS growth has been selected as a performance measure as the Committee feels it is a strong indicator of both long-term shareholder

return and the underlying financial performance of the business. It is transparent and highly visible to executives.

ROE has been selected as the Committee believes that a returns metric reinforces the focus on capital efficiency and delivery of strong

returns for our shareholders, thereby further strengthening the alignment of incentives with Admiral’s strategy.

Relative TSR has been selected to reflect value creation for Admiral’s shareholders as compared to comparative alternative investments.

Since the 2019 award, vesting of DFSS awards is also linked to non-financial measures which may include strategic, customer and other

measures. The Committee believes that the additional emphasis on these measures reinforces Admiral’s focus on our customers and

on other non-financial Group priorities, whilst also more clearly demonstrating alignment of Group remuneration practices with the

requirements of Solvency II.

The specific performance measures and their respective weightings for each DFSS award may vary to reflect the strategic priorities at

the time of the award.

For the annual bonus, forward-looking performance measures, weightings and targets are selected near the start of the year covering

financial and non-financial measures to align with the Group’s strategic objectives.

Performance targets are set taking into account the Company’s strategic priorities and the economic environment in which the

Company operates. The Committee believes the performance targets are stretching and motivational, and that maximum outcomes are

available only for outstanding performance.

180 Corporate Governance180

Admiral Group plc Annual Report and Accounts 2023

Directors’ Remuneration Policy

continued

Remuneration Policy for Other Employees

The Company’s approach to annual salary reviews is consistent across the Group, with consideration given to the role size, complexity,

experience required, individual performance and pay levels in comparable companies.

In general, the Remuneration Policy which applies to other senior executives is consistent with that for Executive Directors.

Remuneration is typically linked to Company and individual performance in a way that reinforces shareholder value creation.

Around 4,300 employees from across the Group, including the Executive Directors, participate in the DFSS. The Committee determines

DFSS awards for those executives within its remit and on an aggregate basis for all other participants in the DFSS. For the Executive

Directors, all DFSS share awards are subject to performance conditions. For other senior managers and employees, a proportion of awards

(ranging from half to two-thirds) are subject to performance, with performance conditions either in line with those described above

or set based on key performance drivers of the individual’s relevant business unit, and the remainder has no performance conditions

attached other than the requirement that the recipient remains an employee of the Group at the date of vesting. Award sizes vary by

organisational level and an assessment of both financial and non-financial performance.

Most holders of DFSS awards receive a DFSS cash bonus, which is equivalent to the dividend on unvested DFSS share awards. The bonus

for a number of senior managers is adjusted for performance against a scorecard of customer and other non-financial metrics.

The Company operates a personal pension scheme which is available to all UK employees once they have completed their probationary

period. For all employees, including the Executive Directors, the Company matches the employee contribution up to a maximum of 6%

of salary or provides the equivalent value in cash.

All UK employees who have served a minimum tenure at Admiral are eligible to participate in the SIP on the same terms. Most overseas

employees receive an equivalent award to the UK SIP awards and these awards have no performance measures attached.

Service Contracts and Leaver/Change of Control Provisions

The Company’s Policy is to limit payments upon termination of employment to pre-established contractual arrangements. In the event

that the employment of an Executive Director is terminated, any compensation payable will be determined in accordance with the terms

of the service contract between the Company and the employee, as well as the rules of any incentive plans. Under normal circumstances,

Executive Directors are entitled to receive termination payments in lieu of notice based on base salary and compensation for loss of

benefits. The Company has the ability to pay such sums in instalments. The notice period for all Executive Directors is one year.

Executive Director Date of appointment Contract duration

Geraint Jones 13 August 2014 Rolling contract, 12-month notice period

Milena Mondini de Focatiis 11 August 2020 Rolling contract, 12-month notice period

There is no provision in the Executive Directors’ contracts for compensation to be payable on early termination of their contract over and

above the notice period element. The Executive Directors’ service contracts are available to view at the Company’s registered office.

When considering termination payments, the Committee reviews all potential incentive outcomes to ensure they are fair to both

shareholders and participants. The table below summarises how the awards under the DFSS and Annual Bonus scheme are typically

treated in specific circumstances, with the final treatment remaining subject to the Committee’s discretion.

Corporate Governance

181

Admiral Group plc Annual Report and Accounts 2023

Plan Scenario Treatment of awards Timing of vesting

DFSS Resignation. Awards lapse under most circumstances

e.g., dismissal for cause or resignation.

n/a.

Death, injury or disability, redundancy,

retirement, or any other reasons the

Committee may determine.

Any unvested award will be pro-rated for

time with reference to the proportion

of the vesting period remaining at termination,

and performance, unless the Committee

determines otherwise.

Normal

vesting date.

Change of control. Unless the Committee determines otherwise,

any unvested award will be pro-rated for time

with reference to the proportion of the

vesting period remaining at change of control,

and extent to which the Committee determines

that the performance conditions have been

met or are likely to be met at the point

of change of control.

Immediately.

Annual bonus Resignation. Eligibility forfeited under most circumstances,

e.g., dismissal for cause or resignation.

n/a

Death, injury or disability, redundancy,

retirement, or any other reasons the

Committee may determine.

Any bonus payable will be pro-rated for

time with reference to the portion of the

performance period remaining at termination,

and performance, unless otherwise determined

at the discretion of the Committee.

Normal

payment date.

Change of control. Unless the Committee determines otherwise,

any bonus eligibility will be pro-rated

for time with reference to the proportion

of the performance period remaining at change

of control, and extent to which the Committee

determines that the performance conditions

have been met or are likely to be met at the

point of change of control.

Immediately.

For all leavers (with the exception of termination for cause), vested DFSS awards that are still subject to a holding period will normally

be released in full at the end of the holding period, though the Committee has discretion to determine otherwise, taking into account

the circumstances at the time.

Non-Executive Directors

The Company has entered into letters of appointment with its Non-Executive Directors (NEDs).

Summary details of terms and notice periods are included below.

NED Term Initial date of appointment

Commencement

of current contract Notice period

Mike Rogers 3 years 1 February 2023 1 February 2023 Three months

Justine Roberts 3 years 17 June 2016 17 June 2023 One month

Andy Crossley 3 years 27 February 2018 27 February 2024 One month

Michael Brierley 3 years 5 October 2018 5 October 2021 One month

Karen Green 3 years 14 December 2018 14 December 2021 One month

Jayaprakasa Rangaswami 3 years 29 April 2020 29 April 2023 One month

Evelyn Bourke 3 years 30 April 2021 30 April 2021 One month

Bill Roberts 3 years 11 June 2021 11 June 2021 One month

Fiona Muldoon 3 years 2 October 2023 2 October 2023 One month

The NEDs are not eligible to participate in the SIP, DFSS or Annual bonus scheme and do not receive any pension contributions.

182 Corporate Governance182

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Directors’ Remuneration Policy

continued

Details of the 2024 Policy on NED fees are set out in the table below:

Purpose and link to strategy Operation Opportunity and performance metrics

To attract and retain NEDs

of the highest calibre

with experience relevant

to the Company

Fees are reviewed annually.

The Group Chair fee is determined by the

Committee after consultation with the

Executive Directors. The NED fees are

determined by the Group Chair together

with the Executive Directors.

Additional fees are payable for acting as

Senior Independent Director or as Chair or

member of a Board Committee and may be

payable as appropriate in relation to other

additional responsibilities (e.g., attending

meetings overseas).

Fees are paid in a mix of cash and Company

shares for the Company Chair, and in

cash for other Non-Executive Directors.

The Board retains discretion to vary the mix

or determine that fees are paid entirely in

cash or Company shares.

Fee levels are set by reference to NED fees at

companies of a similar size and complexity.

In the event that there is a material

misalignment with the market or a change

in the complexity, responsibility or time

commitment required to fulfil a NED role, the

Board has discretion to make an appropriate

adjustment to the fee level.

The maximum aggregate annual fee for

NEDs is capped at the limit provided for

in the Company’s Articles of Association.

There are no changes to the 2024 Policy on NED fees from the 2021 version.

Pay-for-Performance: Scenario Analysis

The following charts provide an estimate of the potential future reward opportunities for the Executive Directors, and the potential split

between the different elements of pay under different performance scenarios in a given year.

Illustrative Scenario Analysis

Maximum with

share price growth

Maximum

On-target

Minimum

Group CEO

£0

Group CFO

Maximum with

share price growth

Maximum

On-target

Minimum

£4,000,000£3,000,000

£2,000,000

£1,000,000 £5,000,000

£7,000,000

£6,000,000

17%

14%

32% 51%

27% 43%

30%

17%

33%

28%

50%

42%

14%

29%

100%

61%

26%

100%

26% 60%

Annual Bonus

Fixed remuneration

DFSS

Key

The value of DFSS awards is calculated based on the average share price in the last three months of 2023 £25.69 and the number of DFSS

shares to be awarded in 2024 (95,000 and 55,000 shares respectively).

Corporate Governance

183

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

The performance scenarios are based on the following assumptions:

Fixed remuneration Comprising the 2024 base salary, benefits (based on the annualised 2023 single figure for the Group

CEO and CFO) and a 6% pension contribution (uncapped).

On-target remuneration Fixed remuneration plus the value of the Annual Bonus and DFSS achieving on-target performance

of 50% of maximum.

Maximum remuneration Fixed remuneration plus the value of the Annual Bonus and DFSS achieving maximum performance.

Maximum remuneration with

50% share price appreciation

Maximum remuneration increased to assume a 50% increase to the value of the shares granted

under the DFSS since the point of grant.

Approach to Remuneration Relating to New Executive Director Appointments

External Appointments

When appointing a new Executive Director, the Committee’s policy is to set the remuneration package for a new Executive Director in

accordance with the approved Remuneration Policy at the time of the appointment.

In determining the appropriate remuneration for a new Executive Director, the Committee will consider all relevant factors to ensure that

arrangements are in the best interests of the Company and its shareholders. Where an individual is appointed on an initial base salary that

is below market, any shortfall may be managed with phased increases over a period of time, subject to the individual’s performance and

development in the role. This may result in above-average salary increases during this period.

The Committee may also make an award to ‘buy out’ incentive arrangements forfeited on leaving a previous employer. In doing so, the

Committee will consider relevant factors including any performance conditions attached to the forfeited awards and the likelihood of

those conditions being met to ensure that the value of the buy-out award is no greater than the fair value of the awards it replaces.

The Committee may also avail itself of Listing Rule 9.4.2 R if appropriate for the buy-out of incentive arrangements (i.e., if the terms of

participation for the prospective Executive Director are similar to all, or substantially all employees who participate in the plan, then

approval by ordinary resolution of the shareholders of the listed Company in general meeting is not required).

Internal Appointments

Remuneration for new Executive Directors appointed by way of internal promotion will similarly be determined in line with the Policy for

external appointees, as detailed above. Where an individual has contractual commitments made prior to their promotion to the Board,

the Company will continue to honour these arrangements. Incentive opportunities for below-Board employees are typically no higher

than for Executive Directors, but measures may vary if necessary.

Other Directorships

Executive Directors are permitted to accept appointments as Non-Executive Directors of companies with the prior approval of the Group

Board. Approval will be given only where the appointment does not present a conflict of interest with the Group’s activities, and where

the wider exposure gained will be beneficial to the development of the individual.

Considerations of Conditions Elsewhere in the Group

The Committee considers the pay and employment conditions elsewhere in the Group when determining remuneration for

Executive Directors.

Considerations of Shareholder Views

When determining remuneration, the Committee takes into account best practice guidelines issued by institutional shareholder bodies.

The Committee is open to feedback from shareholders on the Remuneration Policy. It will continue to monitor trends and developments

in corporate governance and market practice to ensure the remuneration structure for our Executive Directors remains appropriate.

Considerations of Regulatory Requirements

The Committee regularly reviews the Remuneration Policy and structure in the context of Solvency II remuneration guidance, and EBA,

PRA, and FCA expectations regarding the supervision of insurance firms. The Group Chief Risk Officer periodically attends Committee

meetings as part of this process and provides support to the Committee in understanding any risk-related implications of remuneration

decisions. Whilst the Remuneration Policy includes several features which help ensure compliance with current regulatory guidance, the

Committee reserves the discretion to adjust the Remuneration Policy, and its execution, to take into account any developments in such

regulatory guidance.

184 Corporate Governance

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Directors’ Remuneration Policy

continued

Corporate GovernanceCorporate Governance

This section of the report provides details of how Admiral’s Remuneration Policy was implemented in 2023 and

how the Remuneration Committee intends to implement the proposed Remuneration Policy in 2024 (subject to

shareholder approval).

Remuneration Committee Membership in 2023

The Board sets the Group’s Remuneration Policy and, through the authority delegated to it by the Board, the Committee is responsible

for making recommendations to the Board on the implementation of the Remuneration Policy. Its remit includes recommending

the remuneration of the Group Board Chair and the Executive Directors; approving the remuneration of senior management; and

determining the composition of and awards made under the performance-related incentive schemes.

At the end of 2023 the Committee comprised Evelyn Bourke, Michael Brierley, Justine Roberts and Karen Green. The Committee had

seven scheduled meetings and it also held a number of ad hoc/late notice meetings to deal with specific issues in a timely manner.

The Group Chair, CEO, CFO and CRO are invited to meetings where the Committee considers it appropriate to obtain their advice on

Group strategy and performance and senior executive pay strategy. The Group CEO typically attends all meetings. No director is involved

in deciding their own remuneration outcome. The members of the Committee do not have any personal financial interests (other than

shareholdings), or any conflicts, that relate to the business of the Committee. The Committee members do not have any day-to-day

involvement in the running of the Group.

Committee activities

During the year ended 31 December 2023, in addition to its regular activities, the Committee also:

• Reviewed and proposed revisions to the Remuneration Policy in anticipation of the upcoming binding vote by shareholders at the AGM

in 2024;

• Reviewed the implementation of a set of group-wide non-financial performance measures for the DFSS;

• Reviewed the performance ranges for the financial measures for the 2023 DFSS; and

• Reviewed the design of annual incentives as part of the ongoing work on the Group’s reward strategy.

As mentioned in the Governance Report, during the year ended 31 December 2023, the Committee also performed its regular activities:

• Reviewed the DFSS vesting and bonus arrangements for Executive Directors, senior management and relevant staff (Material Risk

Takers) covered under Solvency II;

• Reviewed Admiral’s Gender Pay Gap reporting statistics;

• Reviewed risk events and their impact on variable pay;

• Undertook an evaluation of the Committee’s performance during the year;

• Reviewed the Committee’s terms of reference;

• Reviewed the Group’s Malus and Clawback Framework; and

• Reviewed external remuneration trends and market conditions.

Remuneration topics were discussed with employees at the Employee Consultation Group (ECG), which met four times over the year.

Key themes discussed at the ECG were: Executive Director compensation, Real Living Wage, the ongoing cost of living crisis, employee

benefits and changes to the HMRC dividend allowance.

On 1 March 2024, the Chair of the Remuneration Committee and Group Head of Reward met with the ECG to discuss the remuneration

for the Executive Directors and the proposed changes to the 2024 Directors’ Remuneration Policy. The detail of the Policy was be covered

in depth, with time set aside for members of the ECG to give feedback and ask any questions they felt were relevant. There was some

good discussion about how the remuneration for Executive Directors linked to wider colleague pay.

Shareholder engagement on the 2024 Directors’ Remuneration Policy

In October of 2023, we wrote to our top 35 shareholders, outlining the proposed changes to the Directors’ Remuneration Policy and

the rationale for the changes. This distribution covered around 70% of the shareholder base. Our brokers considered this level of

engagement to be very thorough. We consulted with our brokers on the list and overall coverage before issuing the letter.

The Committee Chair held follow up meetings with eight investors, received with written responses from two shareholders, and ‘no need

to meet or positive’ responses from a further five. A further meeting was held in February 2024 with one investor. Additionally, a letter

was issued to the four main proxy agencies, with meetings happening in January and February 2024.

The overall summary of the feedback from shareholders shows broad support for the policy changes which are being proposed.

There was a good deal of feedback focusing on the implementation of the policy changes, including ensuring that measures and targets

in the DFSS and new Annual Bonus Plan are relevant and stretching. Shareholders commented on the distinctive culture of Admiral with

its high level of share ownership and wanted assurance that the Policy would not lead to unfairness between Executive Directors and the

wider population. This has been taken into consideration.

185

Admiral Group plc Annual Report and Accounts 2023

Annual Report on Remuneration

Committee effectiveness review

As part of the Committee’s annual review of its performance and processes, each Committee member and regular attendee completed

a questionnaire designed to assess the Committee’s performance, including the activities and general operation of the Committee.

The Committee discussed the results of the review at its meeting in December 2023 and concluded that, overall, the Committee

remained effective.

To help improve its performance over the coming year, the Committee highlighted the importance of discussing key issues in a timely

fashion and getting management engagement earlier to ensure sufficient time for management to change direction where needed or

implement a new plan. It was noted that Committee support had improved.

Advisors to the Committee

During the year, to enable the Committee to reach informed decisions, we obtained advice on market data and trends from independent

consultants Willis Towers Watson (WTW). WTW reported directly to the Committee Chair and are signatories to and abide by the Code of

Conduct for Remuneration Consultants (which can be found at www.remunerationconsultantsgroup.com). WTW also provided advice to

the Company on capital modelling, claims metrics, and pricing.

The fees paid to WTW for work supporting the Committee in 2023 (based on time and materials) totalled £75,818.

The Committee undertakes due diligence periodically to ensure that advisors remain independent of the Company and that the advice

provided is impartial and objective. The Committee is satisfied that the advice provided by WTW is independent.

Summary of Shareholder Voting at the 2023 AGM

The table below shows the results of the advisory vote on the 2022 Annual Report on Remuneration.

For Against Total votes cast Abstentions

Annual Report on Remuneration Total number of votes 225,445,845 29,282,756 254,728,601 4,420

% of votes cast 88.50% 11.50%

Total Single Figure of Remuneration for Executive Directors (audited)

The table below sets out the total single figure remuneration received by each Executive Director for the years ended 31 December 2023

and 31 December 2022:

Executive Director

Base salary

Benefits

Pension

To t a l

fixed pay

SIP

DFSS

DFSS bonus

To t a l

variable pay

To t a l

remuneration

Milena Mondini

de Focatiis

2023 £737,326 £455 £15,000 £752,781 £3,605 £1,011,775 £296,017 £1,311,397 £2,064,178

2022 £715,850 £480 £15,000 £731,330 £3,589 £1,139,007 £399,085 £1,541,681 £2,275,511

Geraint Jones

2023 £433,472 £455 £15,000 £448,927 £3,605 £589,791 £172,676 £766,072 £1,214,999

2022 £416,800 £480 £15,000 £432,280 £3,589 £637,324 £260,516 £901,429 £1,333,709

The figures have been calculated as follows:

1. Base salary: amount earned for the year.

2. Benefits: the taxable value of annual benefits received in the year.

3. Pension: the value of the Company’s contribution during the year.

4. SIP: the face value at grant.

5. DFSS: the value at vesting of shares vesting on performance over the three-year periods ending 31 December 2023 and 31 December

2022. For the 2023 figures, given that vesting occurs after the 2023 Directors’ Remuneration Report is finalised, the figures are based

on the average share price in the last three months of 2023 of £25.69. The 2022 figures have been trued up based on the actual

share price on vesting of £22.62 for Milena Mondini de Focatiis and £23.92 for Geraint Jones. For 2023, unfavourable movements

of -£348,942 and -£203,408 are included in the DFSS value, attributable to a decrease in the share price over the vesting period for

Milena Mondini de Focatiis and Geraint Jones, respectively. For 2022, an increase of £9,567 of the DFSS value is attributable to share

price appreciation over the vesting period for Milena Mondini de Focatiis. For Geraint Jones, a decrease of £100,981 is attributable

to share price depreciation over the vesting period. For the purpose of clarity, it should be noted that the awards for the Executive

Directors were made at different points in 2020, which has led to the difference in these figures.

186 Corporate Governance186

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Annual Report on Remuneration

continued

6. DFSS bonus: the bonus is equivalent to dividends that were paid in respect of the performance year on all outstanding DFSS shares

awarded but not yet vested. The bonus is paid in two tranches annually:

i) for H1 2023: a bonus of £144,778 was paid to Milena Mondini de Focatiis, based on 270,000 unvested shares, a scorecard outcome

of 105.14% and the interim dividend of 51p per share; and a bonus of £84,454 was paid to Geraint Jones based on 157,500 unvested

shares and a scorecard outcome of 105.14% and the interim dividend of 51p per share.

ii) for H2 2023, due for payment in May 2024: a bonus of £148,330 is due to Milena Mondini de Focatiis, based on 270,000 unvested

shares, a scorecard outcome of 107.72% and the final dividend of 52p per share; and a bonus of £86,526 is due to Geraint Jones

based on 157,500 unvested shares and a scorecard outcome of 107.72 % and the final dividend of 52p per share.

The payments for H2 2023 are subject to completion of internal governance procedures.

7. Milena Mondini de Focatiis received an Anniversary award of £2,500 during 2022 which is included in the total remuneration number.

Anniversary payments are made to all colleagues who reach significant milestones in their employment with the Group.

Total Single Figure of Remuneration for Non-Executive Directors (audited)

The table below sets out the total single figure remuneration received by each NED for the years ended 31 December 2023 and

31 December 2022.

Total fees

2023 2022

Director Fees Taxable benefits

Fees Taxable benefits

Annette Court

£82,136 £879 £346,084 £1,739

Mike Rogers

£270,042 £889 ––

Karen Green £113,000 £2,205 £103,750 £808

Jean Park

(£1,477) – £153,000 £130

Justine Roberts

£106,045 £1,253 £87,875 £769

Andy Crossley

5,6

£188,000 £5,166 £170,667 £1,918

Michael Brierley

£152,000 £4,806 £140,000 £992

Jayaprakasa Rangaswami

£85,955 £932 £93,583 £528

Evelyn Bourke £95,000 £3,605 £95,000 £1,659

Bill Roberts

£103,352 £25,161 £75,000 £8,135

Fiona Muldoon

£20,928 – ––

1 The 2023 fee for Annette Court is £82,136 (a cash fee of £57,495 and a share fee of £24,641) and is reflective of her leave date of 27 April 2023.

2 Mike Rogers was appointed as the Group Chair on 27 April 2023.

3 Jean Park’s fees for 2023 are reflective of her retiring from the board on 20 January 2023. Additionally, there was an overpayment of fees in 2022, which were corrected and paid back in 2023,

leading to the negative fee showing for 2023.

4 Justine Roberts joined the Group Remuneration Committee on 31 January 2023. In addition, Justine was confirmed as Senior Independent Director on a permanent basis effective 31 January 2023,

having undertaken the role on an interim basis since 22 February 2022.

5 Andy Crossley was appointed Chair of the Group Risk Committee effective from 23 October 2023. This followed a period as interim Chair since 22 February 2022.

6 The fees for Andy Crossley and Michael Brierley include additional fees in relation to their positions as Chair of the EUI Limited Board of Directors and Admiral Financial Services Limited Board of

Directors, respectively.

7 Jayaprakasa Rangaswami left the Group Remuneration Committee as an interim member on 31 January 2023.

8 The fee for Bill Roberts includes an additional fee in relation to his position as a NED of the Elephant Board of Directors, which he was appointed to on 1 February 2023.

9 Fiona Muldoon was appointed as an independent Non-Executive Director and member of the Group Audit Committee on 2 October 2023.

10 Taxable benefits represent those expense reimbursements relating to travel, accommodation and subsistence in connection with the attendance at Board, Subsidiary and Committee meetings

during the year, which are deemed by HMRC to be taxable. The amounts in the table are ‘grossed-up’ to include the UK tax paid by the Company on behalf of the Non-Executive Directors.

Non-taxable expense reimbursements have not been included in the table.

Incentive Outcomes for Financial Year to 31 December 2023 (audited)

DFSS Awards Vesting on Performance to 31 December 2023

On 23 September 2021, Milena Mondini de Focatiis was granted an award under the DFSS of 90,000 shares with a value at the date

of award of £3,109,500 (based on a grant date share price of £34.55).

On 23 September 2021, Geraint Jones was granted an award under the DFSS of 52,500 shares with a value at the date of award

of £1,813,875 (based on a grant date share price of £34.55).

Vesting of the award was based 80% on the achievement of financial performance measures and 20% on a scorecard of

non-financial measures.

Corporate Governance

187

Admiral Group plc Annual Report and Accounts 2023

Financial performance outcomes

The performance measures applicable to these awards are, EPS growth, TSR vs. FTSE 350 (excluding investment companies), and ROE,

weighted equally and all measured over the three-year period 1 January 2021 to 31 December 2023.

Over this period there was solid return for our shareholders, with TSR slightly above median vs the FTSE350 benchmark, and with ROE

of 41.60%. This is in contrast to an EPS growth of -37.7%, which was impacted by the very high EPS for 2020, which was impacted by the

pandemic period. The combination of these shareholder returns, and EPS growth contributes to a vesting of 37.20% for the financial

measures. The Committee reviewed this vesting outcome and concluded that it was appropriate.

The table below details the Company’s performance against the performance range.

Performance range

Actual outturn

Vesting Contribution

(% of maximum)Performance measure Threshold Maximum Vesting schedule

EPS growth 0.5% growth 36% growth 10% for achieving

threshold with straight

line relationship to

100% for maximum

performance

-37.70% 0.00%

TSR vs. FTSE

350 (excluding

investment

companies)

Median Upper quartile 25% for median, with

straight line relationship

to 100% for upper

quartile

56th percentile 45.20%

Return on

Equity (ROE)

25% 55% 25% for achieving

threshold with straight

line relationship to

100% for maximum

performance

41.60% 66.40%

Vesting 37.20%

Non-financial performance outcomes

The individual vesting contribution of the non-financial measures for Milena Mondini de Focatiis and Geraint Jones are set out in the table

below. These aggregated to an overall rating across the 3 years of 69.98% and 69.83% respectively and have a weighted outcome of

14.00% and 13.97%, respectively.

Further details of the scoring for 2023 can be seen on page 190.

Overall Vesting

The combined vesting outcomes for Milena Mondini de Focatiis and Geraint Jones can be seen in the below table.

Award Weighting Performance outcomes Vesting (% of maximum)

DFSS Vesting Component

Milena Mondini

de Focatiis Geraint Jones

Milena Mondini

de Focatiis Geraint Jones

Milena Mondini

de Focatiis Geraint Jones

Financial performance measures:

EPS growth, TSR vs. FTSE 350

(excluding investment companies)

and Return on Equity (ROE)

80.00% 37.20% 29.76%

Non-financial performance measures 20.00% 69.98% 69.83% 14.00% 13.97%

Total 100.00% 43.76% 43.73%

The Committee reviewed the vesting outcomes and concluded that they were appropriate, and that no adjustments were required.

Based on performance and scorecard outcomes the total amount that will vest in September 2024 to Milena Mondini de Focatiis will

therefore be 43.76% (i.e., 39,384 shares), and the total amount that will vest to Geraint Jones will be 43.73% (i.e., 22,958 shares), subject to

their continued employment on the vesting date.

Vested DFSS awards are subject to clawback provisions. Events which may lead to the application of clawback are set out in the Group’s

Malus and Clawback Framework and include material financial misstatement, responsibility for conduct which results in significant losses,

material failure of risk management, misconduct, reputational damage or corporate failure.

188 Corporate Governance188

Admiral Group plc Annual Report and Accounts 2023

Corporate Governance

Annual Report on Remuneration

continued

DFSS bonus for 2023

In line with the Remuneration Policy, the Group paid a bonus to all holders of DFSS shares in 2023, which was equivalent to the dividend

payable on all outstanding DFSS shares awarded but not yet vested. The 2023 Bonus for Executive Directors also includes a potential +/-

20% adjustment to the DFSS bonus based on performance of a set of non-financial performance metrics, which for 2023 was grouped

into three categories: Strategy, customer and ESG.

For the customer and ESG strategic pillars, relevant quantitative data was used to assess performance and an outcome was determined.

For the strategy, the Board members derived a collective view on the progress against the strategic priorities.

Details of the measures used in the scorecard and outcomes are summarised in the table below:

Outcomes

(% out weighting for each category)

Category Metrics Target Maximum H1 H2

Strategy Overall scoring from the Board on scorecard of

measures around:

16.50% 33.00% 25.30%

• Progress towards Admiral 2.0

• Diversification – existing non-motor product

development (both top line and KPIs), in

particular Household and Lending

• Diversification – development of new products

• Progress towards defining motor

mobility strategy

Customer Customer Feedback (NPS) 8.50% 17.00% 9.98% 9.44%

Customer Outcomes (CRMI) 8.50% 17.00% 5.46% 12.42%

ESG People (Trust Index) 9.00% 18.00% 9.00%

Diversity (Female representation at Senior level) 3.75% 7.50% 5.63%

Inclusion (Inclusion survey results) 3.75% 7.50% 7.50%

To t al 50.00% 100.00% 62.86% 69.29%

Overall scorecard

multiplier

100.00% 120.00% 105.14% 107.72%

The Admiral Group Board makes an annual judgment based on its collective view of progress against the stated strategic measures.

The Board was satisfied that progress against strategic aims continued to be solid, and having reviewed business context and supporting

data, assessed this progress was worthy of 76.67% of maximum.

Customer outcome and feedback scoring is measured against entity set targets, with results assessed for each half year.

Customer outcomes for the UK business improved markedly in H2 2023 to 70% of maximum vs. 20% for H1 2023, as the pressure on

claims processing and staff numbers eased through the year. Customer feedback was generally steady through the year, with a slight fall

in outcomes for Admiral Money and Elephant between the half years; Admiral Seguros’ outcomes for H2 fell below threshold, with 0%

outcome, compared with 55% for H1.

Trust Index scores are measured relative to the benchmark from the Great Place To Work® (GPTW) survey annually, with outcomes

determined mechanically relative to benchmark. For 2023, the Group’s score was up 1% compared with 2022, moving to 85% from 84%.

However, the GPTW benchmark score also increased by 1% from 2022 to 87% for 2023. This means that the score remains 2% below the

benchmark, giving an outcome of 50% for the 2023 performance year.

The Inclusion survey results are scored on a similar basis to the Trust Index, relative to the GPTW benchmark. Scores improved for 2023 in

comparison to 2022, with all responses coming at or above the benchmark, meaning 100% outcome for this element.

The Diversity measure outcome based on mechanical scoring against set targets – is slightly down on last year due to headcount

movements, with a year-end position of 35.29%, which equates to an outcome of 75% of maximum.

The overall outcome of the scorecard was assessed as a 105.14% multiplier to the DFSS bonus paid for H1 2023 and a 107.72% multiplier

to the DFSS bonus for H2 2023 (to be paid in 2024) for Milena Mondini de Focatiis and Geraint Jones.

In addition, the Executive Directors’ DFSS bonus is subject to a further risk adjustment (downwards only) to take account of risk events

considered to have a material customer, regulatory or financial impact.

During the year, and in addition to the above, the Committee took into account relevant trigger events as part of the established risk

adjustment process, and determined it was not appropriate to apply a downwards adjustment on that basis.

DFSS bonus payments are subject to malus and clawback provisions.

Corporate Governance

189

Admiral Group plc Annual Report and Accounts 2023

Scheme Interests Granted in 2023 (audited)

DFSS

On 28 September 2023, Milena Mondini de Focatiis was granted an award of 90,000 shares and Geraint Jones was granted an award of

52,500 shares under the DFSS. Using the share price on the date of the grant of £23.72, this is the equivalent to £2,134,800 or 290% of

Milena’s base salary and £1,245,300 or 287% of Geraint’s base salary respectively.

The three-year period over which performance will be measured is 1 January 2023 to 31 December 2025. The award is eligible to vest on

the third anniversary of the date of grant i.e., September 2025, subject to performance and to continued employment. Vested awards will

be subject to an additional two-year post-vest holding period.

The award will vest on EPS growth, TSR vs. FTSE 350 (excluding investment companies), ROE and a scorecard of strategic, customer

and other non-financial measures, inclusive of customer outcomes, ESG and strategic measures. There will also be the potential for

downwards adjustment subject to an assessment of risk events considered to have a material customer, regulatory or financial impact

over the course of the performance period. The performance conditions are summarised in the table below:

Award Element Performance measure Description Weighting

Performance range

VestingThreshold Stretch Maximum

Financial

Performance

Earnings per share (EPS) EPS growth over

the performance

period

26.67% Growth

of 0%

Growth

of 10%

Growth

of 30%

25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

Return on Equity (ROE) ROE over the

performance

period

26.67% 25% 35% 45% 25% for reaching

Threshold 75% for

achieving Stretch and

100% for Maximum

performance.

Total Shareholder

Return (TSR)

TSR ranked on

a relative basis

vs FTSE 350

comparator

group

26.67% Median N/A Top

Quartile

25% for reaching

Threshold and

100% for Maximum

performance.

Non-financial

Performance

Strategy Strategic

Assessment

The Board’s

assessment of

progress towards

strategic aims.

6.60% N/A N/A N/A Vesting of between

0% and 100% based

on the outcome of the

Board’s assessment.

Customer Group NPS The outcome of

the Group NPS,

weighted by

entity customer

headcount.

6.80% 35 48 55 25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

ESG Diversity The proportion

of women

in senior

management

roles.

3.30% 30% 36% 40% 25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

Inclusion The Group’s

Inclusion scores

from the GPTW

Survey, scored on

a basis relative to

the benchmark.

3.30% >10%

below

bench-

mark

N/A At

bench-

mark

20% for reaching

Threshold, 40% for

>6% below benchmark

and 100% for Maximum

performance.

DFSS awards are subject to malus and clawback provisions, which are set out in the Group’s Malus and Clawback Framework.

190 Corporate Governance190

Admiral Group plc Annual Report and Accounts 2023

Annual Report on Remuneration

continued

Setting the 2023 DFSS Financial Performance Ranges

The financial performance targets for the 2022 DFSS scheme were changed more significantly than in previous years due to the

exceptional earnings per share achieved during 2021 and the impact of the Group’s diversification strategy on ROE. The Remuneration

Committee chair met with a number of shareholders to hear their views. While understanding the unique circumstances of 2020 and

2021, most shareholders preferred reversion to the target setting approach of the past. The proposed 2023 DFSS financial performance

targets are set out below:

Earnings Per Share

The EPS measure was changed to an absolute EPS target range for the 2022 DFSS scheme because a growth target was considered

unsuitable due to the exceptionally high EPS achieved during 2021. Following feedback from shareholders, the proposed target for the

2023 scheme has reverted to an EPS growth target.

Return on Equity

The 2023 scheme performance range has been set considering the Group’s strategic objective of long-term growth and diversification,

which is projected to increase equity and result in a flatter ROE over the next few years. Recognising shareholder feedback, the proposed

ROE targets for the 2023 scheme are more challenging than the 2022 scheme, with higher targets set for threshold, stretch and

maximum in the performance range, moving from 20-40% for 2022 to 25-45% for 2023.

Total Shareholder Return

TSR is assessed on relative performance and is therefore considered an appropriate measure of the Group’s return to shareholders.

Consequently, no changes to the measure were proposed for the 2023 scheme.

SIP

In March 2023, Milena Mondini de Focatiis and Geraint Jones were granted awards under the SIP of 95 shares with a face value of

£1,787.43, which will mature on 13 March 2026, subject to continued employment.

In August 2023 Milena Mondini de Focatiis and Geraint Jones were granted awards under the SIP of 77 shares with a face value of

£1,817.97, which will mature on 21 August 2026, subject to continued employment.

Exit Payments (audited)

No exit payments were made to an Executive Director during the year.

Payments to Past Directors (audited)

Following stepping down from the role of CEO on 31 December 2020, David Stevens has continued as an adviser to the Group in a part-

time capacity. During 2023, he earned a salary of £60,090.

He also sits as a Non-Executive Director on the Board of Admiral Financial Services Limited for which he receives no fee.

Implementation of Remuneration Policy for 2024

Executive Directors

Salary, Pension and Benefits

Salaries for the Executive Directors in 2024 have been determined in line with the proposed Remuneration Policy, subject to shareholder

approval. Milena Mondini de Focatiis’ salary was increased by 4.97% to £774,000 effective 1 January 2024 and Geraint Jones’ salary was

increased by 7.27% to £465,000 effective 1 January 2024.

Consideration was given to ensure these increases are fair relative to the proposed increases for employees across the Group for 2024.

The average pay review in 2024 is expected to be in the region of 5% as we continue to support our people through the impact of

the cost of living challenges. The benchmarking of the fixed elements of remuneration for Milena and Geraint indicated that their

salaries were significantly lower than the lower quartile of peer companies across the FTSE 100 and major UK and European insurers.

The proposed salary increases are designed to align their salaries more towards the lower quartile of peer salaries.

The Remuneration Committee notes the increase for Geraint Jones is above that which is expected for most colleagues. This increase

begins to address the competitiveness of his base pay relative to the lower quartile of the market. The Remuneration Committee intends

to increase his salary to the lower quartile of the market by the end of this policy period, by increments. The Remuneration Committee

will review his increase each year to ensure it is appropriate and moves his positioning as intended. This means that the increase for

Geraint may be ahead of those generally given to colleagues for the duration of the policy.

The Executive Directors will continue to participate in the Group Personal Pension Plan on a consistent basis with other employees, where

employee contributions are matched up to a maximum 6% of base salary. The Company will offer individuals a choice between pension

contributions and cash in lieu. Both Executive Directors will continue to receive benefits in line with the Policy. Both will benefit from the

removal of the cap of £15,000 on the absolute amount of contribution.

DFSS

The Committee intends to make awards under the DFSS to Milena Mondini de Focatiis and Geraint Jones in September 2024 of 95,000

and 55,000 shares, respectively. The Committee will confirm the size for each of the 2024 DFSS awards closer to the award date.

In determining whether the award size should differ from the above number of shares, the Committee will consider any large share price

change over the prior year, and in particular whether this is due to external factors out of management control. The actual 2024 DFSS

awards will be disclosed in the 2024 Annual Report on Remuneration.

Corporate Governance

191

Admiral Group plc Annual Report and Accounts 2023

It is currently anticipated that the vesting of 2024 DFSS awards for Milena Mondini de Focatiis and Geraint Jones will continue to be

assessed across the three-year performance period using an 75% performance weighting on EPS growth, TSR (measured on a relative

basis, equally split between the FTSE100 and a subset of insurance peers with substantial general insurance segments) and ROE, and a

25% weighting on a scorecard of strategic, customer and other non-financial metrics. The measures and performance ranges for the

2024 DFSS are set out in the table below.

Award Element Performance measure Description Weighting

Performance range

VestingThreshold Stretch Maximum

Financial

Performance

Earnings per share (EPS) EPS growth over

the performance

period

25.00% 0% 35% 45% 25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

Return on Equity (ROE) ROE over the

performance

period

25.00% 30% N/A% 45% 25% for reaching

Threshold, and 100% for

Maximum performance.

Total Shareholder

Return (TSR)

TSR ranked on

a relative basis

vs FTSE 100 and

insurance peer

comparator

group

25.00% Median N/A Top

Quartile

25% for reaching

Threshold and 100% for

Maximum performance.

Non-financial

Performance

Strategy Strategic

Assessment

The Board’s

assessment of

progress towards

strategic aims.

8.25% N/A N/A N/A Vesting of between 0%

and 100% based on the

outcome of the Board’s

assessment.

Customer Group NPS The outcome of

the Group NPS,

weighted by

entity customer

headcount.

8.50% 35 48 55 25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

ESG Diversity The proportion

of women

in senior

management

roles.

2.06% 30% 36% 40% 25% for reaching

Threshold, 75% for

achieving Stretch and

100% for Maximum

performance.

Inclusion The Group’s

Inclusion scores

from the GPTW

Survey, scored on

a basis relative to

the benchmark.

2.06% >10%

below

bench-

mark

N/A At bench-

mark

25% for reaching

Threshold, 40% for >6%

below benchmark and

100% for Maximum

performance.

Carbon

emissions

tbc

4.13% tbc

tbc

1 Carbon emissions target to be confirmed, subject to work of base lining the Company’s carbon emissions as set out below.

The Committee intends that this set of financial measures applies to the DFSS awards made throughout this policy period, which is to say

the awards for 2024, 2025 and 2026.

It has been an aim of the Committee to include carbon emissions targets as part of the NFM scorecard to support the delivery of the

Group’s net zero targets. For the 2024 scheme, the non-financial measures will comprise, Group NPS, Diversity, Inclusion and carbon

emissions targets. This is subject to the work of base lining the Company’s carbon emissions which has been delayed due to the agency

having a back log.

There will be the potential for downwards adjustment subject to an assessment of risk events considered to have a material customer,

regulatory or financial impact over the course of the performance period.

192 Corporate Governance192

Admiral Group plc Annual Report and Accounts 2023

Annual Report on Remuneration

continued

Annual Bonus

Under the 2024 Policy, subject to shareholder approval, Milena Mondini de Focatiis and Geraint Jones will be eligible to participate in an

Annual Bonus in 2024. The bonus opportunity will be 0-200% of base pay for the Executive Directors, with an on-target award of 100%.

Performance will be based on the following measures and weightings:

Measure Weighting

Financial Measures (75% of total)

Profit 67.5%

Turnover 7.5%

Non-financial Measures (25% of total)

Trust Index (people) 12.5%

Customer Outcomes (CRMI) 12.5%

To t al 100%

The profit measure will be profit before tax. Turnover is the total value of the revenue generated by the Group. Both Profit and

Turnover values are reported in the ARA annually, and the values used to determine Annual Bonus outcomes will be consistent with the

reported figures.

Customer Outcomes comprise customer measures and associated outcomes from the Group entities for the performance year, in which

outcomes are scored relative to entity-set performance ranges, with mechanical outcomes based on performance for each month.

The Trust Index is the average of employee responses to the core survey questions in the Great Place To Work® (“GPTW”) survey. This is

scored relative to the benchmark of the world’s 25 best workplaces provided by GPTW.

The Remuneration Committee will follow a two-phase methodology for determining Executive Director Annual Bonus outcomes; the

formulaic outcome against the measures detailed above followed by a holistic review of the extent to which that formulaic outcome is

reflective of the overall performance of the Group.

Phase 1: Formulaic Review. At the end of the performance period, the final performance against each measure is assessed on a

standalone basis. Data for the measures is taken from the Group’s financial reports which are reviewed by the Audit Committee and

approved by the Board.

Phase 2: Holistic Review. The Committee will then consider the overall fairness of the formulaic Group scorecard outcome in the context

of the business performance in the prevailing market conditions, which can be assessed against a non-exhaustive basket of measures

such as:

• Executive Director personal performance

• Dividend and/or share price performance

• Impact on strategic delivery

• Risk appetite adherence

• Loss and/or combined ratio outcomes

• Financial stability of the Group

• Wider ESG performance

• Inclusion and diversity measures

• Delivery of technology milestones.

The Committee will be able to carefully determine a final bonus outcome for each Executive Director that is fair and appropriate for the

year’s performance and is in the best interests of shareholders.

A detailed summary of the factors used to determine bonus outcomes for the Executive Directors will be disclosed in the DRR following

the performance period.

In line with the position set out in the Policy, 40% of any bonus earned will be subject to deferral into Admiral Group shares for a period

of three years.

There will be the potential for downwards adjustment subject to an assessment of risk events considered to have a material customer,

regulatory or financial impact over the course of the performance period.

Corporate Governance

193

Admiral Group plc Annual Report and Accounts 2023

Chair and Non-Executive Directors

Fees for the Board Chair and other Non-Executive Directors were reviewed in January 2024 having previously been last reviewed in 2023.

Increases were made, effective 1 January 2024, to reflect the increased time commitment of these roles.

2024 fee (p.a.) 2023 fee (p.a.)

Chair

£386,250 £375,000

NED base fee £73,500 £70,000

Additional fee for chairing:

• Audit Committee £26,250 £25,000

• Group Risk Committee £45,150 £43,000

• Remuneration Committee £26,250 £25,000

• Nomination and Governance Committee £10,500 £10,000

Additional fee for membership of:

• Audit Committee £15,750 £15,000

• Group Risk Committee £15,750 £15,000

• Remuneration Committee £12,600 £12,000

• Nomination and Governance Committee £8,400 £8,000

Additional fee for being Senior Independent Director £17,850 £17,000

1 The 2023 fee shown is for the new Chair, Mike Rogers. The Board Chair does not receive any additional fees (e.g., for committee membership) as these are included in the overall Chair fee.

2 The fee payable for 2024 for Chairing the Group Risk Committee continues to include an additional fee in recognition of the increased time commitment required due to the Admiral Internal

Model process. It comprises a base fee of £26,250 and an additional fee of £18,900.

New Group Chair Arrangements

It was announced on 31 January 2023 that Mike Rogers was to be appointed as Admiral Group Chair subject to regulatory approval

and shareholder approval at the Admiral AGM. His fee was set at £375,000. In June 2023, Mike Rogers entered into a Share Acquisition

Agreement with the Group to purchase an annual amount equal to 30% of the gross amount of the fee, which will continue on this

basis until he achieves a shareholding equal to 150% of his annual fee. This will be assessed annually, and the agreement contains a top

up mechanism; if the value of the purchased shares is less than 150% of the gross amount of the fee, the Chair will purchase additional

shares to maintain a shareholding of 150% of the gross fee.

CEO pay ratio

The table below sets out the pay ratios for the CEO for the periods ended 31 December 2022 and 31 December 2023.

Year Method Lower quartile Median Upper quartile

2023

Option A

75:1 64:1 43:1

2022 80:1 69:1 45:1

The lower quartile, median and upper quartile employees were determined using calculation methodology A which involved calculating

the actual full-time equivalent remuneration for all UK employees for 2023. From this analysis, three employees were then identified

as representing the 25th, 50th and 75th percentile of the UK employee population. Admiral chose this method as it is the preferred

approach of the Government and investor bodies and Admiral had the systems in place to apply this method. It is also consistent with the

approach used to calculate the ratios for 2018 to 2022.

The Committee has considered the pay data for the three employees identified and believes that it fairly reflects pay at the relevant

quartiles amongst our UK workforce. The three individuals identified were full time employees during the year. None received an

exceptional incentive award which would otherwise inflate their pay figures. No adjustments or assumptions were made by the

Committee with the total remuneration of these employees calculated in accordance with the methodology used to calculate the single

figure of the CEO. It should be noted that the lower quartile employee was in receipt of DFSS bonus and/or DFSS vesting in the year.

The employee pay levels for 2023 are detailed below:

CEO P25 (lower quartile) P50 (median) P75 (upper quartile)

Salary £737,326 £21,392 £26,164 £42,000

Total Remuneration

£2,064,178 £27,382 £32,050 £48,397

1 The single figure of remuneration for the CEO includes actual salary and pension costs paid during 2023, in line with The Companies (Miscellaneous Reporting) regulations 2018. For other

employees, salary and pension costs are included on an FTE basis, in line with the legislation. While the basis of calculation differs between CEO and other employees, management considers this a

fair comparison of remuneration.

The pay ratio has fallen over the course of 2023. This is due to the slight fall in CEO pay in 2023, compared with 2022. The underlying data

for employee pay levels is broadly flat compared with 2022, despite an increase in population of c.9%, the majority of which will have

been at more junior levels of the workforce.

194 Corporate Governance194

Admiral Group plc Annual Report and Accounts 2023

Annual Report on Remuneration

continued

A significant proportion of Milena Mondini de Focatiis’ remuneration is dependent on the Company’s performance and therefore it may

vary more materially, resulting in movements in the CEO pay ratio from year to year. However, the reward policies and structures applying

to the CEO are broadly aligned with those of the wider workforce and therefore consistent performance is likely to lead to a broadly

consistent CEO pay ratio.

Relative Importance of Spend on Pay

The table below shows the percentage change in dividends and total employee remuneration spend from the financial year ended

31 December 2022 to the financial year ended 31 December 2023.

2023

£m

2022

£m

% change

Distribution to shareholders 309 465 -34%

Employee remuneration 501 452 11%

The Directors are proposing a final dividend for the year ended 31 December 2023 of 52 pence per share bringing the total dividend for

2023 to 103 pence per share (2022: 157 pence per share).

Pay for Performance

The following graph sets out a comparison of Total Shareholder Return (TSR) for Admiral Group plc shares with that of the FTSE 100 and

FTSE 350 indices, of which the Company is a constituent, over the ten-year period to 31 December 2023. The Directors consider these

to be the most appropriate indices against which the Company should be compared. TSR is defined as the percentage change over the

period, assuming reinvestment of income.

10 year TSR performance: Admiral vs. FTSE100 and FTSE350 indices

Growth in value of a hypothetical £100 holding over the 10 years to 31 December 2023

£450

£400

£350

£300

£250

£200

£150

£100

£50

£0

Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-19Dec-18 Dec-20 Dec-21 Dec-22 Dec-23

Admiral

FTSE 100 FTSE 350

CEO 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Incumbent

Henry

Engelhardt

Henry

Engelhardt

Henry

Engelhardt

David

Stevens

David

Stevens

David

Stevens

David

Stevens

David

Stevens

Milena

Mondini de

Focatiis

Milena

Mondini de

Focatiis

Milena

Mondini de

Focatiis

CEO single figure

of Remuneration

£393,260 £397,688 £148,776 £246,023 £395,019 £403,662 £413,724 £421,285 £2,082,191

£2,275,511

£2,064,178

DFSS vesting

outcome

(% of maximum)

n/a n/a n/a n/a n/a n/a n/a n/a 98.57% 59.24% 43.76%

CFO 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Incumbent

Kevin

Chidwick

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

Geraint

Jones

CFO single figure

of Remuneration

£1,204,164 £363,551 £539,704 £599,139 £1,184,445 £1,461,813 £1,773,303 £2,329,513 £1,737,805 £1,333,709

£1,214,999

DFSS vesting

outcome

(% of maximum)

70.00% 85.00% 69.00%

50.00%

and 0.00%

74.20% 87.60% 88.8% 98.5% 93.08% 59.21% 43.73%

1 Henry Engelhardt stepped down from the Board on 13 May 2016. His 2016 remuneration includes salary and benefits for his service as CEO.

2 David Stevens was appointed as the CEO on 13 May 2016. His 2016 remuneration includes salary, pension and benefits for his service as CEO.

3 Geraint Jones was appointed to the Board as CFO on 13 August 2014. His 2014 remuneration includes salary, pension and benefits for his service as CFO, his full year DFSS and his full year

DFSS bonus.

4 Milena Mondini de Focatiis was appointed as the CEO on 1 January 2021. Her 2021 remuneration includes salary, pension and benefits for her service as CEO.

5 This figure has been trued up since the 2022 report for the value of the 2020 DFSS based on the actual share price on vest of £22.43.

6 This figure has been trued up since the 2022 report for the value of the 2020 DFSS based on the actual share price on vest of £27.71.

7 43.76% of Milena Mondini de Focatiis’ and 43.73% of Geraint Jones’ 2021 DFSS award will vest in September 2024, subject to their continued employment on the vesting date.

There are no annual bonus outcomes to report in the table as the Admiral DFSS bonus is not structured as a traditional annual bonus

scheme and consequently a vesting outcome (as a percentage of maximum) is meaningless. This will be different for the 2024 Annual

Report with the new structure of Annual Bonus

Corporate Governance

195

Admiral Group plc Annual Report and Accounts 2023

Annual change of each director’s pay compared to the annual change in average employee pay

The following table summarises the annual percentage change of each director’s remuneration compared to the annual percentage

change of the average remuneration of the company’s employees, calculated on a full-time equivalent basis.

Financial year-ended 31 December 2023 2023 (% change)

Director’s remuneration Base salary/fees Taxable benefits DFSS bonus

Executive Directors

Milena Mondini de Focatiis 3.00% (5.21%) (25.83%)

Geraint Jones 4.00% (5.21%) (33.72%)

Non-Executive Directors

Annette Court (76.27%) (49.45%) N/A

Mike Rogers N/A N/A N/A

Evelyn Bourke 0.00% 117.30% N/A

Karen Green 8.92% 172.90% N/A

Jean Park (100.97%) (100%) N/A

Jayaprakasa Rangaswami (8.15%) 76.52% N/A

Justine Roberts 20.68% 62.94% N/A

Andy Crossley 10.16% 169.33% N/A

Michael Brierley 8.57% 384.46% N/A

Bill Roberts 37.80% 209.30% N/A

Fiona Muldoon N/A N/A N/A

Percentage change in employees’ remuneration 9.01% (5.31%) (43.58%)

The percentage increases for the Non-Executive Director taxable benefits relate to expenses for travel, accommodation and subsistence.

The percentage change in employee base pay is a view across the whole group and is inclusive of colleague internal movements and

promotions throughout 2023.

Dilution

The Company has previously used newly issued shares to fund the DFSS and SIP shares. The Company has controls in place to ensure that

shares awarded under the incentive schemes operated by the Company within any rolling ten-year period do not exceed 10% of the

number of ordinary shares in the capital of the Company in issue at the time of each award. It is currently anticipated that a combination

of attrition and actual vesting will result in dilution of less than 10%. As required by the rules of our share schemes, the Company will in

any event ensure that the actual dilution level does not exceed 10% in any rolling ten-year period by funding of any vested (and future)

share scheme awards as appropriate with market-purchased shares.

In 2024 the Company will change the way the employee share schemes are funded. Initially shares already assigned to the trust will be

used to fund the schemes and then the Company will move to a market purchase funding model (likely from 2026 onwards).

Interests held by Directors (audited)

The Company has adopted Executive Director shareholding guidelines whereby all Executive Directors are required to acquire and retain

a beneficial shareholding in the Company equal to at least 400% of base salary (excluding salary shares, where applicable), which can

be built up over a period of five years from the later of the introduction of the guidelines and the individual’s date of appointment.

Both Executive Directors meet the shareholding requirement.

As at 31 December 2023, the Directors held the following interests:

Shares held

Shareholding

requirement

(% of

2023 salary)

Current

shareholding

(% of

2023 salary)

Requirement

met?

Director’s remuneration

Beneficially

owned outright

Subject to

continued

employment only

Subject to

performance

conditions

Milena Mondini de Focatiis

108,154 39,384

180,000 400% >400% Yes

Geraint Jones 143,841 22,958

105,000 400% >400% Yes

Mike Rogers 4,813

Evelyn Bourke 7,459

Jayaprakasa Rangaswami –

Justine Roberts –

Andy Crossley 4,984

Michael Brierley 4,287

Karen Green –

Bill Roberts 9,245

Fiona Muldoon –

196 Corporate Governance196

Admiral Group plc Annual Report and Accounts 2023

Annual Report on Remuneration

continued

1 Total includes SIP shares both matured and awarded.

2 Total reflects shares from the 2021 DFSS award (performance test has been applied, and award is due to vest in September 2024).

3 The final column in the above table relates to meeting the current Remuneration Policy requirement of 400% of salary, based on a share price of £26.84 at closing on 29th December 2023.

4 Milena Mondini de Focatiis has 5 years from her appointment as Executive Director (11 August 2020) to meet the guideline.

There have been no changes in the Directors’ holdings in the share capital of the Company, as set out in the table above, between

31 December 2023 and the date of this Report

None of the Directors had an interest in the shares of any subsidiary undertaking of the Company or in any significant contracts of

the Group.

Executive Directors’ Interests in Shares under the DFSS and SIP and salary share awards (audited)

Type

At start

of year

Awarded

during year

Vested/

matured

during year

At end

of year

Price at

award (£)

Value at

award date

(£)

Value at

31 December

2023

or maturity

(£)

Date of

Award

Final

vesting/

maturity

date

Milena Mondini de Focatiis

DFSS 85,000 – 50,354 – £22.43 £1,906,550 £1,138,905 24/04/2020 24/04/2023

DFSS 90,000 – – 90,000 £34.55 £3,109,500 £2,415,600 23/09/2021 23/09/2024

DFSS 90,000 – 90,000 £21.59 £1,943,100 £2,415,600 22/09/2022 22/09/2025

DFSS 90,000 90,000 £23.79 £2,141,100 £2,415,600 28/09/2023 28/09/2026

SIP 88 – 88 – £20.58 £1,811 £1,683 13/03/2020 13/03/2023

SIP 68 – 68 – £26.40 £1,795 £1,612 02/09/2020 02/09/2023

SIP 61 – – 61 £29.44 £1,796 £1,637 12/03/2021 12/03/2024

SIP 50 – – 50 £36.11 £1,806 £1,342 01/09/2021 01/09/2024

SIP 72 – – 72 £24.81 £1,786 £1,932 11/03/2022 11/03/2025

SIP 81 – – 81 £22.25 £1,802 £2,174 24/08/2022 24/08/2025

SIP – 95 – 95 £18.82 £1,787 £2,550 13/03/2023 13/03/2026

SIP – 77 – 77 £23.61 £1,818 £2,067 21/08/2023 21/08/2026

Geraint Jones

DFSS 45,000 – 26,644 – £27.71 £1,246,950 £637,324 24/09/2020 24/09/2023

DFSS 52,500 – – 52,500 £34.55 £1,813,875 £1,409,100 23/09/2021 23/09/2024

DFSS 52,500 – – 52,500 £21.59 £1,133,475 £1,409,100 22/09/2022 22/09/2025

DFSS 52,500 52,500 £23.79 £1,248,975 £1,409,100 28/09/2023 28/09/2026

Salary Shares 2,500 – 2,500 – £20.58 £51,450 £46,265 13/03/2020 13/03/2023

Salary Shares 2,500 – 2,500 – £26.40 £66,000 £59,537 02/09/2020 02/09/2023

SIP 88 – – 88 £20.58 £1,811 £1,683 13/03/2020 13/03/2023

SIP 68 – – 68 £26.40 £1,795 £1,612 02/09/2020 02/09/2023

SIP 61 – – 61 £29.44 £1,796 £1,637 12/03/2021 12/03/2024

SIP 50 – – 50 £36.11 £1,806 £1,342 01/09/2021 01/09/2024

SIP 72 – – 72 £24.81 £1,786 £1,932 11/03/2022 11/03/2025

SIP 81 – – 81 £22.25 £1,802 £2,174 24/08/2022 24/08/2025

SIP – 95 – 95 £18.82 £1,787 £2,550 13/03/2023 13/03/2026

SIP – 77 – 77 £23.61 £1,818 £2,067 21/08/2023 21/08/2026

1 The value at maturity relates only to shares vested.

2 For SIP and Salary Shares, the price at award reflects the average closing share price over the five days prior to the award date.

The closing price of Admiral shares on 29 December 2023 was £26.84 per share.

By order of the Board,

Evelyn Bourke

Chair of the Remuneration Committee

6 March 2024

Corporate Governance

197

Admiral Group plc Annual Report and Accounts 2023

The Directors present their Annual Report and audited Financial Statements for the year ended

31 December 2023.

Group results and dividends

The profit for the year, after tax but before dividends, amounted to £337.2 million (2022: £285.3 million, restated following the adoption

of IFRS 17). The Directors declared and paid dividends of £307.1 million during 2023 (2022: £658.3 million). Refer to note 12b for

further details.

The Directors have proposed a final dividend of £156 million (52 pence per share). Subject to shareholders’ approval at the 2024 Annual

General Meeting (AGM), the final dividend will be paid on 7 June 2024 to shareholders on the register at the close of business on

10 May 2024.

Further information on the Group’s dividend policy is located in note 3 on page 236 and on page 37 of the Strategic Report.

Research and development

Details of costs incurred in respect of research and development can be found in note 11c on page 297.

Political donations

No political donations were made during the year.

Interest capitalised

No interest was capitalised by the Group during the year.

Significant contracts of material interest to shareholders

The Group considers its co-insurance and reinsurance contracts to be significant and of material interest to shareholders. A number of the

Group’s contractual arrangements with reinsurers include features that, in certain scenarios, allow for reinsurers to recover losses incurred

to date. The overall impact of such scenarios would not lead to an overall net economic outflow from the Group. No other contractual

arrangements are considered to be significant to the running of the Group’s business.

Financial instruments

The objectives and policies for managing risks in relation to financial instruments held by the Group are set out in note 2 to the

Financial Statements.

Directors and their interests

The present Directors of the Company are shown on page 118 of this Report, whilst Directors’ interests in the share capital of the

Company are set out in the Remuneration Report on page 196. A list of Directors in the financial period to 31 December 2023 is shown on

page 142.

Going concern

Under Provision 30 of the 2018 UK Corporate Governance Code, the Board confirms that it considers the going concern basis of

accounting appropriate. In considering this requirement, the Directors have taken into account the factors below.

In particular, as part of this assessment the Board considered updated projections of performance and profitability a number of times

throughout the year, with some key highlights including:

• The Group’s profit projections, including:

– Changes in premium rates and projected policy volumes across the Group’s insurance businesses

– The impacts of the continued elevated inflationary environment on the cost of settling claims across all of the Group’s

insurance businesses

– The return of motor claims frequency towards pre-pandemic levels

– Projected trends in other revenue generated by the Group’s insurance business from fees and the sale of ancillary products

– Projected contributions to profit from businesses other than the UK Car insurance business

– Expected trends in unemployment in the context of credit risks and the growth of the Group’s consumer lending business

– The More Than acquisition due to complete in the first half of 2024

– Assessment of wider market risk and changes in investment performance given the changing interest rates toward the end of 2023.

• The Group’s solvency position, which has been closely monitored through periods of market volatility. 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, focusing on regulatory guidance issued by the FCA and the PRA in the UK and regular communications

between management and regulators

• A review of the Company’s principal risks and uncertainties and the assessment of emerging risks, including climate related risks.

198 Corporate Governance198

Admiral Group plc Annual Report and Accounts 2023

Directors’ Report

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.

Further information is shown in the Viability Statement on page 109.

Share capital, AGM and related matters

Major shareholders

Other than as stated below, as far as the Company is aware, there are no persons with significant direct or indirect holdings in the

Company. Information provided to the Company pursuant to Rule 5 of the FCA’s Disclosure and Transparency Rules (DTRs) is published on

a Regulatory Information Service and on the Company’s website.

The Company received notifications in accordance with the FCA’s DTRs of the following notifiable interests in the voting rights in the

Company’s issued share capital:

As at 31 December 2023

Shareholder Number of Shares % voting rights

Mawer Investment Management Ltd. 21,727,558 7.2%

Henry Engelhardt & Diane Briere de I’Isle 20,277,027 6.7%

BlackRock Inc. 17,849,752 5.8%

Moondance Foundation 15,400,000 5.1%

Rothschild and Co Wealth Management UK Limited 15,322,698 5.0%

Vanguard Group Holdings 12,560,052 4.1%

FMR LLC 11,711,392 3.9%

David & Heather Stevens 8,422,950 2.8%

Münchener Rückversicherungs- Gesellschaft AG 5,297,781 1.7%

The percentage of voting rights detailed above were calculated at the time the relevant disclosures were made in accordance with the

DTRs. The DTRs require notification when the percentage voting rights (through shares and financial instruments) held by a shareholder

reaches, exceeds or falls below an applicable threshold. The information provided below was correct at the date of notification; however,

the date the notification was received may not have been within the current financial year. It should be noted that these holdings are

likely to have changed since the Company was notified. However, notification of any change is not required until the next notifiable

threshold is crossed.

Notifications received by the Company in accordance with the FCA’s DTRs in the period from 31 December 2023 to 6 March 2024

were as follows:

Shareholder Date of notification

Number of shares

as at date of

notification

% of voting rights

as at the date of

notification

Rothschild and Co Wealth Management UK Limited 3 January 2024 15,310,942 4.99%

Rothschild and Co Wealth Management UK Limited 5 January 2024 15,316,355 5.00%

Rothschild and Co Wealth Management UK Limited 26 January 2024 15,296,742 4.99%

Rothschild and Co Wealth Management UK Limited 22 February 2024 15,320,057 5.00%

Rothschild and Co Wealth Management UK Limited 28 February 2024 15,315,212 4.99%

Rothschild and Co Wealth Management UK Limited 6 March 2024 15,321,078 5.00%

There are no people who hold shares carrying special rights with regard to control of the Company.

Further information on the rights attaching to shares under the employee share schemes are provided in the Remuneration Report.

Shares held in Employee Benefit Trust (EBT)

The EBT does not use its voting rights in respect of the shares it holds in the EBT at general meetings, however, it may choose to do so if

recommended by the Company via a letter of wishes. If any offer is made to shareholders to acquire their shares, the trustee will not be

obliged to accept or reject the offer in respect of any shares which are at that time subject to subsisting awards, but will have regard to the

interests of the award holders and will have power to consult them to obtain their views on the offer. Subject to the above, the trustee may

take action with respect to any offer it thinks fair. The trustee has waived its right to dividends on the shares held in the trust.

Corporate Governance

199

Admiral Group plc Annual Report and Accounts 2023

Additional information for shareholders

The following provides the additional information required for shareholders in accordance with the Takeovers Directive and the

respective UK law.

At 31 December 2023, the Company’s issued share capital comprised a single class of shares referred to as ordinary shares. Details of the

share capital and shares issued during the year can be found in note 12d. The rights and obligations attached to the Company’s ordinary

shares are set out in the Articles of Association of the Company, copies of which can be obtained from Companies House.

If a poll is called at a general meeting, every member present in person or by proxy and entitled to vote shall have one vote for every ordinary

share held. The notice of the general meeting specifies deadlines for exercising voting rights either by proxy notice or present in person or

by proxy in relation to resolutions to be passed at general meeting. All proxy votes are counted and the numbers for, against or withheld in

relation to each resolution are announced at the Annual General Meeting and published on the Company’s website after the meeting.

There are no restrictions on the transfer of ordinary shares in the Company other than:

• Certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws)

• Pursuant to the Listing Rules of the FCA whereby certain employees and Directors of the Company require the approval of the

Company to deal in the Company’s securities.

The Company has not purchased any of its own shares during the period.

There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or

employment (whether through resignation, purported redundancy or otherwise) that occur because of a takeover bid.

There are a number of agreements that alter or terminate upon a change of control of the Company following a takeover bid, such as

commercial contracts (entered into in the normal course of business). None are considered to be significant in terms of their impact on

the business of the Group as a whole.

Powers of the Company Directors

The Directors are responsible for managing the business of the Company and may exercise all powers of the Company subject to

the provisions of relevant statutes, to any directions given by special resolution and to the Company’s Memorandum and Articles.

The Articles, for example, contain specific provisions and restrictions concerning the Company’s power to borrow money. Powers relating

to the issuing of new shares and buyback of shares are also included in the Articles and such authorities are renewed by shareholders at

the Annual General Meeting each year.

Power to issue shares

At the last Annual General Meeting, held on 27 April 2023, authority was given to the Directors to allot unissued relevant securities in the

Company up to a maximum nominal amount of £202,157 representing the Investment Association’s Guidelines limit of approximately

two thirds of the issued share capital as at 17 March 2023. This authority expires on the date of the Annual General Meeting to be held on

25 April 2024 and the Directors will seek to renew this authority for the following year.

A further special resolution passed at that meeting granted authority to the Directors to allot equity securities in the Company (up to

a maximum of 5% of the issued share capital of the Company) for cash, without regard to the pre-emption provisions of the Companies

Act 2006. This authority also expires on the date of the Annual General Meeting to be held on 25 April 2024 and the Directors will seek to

renew this authority for the following year.

The Board is aware of the principles published by the Pre-Emption Group in November 2022, and their template resolutions published on

4 November 2022, allowing a Company the ability to seek authority over a further 10% of the issued ordinary share capital on a non-pre-

emptive basis subject to certain conditions. The Board has set out its proposal, in line with the Pre-Emption Group principles, regarding its

requested authority to allot shares in the Notice of Meeting for the 2024 AGM.

Appointments of Directors

The Company’s Articles of Association (the Articles) give the Directors power to appoint and replace Directors. Under the Terms of

Reference of the Group Nomination and Governance Committee, any appointment must be recommended by the Group Nomination

and Governance Committee for approval by the Board of Directors. The Articles provide that all Directors will retire and offer themselves

for re-election at each Annual General Meeting, in accordance with the UK Corporate Governance Code and the Company’s current

practice. Therefore, all Directors will be submitting themselves for either election or re-election by shareholders at the forthcoming AGM.

Articles of Association

The Articles may only be amended by special resolution of the shareholders.

Directors’ indemnities and insurance

Directors and Officers insurance cover is in place for all Directors to provide cover against certain acts or omissions on behalf of the

Company. A Deed Poll of Indemnity was executed in October 2015, indemnifying each of the Directors, and Company Secretary, in

relation to certain losses and liabilities that they might incur in the course of acting as Directors of the Company. The Deed Poll of

Indemnity is categorised as qualifying third party provisions as defined by Section 234 of the Companies Act 2006 and remains in force

for all past and present Directors of the Company.

200 Corporate Governance200

Admiral Group plc Annual Report and Accounts 2023

Directors’ Report

continued

The Board is of the view that it is in the best interests of the Group to attract and retain the services of the most able and experienced

Directors by offering competitive terms of engagement, including the granting of such indemnities. Neither the Deed Poll of Indemnity

nor insurance cover would provide any coverage in the event that a Director is proved to have acted fraudulently or dishonestly.

Annual General Meeting (AGM)

It is proposed that the next AGM be held at Tŷ Admiral, David Street, Cardiff, CF10 2EH on Thursday 25 April 2024, notice of which will be

available to shareholders alongside, or at a date near to the publication of the Annual Report.

Reporting, accountability and audit

UK Corporate Governance Code

Admiral is subject to the UK Corporate Governance Code (the Code), published by the Financial Reporting Council (FRC) in July 2018 and

available on their website, www.frc.org.uk. The Company’s Annual Report and Accounts, taken as a whole, addresses the requirements

of the 2018 Code.

The Code was applicable for the Group during the year under review, and the Group has applied the principles and complied with the

provisions of the Code except with regard to non-compliance with provision 19 for part of the year from 1 January 2023 to 27 April

2023, from this date to the 31 December 2023 the Company was in full compliance with the requirements of the Code, as set out in the

Corporate Governance Report on page 113.

Admiral has reviewed the changes to the revised Code which the FRC published on 22 January 2024 and intends to be effective for

companies with financial reporting periods beginning on or after 1 January 2025. Admiral intends to be fully compliant with the revised

Code from 1 January 2025 and will disclose the measures introduced to ensure compliance with the new Code in the 2025 Annual Report

and Accounts to be published in 2026.

The Directors confirm that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the

information necessary for shareholders to assess the Company’s position and performance, business model and strategy.

The Board is ultimately responsible for the Group’s system of risk management and internal control and, through the Audit Committee,

has reviewed the effectiveness of the Group’s internal control and risk management arrangements relating to the financial reporting

process and the principal risks facing the business. The Board is satisfied that the Group’s internal control and risk management

framework is prudent and effective and that, through the Audit Committee and Group Risk Committee, risk can be assessed, managed

and assurance given that all material controls are reviewed and monitored.

Information on the composition and operation of the Board and its Committees is located in the following sections:

• Corporate Governance Report on page 113 in respect of the Board

• Nomination and Governance Committee Report on page 146

• Audit Committee Report on pages 161

• Group Risk Committee Report on page 168

• Remuneration Committee Report on page 185.

The Group’s gender diversity information for the financial year, together with an explanation of the policies related to diversity, are set

out in the Strategic Report on page 62 and in the Nomination and Governance Committee Report on page 154.

Branches

The Group has several branches located in Canada, India, France and Italy, through its subsidiary structure. Further details of the

Company’s subsidiaries, associated undertakings and branches are contained in note 12e.

Directors’ responsibilities

The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance

with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law

they are required to prepare the Group Financial Statements in accordance with United Kingdom adopted international accounting

standards and applicable law and have elected to prepare the parent Company financial statements in accordance with UK accounting

standards and applicable law, including FRS 101 Reduced Disclosure Framework.

Under Company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view

of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and

Parent Company financial statements, the Directors are required to:

• Select suitable accounting policies and then apply them consistently

• Make judgements and accounting estimates that are reasonable and prudent

• For the Group financial statements, state whether they have been prepared in accordance with IFRS as adopted by the UK

Corporate Governance

201

Admiral Group plc Annual Report and Accounts 2023

• For the Parent Company financial statements, state whether applicable UK accounting standards, including FRS 101 Reduced

Disclosure Framework, have been followed, subject to any material departures disclosed and explained in the Parent Company

financial statements

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue

in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s

transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to

ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are

reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’

Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the

Company’s website.

Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in

other jurisdictions.

Responsibility statement

The Directors confirm that to the best of their knowledge:

• The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the

assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a

whole; and

• The Directors’ Report and the Strategic Report include a fair review of the development and performance of the business and the

position of the Company, and the undertakings included in the consolidation taken as a whole, together with a description of the

principal risks and uncertainties.

Disclosure of information to auditor

The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no

relevant audit information of which the Company’s auditor is unaware; and each Director has taken all the steps that they ought to have

taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of

that information.

Auditor

Following the Board’s approval of the Audit Committee’s recommendation to reappoint the Company’s auditor, Deloitte LLP has

indicated willingness to continue in office and resolutions to reappoint it and to authorise the Directors to fix its remuneration will be

proposed at the AGM.

Index of disclosures

Information included in the Strategic Report: As permitted by legislation, some matters required to be included in the Directors’ Report

have instead been included in the Strategic Report as the Board considers them to be of strategic importance. These are identified with

an asterix (*) in the table below.

Information/disclosure Pages

Agreement for loss of office or employment on takeover 181, 200

Allotment of shares for cash pursuant to Group employee share schemes* 299

Amendment of the Articles of Association 200

Annual General Meeting (AGM) 201

Appointment and replacement of Directors 200, 146

Audit Committee Report 161

Business review 32

Business model 08

Directors in office during the year 118, 142

Significant agreements impacted by a change of control 200

Changes in borrowings 235, 275

Charitable donations 21, 66

Climate related disclosures, including GHG emissions and energy consumption 71

Corporate Governance Report 113

Culture 132

202 Corporate Governance202

Admiral Group plc Annual Report and Accounts 2023

Directors’ Report

continued

Information/disclosure Pages

Details of long-term incentive schemes* 172

Directors’ insurance and indemnities 200

Directors’ inductions and training 146

Directors’ interests in shares 196

Directors’ Responsibilities Statement 201

Directors’ service contracts 181

Disclosure of information to the Auditor 202

Diversity disclosures 154

Dividends 198, 299

Engagement with suppliers, customers and others in a business relationship with the Company* 87

Employee engagement 62, 89

Employees with disabilities 62

Fair, balanced and understandable 201

Financial risk management 228

Financial instruments 198, 268

Future developments of the business 22

Going Concern Statement 198, 306

Group Risk Committee 168

Independent Auditors’ Report 205

Interest capitalised by the Group* 205

Nomination and Governance Committee Report 146

Non-Financial Information Statement 96

Political donations and expenditure 198

Post-balance sheet events 301

Powers for the Company to issue or buy back its shares 200

Powers of Directors 200

Principal risks and uncertainties 98

Related undertakings 300

Reappointment of Auditor 185

Remuneration Committee Report 185

Rights attaching to shares 199, 298

Risk management and internal control 98, 161, 201

s172 Statement 87

Share capital 199, 298

Shareholder engagement 90, 136

Shareholder waiver of dividends and future dividends* 199, 299

Significant related party agreements* 200, 301, 312

Significant shareholders 199

Statement of compliance with the UK Corporate Governance Code 125, 201

Strategic Report 14

Sustainability Report 56

Viability Statement 109

Voting rights 200

* Information required to be disclosed in the Annual Report under Listing Rule 9.8.4R is marked with an asterisk (*).

Approved by the Board of Directors and signed on its behalf by

Dan Caunt Geraint Jones

Company Secretary Chief Financial Oﬃcer

6 March 2024 6 March 2024

Corporate Governance

203

Admiral Group plc Annual Report and Accounts 2023

FINANCIAL

STATEMENTS

In this section

205 Independent Auditor’s Report

216 Consolidated Income Statement

217 Consolidated Statement of Comprehensive Income

218 Consolidated Statement of Financial Position

219 Consolidated Cashflow Statement

220 Consolidated Statement of Changes in Equity

221 Notes to the Consolidated Financial Statements

303 Appendix to the Group Financial Statements (unaudited)

305 Parent Company Financial Statements

306 Notes to the Parent Company Financial Statements

Additional Information

316 Glossary

204 Financial Statements204

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

Report on the audit of the Financial Statements

1. Opinion

In our opinion:

• the financial statements of Admiral Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and fair view

of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and of the Group’s profit for the year

then ended;

• the Group financial statements have been properly prepared in accordance with United Kingdom adopted international

accounting standards;

• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

• the Consolidated and Parent Company Income Statements;

• the Consolidated and Parent Company Statements of Comprehensive Income;

• the Consolidated and Parent Company Statements of Financial Position;

• the Consolidated Cash Flow Statement;

• the Consolidated and Parent Company Statements of Changes in Equity;

• the related notes 1 to 13 to the Group financial statements, excluding the capital adequacy disclosures in note 3.2.3 calculated in

accordance with the Solvency II regime which are marked as unaudited; and

• the related notes 1 to 14 to the Parent Company financial statements.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and

United Kingdom adopted international accounting standards. The financial reporting framework that has been applied in the preparation

of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced

Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities

under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of

our report.

We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit

of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public

interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services

provided to the Group for the year are disclosed in note 9c to the financial statements. We confirm that we have not provided any

non-audit services prohibited by the FRC’s Ethical Standard to the Group or the Parent Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Financial Statements

205

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

continued

3. Summary of our audit approach

Key audit matters The key audit matters that we identified in the current year were:

• Valuation of UK motor large bodily injury reserves within the liability for incurred claims;

• Inflation assumptions applied to UK motor bodily injury claims within the liability for incurred claims; and

• Initial adoption of IFRS 17 Insurance Contracts.

Within this report, key audit matters are identified as follows:

Newly identified

Increased level of risk

Similar level of risk

Decreased level of risk

Materiality The materiality that we used for the Group financial statements was £22.1 million which was determined

on the basis of 5% of profit before tax (‘PBT’).

Scoping We identified five reporting components which we determined should be subject to full scope audits

this year.

Specific audit procedures were completed in respect of five further components which, although not

financially significant, did present some specific audit risks which needed to be addressed.

The components within the scope of our audit procedures account for 98% of the Group’s profit before tax,

99% of the Group’s revenue and 99% of the Group’s net assets.

Significant changes

in our approach

IFRS 17 became effective on 1 January 2023, thus we have also identified the impact of the Group’s

adoption of IFRS 17 on the restated comparative information presented for the year ended 31 December

2022 as an additional key audit matter, as this is a new and complex accounting standard which has

required considerable judgment and interpretation in its implementation.

4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis of

accounting included:

• We obtained an understanding of the relevant controls relating to the Board’s going concern assessment process;

• We inspected the Group ORSA (‘Own Risk and Solvency Assessment’) to support our understanding of the key risks faced by the Group,

its ability to continue as a going concern, and the longer-term viability of the Group;

• We evaluated management’s going concern assessment in light of the current macroeconomic uncertainties;

• We considered the available cash and cash equivalents balance at year-end and assessed how this is forecast to fluctuate over a period

of at least 12 months from the date of signing the financial statements in line with management’s forecast performance. This analysis

included assessing the amount of headroom in the forecasts considering cash and regulatory liquidity requirements;

• We assessed management’s reverse stress testing over the projected profitability, solvency and liquidity positions and the likelihood of

the various scenarios that could adversely impact upon the Group’s liquidity and solvency headroom; and

• We obtained and inspected correspondence between the Group and its regulators, as well as reviewed the Group Risk Committee

meeting minutes, to identify any items of interest which could potentially indicate either non-compliance with regulation or potential

litigation or regulatory action held against the Group.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the Group's and Parent Company’s ability to continue as a going concern for a

period of at least twelve months from when the financial statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw

attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to

adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of

this report.

206 Financial Statements206

Admiral Group plc Annual Report and Accounts 2023

5. Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements

of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we

identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and

we do not provide a separate opinion on these matters.

5.1. Valuation of UK motor large bodily injury reserves within the liability for incurred claims

Key audit

matter description

The Group’s gross liability for incurred claims totalled £3,452m as at 31 December 2023 (31 December

2022: £3,174m). Judgments made in determining the valuation of claims reserves are by far the most

significant in terms of their impact on the Group’s financial position. Setting these claims reserves is

an inherently subjective exercise and small changes in underlying assumptions may have a material

impact on the overall year-end result reported.

Specifically, our significant areas of focus are the Group’s selection of the frequency and severity

assumptions for large bodily injury claims arising in the UK motor insurance business. These particular

claims result in higher individual claims reserves and are more judgmental, in terms of the

development of the ultimate losses, due to the longer-term nature of the Group’s exposure (compared

to property damage claims). Therefore, we determine this as a key audit matter.

Refer to page 164 in the Audit Committee report where this is included as a significant issue and note

3 and note 5f in the financial statements which refer to this matter.

How the scope of our

audit responded to the

key audit matter

We obtained an understanding, and tested the relevant controls governing the selection of the

frequency and severity actuarial assumptions identified for large bodily injury claims in the UK

motor insurance business, as well as the wider process supporting the valuation of the liability for

incurred claims.

We obtained and inspected the reports from management and involved our internal actuarial

specialists to support our assessment of management’s frequency and severity assumptions for UK

motor insurance business.

We benchmarked the frequency assumptions against available industry data and considered the

comparison in the context of the risk profile of the Group’s portfolio and the year-on-year changes in

these assumptions.

We undertook a graphical analysis of incurred development patterns to assess and challenge the

severity assumptions. We benchmarked the average cost per claim assumptions against available

third-party industry data in the context of this incurred development analysis.

Key observations Based on the procedures described above, we concluded that the selection of the frequency and

severity assumptions for large bodily injury claims arising in the UK motor insurance business within

the gross liability for incurred claims is appropriate.

Financial Statements

207

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

continued

5.2. Inflation assumptions applied to UK motor bodily injury claims within the liability for incurred claims

Key audit

matter description

Given the ongoing uncertainty associated with the UK’s current and future inflationary environment,

the impact of future inflation assumptions requires the application of significant judgment which

has a material impact on the liability for incurred claims. In the current macroeconomic environment,

there is a greater level of uncertainty associated with projecting future assumptions than in previous

periods owing to the uncertainty in forecast future inflation and the extent to which this will impact

claims inflation.

The most significant impact of such inflation assumptions relates to bodily injury claims given the

relatively low implicit inflation in historical data trends and the time it takes for such claims to develop

and settle. Therefore, the effect of such inflationary pressures will not be observable in the claims

data for some time, unlike for damage claims where the impact of inflation is already arising due

to inflationary trends in historical data, their faster development, and is more closely linked to the

Consumer Price Index (‘CPI’).

Our audit work to respond to the specific risks associated with inflationary assumptions in the UK

motor bodily injury claims reserves required significant input from our actuarial specialists and was the

focus of a significant amount of audit effort therefore, we considered this a key audit matter.

Refer to page 165 in the Audit Committee report where this is included as a significant issue and note

3 and note 5f in the financial statements which refer to this matter.

How the scope of our

audit responded to the

key audit matter

We obtained an understanding of and tested relevant controls relating to the key inflation

assumptions identified.

We obtained and inspected the reports from both management and with involvement of our actuarial

specialists we assessed the key inflation assumptions.

We benchmarked management’s inflation assumptions against available industry data and considered

the results of this comparison.

We inspected and challenged the methodology applied in determining the impact of excess inflation

on the year-end liability for incurred claims, including challenging the future inflation assumptions

with reference to current and future expectations of market wage inflation.

Key observations Based on the procedures described above, we concluded that the inflation assumptions applied to UK

motor bodily injury claims reserves are appropriate.

208 Financial Statements208

Admiral Group plc Annual Report and Accounts 2023

5.3. Initial adoption of IFRS 17 Insurance Contracts

Key audit

matter description

With effect from 1 January 2023, the Group transitioned to IFRS 17: Insurance Contracts which replaced

the existing standard for insurance contracts, IFRS 4. The new standard establishes the principles

for the recognition, measurement, presentation and disclosure of insurance contracts which are

significantly different to those required under IFRS 4. The Group’s financial statements for the year

ended 31 December 2023 are the Group’s first set of financial statements to include the adoption

of the new standard. As a result, comparative financial information has been restated from 1 January

2022, with the first-time adoption of IFRS 17 resulting in a decrease in equity of £125.6 million upon

transition as shown in the Consolidated Statement of Changes in Equity.

The application of IFRS 17 to the Group’s insurance contracts requires significant management

judgment in developing the valuation methodology, defining the related accounting policies and

implementing those policies appropriately within the relevant calculation models. The judgments,

policy choices and elections made have the potential to significantly impact the financial results of the

Group and its key performance indicators.

We have concluded that the impact of the adoption of IFRS 17 on the restated 2022 comparative

financial information forms a key audit matter as this is a new and complex accounting standard which

has required considerable judgment and interpretation in its implementation. Furthermore, the new

standard has introduced a number of significant changes, including new requirements regarding the

recognition and measurement of insurance contracts and related account balances and classes of

transactions. In order to meet the requirements of the new standard, significant changes have also

been made to the systems, processes and controls with effect from 1 January 2023. This resulted in an

increased extent of audit effort, including the involvement of our internal actuarial and IT specialists.

Refer to page 165 in the Audit Committee report where this is included as a significant issue and note

1 in the financial statements which sets out the qualitative and quantitative IFRS 17 information,

including the relevant recognition and measurement requirements of the Standards, and the

accounting policies applied on its adoption.

How the scope of our

audit responded to the

key audit matter

To respond to the key audit matter we have performed the following:

• Obtained an understanding of and tested the relevant controls governing the restated 2022

comparative financial information and, in particular, those controls over the assumptions and

methodologies applied in the new IFRS 17 models in valuing the liability for incurred claims;

• Evaluated the appropriateness of key technical accounting decisions, judgments, assumptions

and elections made in determining the impacts to assess compliance with the requirements of

the standard;

• With the involvement of our internal actuarial specialists we performed procedures to assess the

Group’s implementation of the defined methodology and IFRS 17 calculation models;

• We evaluated the data and other information required for the IFRS 17 calculations, including the

data inputs to the calculation of the fulfilment cashflows and the risk adjustment within the liability

for incurred claims; and

• We tested the new disclosures and the disclosures related to the transition impact and reconciled

the disclosures to underlying accounting records and supporting data.

Key observations Based on the procedures described above, we are satisfied that the Group’s insurance contracts are

appropriately recognised under IFRS 17.

Financial Statements

209

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

continued

6. Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions

of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work

and in evaluating the results of our work.

Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:

Group financial statements Parent Company financial statements

Materiality £22.1 million (2022: £23.4 million) £4.4 million (2022: £4.2 million)

Basis for determining

materiality

5% of profit before tax

(2022: 5% of profit before tax).

3% of two-year average of net assets

(2022: 3% of two-year average of net assets).

Rationale for the

benchmark applied

We consider profit before tax to be the critical

benchmark of the performance of the Group and

consider this benchmark to be suitable having

compared to other benchmarks. Our materiality

equates to 1% of insurance revenue and 2%

of equity (2022: 1% of insurance revenue and

2% of equity).

The Parent Company primarily exists as the

holding company which carries investments

in Group subsidiaries and is the issuer of listed

securities. We consider that net assets is the

critical benchmark for the Parent Company.

The measure uses a two-year average of net

assets which we consider appropriate given the

inherent volatility associated with the timing of

dividend payments.

PBT

£442.8m

Group materiality

£22.1m

Component

materiality range

£3.2m to £17.6m

Audit Committee

reporting threshold

£1.1m

PBT

Group materiality

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and

undetected misstatements exceed the materiality for the financial statements as a whole.

Group financial statements Parent Company financial statements

Performance materiality 70% (2022: 70%) of Group materiality 70% (2022: 70%) of Parent Company materiality

Basis and rationale for

determining performance

materiality

In determining performance materiality, we considered the following factors:

• our risk assessment, including our assessment of the Group’s overall control environment and that

we consider it appropriate to rely on controls over a number of business processes; and

• our past experience of the audit, which has indicated a low number of uncorrected misstatements

identified in prior periods.

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £1.1 million

(2022: £1.1 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the

financial statements.

210 Financial Statements210

Admiral Group plc Annual Report and Accounts 2023

7. An overview of the scope of our audit

7.1. Identification and scoping of components

The five (2022: five) significant components of the Group which were identified in our audit planning are Admiral Insurance (Gibraltar)

Limited, Admiral Insurance Company Limited, EUI Limited, Admiral Europe Compañía de Seguros, and the Parent Company, Admiral

Group plc.

Each of these significant components was subjected to a full-scope audit, completed to individual component materiality levels

which ranged from £3.2 million to £17.6 million (2022: £2.9 million to £22.2 million) dependent upon the relative significance of each

individual component.

We have completed specific audit procedures, designed to address specific audit risks, for five (2022: eight) further components.

The components within the scope of our audit procedures account for 98% (2022: 98%) of the Group’s profit before tax, 99%

(2022: 99%) of the Group’s revenue and 99% (2022: 99%) of the Group’s net assets.

For the remaining components which were not subject to full-scope audits or specified audit procedures, we performed analysis

at an aggregated Group level to re-assess our evaluation that there were no significant risks of material misstatement in any of

these components.

Finally, we performed audit procedures over the consolidation process by testing the material consolidation adjustments made by

management in calculating their consolidated financial statements.

Speciﬁed audit procedures

Full audit scope

Review at group level

Revenue

90%

9% 1%

Speciﬁed audit procedures

Full audit scope

Review at group level

Profit before tax

94%

4% 2%

Speciﬁed audit procedures

Full audit scope

Review at group level

Net assets

95%

4% 1%

7.2. Our consideration of the control environment

We obtained an understanding of and tested the relevant controls within the Group, including controls over the following business

processes: financial reporting, insurance revenue, other revenue, insurance service expenses, liability for incurred claims, liability for

remaining coverage, reinsurance and coinsurance, cash and investments. We also identified the key IT systems in the Group that were

relevant to the audit, and involved our internal IT specialists to support our testing of general IT controls over these systems, including

the policy administration system, claims administration systems and the data warehouse.

7.3. Our consideration of climate-related risks

In planning our audit, we have considered the impact of climate change on the Group’s operations and subsequent impact on its financial

statements. The Group sets out its assessment of the potential impact on page 107 of the Emerging Risks section.

In conjunction with our climate reporting specialists, we have held discussions with the Group to understand management’s:

• process for identifying affected operations, including the governance and controls over this process, and the subsequent effect on the

financial reporting of the Group; and

• long-term strategy to respond to climate-related risks as they emerge including the effect on the Group’s forecasts.

Financial Statements

211

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

continued

In addition, our audit work also involved:

• challenging the completeness of the physical and transition risks identified based on our understanding of the Group, and considered

in the Group’s climate risk assessment and the conclusion that there is no material impact of climate change risk on the current year

financial reporting;

• assessing the Group’s qualitative analysis which supports the Group’s conclusion that there is no material financial statement impact of

climate risk on expected credit losses;

• assessing disclosures in the Annual Report against the requirements of the TCFD framework, paragraph 8(a) of Listing Rule 9.8.6R, as

well as the mandatory climate-related financial disclosure requirements (“CFD”) ; and

• evaluating the appropriateness of disclosures included in the financial statements in Note 2.

We have not been engaged to provide assurance over the accuracy of TCFD disclosures set out on page 73 of the annual report. As part

of our procedures, we are required to read these disclosures and to consider whether they are materially inconsistent with the financial

statements or our knowledge obtained during the course of our audit. We did not identify any material inconsistencies as a result of

these procedures.

7.4. Working with other auditors

We engaged local component auditors, being Deloitte member firms in Spain and the US, to perform the audit work over entities

residing in these respective territories. We also engaged component auditors in the Deloitte UK firm to perform the audit work over

the Admiral Money segment of the Group. We directed and supervised the work of Deloitte Spain and Deloitte UK, including through

in-person visits and through remote communication and review of their work.

For the US auditors we concluded it was not necessary to undertake in-person visits to this component, rather we directed and

supervised the work of the component auditor by having frequent phone calls with the component audit team, participating in video

conferences and reviewing key audit documentation remotely.

8. Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s

report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our

report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to

a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary

to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s ability to

continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting

unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative

but to do so.

10. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a

high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/

auditorsresponsibilities. This description forms part of our auditor’s report.

212 Financial Statements212

Admiral Group plc Annual Report and Accounts 2023

11. Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud is detailed below.

11.1. Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and

regulations, we considered the following:

• the nature of the industry and sector, control environment and business performance including the design of the Group’s

remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;

• the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error;

• results of our enquiries of management, internal audit, the directors and the Audit Committee about their own identification and

assessment of the risks of irregularities, including those that are specific to the Group’s sector;

• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:

– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and

• the matters discussed among the audit engagement team including significant component audit teams and relevant internal

specialists, including tax, actuarial, financial instruments, IT, climate, and industry specialists regarding how and where fraud might

occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and

identified the greatest potential for fraud in the following areas: valuation of UK motor large bodily injury claims reserves within

the liability for incurred claims and inflation assumptions applied to UK motor bodily injury claims within the liability for incurred

claims. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of

management override.

We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those

laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.

The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, Solvency II regulation and

relevant tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but

compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s

operating licence, and the Financial Conduct Authority and the Prudential Regulation Authority regulations.

11.2. Audit response to risks identified

As a result of performing the above, we identified the valuation of UK motor large bodily injury reserves within the liability for incurred

claims and inflation assumptions applied to UK motor bodily injury claims within the liability for incurred claims as key audit matters

related to the potential risk of fraud. The key audit matters section of our report explains the matters in more detail and also describes

the specific procedures we performed in response to those key audit matters.

In addition to the above, our procedures to respond to the risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of

relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement

due to fraud;

• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with

HMRC, the Financial Conduct Authority and the Prudential Regulation Authority; and

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other

adjustments; assessing whether the judgments made in making accounting estimates are indicative of a potential bias; and evaluating

the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including

internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws

and regulations throughout the audit.

Financial Statements

213

Admiral Group plc Annual Report and Accounts 2023

Independent Auditor’s Report

to the members of Admiral Group plc

continued

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the

Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements

are prepared is consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the

course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.

13. Corporate Governance Statement

The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the

Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified

for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:

• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any

material uncertainties identified set out on page 198;

• the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is

appropriate set out on page 109;

• the directors' statement on fair, balanced and understandable set out on page 201;

• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 98;

• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set

out on page 98; and

• the section describing the work of the Audit Committee set out on page 161.

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received

from branches not visited by us; or

• the Parent Company financial statements are not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not

been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

214 Financial Statements214

Admiral Group plc Annual Report and Accounts 2023

15. Other matters which we are required to address

15.1. Auditor tenure

Following the recommendation of the Audit Committee, we were appointed by shareholders’ approval at the Annual General Meeting on

27 April 2023 to audit the financial statements for the year ending 31 December 2023 and subsequent financial periods. The period of

total uninterrupted engagement including previous renewals and reappointments of the firm is eight years, covering the years ending

31 December 2016 to 31 December 2023.

15.2. Consistency of the audit report with the additional report to the Audit Committee

Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISAs (UK).

16. Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.

Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to

them in an auditor’s 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 and the Company’s members as a body, for our audit work, for this report, or for the opinions we

have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these

financial statements form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA

in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format Annual

Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.

Adam Addis

(Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

6 March 2024

Financial Statements

215

Admiral Group plc Annual Report and Accounts 2023

Consolidated Income Statement

For the year ended 31 December 2023

		Year ended
			Restated
		31 December 2023	31 December 2022
	Note	£m	£m
Insurance revenue	5	3,486.1	2,956.9
Insurance service expenses	5	(3,093.2)	(2,737.2)
Insurance service result before reinsurance		392.9	219.7
Net expense from reinsurance contracts held	5	(87.1)	(38.4)
Insurance service result		305.8	181.3
Investment return	6	122.9	64.6
Finance expenses from insurance contracts issued	5	(94.5)	(52.0)
Finance income from reinsurance contracts held	5	28.9	13.6
Net insurance finance expenses		(65.6)	(38.4)
Net insurance and investment result		363.1	207.5
Interest income from financial services	7	94.9	58.7
Interest expense related to financial services	7	(26.8)	(12.6)
Net interest income from financial services		68.1	46.1
Other revenue and profit commission	8	205.7	256.4
Other operating expenses	9	(250.8)	(204.6)
Other operating expenses recoverable from co-insurers	9	107.8	86.7
Expected credit losses	6	(31.0)	(18.9)
Other income and expenses		31.7	119.6
Operating profit		462.9	373.2
Finance costs	6	(20.5)	(13.5)
Finance costs recoverable from co- and reinsurers	6	0.4	1.5
Net finance costs		(20.1)	(12.0)
Profit before tax		442.8	361.2
Taxation expense	10	(105.6)	(75.9)
Profit after tax		337.2	285.3
Profit after tax attributable to:
Equity holders of the parent		338.0	286.5
Non-controlling interests (NCI)		(0.8)	(1.2)
		337.2	285.3
Earnings per share
Basic	12	111.2p	95.4p
Diluted	12	110.8p	95.0p
Dividends declared and paid (total)	12	307.1	658.3
Dividends declared and paid (per share)	12	103.0p	223.0p

1 2022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

216 Financial Statements216

Admiral Group plc Annual Report and Accounts 2023

	Year ended
		Restated
	31 December 2023	31 December 2022
	£m	£m
Profit for the period	337.2	285.3
Other Comprehensive Income
Items that are or may be reclassified to profit or loss
Movements in fair value reserve	98.1	(255.6)
Deferred tax charge in relation to movement in fair value reserve	(5.7)	13.0
Movements in insurance finance reserve	(78.9)	177.8
Deferred tax in relation to movement in insurance finance reserve	9.7	(22.8)
Exchange differences on translation of foreign operations	3.7	(4.3)
Movement in hedging reserve	(18.1)	25.1
Deferred tax charge in relation to movement in hedging reserve	4.5	(7.0)
Other Comprehensive Income for the period, net of income tax	13.3	(73.8)
Total comprehensive income for the period	350.5	211.5
Total comprehensive income for the period attributable to:
Equity holders of the parent	351.3	212.6
Non-controlling interests	(0.8)	(1.1)
	350.5	211.5

1. 2022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2023

Financial Statements

217

Admiral Group plc Annual Report and Accounts 2023

Consolidated Statement of Financial Position

For the year ended 31 December 2023

			As at
			Restated	Restated
		31 December 2023	31 December 2022	1 January 2022
	Note	£m	£m	£m
ASSETS
Property and equipment	11	90.1	89.8	103.2
Intangible assets	11	242.9	217.6	151.8
Deferred income tax	10	46.1	28.4	20.7
Corporation tax asset		20.4	9.1	10.2
Reinsurance contract assets	5	1,191.9	1,015.4	987.2
Loans and advances to customers	7	879.4	823.9	556.8
Other receivables	6	409.9	316.4	391.5
Financial investments	6	3,862.4	3,411.2	3,742.6
Cash and cash equivalents	6	353.1	297.0	372.7
Total assets		7,096.2	6,208.8	6,336.7
EQUITY
Share capital	12	0.3	0.3	0.3
Share premium account		13.1	13.1	13.1
Other reserves	12	(40.5)	(50.2)	23.7
Retained earnings		1,018.9	922.6	1,243.5
Total equity attributable to equity holders of the parent		991.8	885.8	1,280.6
Non-controlling interests		1.0	1.2	2.3
Total equity		992.8	887.0	1,282.9
LIABILITIES
Insurance contracts liabilities	5	4,581.7	4,025.4	3,926.4
Subordinated and other financial liabilities	6	1,129.8	939.1	670.9
Trade and other payables	6, 11	305.8	254.9	351.2
Lease liabilities	6	81.2	88.5	105.3
Corporation tax liabilities		4.9	13.9	–
Total liabilities		6,103.4	5,321.8	5,053.8
Total equity and total liabilities		7,096.2	6,208.8	6,336.7

1. 2022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

The accompanying notes form part of these financial statements. These financial statements were approved by the Board of Directors on

6 March 2024 and were signed on its behalf by:

Geraint Jones

Chief Financial Oﬃcer

Admiral Group plc

Company Number: 03849958

218 Financial Statements218

Admiral Group plc Annual Report and Accounts 2023

Consolidated Cashflow Statement

For the year ended 31 December 2023

		Year ended
			Restated
		31 December 2023	31 December 2022
	Note	£m	£m
Profit after tax		337.2	285.3
Adjustments for non-cash items:
– Depreciation of property, plant and equipment and right-of-use assets		18.2	18.2
– Impairment/ disposal of property, plant and equipment and right-of-use assets		(4.0)	(1.2)
– Amortisation and impairment of intangible assets	11	40.5	23.7
– Movement in expected credit loss provision		15.7	11.7
– Share scheme charges		63.3	57.3
– Interest expense on funding for loans and advances to customers		26.2	12.6
– Investment return	6	(119.3)	(64.6)
– Finance costs, including unwinding of discounts on lease liabilities		20.5	13.4
– Taxation expense	10	105.6	75.9
Change in gross insurance contract liabilities	5	451.3	372.8
Change in reinsurance assets	5	(141.8)	(124.2)
Change in insurance and other receivables		(94.7)	75.1
Change in gross loans and advances to customers	7	(73.6)	(280.6)
Change in trade and other payables, including tax and social security	11	52.4	(96.3)
Cashflows from operating activities, before movements in investments		697.5	379.1
Purchases of financial instruments		(3,538.4)	(3,198.0)
Proceeds on disposal/ maturity of financial instruments		3,176.1	3,328.3
Interest and investment income received		76.8	58.7
Cashflows from operating activities, net of movements in investments		412.0	568.1
Taxation payments		(133.0)	(91.2)
Net cashflow from operating activities		279.0	476.9
Cashflows from investing activities:
Purchases of property, equipment and software		(75.9)	(98.6)
Investments in Associates		–	(2.4)
Net cash used in investing activities		(75.9)	(101.0)
Cashflows from financing activities:
Proceeds on issue of loan backed securities		44.9	267.8
Proceeds from other financial liabilities		136.2	–
Finance costs paid, including interest expense paid on funding for loans		(35.1)	(25.3)
Repayment of lease liabilities		(10.7)	(9.2)
Equity dividends paid	12	(307.1)	(658.3)
Net cash used in financing activities		(171.8)	(425.0)
Net increase/ (decrease) in cash and cash equivalents		31.3	(49.1)
Cash and cash equivalents at 1 January		297.0	372.7
Effects of changes in foreign exchange rates		24.8	(26.6)
Cash and cash equivalents at end of period	6	353.1	297.0

1. 2022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

Financial Statements

219

Admiral Group plc Annual Report and Accounts 2023

Consolidated Statement of Changes in Equity

For the year ended 31 December 2023

								Attributable to the owners of the Company
						Foreign	Insurance	Retained		Non-
		Share	Share	Fair value	Hedging	exchange	finance	profit		controlling	To t a l
		capital	premium	reserve	reserve	reserve	reserve	and loss	To t a l	interests	equity
	Note	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2022
previously reported		0.3	13.1	36.7	3.0	4.3	–	1,348.8	1,406.2	2.3	1,408.5
Impact of initial application
of IFRS 17		–	–	–	–	0.2	(20.5)	(105.3)	(125.6)	–	(125.6)
At 1 January 2022 restated		0.3	13.1	36.7	3.0	4.5	(20.5)	1,243.5	1,280.6	2.3	1,282.9
Profit/(loss) for the period		–	–	–	–	–	–	286.5	286.5	(1.2)	285.3
Other Comprehensive Income		–	–	(242.6)	18.1	(4.4)	155.0	–	(73.9)	0.1	(73.8)
Total comprehensive income for the period		–	–	(242.6)	18.1	(4.4)	155.0	286.5	212.6	(1.1)	211.5
Transactions with equity holders
Dividends	12	–	–	–	–	–	–	(658.3)	(658.3)	–	(658.3)
Share scheme credit		–	–	–	–	–	–	57.3	57.3	–	57.3
Deferred tax credit on share scheme credit		–	–	–	–	–	–	(6.4)	(6.4)	–	(6.4)
Total transaction with equity holders		–	–	–	–	–	–	(607.4)	(607.4)	–	(607.4)
As at 31 December 2022		0.3	13.1	(205.9)	21.1	0.1	134.5	922.6	885.8	1.2	887.0
At 1 January 2023		0.3	13.1	(205.9)	21.1	0.1	134.5	922.6	885.8	1.2	887.0
Profit/(loss) for the period		–	–	–	–	–	–	338.0	338.0	(0.8)	337.2
Other Comprehensive Income		–	–	92.4	(13.6)	3.7	(69.2)	–	13.3	–	13.3
Total comprehensive income for the period		–	–	92.4	(13.6)	3.7	(69.2)	338.0	351.3	(0.8)	350.5
Transactions with equity holders
Dividends	12	–	–	–	–	–	–	(307.1)	(307.1)	–	(307.1)
Share scheme credit		–	–	–	–	–	–	63.3	63.3	–	63.3
Deferred tax credit on share scheme credit		–	–	–	–	–	–	2.1	2.1	–	2.1
Transfer to loss on disposal
of assets held for sale		–	–	–	–	(3.6)	–	–	(3.6)	0.6	(3.0)
Total transactions with equity holders		–	–	–	–	(3.6)	–	(241.7)	(245.3)	0.6	(244.7)
As at 31 December 2023		0.3	13.1	(113.5)	7.5	0.2	65.3	1,018.9	991.8	1.0	992.8

1. 2022 comparative figures have been restated following the adoption of IFRS 17 Insurance Contracts. For further information see note 2 to the financial statements.

220 Financial Statements220

Admiral Group plc Annual Report and Accounts 2023

General information

Admiral Group plc is a public limited Company incorporated in England and Wales. Its registered office is at Tŷ Admiral, David Street,

Cardiff, CF10 2EH and its shares are listed on the London Stock Exchange. The nature of Admiral Group operations and its principal

activities is set out in the Business model section on page 8.

1. Basis of preparation

The consolidated financial statements have been prepared and approved by the Directors in accordance with United Kingdom adopted

international accounting standards in conformity with the requirements of the Companies Act 2006. The Company has elected to

prepare its Parent Company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework

(FRS 101).

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 as fair value through Other Comprehensive Income, and insurance and reinsurance contract assets and liabilities which

are measured at their fulfilment value in accordance with IFRS 17 Insurance Contracts. The Group and Company financial statements are

presented in pounds sterling, rounded to the nearest £0.1 million.

Cashflows from operating activities before movements in investments comprise all cashflows arising from the Group’s insurance and

reinsurance activities, and from loans and advances issued to customers. Cashflows from financing activities include the cashflows on issues

of loan backed securities, lease liabilities and other financial liabilities.

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 can 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 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 Group has securitised certain loans and advances to customers by the transfer of the loans to special purpose entities (’SPEs’)

controlled by the Group. Securitisation enables a subsequent issuance of debt by the SPEs to investors who gain the security of the

underlying assets as collateral. These SPEs are fully consolidated into the Group financial statements under IFRS 10 Consolidated Financial

Statements, as the Group controls the entity in line with the above definition.

The preparation of financial statements in conformity with adopted IFRS 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

year in which the estimate is reviewed. To the extent that a change in an accounting estimate gives rise to changes in assets and liabilities,

the movement is recognised by adjusting the carrying amount of the related asset or liability in the period in which the change occurs.

Further information regarding the Group’s critical accounting judgements and estimates is provided in note 2 to the financial statements.

Going concern

The consolidated financial statements have been prepared on a going concern basis. In considering this requirement, the directors have

taken into account the following:

• The Group’s profit projections, including:

– Changes in premium rates and projected policy volumes across the Group’s insurance businesses

– The impacts of the continued elevated inflationary environment on the cost of settling claims across all of the Group’s

insurance businesses

– The return of motor claims frequency towards pre-pandemic levels

– Projected trends in other revenue generated by the Group’s insurance business from fees and the sale of ancillary products

– Projected contributions to profit from businesses other than the UK Car insurance business

– Expected trends in unemployment in the context of credit risks and the growth of the Group’s consumer lending business

– The More Than acquisition due to complete in the first half of 2024

– Assessment of wider market risk and changes in investment performance given the changing interest rates toward the end of 2023.

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

Financial Statements

221

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

1. Basis of preparation continued

• The Group’s solvency position, which has been closely monitored through periods of market volatility. The Group continues to maintain

a strong solvency position above target levels

• The adequacy of the Group’s liquidity position after considering all 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, focusing on regulatory guidance issued by the FCA and the PRA in the UK and regular communications

between management and regulators

• A review of the Company’s principal risks and uncertainties and the assessment of emerging risks, including climate related risks.

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.

Further information regarding the Company’s business activities, together with the factors likely to affect its future development,

performance and position, is set out in the Strategic Report. Further information regarding the financial position of the Company,

its cashflows, liquidity position and borrowing facilities are also described in the Strategic Report. In addition, note 2 to the financial

statements include the Group’s insurance and financial risk management objectives, details of its financial instruments and its exposures

to credit risk and liquidity risk; and its objectives, policies and processes for managing its capital.

Adoption of new and revised standards

The Group has adopted the following IFRSs and interpretations during the year, which have been issued and endorsed:

• IFRS 17 Insurance Contracts (effective 1 January 2023)

• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (effective

1 January 2023)

• Amendments to IAS 1 Presentation of Financial Statements and Practice Statement 2: Disclosures of Accounting policies (effective

1 January 2023)

• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective

1 January 2023).

• Amendments to IAS 12 Income Taxes: International tax reform - Pillar two model rules (effective 1 January 2023).

The application of the amendments listed above has not had a material impact on the Group’s results, financial position and cashflows.

Further information on the impact of the transition to IFRS 17 is provided below.

IFRS 17 adoption

IFRS 17, the new insurance contracts standard, replaces IFRS 4 Insurance Contracts, from 1 January 2023.

As a result, the opening balance sheet (1 January 2022) and prior year comparatives (FY 2022) have been restated under IFRS 17, applying

the transitional provisions in Appendix C to IFRS 17. The nature of the changes in accounting policies can be summarised as follows:

Changes to classification and measurement.

The adoption of IFRS 17 did not change the classification of the Group’s insurance contracts.

The Group was previously permitted under IFRS 4 to continue accounting using its previous (UK GAAP) accounting policies. However, IFRS

17 establishes specific principles for the recognition and measurement of insurance contracts issued and reinsurance contracts held by

the Group.

Under IFRS 17, the Group’s insurance contracts issued and reinsurance contracts held have all been assessed as eligible to be measured

by applying the premium allocation approach (‘PAA’). The PAA simplifies the measurement of insurance contracts in comparison with the

general model in IFRS 17.

The measurement principles of the PAA differ from the ‘earned premium approach’ used under IFRS 4 in the following key areas:

• The liability for remaining coverage reflects premiums received less amounts recognised in revenue for insurance services provided

• The Group has chosen to expense its insurance acquisition cashflows as incurred

• Measurement of the liability for remaining coverage involves an explicit evaluation of risk adjustment for non-financial risk when a

group of contracts is onerous in order to calculate a loss component

• Measurement of the liability for incurred claims (previously claims outstanding) is determined on a discounted probability-weighted

expected value basis, and includes an explicit risk adjustment for non-financial risk.

• Measurement of the asset for remaining coverage (reflecting reinsurance premiums paid for reinsurance held minus ceded earned

premium) is adjusted to include a loss-recovery component to reflect the expected recovery of onerous contract losses where such

contracts reinsure onerous direct contracts.

222 Financial Statements222

Admiral Group plc Annual Report and Accounts 2023

Presentation and disclosure

For presentation in the Statement of Financial Position, the Group aggregates insurance and reinsurance contracts issued and reinsurance

contracts held respectively, and presents separately:

• Portfolios of insurance contracts issued that are assets

• Portfolios of insurance contracts issued that are liabilities

• Portfolios of reinsurance contracts held that are assets

• Portfolios of reinsurance contracts held that are liabilities.

The portfolios referred to above are those established at initial recognition in accordance with the IFRS 17 requirements.

The line item descriptions in the Statement of Profit or Loss and Other Comprehensive Income have been changed significantly

compared with last year. Previously, the Group reported the following line items:

• Gross written premiums

• Net written premiums

• Changes in unearned premium reserves

• Gross insurance claims

• Net insurance claims

• Net operating expenses.

Instead, IFRS 17 requires separate presentation of:

• Insurance revenue

• Insurance service expenses

• Income or expenses from reinsurance contracts held

• Insurance finance income or expenses.

The Group provides disaggregated qualitative and quantitative information about:

• Amounts recognised in its financial statements from insurance contracts issued and reinsurance contracts held

• Significant judgements, and changes in those judgements, when applying the standard.

The new accounting policies and choices adopted in the implementation of IFRS 17 are disclosed in the notes to these

financial statements.

Transition approach

The full retrospective approach was applied to the insurance contracts issued and reinsurance contracts held that were in force at the

transition date.

The transition approach was determined at a group of insurance contracts level. Accordingly, the Group has recognised and measured

each group of insurance contracts in this category as if IFRS 17 had always applied; derecognised any existing balances that would not

exist had IFRS 17 always applied; and recognised any resulting net difference in equity.

Impact of Transition on Equity

The total impact of the transition was a reduction in equity of £125.6 million, as shown in the Consolidated Statement of Changes

in Equity. The Statement of Financial Position presents the restated balance sheet as at the transition date of 1 January 2022, with

supporting notes providing further detail as required.

The key changes driving the adverse impact on transition are:

• An adverse impact arising from the Group’s accounting policy choice to expense acquisition costs, which results in a write off of the

Group’s gross deferred acquisition cost asset

• A reduction in quota share reinsurance assets primarily as a result of the change in timing in recognition of ceded quota share expense

recoveries, which under IFRS 17 are realised in line with the earning of premium, rather than aligned to when the gross expenses

are incurred

• An adverse impact due to the deferral of revenue in relation to underwritten ancillary products, which was previously recognised

immediately as commission income

• An offsetting favourable impact due to change in the Group’s claims liabilities, net of reinsurance, as a result of the requirements for

the liability and asset for incurred claims to be calculated using a probability weighted, discounted best estimate plus risk adjustment

for non-financial risk

• The tax treatment of the transition impact follows the accounting treatment, with no transitional relief available. The tax impact on

transition has been calculated at an entity level, based on the tax rates in place in 2023, when the tax transition impacts are realised.

Deferred tax assets in relation to carried forward losses are recognised only to the extent that it is probable future taxable profit will be

available against which the assets can be utilised, in accordance with the Group’s accounting policy for taxation.

Financial Statements

223

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

1. Basis of preparation continued

Summary of Impact of Transition on FY 2022 restated result

		31 December 2022
£m	IFRS 17	IFRS 4	Change
Analysis of profit
UK Insurance	509.7	615.9	(106.2)
International Insurance	(56.2)	(53.8)	(2.4)
International Insurance – European Motor	(16.5)	(1.6)	(14.9)
International Insurance – US Motor	(36.4)	(48.9)	12.5
International Insurance – Other	(3.3)	(3.3)	–
Admiral Money	2.1	2.1	–
Other	(94.4)	(95.2)	0.8
Group profit before tax	361.2	469.0	(107.8)

The 2022 profit before tax on an IFRS 17 basis is lower than that reported under IFRS 4. The following table sets out the key differences

for the UK and international insurance profits reported under IFRS 17 compared to IFRS 4:

£m	UK	International
IFRS 4 reported profit	615.9	(53.8)
Timing of reserve releases	(93.3)	(9.9)
Discounting	15.4	9.5
Timing of Quota share reinsurance recoveries	(41.2)	(2.9)
Other	12.9	0.9
IFRS 17 reported profit before tax	509.7	(56.2)

The difference between IFRS 4 and IFRS 17 reported profit primarily arises as a result of differences in the reserve strength or risk

adjustment position over the course of 2022 under each standard. Under IFRS 4, Admiral moved down to the 95th percentile over the

course of 2022. Under IFRS 17, Admiral moved down to the 95th percentile at the transition date of 1 January 2022, and remained at that

percentile during 2022. This results in lower reserve releases under IFRS 17 in 2022, and therefore lower profit.

The discounting impact shown above is the impact of the discounting of the gross, net of XoL claims cost and finance expenses

recognised in the period. In UK Insurance, whilst there is a favourable impact of discounting of the claims incurred of circa £52 million at

YE 2022, this is offset by the unwind of discounting of prior years, reducing the overall discounting benefit to £15 million when compared

to IFRS 4 claims costs. It should be noted that whilst the higher discount curves seen in 2022 result in lower claims reserves, the Group’s

accounting policy decision to take the impact of changes in yield curve on outstanding claims reserves to Other Comprehensive Income

means that this is not a material driver of IFRS 17 profit in 2022.

In addition, the majority of the discounting benefit on gross claims net of excess of loss reinsurance is offset by the significant adverse

movement on quota share recoveries. This is significant given that, due to quota share contracts having been largely commuted on

earlier underwriting years, there is no significant offsetting finance income (representing the unwind of discounting within the quota

share result).

Other movements include a number of largely offsetting differences in the timing of recognition of acquisition expenses, quota share

reinsurance profit commission recoveries, and movements in the onerous loss component.

New and revised IFRS Standards in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Standards that

have been issued but are not yet effective:

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective 1 January 2025)

• Amendments to IAS 7 Statement of Cashflows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements

(effective 1 January 2024)

• Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as Current or Non-current

(effective 1 January 2024)

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (effective 1 January 2024).

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements

of the Group in future periods.

224 Financial Statements224

Admiral Group plc Annual Report and Accounts 2023

Acquisition of More Than home and pet personal lines from RSA

During December 2023 the Group signed an agreement to acquire the UK direct Home and Pet personal lines insurance operations of

RSA Insurance Group Limited (“RSA”). The acquisition is expected to complete during the first half of 2024. The consideration payable at

completion is £82.5 million, with a further potential payment of £32.5 million depending on the number of policies successfully migrated

to the Group. The acquisition will not include liabilities relating to existing policies, which will remain with RSA. There is no impact on the

results reported in these financial statements as a result of the transaction.

2. Critical accounting judgements and estimates

In applying the Group’s accounting policies as described in the notes to the financial statements, the Directors are required to make

judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates

and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates

and associated assumptions are based on historical experience and other factors that are considered to be relevant, including where

appropriate, weather-related factors. Actual results may differ from these estimates.

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 revised if the revision affects only that period, or in the period of the revision and future periods if the

revision affects both current and future periods.

2.1 Critical accounting judgements

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the

Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts

recognised in financial statements.

Premium allocation approach (‘PAA’)

The Group applies the PAA to all of its insurance and reinsurance contracts.

The coverage period of insurance contracts is typically one year or less, including insurance contract services arising from all premiums

within the contract boundary. The Group does not consider the existing products with more than 12 months coverage to be material.

The Group’s insurance contracts are therefore automatically eligible for the PAA.

However, the Group’s reinsurance contracts are not automatically eligible for the PAA given that the coverage period is greater than one

year. The Group has modelled the expected cashflows and reasonably possible future scenarios for its reinsurance contracts, and as a

result expects that the measurement of the asset for remaining coverage for the group containing those contracts under the PAA does

not differ materially from the measurement that would be produced applying the general model. Its reinsurance contracts are therefore

eligible for the PAA.

The modelling of the cashflows associated with the Group’s reinsurance contracts, and reasonably possible future scenarios, is a key area

of judgement that impacts the PAA eligibility assessment and the resulting measurement of and presentation of reinsurance contracts in

these financial statements.

Classification of the Group’s contracts with reinsurers as reinsurance contracts

A contract is required to transfer significant insurance risk in order to be classified as such. Management reviews all terms and conditions

of each such insurance and reinsurance contract in order to be able to make this judgement. In particular, all reinsurance contracts (both

excess of loss and quota share contracts) held by the Group have been assessed and it has been concluded that all contracts transfer

significant insurance risk and have therefore been classified and accounted for as reinsurance contracts within these financial statements.

Unit of account: combination of insurance contracts and separation of distinct components

The lowest unit of account in IFRS 17 is the contract and there is a presumption that a contract with the legal form of a single contract

would generally be considered a single contract in substance. However, there might be certain facts and circumstances where legal

form does not reflect the substance of the arrangement and separation of the contract is required, or alternatively circumstances when

contracts should be combined, such as when a set of insurance contracts with the same or a related counterparty may achieve, or be

designed to achieve, an overall commercial effect.

Overriding the legal contract to reflect substance is not a policy choice; it is a significant judgement requiring careful consideration of all

relevant facts and circumstances. The following considerations, as set out by the IFRS 17 Transition Resource Group, are deemed relevant

in assessing whether the contracts should be separated, or alternatively, combined:

• whether there is interdependency between the different risks covered

• whether components lapse together, and

• whether components can be priced and sold separately.

Financial Statements

225

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

2. Critical accounting judgements and estimates continued

In addition, any cashflows related to promises to transfer distinct goods or services, other than insurance contract services, that are

within the host insurance contract are separated and recognised by applying IFRS 15. In determining whether there are such distinct

components, the following is considered:

• whether the policyholder can benefit from the good or service on its own or together with other resources available to

the policyholder

• whether the cashflows and risks associated with the good or service are highly interrelated with the cashflows and risks associated

with the insurance components in the contract

• whether the Group provides a significant service in integrating the good or service with the insurance components.

After separating any such distinct components, IFRS 17 is applied to all remaining components of the (host) insurance contract.

The Group has determined that, in applying these requirements to its insurance contracts:

• The individual insurance policies contained in a ’multi-cover policy’ are treated as separate contracts, given that the components can

be priced and sold separately, there is little interdependency between the risks covered, and the components can lapse separately

• The cashflows associated with administration fees (for changes to the underlying insurance policy), and instalment income (being

the additional fees payable by a policyholder associated with paying for an insurance contract over 12 months, rather than in one

up-front payment), are non-distinct given that the policyholder cannot benefit from these services separately and the services are

highly interrelated with the core insurance policy. These cashflows are therefore treated as insurance revenue under IFRS 17. However,

for the component of the insurance policy that is underwritten outside the Group by a third party insurer, the Group is performing an

agency service on behalf of the third party insurer, and therefore this component is treated as a separate component of revenue and

accounted for under IFRS 15

• The cashflows associated with ancillary or ’add on’ products (which are sold within the same set of contracts as the core product), are

separated from the core product in cases where the policyholder can benefit from the product on its own, and where the cashflows are

not highly interrelated with the insurance components in the contract or the Group does not provide a significant service in integrating

the products.

In addition, the Group’s quota share reinsurance contracts contain profit commission arrangements. Under these arrangements, there

is a minimum guaranteed amount that the Group, as the policyholder, will always receive – either in the form of profit commission, or

as claims, or another contractual payment irrespective of the insured event happening. The minimum guaranteed amounts have been

assessed to be highly interrelated with the insurance component of the reinsurance contracts and are, therefore, non-distinct investment

components which are not accounted for separately. Given that the receipt and payment of these non-distinct investment components

do not relate to the provision of insurance services, the amounts are excluded from the net reinsurance expenses in the Group’s Income

Statement (i.e. both ceded reinsurance premiums and ceded recoveries are presented net of the minimum guaranteed amount that the

Group will always receive).

Presentation of reinsurance ‘funds withheld’ contracts

The Group has a number of quota share reinsurance contracts that have funds withheld features, whereby the quota share proportion of

ceded premiums and related recoveries are retained by the Group, and settled on a net basis at commutation. The only initial cashflows

during the coverage period are therefore the payment of any reinsurer margin.

Under IFRS 17, the reinsurance assets related to these funds withheld contracts are presented on a cashflow basis i.e. the full proportional

share of ceded premiums and recoveries is not presented in either the Income Statement or the Statement of Financial Position.

Consolidation of the Group’s special purpose entities (‘SPEs’)

The Group has set up a number of SPEs in relation to the Admiral Money business, whereby the Group securitises certain loans by the

transfer of the loans to the respective SPEs. The securitisation enables a subsequent issue of debt by the SPEs to investors who thereby

gain the security of the underlying assets as collateral.

The accounting treatment of SPEs has been assessed and it has been concluded that the entities should be fully consolidated into the

Group’s financial statements under IFRS 10. This is due to the fact that despite not having legal ownership, the Group has control of the

SPEs, being exposed to the returns and having the ability to affect those returns through its power over the SPEs.

The SPEs have therefore been fully consolidated in the Group’s financial statements.

2.2 Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have

a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are

discussed below.

226 Financial Statements226

Admiral Group plc Annual Report and Accounts 2023

Best estimate of future cashflows to fulfil insurance contracts

The ultimate cost of outstanding claims that have been incurred prior to the balance sheet date and that remain unsettled at the

balance sheet date, for material lines of business, is estimated by internal actuarial teams using a range of standard actuarial claims

projection techniques, (such as incurred and paid chain ladder techniques, Bornhuetter-Ferguson methods and initial expected

assumptions) to allow an actuarial assessment of their potential outcome. This includes an allowance for unreported claims.

The projection of the overall claims reserve is subject to comparison against equivalent outputs produced by an independent external

actuarial specialist for material lines of business.

Claims are segmented into groups with similar characteristics and which are expected to develop and behave similarly, for example bodily

injury (attritional and large) and damage claims, with specific projection methods selected for each head of damage. Key sources of

estimation uncertainty arise from both the selection of the projection methods and the assumptions made in setting claims provisions.

Internal and external factors may affect the cost of settling claims in ways that wouldn’t be allowed for by standard actuarial techniques;

where this occurs adjustments to the technique, assumptions or result may be applied. Examples of these factors include:

• Changes in the reporting patterns of claims impacting the frequency of bodily injury and damage claims

• Emerging inflationary trends on the average cost of bodily injury and damage claims

• The likelihood of bodily injury claims settling as Periodic Payment Orders

• Changes in the regulatory or legal environment that lead to changes in awards for bodily injury claims and associated legal costs

• Changes to the underlying process and methodologies employed in setting and reviewing case reserve estimates.

Additional qualitative judgement is used to assess the extent to which past trends may not apply in future, (e.g., to reflect one-off

occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims inflation,

judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order

to arrive at the estimated ultimate cost of claims that present the probability weighted expected value outcome from the range of

possible outcomes, taking account of all the uncertainties involved.

The Group also has the right to pursue third parties for payment of some or all costs. Estimates of salvage recoveries and subrogation

reimbursements are offset against ultimate claims costs. Other key circumstances affecting the reliability of assumptions include delays

in settlement.

Outputs of the actuarial projections include ultimate average cost per claim and claim frequency by accident year, implied claims

inflation metrics and ultimate loss ratios and burn costs by accident year and underwriting year. These metrics are reviewed and

challenged as part of the process for making allowance for the uncertainties noted.

Methods used to measure the risk adjustment for non-financial risk

The risk adjustment for non-financial risk is the compensation that is required for bearing the uncertainty about the amount and timing of

cashflows that arises from non-financial risk as the insurance contract is fulfilled. Because the risk adjustment represents compensation for

uncertainty, estimates are made on the degree of diversification benefits and expected favourable and unfavourable outcomes in a way that

reflects the Group’s degree of risk aversion. The Group estimates an adjustment for non-financial risk separately from all other estimates.

Applying a confidence level technique (value at risk (“VaR”), the Group estimates the probability distribution of the present value of the

future cashflows from insurance contracts at each reporting date and calculates the risk adjustment for non-financial risk as the excess of

the value at risk at the target confidence level over the expected present value of the future cashflows.

The Group’s risk adjustment is set in a range between the 85th and 95th percentile, on a net of excess of loss reinsurance basis. The level and

estimate of risk adjustment required at reporting date is made in a way that reflect the Group’s degree of risk aversion, taking into account

both internal factors (such as data quality and trends; diversification across portfolios) and external factors (such as inflation and potential

changes in Ogden rate) that are relevant at that point in time.

To determine the risk adjustment for non-financial risk for reinsurance contracts, the Group applies these techniques both gross and net

of excess of loss reinsurance and derives the amount of risk being transferred to the reinsurer as the difference between the two results.

The net of excess of loss risk adjustment is allocated to quota share reinsurance contracts on a proportional basis.

The risk adjustment is calculated at the issuing entity level. Diversification benefit is included across portfolios within the entity, to reflect

the diversification in contracts sold across entities.

The risk adjustment is then allocated down to each portfolio of contracts within the entity using a spread VaR methodology to inform the

allocation, to ensure coherence of the gross and excess of loss reinsurance results for risk adjustment across the portfolios within an entity.

Allocations of the risk adjustment to each underwriting year (annual cohort) of contracts within a portfolio is performed manually, based on a

systematic approach using management judgement. This typically involves allocating a higher proportion of the risk adjustment to the more

recent underwriting years that are less developed and therefore more uncertain, compared to the proportion of risk adjustment allocated to

older, more developed years.

Where a risk adjustment is required for the liability for remaining coverage due to facts and circumstances indicating that contracts are

onerous, this is derived using the risk adjustment for the earned portion of the reserves, adjusted for the unearned claims reserves to reflect

the difference in exposure/size of reserves and difference in drivers of risk in the reserves.

Financial Statements

227

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

2. Critical accounting judgements and estimates continued

Calculation of expected credit loss provision

The Group is required to calculate an expected credit loss (‘ECL’) allowance in respect of the carrying value of the Admiral Money loan

book in line with the requirements of IFRS 9. Due to the size of the loan book, the calculation of the ECL is deemed to be a critical

accounting judgement and includes key sources of estimation uncertainty.

Management applies judgement in:

• Determining the appropriate modelling solution for measuring the ECL

• Calibrating and selecting appropriate assumptions

• Setting the criteria for what constitutes a significant increase in credit risk

• Identification of key scenarios to include and determining the credit loss in these instances.

The key areas of estimation uncertainty are in the calculation of the probability of default (‘PD’) in the base scenario for stage 1 and 2

assets, and the determination, impact assessment and weighting of the forward-looking scenarios.

Refer to the analysis in note 7 to the financial statements for further detail on the Group’s ECL methodology applied in the period.

3. Insurance and financial risk

The Group’s activities expose it primarily to insurance risk, and financial risks of credit, spread, interest rate, liquidity and foreign exchange

risk. The Board of Directors is ultimately responsible for the management of insurance risk and financial risks, although it has delegated

the detailed oversight of supervising risk management and internal control to the Group Risk Committee.

There are several key elements to the risk management environment throughout the Group. These are detailed in full in the Corporate

Governance Statement. Specific considerations for the risks arising from insurance and financial risk are detailed below.

3.1 Insurance risk

The Group’s primary business is the issuance of insurance contracts that transfer risk from policyholders to the Group and its co-

insurance partners.

Insurance risk involves uncertainty over the occurrence, amount or timing of claims arising on insurance contracts issued.

It is primarily comprised of Reserve risk; the risk that the value of insurance liabilities established is insufficient to cover the ultimate cost

of claims incurred at the balance sheet date, and premium risk; the risk that the claims experience on business written but not earned is

higher than allowed for in the premiums charged to policyholders.

The Board has ultimate responsibility for the management of insurance risk although as set out above, it has delegated the detailed

oversight of risk management to the Group Risk Committee. The Group also has a Group Reserving Committee as well as local Reserving

Committees which are comprised of senior managers within the finance, claims, pricing and actuarial functions in the respective

businesses. The Reserving Committees primarily recommend the approach for claims reserving but also review the systems and controls

in place to support accurate reserving and consider material reserving issues such as large bodily injury claims frequency and severity, the

impact of changes in the claims systems and the external environment.

The Board implements certain policies to mitigate and control the level of insurance risk accepted by the Group. These include

pricing policies and claims management and administration processes, in addition to reserving policies and entering into

reinsurance arrangements.

3.1.1 Reserve risk

Reserve risk arises from:

• The uncertain nature of claims, in particular the development of large bodily injury claims

• Unexpected future impact of socioeconomic trends or regulatory changes, for example changes to the Ogden discount rate

• Data issues and changes to the claims reporting process

• Failure to recognise claims trends in the market including a slow-down in the processing of recoveries and liabilities with third party

insurers which increases the estimation risk of these amounts

• Changes in underwriting and business written so that past trends are not necessarily a predictor of the future.

Understatement of reserves may result in not being able to pay claims when they fall due. Alternatively, overstatement of reserves can

lead to a surplus of funds being retained resulting in opportunity cost; for example, lost investment return or insufficient resource to

pursue strategic projects and develop the business.

228 Financial Statements228

Admiral Group plc Annual Report and Accounts 2023

Reserve risk is mitigated through a series of processes and controls. The key processes are as follows:

• Regular management and internal actuarial review of individual and aggregate case claim reserves, including regular reporting of

management information and exception reporting of significant movements

• Regular management and internal actuarial review of large claims, including claims settled or potentially settled by PPOs for which the

uncertainty is increased by factors such as the lifetime of the claimant and movements in the indexation for the cost of future care of

the claimant

• Bi-annual external actuarial review of best estimate claims reserves using a variety of recognised actuarial techniques

• Internal actuarial analysis of reserve uncertainty through qualitative analysis, scenario testing and a range of stochastic

reserving techniques

• Ad hoc external reviews of reserving related processes and assumptions

• The application of a risk adjustment aligned with Group risk appetite.

As described in note 2, critical accounting judgements and estimates, the Group includes the risk adjustment for non-financial risk within

its measurement of insurance contracts and reinsurance contract assets, using a confidence level technique, with the risk adjustment

being set in a range between the 85th and 95th percentile, on a net of excess of loss reinsurance basis.

Whilst the underlying methods to calibrate the reserve risk distribution from which the percentile is selected are consistent year on year,

a number of developments in the reserve risk modelling in 2023 result in a slightly less volatile distribution than at the end of 2022.

The reserves including risk adjustment at 31 December 2023 equated to a 93rd percentile confidence level position (2022: 95th

percentile) to the nearest whole percentile. The reduction in the confidence level from 2022 is reflective of the Group’s assessment of

uncertainty and the level of adverse risks associated with both internal and external factors, and in particular the Group’s continued

diversification across portfolios.

3.1.2 Premium risk

As noted above, the Group defines premium risk as the risk that claims cost on business written but not yet earned is higher than allowed

for in the premiums charged to policyholders. This also includes catastrophe risk, the risk of incurring significant losses as a result of the

occurrence of manmade catastrophe, or natural weather events.

Key processes and controls operating to mitigate premium risk are as follows:

• Experienced and focused senior management and teams in relevant business areas including pricing and claims management

• A data-driven and analytical approach to regular monitoring of claims and underwriting performance

• Observations of weather events trends to understand climate impacts on frequency and severity

• Capability to identify and resolve underperformance promptly through changes to key performance drivers, in particular pricing.

3.1.3 Reinsurance risk

The Group purchases reinsurance as part of its risk mitigation programme. Reinsurance held is placed on both an excess of loss basis,

designed to protect the Group against very large individual claims and catastrophe losses, and a proportional basis i.e. quota–share

reinsurance which is taken out to reduce the overall exposure of the Group to its insurance contracts.

Reinsurance risk is the risk of placement of ineffective reinsurance arrangements, or the economic risk of reduced availability of

reinsurance arrangements in future periods.

The Group mitigates these risks by ensuring that it has a diverse range of financially secure reinsurance partners, including a long-term

relationship with Munich Re and a number of other large reinsurers.

Amounts recoverable from reinsurers are estimated in a manner consistent with underlying insurance contract liabilities and in

accordance with the reinsurance contract terms. Although the Group has reinsurance arrangements, it is not relieved of its direct

obligations to its policyholders and thus a credit exposure exists with respect to reinsurance held, to the extent that any reinsurer is

unable to meet its obligations.

Information regarding reinsurance credit risk is provided in note 3.2.1.

3.1.4 Concentration of insurance risk

The Directors do not believe there are significant concentrations of insurance risk. This is because the risks are spread across a large

number of policies across a wide regional base. The International Car Insurance, UK Household, UK Travel and UK Pet businesses further

contribute to the diversification of the Group’s insurance risk.

The Group’s placement of reinsurance is diversified such that it is neither dependent on a single reinsurer nor are the operations of the

Group substantially dependent upon any single reinsurance contract.

The tables in note 5f(i) show the concentration of net insurance contract liabilities by product type and geographic area.

Financial Statements

229

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

3. Insurance and financial risk continued

3.1.5 Sensitivity analysis

The following sensitivity analysis shows the impact on profit for reasonably possible movements in key assumptions with all other

assumptions held constant. The correlation of assumptions will have a significant effect in determining the ultimate impacts, but to

demonstrate the impact due to changes in each assumption, assumptions have been changed on an individual basis. It should be noted

that movements in these assumptions are non-linear.

The sensitivities are shown for UK motor only, being the line of business where such sensitivities could have a material impact at a

Group level. The sensitivities are shown on a gross and net of quota share reinsurance basis to illustrate the impacts on shareholder

profit and equity before and after risk mitigation from quota share reinsurance. The sensitivities (both gross and net) include the

impacts of movements in co-insurance profit commission, given that underwriting year loss ratios including risk adjustment, are a direct

input to the calculation of profit commission. Refer to note 8 to these financial statements for the accounting policy for co-insurance

profit commission.

Ogden discount rate

The sensitivities reflect the impact on profit before tax and equity in 2023 for changes to the Ogden discount rate from the current rate

of minus 0.25%, with all other assumptions (including the absolute value of risk adjustment) remaining unchanged.

		2023
	Impact on profit	Impact on profit	Impact on	Impact on
	before tax gross of	before tax net of	equity gross of	equity net of
£m	reinsurance	reinsurance	reinsurance	reinsurance
Ogden discount rate increase by 125 bps to +1.00%	133.9	95.3	110.6	77.0
Ogden discount rate increase by 75 bps to +0.50%	82.8	57.4	68.3	46.3
Ogden discount rate increase by 25 bps to 0.00%	29.2	20.0	24.0	16.1
Ogden discount rate decrease by 75 bps to -1.00%	(104.4)	(70.2)	(86.3)	(56.6)

The sensitivities do not reflect the full ultimate impacts of changes in the Ogden rate as some of the impact will flow into future

financial periods.

In addition, should the Ogden discount rate change in future periods, the impacts on profit before tax and equity are likely to be larger

than those set out above, as a result of including the impacts on claims arising in relation to premium written and earned beyond

31 December 2023.

Risk adjustment

The sensitivities reflect the impact on profit before tax in 2023 and equity as at the end of 2023 for changes in the selection of the UK

motor risk adjustment confidence level at 31 December 2023, with all other assumptions remaining unchanged.

	Impact on profit	Impact on profit	Impact on	Impact on
	before tax gross of	before tax net of	equity gross of	equity net of
£m	reinsurance	reinsurance	reinsurance	reinsurance
Risk adjustment increase to 95th percentile	(54.4)	(25.6)	(45.6)	(20.3)
Risk adjustment decrease to 90th percentile	45.6	24.1	38.3	19.3
Risk adjustment decrease to 85th percentile	108.8	57.6	91.2	46.0

230 Financial Statements230

Admiral Group plc Annual Report and Accounts 2023

Undiscounted loss ratios, including risk adjustment

The sensitivities reflect the impact on profit before tax in 2023 and equity as at the end of 2023, of a change in the booked loss ratios for

individual underwriting years (UWY) as at 31 December 2023, with all other assumptions remaining unchanged.

				2023
		UWY 2020 impact on:		UWY 2021 impact on:		UWY 2022 impact on:		UWY 2023 impact on:
£m	PBT	Equity	PBT	Equity	PBT	Equity	PBT	Equity
Increase of 1%: gross of reinsurance	(19.8)	(15.2)	(13.9)	(11.1)	(14.5)	(12.6)	(9.6)	(8.4)
Increase of 3%: gross of reinsurance	(59.3)	(45.7)	(41.7)	(33.4)	(43.4)	(37.7)	(28.7)	(25.3)
Increase of 5%: gross of reinsurance	(98.9)	(76.1)	(69.5)	(55.6)	(72.3)	(62.9)	(47.8)	(42.2)
Decrease of 1%: gross of reinsurance	19.8	15.2	13.9	11.1	14.5	12.6	9.6	8.4
Decrease of 3%: gross of reinsurance	59.3	45.7	41.7	33.4	43.4	37.7	28.7	25.3
Decrease of 5%: gross of reinsurance	98.9	76.1	69.5	55.6	72.3	62.9	47.8	42.2
Increase of 1%: net of reinsurance	(19.8)	(15.2)	(6.4)	(5.0)	(4.4)	(3.6)	(3.5)	(2.8)
Increase of 3%: net of reinsurance	(59.3)	(45.7)	(19.1)	(15.1)	(13.1)	(10.8)	(10.4)	(8.5)
Increase of 5%: net of reinsurance	(98.9)	(76.1)	(29.0)	(22.8)	(21.8)	(18.0)	(17.3)	(14.2)
Decrease of 1%: net of reinsurance	19.8	15.2	7.0	5.5	4.4	3.6	3.4	2.8
Decrease of 3%: net of reinsurance	59.3	45.7	27.3	21.7	13.1	10.8	10.4	8.5
Decrease of 5%: net of reinsurance	98.9	76.1	49.0	39.0	24.1	20.0	19.6	16.3

*2. ‘Booked’ loss ratios are undiscounted underwriting year loss ratios, including risk adjustment.

3.2. Financial risk

The Group’s activities expose it primarily to financial risks of credit, spread, interest rate, liquidity and foreign exchange risk. The detailed

oversight of supervising risk management and internal control has been delegated to the Group Risk Committee.

There is also an Investment Committee that makes recommendations to the Group and subsidiary Boards on investment strategy, and

overseas the Group’s investments, as well as advising on liquidity funding and foreign exchange management.

3.2.1 Credit risk

The Group defines credit risk as the risk of financial loss if another party fails to perform its obligations. The key areas of exposure to

credit risk for the Group result through its reinsurance programme, investments, bank deposits, loans and advances to customers and

policyholder receivables.

The Directors consider credit quality and counterparty exposure frequently and in significant detail. The Directors consider that the

policies and procedures in place to manage credit exposure continue to be appropriate for the Group’s risk appetite and, during 2023,

and historically, no material credit losses have been experienced by the Group.

Financial investments and cash

Credit and counterparty risk is managed by the Group by investing in high quality money market funds, and setting suitable parameters

for asset managers to adhere to when purchasing debt securities. Cash balances and deposits are placed only with highly rated

credit institutions.

The Group primarily invests the following asset types:

• Debt securities are held within segregated mandates and investment funds. This includes government debt, private debt and asset

backed securities. The guidelines of the investments ensure management of credit risk. Generally, the duration of the securities is

relatively short and similar to the duration of the on book claims liabilities

• Liquidity funds, which in turn invest in a mixture of short-dated fixed and variable rate securities, such as cash deposits, certificates of

deposits, floating rate notes and other commercial paper

• Deposits held with well rated institutions and which are short in duration (under three years). These are classified as held at amortised

cost. Therefore, neither the carrying value of the asset, nor the interest return will be impacted by fluctuations in interest rates.

The detailed holdings are reviewed regularly by the Investment Committee.

Reinsurance assets

To mitigate the risk arising from exposure to reinsurers (in the form of reinsurance recoveries), the Group only conducts business with

companies of appropriate financial strength ratings. In addition, many reinsurance contracts are operated on a funds withheld basis,

which substantially reduces credit risk, as the Group retains the cash received from policyholders.

Financial Statements

231

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

3. Insurance and financial risks continued

Loans and advances to customers

The risk appetite for the lending business is set to ensure that the risk taken is commensurate with the expected returns.

Management has defined an amber and a red loan loss limit, representing points at which action is required. These limits have been

defined by management to reflect the business maturity, the business’ ambitions and the economic climate. Risk appetite is assessed at

least annually, while the limits are continuously monitored. See note 7 for further information.

Other receivables

A further principal form of credit risk is in respect of amounts due from policyholders, largely due to the potential for default by

instalment payers. The impact of this is mitigated by the large customer base and low average level of balance recoverable. There is also

mitigation by the operation of numerous high- and low-level controls in this area, including payment on policy acceptance as opposed to

inception and automated cancellation procedures for policies whereby payment has not been received.

The amount of bad debt expense relating to policyholder debt charged to the Income Statement in 2023 and 2022 is insignificant.

Trade receivables and other debtors are also subject to credit risk, although this is mitigated by a review of the credit worthiness of all

counterparties prior to them being accepted.

All other assets are assessed as low credit risk under IFRS 9, with no significant amounts past due or impaired. No further disclosure is

provided due to this having an immaterial impact on the financial statements.

Credit exposure and quality analysis

The table below provides information regarding the credit risk exposure of the Group.

			31 December 2023
				BBB and
	AAA	AA	A	Sub-BBB	Not rated	To t a l
	£m	£m	£m	£m	£m	£m
Financial investments measured
at FVTPL
Money market and other funds	194.9	236.1	355.7	71.2	30.9	888.8
Equity Investments (designated FVTPL)	–	–	–	–	12.4	12.4
Derivative financial instruments	–	–	–	–	17.6	17.6
Investment in associate	–	–	–	–	1.0	1.0
Financial investments
classified as FVOCI
Corporate and private debt securities	414.2	235.7	955.3	468.1	210.0	2,283.3
Government debt securities	57.2	455.3	5.2	1.9	–	519.6
Equity Investments (designated FVOCI)	–	–	–	–	23.0	23.0
Financial assets measured
at amortised cost
Deposits with credit institutions	–	–	116.7	–	–	116.7
Total financial investments	666.3	927.1	1,432.9	541.2	294.9	3,862.4
Cash and cash equivalents	–	12.2	318.2	22.6	0.1	353.1
Reinsurance contract assets	–	913.8	277.4	0.7	–	1,191.9
Other receivables					75.0	75.0
Loans and advances to customers
(note 7) *2					879.4	879.4
Total exposure	666.3	1,853.1	2,028.5	564.5	1,249.4	6,361.8

232 Financial Statements232

Admiral Group plc Annual Report and Accounts 2023

			31 December 2022
				BBB and
	AAA	AA	A	Sub-BBB	Not rated	To t a l
	£m	£m	£m	£m	£m	£m
Financial investments measured at FVTPL
Money market and other funds	66.3	344.2	328.3	89.8	66.7	895.3
Equity Investments (designated FVTPL)	–	–	–	–	6.4	6.4
Derivative financial instruments	–	–	–	–	33.0	33.0
Investment in associate	–	–	–	–	2.4	2.4
Financial investments classified as FVOCI
Corporate and private debt securities	258.3	188.5	845.6	451.5	123.9	1,867.8
Government debt securities	266.7	209.3	1.7	2.1	–	479.8
Equity Investments (designated FVOCI)	–	–	–	–	25.1	25.1
Financial assets measured
at amortised cost
Deposits with credit institutions	–	–	101.3	–	0.1	101.4
Total financial investments	591.3	742.0	1,276.9	543.4	257.6	3,411.2
Cash and cash equivalents	–	23.5	254.1	19.2	0.2	297.0
Reinsurance contract assets	–	586.6	423.4	1.1	4.3	1,015.4
Trade and other receivables	–	–	–	–	87.6	87.6
Loans and advances to customers
(note 7) *2	–	–	–	–	823.9	823.9
Total exposure	591.3	1,352.1	1,954.4	563.7	1,173.6	5,635.1

*1. £26.8 million (2022: £59.4 million) of the unrated exposure stems from money market funds, which are rated AAA/AA, but the underlying securities are not. The remaining unrated exposure is a

mixture of private debt £210.0 million (2022: £123.9 million) and other holdings £57.1 million (2022: £71.8 million).

*2. Loans and advances to customers are assets generated within the Group and hence not externally rated. See note 7 for management’s internal assessment of credit risk.

There were no further significant financial assets that were past due at the close of either 2023 or 2022.

3.2.1.2 Credit Spread risk

Spread risk is the risk of losses arising from changes in the spread between corporate bond yields and the risk-free yield curve.

These losses may not be realized as bonds are typically held to maturity.

Sensitivity to credit spread risk

The impact on equity of 100 and 200 basis point increases in credit spreads on financial investments and cash at the relevant valuation

date, is as follows:

	31 December 2023	31 December 2022
	£m	£m
Reduction in equity – 100bps	(75.4)	(64.4)
Reduction in equity – 200bps	(150.8)	(128.7)

The impact on the Income Statement from movements in credit spreads at the valuation date is immaterial.

No sensitivity analysis has been presented in relation to the impact on insurance liabilities and reinsurance assets in respect of changes

in credit spreads, as it has been assumed that there is no direct impact on the illiquidity premium as a result of a movement in

credit spreads.

Also see note 7 for further information on sensitivity in respect of credit risk in relation to loans and advances to customers.

3.2.2 Interest rate risk

The Group considers interest rate risk to be the risk that unfavourable movements in interest rates could adversely impact on the capital

values of financial assets and liabilities.

Interest rate risk on financial instruments arises primarily from the Group’s investments in debt securities. These investments are

exposed to the risk of adverse changes in fair values or future cashflows because of changes in market interest rates.

In addition, the value of insurance contract liabilities and reinsurance contracts assets recognised within the financial statements are

impacted by changes in interest rates, given that these are discounted using a risk-free interest rate, plus illiquidity premium.

The Group manages interest rate risk by closely matching, where possible, the durations of insurance contracts with fixed and guaranteed

terms and the supporting financial assets. The Group monitors its interest rate risk exposure through periodic reviews of asset and

liability positions. Additionally, estimates of cashflows and the impact of interest rate fluctuations are modelled and reviewed every

six months.

Financial Statements

233

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

3. Insurance and financial risks continued

Loans and advances to customers

The Group’s consumer loan portfolio consists of fixed rate loans, which are funded at a floating variable rate. The Group has interest

rate swap arrangements in place to eliminate the majority of the interest rate risk variability in the cashflows payable on the loan

backed securities.

Hedge accounting

Hedge accounting is applied when the criteria specified in IFRS 9 are met. In line with IFRS 9, the gain or loss on the hedged position as at

the balance sheet date is recognised through Other Comprehensive Income.

This results in a hedging reserve in relation to the interest rate swap.

Financial liabilities

Following the repurchase of the subordinated loan notes and the issuance of new subordinated loan notes, the Group holds two

financial liabilities in the form of a £55.1 million subordinated loan note with a ten year maturity and fixed rate coupon of 5.5% with a

redemption date of 25 July 2024 and a £250.0 million subordinated loan note with a ten year maturity and fixed rate coupon of 8.5% with

a redemption date of 6 January 2034. The liabilities are valued at amortised cost and therefore neither the carrying value of the deposits,

nor the interest payable, will be impacted by fluctuations in interest rates.

Other financial assets and liabilities

There is no significant exposure to interest rate risk for other financial assets and liabilities due to these being held at amortised cost.

Sensitivity to interest rate risk

The impact on profit and loss (before tax) and equity arising from the impact of 100 basis point and 200 basis point increases and

decreases in interest rates on insurance contract liabilities and reinsurance contract assets, is as follows:

			31 December 2023
	Impact on profit	Impact on profit	Impact on profit	Impact on profit
	before tax gross of	before tax net of	before tax gross of	before tax net of
£m	reinsurance	reinsurance	reinsurance	reinsurance
Increase of 100 basis points	22.2	15.4	60.1	49.7
Decrease of 100 basis points	(24.3)	(17.0)	(68.4)	(57.4)
Increase of 200 basis points	42.7	29.5	113.9	93.8
Decrease of 200 basis points	(51.2)	(36.2)	(148.5)	(125.9)

The impact on profit before tax of a 100 basis and 200 basis point move in relation to investments and cash is not significant, at

£15.2 million and £30.4 million respectively. The impact on equity is more significant, at £81.7 million and £163.4 million respectively, as a

result of the gains and losses on the majority of the financial investment portfolio being reflected in Other Comprehensive Income.

Sensitivities for the 2022 comparative period are not significantly different to those provided above.

Changes in interest rates mainly affect the Income Statement and equity as follows:

Income statement

• Interest revenue and other finance costs on floating-rate financial instruments (assuming that interest rates had varied by 100 basis

points during the year)

• Changes in the fair value of derivatives and fixed-rate financial instruments measured at FVTPL

• Changes in the discounted fulfilment cashflows of onerous contracts

• Insurance claims expenses, reinsurance claims recoveries and finance income or expenses recognised in profit or loss, as a result of

discounting future cashflows at a revised current rate (assuming that interest rates had varied by 100 basis points during the year).

Equity

• Changes in the fair value of fixed-rate financial assets measured at FVOCI

• Insurance finance income and expenses recognised in OCI as a result of discounting future cashflows at a revised current rate

• The effect on profit or loss as above, net of tax.

The Group’s Solvency II balance sheet, which includes technical provisions discounted using Bank of England and EIOPA yield curves

reflects a low sensitivity to interest rates as a result of well-matched durations of assets and liabilities.

234 Financial Statements234

Admiral Group plc Annual Report and Accounts 2023

3.2.3 Liquidity risk

Liquidity risk is defined as the risk that the Group does not have sufficient available financial resources to enable it to meet its obligations

as they fall due, or can only secure them at excessive cost.

The Group holds appropriate liquidity buffers at the Parent Company and subsidiary levels.

Further, as noted above, a significant portion of insurance funds are invested in investment funds with same day liquidity, meaning that

a large proportion of the Group’s cash and investments are readily available.

Insurance and reinsurance contracts

The following table analyses the undiscounted, best estimate cashflows of the Group’s claims liabilities under its insurance and

reinsurance contracts, which reflects the dates on which the cashflows are expected to occur. Liabilities and assets for remaining

coverage are excluded from this analysis.

	< 1 year	1 –3 years	3 –5 years	> 5 years
Insurance contract liabilities	£m	£m	£m	£m
31 December 2023
UK Motor	667.1	691.2	428.8	791.9
UK Non-motor insurance	152.1	38.8	7.8	0.5
International	277.1	163.1	51.9	123.5
31 December 2022
UK Motor	609.5	643.2	384.6	679.3
UK Non-motor insurance	105.2	31.7	9.8	1.3
International	263.7	120.7	52.4	110.0

	< 1 year	1 –3 years	3 –5 years	> 5 years
Reinsurance contract assets	£m	£m	£m	£m
31 December 2023
UK Motor	37.5	56.6	58.4	271.5
UK Non-motor insurance	115.2	40.8	7.9	0.6
International	255.5	90.0	41.2	120.0
31 December 2022
UK Motor	31.4	65.3	33.0	235.6
UK Non-motor insurance	79.7	17.3	4.6	0.6
International	257.3	79.9	35.6	78.7

Financial liabilities

	< 1 year	1 –3 years	3 –5 years	> 5 years
At December 2023	£m	£m	£m	£m
Financial liabilities
Subordinated notes	79.4	42.5	42.5	366.9
Loan backed securities	258.9	341.6	128.3	30.8
Other borrowings	55.0	–	–	–
Trade and other payables	303.8	1.9	0.1	–
Lease liabilities	14.9	15.1	11.5	50.5
Total financial liabilities	712.0	401.1	182.4	448.2

*1. Maturity analysis has been performed on a cash-settled basis.

	< 1 year	1 –3 years	3 –5 years	> 5 years
At December 2022	£m	£m	£m	£m
Financial liabilities
Subordinated notes	11.0	211.0	–	–
Loan backed securities	241.0	326.0	125.5	22.2
Other borrowings	20.0	–	–	–
Trade and other payables	254.9	–	–	–
Lease liabilities	10.2	18.4	16.6	57.7
Total financial liabilities	537.1	555.4	142.1	79.9

*1. Maturity analysis has been performed on a cash-settled basis.

A breakdown of the Group’s other borrowings, trade payables and other payables is shown in note 11. The majority of trade and other

payables will mature within three to six months of the balance sheet date.

Financial Statements

235

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

3. Insurance and financial risks continued

Financial assets

The following table analyses the carrying value of financial investments and cash and cash equivalents by contractual maturity, which can

fund the repayment of liabilities as they crystallise, as well as the Group’s other financial assets recognised under IFRS 9. The Group has

disclosed a maturity analysis for financial assets that it holds as part of managing liquidity risk because it considers that this information

is necessary to enable users of financial statements to evaluate the nature and extent of its liquidity risk.

	< 1 year	1 –3 years	3 –5 years	> 5 years
At December 2023	£m	£m	£m	£m
Financial investments
Money market funds	888.8	–	–	–
Derivative financial instruments	19.1	(0.6)	(0.9)	–
Deposits with credit institutions	116.7	–	–	–
Debt securities	336.7	1,000.6	754.2	711.4
Total financial investments	1,361.3	1,000.0	753.3	711.4
Cash and cash equivalents	353.1	–	–	–
Total financial investments and cash	1,714.4	1,000.0	753.3	711.4
Insurance, trade and other receivables	347.7	–	–	–
Loans and advances to customers	251.4	439.4	167.1	21.5
Total financial assets	2,313.5	1,439.4	920.4	732.9

	< 1 year	1 –3 years	3 –5 years	> 5 years
At December 2022	£m	£m	£m	£m
Financial investments
Money market funds	895.3	–	–	–
Derivative financial instruments	19.9	13.1	–	–
Deposits with credit institutions	101.4	–	–	–
Debt securities	431.4	717.3	626.6	572.3
Total financial investments	1,448.0	730.4	626.6	572.3
Cash and cash equivalents	297.0	–	–	–
Total financial investments and cash	1,745.0	730.4	626.6	572.3
Insurance, trade and other receivables	275.2	–	–	–
Loans and advances to customers	235.1	401.1	159.2	28.5
Total financial assets	2,255.3	1,131.5	785.8	600.8

The Group’s Directors believe that the cashflows arising from these assets will be consistent with this profile. Liquidity risk is not,

therefore, considered to be significant.

3.2.4 Foreign exchange risk

Foreign exchange risk arises from unfavourable movements in foreign exchange rates that could adversely impact the valuation of

overseas assets and liabilities.

The Group is exposed to foreign exchange risk through its operations overseas. Although the relative size of the international operations

means that the risks are relatively small, increasingly volatile foreign exchange rates could result in larger potential gains or losses.

Assets held to fund insurance liabilities are held in the currency of the liabilities; however, surplus assets held as regulatory capital in

foreign currencies remain exposed.

The Group’s exposure to net assets and profits in currencies other than the reporting currency is immaterial other than for US dollars and

euros. The Group’s exposure to net assets held in dollars at the balance sheet date was £3.9 million (2022: £23.6 million); the exposure to

net assets held in euros was £76.8 million (2022: £69.3 million).

If the sterling exchange rates against US dollars had strengthened/weakened by 10%, the Group’s profit before tax for the year would

increase/decrease by £2.0 million (2022: £3.9 million).

If the sterling rates with euros had strengthened/weakened by 10%, the Group’s profit before tax for the year would increase/decrease

by £1.3 million (2022: £2.3 million).

236 Financial Statements236

Admiral Group plc Annual Report and Accounts 2023

3.2.5 Objectives, policies and procedures for managing capital

The Group’s capital management policy defines the Board oversight, risk appetite and tier structure of the Group’s capital in addition to

management actions that may be taken in respect of capital, such as dividend payments.

The Group aims to operate a capital-efficient business model by transferring a significant proportion of underwriting risk to co-insurance

and reinsurance partners. This in turn reduces the amount of capital the Group needs to retain to operate and grow and allows the Group

to distribute the majority of its earnings as dividends.

The Board has determined that it will hold capital as follows:

• Sufficient Solvency II Own Funds to meet all of the Group’s Solvency II capital requirements (over a 1 year and ultimate time horizon)

• An additional contingency to cover unforeseen events and losses that could realistically arise. This risk appetite buffer is assessed via

stress testing performed on an annual basis and is calibrated in relation to the one-year regulatory SCR.

The Group’s current risk appetite buffer is 50% above the regulatory SCR.

The Group’s dividend policy is to:

• Pay a normal dividend equal to 65% of post-tax profits for the period

• Pay a special dividend calculated with reference to distributable reserves and surplus capital held above the risk appetite buffer.

This policy gives the Directors flexibility in managing the Group’s capital.

As noted above, the Group’s regulatory capital position is calculated under the Solvency II Framework. The Solvency Capital Requirement

(SCR) is based on the Solvency II Standard Formula, with a capital-add-on to reflect limitations in the Standard Formula with respect to

Admiral’s risk profile (predominately in respect of profit commission arrangements in co-and reinsurance agreements and risks relating to

Periodic Payment Order (PPO) claims).

Solvency ratio (unaudited)

At the date of this report, the Group’s regulatory solvency ratio, calculated using a capital add-on that has not been subject to regulatory

approval, is 200% (2022: 180%). This includes the recognition of the 2023 final dividend of 52.0 pence per share (2022: 52.0 pence per share).

The Group’s 2023 Solvency and Financial Condition Report (SFCR) will, when published, disclose a solvency ratio that is calculated at

the balance sheet date rather than annual report date, using the capital add-on that was most recently subject to regulatory approval.

The estimated and unaudited SFCR solvency ratio is 183%, with the reconciliation between this ratio and the 200% noted above being

as follows:

	31 December 2023	31 December 2022
	£m	£m
Regulatory solvency ratio (estimated and unaudited)
Solvency ratio as reported above	200%	180%
Change in valuation date*	(11%)	(11%)
Other (including impact of updated, unapproved capital add-on)	(6%)	(20%)
Solvency ratio to be reported (SFCR)	183%	149%

*1. The solvency ratio reported above includes additional own funds generated post year-end up to the date of this report.

The Group has complied with its regulatory capital requirements throughout the period.

Subsidiaries

The Group manages the capital of its subsidiaries to ensure that all entities within the Group are able to continue as going concerns and

also to ensure that regulated entities meet regulatory requirements with an appropriate risk appetite buffer. Excess capital above these

levels within subsidiaries is paid up to the Group Parent Company in the form of dividends on a regular basis.

4. Operating segments

4a. Accounting policies

(i) Group consolidation

The consolidated financial statements comprise the results and balances of the Company and all entities controlled by the Company,

being its subsidiaries and SPEs (together referred to as the Group), for the year ended 31 December 2023 and comparative figures for

the year ended 31 December 2022. The financial statements of the Company’s subsidiaries and its SPEs are consolidated in the Group

financial statements.

The Company controls 100% of the voting share capital of all its principal subsidiaries, except Admiral Law Limited.

An SPE is fully consolidated into the Group financial statements under IFRS 10, where the Group has control over the SPE.

The Parent Company financial statements present information about the Company as a separate entity and not about its Group.

In accordance with IAS 24, transactions or balances between Group companies that have been eliminated on consolidation are not

reported as related party transactions in the consolidated financial statements.

Financial Statements

237

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

4. Operating segments continued

(ii) Foreign currency translation

Items included in the financial records of each of the Group’s entities are measured using the currency of the primary economic

environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in pounds

sterling, the Group’s presentational currency, rounded to the nearest £0.1 million.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end

exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement.

Non-monetary items measured at cost are translated at their historic rate and non-monetary items held at fair value are translated using

the foreign exchange rate on the date that the fair value was established.

The financial statements of foreign operations whose functional currency is not pounds sterling are translated into the Group

presentation currency (pound sterling) as follows:

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet

• Income and expenses for each Income Statement are translated at an average exchange rate (unless this average is not a reasonable

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are

translated at the date of the transaction)

• All resulting exchange differences are recognised in Other Comprehensive Income and in a separate component of equity except to

the extent that the translation differences are attributable to non-controlling interests.

On disposal of a foreign operation, the cumulative amount recognised in equity relating to that particular operation is recognised in the

Income Statement.

4b. Segment reporting

The Group has four reportable segments, as described below. These segments represent the principal split of business that is regularly

reported to the Group’s Board of Directors, which is considered to be the Group’s chief operating decision maker in line with IFRS 8

Operating Segments.

UK Insurance

The segment consists of the underwriting of Motor, Household, Pet and Travel insurance and other products that supplement these

insurance policies within the UK. It also includes the generation of revenue from additional products and fees from underwriting

insurance in the UK. The Directors consider the results of these activities to be reportable as one segment as the activities carried out

in generating the revenue are not independent of each other and are performed as one business. This mirrors the approach taken in

management reporting.

International Insurance

The segment consists of the underwriting of car and home insurance and the generation of revenue from additional products and fees

from underwriting car insurance outside of the UK. It specifically covers the Group operations Admiral Seguros in Spain, ConTe in Italy,

L’olivier Assurance in France and Elephant Auto in the US. None of these operations are reportable on an individual basis, based on the

threshold requirements in IFRS 8.

Admiral Money

The segment relates to the Admiral Money business launched in 2017, which provides unsecured personal loans and car finance products

in the UK, primarily through the comparison channel, credit scoring applications and direct channels.

Other

The ‘Other’ segment is designed to be comprised of all other operating segments that are not separately reported to the Group’s Board

of Directors and do not meet the threshold requirements for individual reporting. It includes the results of Admiral Pioneer, and compare.

com prior to its disposal on 27 March 2023.

Taxes are not allocated across the segments and, as with the corporate activities, are included in the reconciliation to the Consolidated

Income Statement and Consolidated Statement of Financial Position.

An analysis of the Group’s revenue and results for the year ended 31 December 2023, by reportable segment, is shown below.

The accounting policies of the reportable segments are materially consistent with those presented in the notes to the financial

statements for the Group.

238 Financial Statements238

Admiral Group plc Annual Report and Accounts 2023

				Year ended 31 December 2023
		International	Admiral
	UK Insurance	Insurance	Money	Other	Eliminations	To t a l
	£m	£m	£m	£m	£m	£m
Turnover	3,776.0	894.9	92.1	48.5	–	4,811.5
Insurance revenue	2,596.8	842.6	–	46.7	–	3,486.1
Insurance revenue net of XoL	2,517.3	811.8	–	44.4	–	3,373.5
Insurance expenses	(559.6)	(249.4)	–	(27.9)	–	(836.9)
Insurance claims net of XoL	(1,560.2)	(565.2)	–	(33.1)	–	(2,158.5)
Quota share reinsurance result	(18.4)	(22.1)	–	0.1	–	(40.4)
Net movement in onerous loss component	4.3	0.6	–	–	–	4.9
Underwriting result	383.4	(24.3)	–	(16.5)	–	342.6
Net investment income	55.2	4.3	–	0.3	(3.2)	56.6
Net interest income from financial services	–	–	66.4	0.2	1.5	68.1
Net other revenue and operating expenses	157.9	2.0	(56.2)	(12.4)	–	91.3
Segment profit/(loss) before tax	596.5	(18.0)	10.2	(28.4)	(1.7)	558.6
Other central revenue and expenses, including share scheme charges						(101.8)
Investment and interest income						4.6
Finance costs						(18.6)
Consolidated profit before tax						442.8
Taxation expense						(105.6)
Consolidated profit after tax						337.2

Revenue and results for the corresponding reportable segments for the year ended 31 December 2022 are shown below.

				Year ended 31 December 2022
		International	Admiral
	UK Insurance	Insurance	Money	Other	Eliminations	To t a l
	£m	£m	£m	£m	£m	£m
Turnover	2,784.3	795.9	59.0	41.7	(0.3)	3,680.6
Insurance revenue	2,174.2	750.0	–	32.7	–	2,956.9
Insurance revenue net of XoL	2,115.7	732.0	–	31.3	–	2,879.0
Insurance expenses	(475.7)	(254.6)	–	(24.8)	–	(755.1)
Insurance claims net of XoL	(1,466.6)	(547.1)	–	(17.5)	–	(2,031.2)
Quota share reinsurance result	104.5	13.9	–	(1.0)	–	117.4
Net movement in onerous loss
component	5.1	(1.0)	–	–	–	4.1
Underwriting result	283.0	(56.8)	–	(12.0)	–	214.2
Net investment income	18.6	1.1	–	0.1	(2.2)	17.6
Net interest income from financial services	–	–	44.6	–	1.5	46.1
Net other revenue and operating expenses	208.1	(0.5)	(42.5)	(5.6)	–	159.5
Segment profit/(loss) before tax	509.7	(56.2)	2.1	(17.5)	(0.7)	437.4
Other central revenue and expenses, including share scheme charges						(74.9)
Investment and interest income						10.1
Finance costs						(11.4)
Consolidated profit before tax						361.2
Taxation expense						(75.9)
Consolidated profit after tax						285.3

*1. Turnover is an Alternative Performance Measure presented before intra-group eliminations. Refer to the glossary and note 13 for further information.

*2. Net investment income is reported net of impairment of financial assets, in line with management reporting.

*3. Eliminations are in respect of the intra-group trading between the Group’s comparison and UK and International Insurance entities and intra-group interest charges related to the UK Insurance and

Admiral Money segment.

*4. Segment results are presented net of gross share scheme charges, and any quota share reinsurance recoveries; these net share scheme charges are presented within ‘Other central revenue and

expenses, including share scheme charges’ in line with internal management reporting.

Financial Statements

239

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

4. Operating segments continued

Segment revenues

The UK and International Insurance reportable segments derive all insurance revenue 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.

Revenues from external customers for products and services are consistent with the split of reportable segment revenues.

Information about geographical locations

All material revenues from external customers, and net assets attributed to a foreign country, are shown within the International

Insurance reportable segment shown on the previous pages.

Segment assets and liabilities

The identifiable segment assets and liabilities at 31 December 2023 are as follows:

				Year ended 31 December 2023
		International	Admiral
	UK Insurance	Insurance	Money	Other	Eliminations	To t a l
	£m	£m	£m	£m	£m	£m
Reportable segment assets	5,128.1	1,045.8	980.1	256.5	(610.8)	6,799.7
Reportable segment liabilities	(3,981.6)	(958.3)	(969.2)	(419.7)	610.8	(5,718.0)
Reportable segment net assets	1,146.5	87.5	10.9	(163.2)	–	1,081.7
Unallocated assets and liabilities						(88.9)
Consolidated net assets						992.8

Unallocated assets and liabilities consist of other central assets and liabilities, plus deferred and current corporation tax balances.

These assets and liabilities are not regularly reviewed by the Board of Directors in the reportable segment format.

Eliminations represent inter-segment funding, balances included in insurance and other receivables and deemed loan receivables in

respect of securitised loan receivables.

The segment assets and liabilities at 31 December 2022 are as follows:

				Year ended 31 December 2022 (restated)
		International	Admiral
	UK Insurance	Insurance	Money	Other	Eliminations	To t a l
	£m	£m	£m	£m	£m	£m
Reportable segment assets	4,579.0	955.3	929.1	218.0	(682.7)	5,998.7
Reportable segment liabilities	(3,508.4)	(863.4)	(902.0)	(485.2)	682.7	(5,076.3)
Reportable segment net assets	1,070.6	91.9	27.1	(267.2)	–	922.4
Unallocated assets and liabilities						(35.4)
Consolidated net assets						887.0

5. Insurance service result

a) Accounting policies

(i) Insurance, Reinsurance and Co-insurance contracts classification

Under IFRS 17, an insurance contract is defined as a contract under which one party (the insurer) accepts significant insurance risk from

another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event)

adversely affects the policyholder.

Insurance contracts

The Group issues insurance contracts in the normal course of business, under which it accepts significant insurance risk from its

policyholders. As a general guideline, the Group determines whether it has significant insurance risk by comparing benefits payable after

an insured event with benefits payable if the insured event did not occur.

Reinsurance contracts

The Group also enters into both excess of loss (‘XoL’) and quota share reinsurance contracts. A contract is only accounted for as a

reinsurance contract in these financial statements where there is significant insurance risk transfer, after an assessment made by

management based on the terms and conditions of the contracts.

240 Financial Statements240

Admiral Group plc Annual Report and Accounts 2023

Co-insurance contracts

Co-insurance arrangements are contracts entered into by the Group’s intermediaries, under which insurance risks are shared on a

proportional basis, with the co-insurer taking a specific percentage of premium written and being responsible for the same proportion

of each claim. The co-insurer therefore takes direct insurance risk from the policyholder and is subsequently directly responsible to the

claimant for its proportion of the claim. As the contractual liability is several and not joint, neither the premiums nor the claims relating

to any external co-insurance contract (i.e. outside the Group) are included in the Income Statement.

Under the terms of these arrangements, the co-insurers reimburse the Group for the same proportionate share of the directly

attributable costs in fulfilling the insurance contracts.

(ii) Level of aggregation

IFRS 17 requires an entity to determine the level of aggregation for applying its requirements. The level of aggregation for the Group

is determined firstly by dividing the business written into portfolios, which comprise contracts subject to similar risks and which are

managed together.

The Group’s insurance business is therefore divided into portfolios based on both the product (line of business such as motor, household

etc), and geography (UK, Italy, Spain, France and the US).

IFRS 17 requires a further division of the portfolios into a ‘group’ of contracts (being the lowest unit of account) based on expected

profitability, and also requires that no group contains contracts issued more than one year apart. However, the Group makes an evaluation

of the smallest unit of account, i.e. whether a series of contracts need to be treated together as one unit based on reasonable and

supportable information, or whether a single contract contains components that need to be separated and treated as if they were stand-

alone contracts.

Following the application of the IFRS 17 level of aggregation requirements, each of the Group’s portfolios (which are determined by

geography and line of business) is further disaggregated by year of issue into a group of contracts based on expected profitability at

inception into three categories:

a) A group of contracts that are onerous at initial recognition, if any

b) A group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any

c) A group of the remaining contracts in the portfolio.

The Group has elected to group together those contracts that would fall into different groups only because law or regulation specifically

constrains its practical ability to set a different price or level of benefits for policyholders with different characteristics.

To assess the profitability of groups of contracts, the Group determines the appropriate level at which reasonable and supportable

information is available. The Group assumes that no contracts in the portfolio are onerous at initial recognition unless facts and

circumstances indicate otherwise. For contracts that are not onerous, the Group assesses, at initial recognition, that there is no significant

possibility of becoming onerous subsequently by assessing the likelihood of changes in applicable facts and circumstances. The Group

considers facts and circumstances to identify whether a group of contracts are onerous based on:

• Pricing information

• Results of similar contracts it has recognised

• Environmental factors, e.g. a change in market experience or regulations.

The Group divides portfolios of reinsurance contracts held applying the same principles set out above, except that the references to

onerous contracts refer to contracts on which there is a net gain on initial recognition.

Reinsurance contracts held are assessed for aggregation requirements on an individual contract basis. For many of the Group’s

reinsurance contracts held, a group comprises a single contract. The Group reports its reinsurance contracts by portfolio, which aggregate

the contracts by type of reinsurance (e.g. quota share or XoL) and product.

These groups represent the level of aggregation at which insurance contracts issued and reinsurance contracts held are initially

recognised and measured. Such groups are not subsequently reconsidered.

Financial Statements

241

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

(iii) Recognition, modification and derecognition

Groups of insurance contracts issued are recognised from the earliest of the following:

• The beginning of the coverage period

• The date when the first payment from the policyholder is due or actually received, if there is no due date

• For a group of onerous contracts, when the Group determines that facts and circumstances indicate that the group is onerous.

A group of reinsurance contracts held is entered into from the earlier of:

• The beginning of the coverage period of the group of reinsurance contracts held. However, the Group delays the recognition of a group

of reinsurance contracts held that provide fully proportionate coverage until the date any underlying insurance contract is initially

recognised, if that date is later than the beginning of the coverage period of the group of reinsurance contracts held

• The date the Group recognises an onerous group of underlying insurance contracts if the Group entered into the related reinsurance

contract held in the group of reinsurance contracts held at or before that date.

The Group derecognises an insurance or reinsurance contract when it is:

• Extinguished i.e. when the obligation specified in the insurance contract expires or is discharged or cancelled, or

• The contract is modified such that the modification results in a change in the measurement model or the applicable standard for

measuring a component of the contract, substantially changes the contract boundary, or requires the modified contract to be included in

a different group. In such cases, the Group derecognises the initial contract and recognises the modified contract as a new contract.

When a modification is not treated as a derecognition, the Group recognises amounts paid or received for the modification with the

contract as an adjustment to the relevant liability for remaining coverage.

(iv) Contract boundary

The Group includes in the measurement of a group of insurance contracts all the future cashflows within the boundary of each contract

in the group. Cashflows are within the boundary of an insurance contract if they arise from substantive rights and obligations that

exist during the reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has

a substantive obligation to provide the policyholder with insurance contract services. A substantive obligation to provide insurance

contract services ends when:

• The Group has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits

that fully reflects those risks, or

• Both of the following criteria are satisfied:

i. The Group has the practical ability to reassess the risks of the portfolio of insurance contracts that contain the contract and, as a

result, can set a price or level of benefits that fully reflects the risk of that portfolio

ii. The pricing of the premiums up to the date when the risks are reassessed does not take into account the risks that relate to periods

after the reassessment date.

A liability or asset relating to expected premiums or claims outside the boundary of the insurance contract is not recognised.

Such amounts relate to future insurance contracts. In assessing the practical ability to reprice, risks transferred from the policyholder to

the Group, such as insurance risk and financial risk, are considered; other risks, such as lapse or surrender risk, are not included.

For groups of reinsurance contracts held, cashflows are within the contract boundary if they arise from substantive rights and obligations

of the Group that exist during the reporting period in which the Group is compelled to pay amounts to the reinsurer or in which the

Group has a substantive right to receive services from the reinsurer.

(v) Presentation

The Group presents separately, in the Statement of Financial Position, the carrying amount of portfolios of insurance contracts issued that

are assets, portfolios of insurance contracts issued that are liabilities, portfolios of reinsurance contracts held that are assets and portfolios of

reinsurance contracts held that are liabilities.

The Group disaggregates the total amount recognised in the Consolidated Income Statement and Consolidated Statement of Other

Comprehensive Income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance

income or expenses.

The Group separately presents income or expenses from reinsurance contracts held from the expenses or income from insurance contracts

issued. This is presented as one single amount in the Consolidated Income Statement, with additional disclosure provided in the notes to the

financial statements.

The Group does not disaggregate the change in risk adjustment for non-financial risk between a financial and non-financial portion.

It includes the entire change as part of the insurance service result.

242 Financial Statements242

Admiral Group plc Annual Report and Accounts 2023

(vi) Measurement

Accounting policy choices

Area	IFRS 17 options	Adopted approach
Premium allocation	Subject to specified criteria, the PAA can be adopted	Coverage period for the Group’s insurance
approach (‘PAA’)	as a simplified approach to the IFRS 17 general model.	contracts assumed is one year or less and so
eligibility		qualifies automatically for PAA.
		Reinsurance contracts (both XoL and quota share)
		include contracts with a coverage period greater
		than one year. However, there is no material
		difference in the measurement of the asset for
		remaining coverage between PAA and the general
		model, therefore these qualify for PAA.
Insurance acquisition	Where the coverage period of all contracts within	The Group’s insurance contracts are all one year
cashflows for insurance	a group is not longer than one year, insurance	or less. The Group has therefore taken the option
contracts issued	acquisition cashflows can either be expensed as	to expense acquisition costs as incurred.
	incurred, or allocated, using a systematic and rational
	method, to groups of insurance contracts (including
	future groups containing insurance contracts that are
	expected to arise from renewals) and then amortised
	over the coverage period of the related group. For
	groups containing contracts longer than one year,
	insurance acquisition cashflows must be allocated to
	related groups of insurance contracts and amortised
	over the coverage period of the related group.
Liability for Remaining	Where there is no significant financing component	There is no allowance made for accretion of
Coverage (‘LRC’),	in relation to the LRC, or where the time between	interest on the LRC given that the premiums are
adjusted for financial	providing each part of the services and the related	received within one year of the coverage period.
risk and time value	premium due date is no more than a year, an entity is
of money	not required to make an adjustment for accretion of
	interest on the LRC.
Liability for Incurred	For PAA groups, where claims or directly attributable	For some claims, for example within the travel
Claims (‘LIC’), adjusted	insurance expenses are expected to be paid within	product line in the UK, and other immaterial
or time value of money	a year of the date that the claim is incurred, it is	product lines across the Group, the incurred claims
	not required to adjust these amounts for the time	are expected to be paid out in less than one year.
	value of money.	Similarly, the majority of directly attributable
		insurance expenses are expected to be settled
		within one year. For these claims and expenses, no
		adjustment is made for the time value of money.
		In addition, given the impact of discounting
		outstanding claims in the Group’s US insurance
		operation is immaterial, no discounting has
		been applied.
		For all other business, the LIC is adjusted for the
		time value of money.
Insurance finance	There is an option to disaggregate part of the	The impact on LIC of changes in discount rates will
income and expense	movement in the LIC resulting from changes	be captured within OCI, in line with the accounting
	in discount rates, and present this in Other	for assets backing the insurance claims liabilities.
	Comprehensive Income (‘OCI’).
Interim reporting	Where an entity is required to apply IAS 34 (as for the	The Group has opted to apply the option to use
	Group) there is an option as to whether to choose a	year-to-date accounting for interim reporting.
	year-to-date” basis or a “period to date” basis for
	financial reporting.

Financial Statements

243

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

Fulfilment cashflows within the contract boundary

The fulfilment cashflows (‘FCF’) are the current estimates of the future cashflows within the contract boundary of a group of contracts

that the Group expects to collect from premiums and pay out for claims, benefits and expenses, adjusted to reflect the timing and the

uncertainty of those amounts. The estimates of future cashflows:

• Are based on a probability weighted mean of the full range of possible outcomes

• Are determined from the perspective of the Group, provided the estimates are consistent with observable market prices for

market variables

• Reflect conditions existing at the measurement date.

In estimating future cashflows, the Group incorporates, in an unbiased way, all reasonable and supportable information that is available

without undue cost or effort at the reporting date. This information includes both internal and external historical data about claims and

other experience, updated to reflect current expectations of future events. The estimates of future cashflows reflect the Group’s view

of current conditions at the reporting date, as long as the estimates of any relevant market variables are consistent with observable

market prices.

An explicit risk adjustment for non-financial risk is estimated separately from the other estimates.

For the Group’s contracts which are measured under the PAA, unless the contracts are onerous, the explicit risk adjustment for

non-financial risk is only estimated and included within the measurement of the liability for incurred claims.

Risk of the Group’s non-performance is not included in the measurement of groups of insurance contracts issued. In the measurement

of reinsurance contracts held, the probability weighted estimates of the present value of future cashflows include potential credit losses

and other disputes of the reinsurer to reflect the non-performance risk of the reinsurer.

The Group estimates certain fulfilment cashflows at the portfolio level or higher and then allocates such estimates to groups

of contracts.

The Group uses consistent assumptions to measure the estimates of the present value of future cashflows for the group of reinsurance

contracts held and such estimates for the groups of underlying insurance contracts.

Discount rates

A bottom-up approach has been applied in the determination of discount rates. Under this approach, the discount rate is determined as

the risk-free yield adjusted for differences in liquidity characteristics between the financial assets used to derive the risk-free yield and

the relevant liability cashflows (known as an illiquidity premium).

A separate risk-free yield is obtained for each currency, where a material amount of business is written in that currency. The risk-free yield

curve is obtained using rates published by the Prudential Regulation Authority (PRA) for the UK insurance business, whilst for AECS the

EIOPA risk free term structures are used. These curves are available from October 2015 and provides rates for terms up to 150 years.

For periods prior to October 2015, observable market data is available for terms up to 25 years for GBP (30 years for EUR). For terms

that aren’t directly observable from market data, the Smith-Wilson approach is used to derive the rates which extrapolates between

the observable data and an assumed ultimate forward rate. The Smith-Wilson approach is used to derive the published Solvency II yield

curves, which supports consistency over time.

Similarly to the approach to risk-free rates, an illiquidity premium will be set by currency. The illiquidity premium will be set by reviewing

internal illiquidity benchmarks and, when required, performing quantitative analysis to support qualitative judgement.

The following weighted average rates, based on the yield curves derived using the above methodology, were used to discount the liability

for incurred claims at the end of the current and prior periods:

		31 December 2023				31 December 2022
	1 year	3 years	5 years	10 years	1 year	3 years	5 years	10 years
UK Insurance	5.4%	4.3%	4.0%	3.9%	5.1%	5.0%	4.7%	4.4%
International (European motor)	4.0%	3.1%	3.0%	3.0%	3.8%	3.9%	3.8%	3.7%

Generally, the illiquidity premium is expected to be stable over time and re-assessment of the assumption will be triggered by significant

changes in internal illiquidity benchmarks and/or changes in the illiquidity of the liabilities (e.g. claims mix). Quantitative analysis will be

performed when the illiquidity premium changes, including performing sensitivity analysis on the assumption.

244 Financial Statements244

Admiral Group plc Annual Report and Accounts 2023

Insurance revenue

The insurance revenue for the period is comprised of the amount of expected premium receipts (excluding any investment component)

allocated to the period. The Group allocates the expected premium receipts to each period of insurance contract services on the basis of

the passage of time. However, if the expected pattern of release of risk during the coverage period differs significantly from the passage

of time, for example due to seasonality of claims, then the allocation is made on the basis of the expected timing of incurred insurance

service expenses. For the periods presented, all insurance premium revenue has been recognised based on the passage of time.

If a change in allocation is necessary due to a change of facts and circumstances, the change is accounted for prospectively as a change

in accounting estimate.

The Group’s insurance revenue is comprised of the following component parts:

• Insurance premium revenue: Insurance premium revenue reflects the expected premium receipts allocated to the period based on

the passage of time, adjusted for seasonality if required. It excludes any additional income that arises from the writing of the insurance

contract that is presented as part of insurance revenue as set out below.

• Instalment income: In contrast to IFRS 4, instalment income related to the risk attaching part of the premium that is retained within

the Group is recognised as part of the insurance revenue cashflows due to it being considered non-distinct from the underlying

insurance policy, as set out in note 2 to the financial statements.

• Administration fees: Administration fees are costs charged to the customer for arranging a change to their policy. The performance

obligation is the change in a customer’s policy and given that the obligation related to activities that are required to fulfil the insurance

contract and the policyholder cannot benefit from the service by itself, it is considered as part of fulfilment cashflows,

i.e. the full transaction price is therefore recognised as part of insurance revenue on a point in time basis.

IFRS 17 does not require separate insurance revenue analysis for insurance contracts measured under PAA. See Appendix 1 and note 13

for further information regarding the disaggregation of insurance revenue.

As stated in note 2, the Group has excluded any instalment income and administration fees derived from the proportion of insurance

coverage under the co-insurance arrangements where the Group bears no risks.

Insurance service expenses

The following elements are included in insurance service expenses:

• Incurred claims and benefits excluding investment components

• Other incurred directly attributable insurance service expenses, including administration and acquisition expenses, and share scheme

expenses that are attributable to insurance services

• Changes that relate to past service (i.e. changes in the fulfilment cashflows relating to the Liability for Incurred Claims)

• Changes that relate to future service (i.e. losses/reversals on onerous groups of contracts from changes in the loss components).

Only items that reflect insurance service expenses (i.e. incurred claims and other insurance service expenses arising from insurance

contracts the Group issues) are reported as insurance expenses. Cashflows that are not directly attributable to a portfolio of insurance

contracts, such as some product development and training costs, are recognised in other operating expenses as incurred.

The total costs incurred in relation to the co-insurance share of insurance business are presented within other operating expenses,

as is the reimbursement of these costs, given that they are not related to the costs directly attributable to fulfilling the Group’s

insurance contracts.

Reinsurance net expense/income

The Group has presented the income or expenses from a group of reinsurance contracts held separately from insurance finance income

or expenses as a single amount and has provided in the disclosure note a separate analysis of the amounts recovered from the reinsurer

and an allocation of the premiums paid that together give a net amount equal to that single amount.

As part of its quota share arrangements, the Group typically recovers either a set ceding commission, or the quota share reinsurer’s

proportional share of the expenses that are incurred in fulfilling the insurance contracts.

These amounts are typically settled net with the premium charged and are not contingent on claims. As a result, under IFRS 17 the

expenses and ceding commissions recovered are considered to reflect a reduction in the transaction price equivalent to charging a lower

premium (with no corresponding ceding commission or expense recovery).

In addition, as set out in note 2 to these financial statements, where the reinsurance arrangements result in a “minimum recovery” from

the reinsurer due to profit commission or sliding scale commission arrangements that is not contingent on claims, and the amount is not

settled “net” with premium, the minimum recovery is treated as a non-distinct investment component.

As a result, the Group treats reinsurance cashflows that are contingent on claims on the underlying contracts as part of the claims that

are expected to be reimbursed under the reinsurance contract held, and excludes non-distinct investment components and commissions

from the allocation of reinsurance premiums presented in the notes to the financial statements.

Financial Statements

245

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

Insurance finance income and expense

Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts arising from:

(a) The effect of the time value of money and changes in the time value of money

(b) The effect of financial risk and changes in financial risk.

The Group disaggregates insurance finance income or expenses on insurance contracts issued between the Consolidated Income

Statement and the Consolidated Statement of Other Comprehensive Income. The impact of changes in market interest rates on the

value of the insurance assets and liabilities are reflected in Other Comprehensive Income in order to minimise accounting mismatches

between the accounting for financial assets and insurance assets and liabilities. The Group’s financial assets backing the insurance

portfolios are predominantly measured at Fair Value through Other Comprehensive Income (‘FVOCI’).

Insurance contracts: Liability for remaining coverage

Initial measurement

For a group of contracts that is not onerous at initial recognition, the Group measures the liability for remaining coverage as: :

• The premiums, if any, received at initial recognition

• Any other asset or liability previously recognised for cashflows related to the group of contracts that the Group pays or receives before

the group of insurance contracts is recognised.

The Group recognises any insurance premium tax collected in relation to the premiums received as part of the premium receipts,

but given it is acting as an agent, these taxes are not included as either insurance revenue or an insurance expense. Any outstanding

insurance premium tax liability is presented within the liability for remaining coverage until paid.

There is no allowance for time value of money as the premiums are received within one year of the coverage period.

Where facts and circumstances indicate that contracts are onerous at initial recognition, the onerous contracts are separately grouped

from other contracts and a loss is recognised in the Consolidated Income Statement for the net outflow, resulting in the carrying amount

of the liability for the group being equal to the fulfilment cashflows. A loss component is established by the Group for the liability for

remaining coverage for such onerous group depicting the losses recognised.

Subsequent measurement

The Group measures the carrying amount of the liability for remaining coverage at the end of each reporting period as:

• The liability for remaining coverage at the beginning of the period; plus

• Premiums received in the period, minus

• The amount recognised as insurance revenue for the services provided in the period, minus

• Payments to the tax authorities in respect of premium receipts.

The onerous loss component is remeasured over the coverage period so that at the end of the coverage period, it is reduced to £nil.

Insurance contracts: Liability for incurred claims

The Group estimates the liability for incurred claims as the fulfilment cashflows related to incurred claims, including any creditors related

to directly attributable insurance expenses. The liability for incurred claims also includes an explicit adjustment for non-financial risk (the

risk adjustment).

Reinsurance contracts held

Initial measurement

The Group measures its reinsurance assets for a group of reinsurance contracts that it holds on the same basis as insurance contracts that

it issues. However, they are adapted to reflect the features of reinsurance contracts held that differ from insurance contracts issued.

Where the Group recognises a loss on initial recognition of an onerous group of underlying insurance contracts or when further onerous

underlying insurance contracts are added to a group, the Group establishes a loss-recovery component of the asset for remaining

coverage for a group of reinsurance contracts held depicting the recovery of losses. The Group calculates the loss-recovery component

by multiplying the loss recognised on the underlying insurance contracts and the percentage of claims on the underlying insurance

contracts the Group expects to recover from the group of reinsurance contracts held. The Group uses a systematic and rational method

to determine the portion of losses recognised on the group of insurance contracts covered by the reinsurance contracts held, in the

case that there is partial coverage of underlying insurance contracts by reinsurance contracts. The loss-recovery component adjusts the

carrying amount of the asset for remaining coverage.

The risk adjustment for non-financial risk is the amount of risk being transferred by the Group to the reinsurer and is calculated with

reference to the gross risk adjustment, adjusted for any excess of loss risk adjustment, as required.

246 Financial Statements246

Admiral Group plc Annual Report and Accounts 2023

Subsequent measurement

The subsequent measurement of reinsurance contracts held follows the same principles as those for insurance contracts issued and

has been adapted to reflect the specific features and terms and conditions of the reinsurance contracts held. In addition, changes in

the fulfilment cashflows that arise from changes in the risk of non-performance of the reinsurer are reflected within net expenses from

reinsurance contracts held within the Income Statement.

Where the Group has established a loss-recovery component, the Group subsequently reduces the loss recovery component to zero in

line with reductions in the onerous group of underlying insurance contracts in order to reflect that the loss-recovery component shall not

exceed the portion of the carrying amount of the loss component of the onerous group of underlying insurance contracts that the entity

expects to recover from the group of reinsurance contracts held.

The extinguishment or commutation of a reinsurance arrangement results in a derecognition of any reinsurance assets or liabilities

related to the commuted contract from the balance sheet, so that the Group retains the full future risk of claims development. As a

result of commutation, any difference arising between the present carrying value of reinsurance assets or liabilities and the cash

settlement is recognised in the Consolidated Income Statement.

5b. Insurance revenue

Insurance revenue for the corresponding reportable segments for the period ended 31 December 2023 are shown below.

			31 December 2023
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Insurance revenue related movement in liability
for remaining coverage	2,250.2	346.6	842.6	46.7	3,486.1

Insurance revenue for the corresponding reportable segments for the period ended 31 December 2022 are shown below.

		31 December 2022 (restated)
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Insurance revenue related movement in liability
for remaining coverage	1,909.7	264.5	750.0	32.7	2,956.9

The Group’s share of its insurance business was underwritten by Admiral Insurance (Gibraltar) Limited, Admiral Insurance Company

Limited, Admiral Europe Compañia Seguros (‘AECS’) and Elephant Insurance Company. The majority of contracts are short term in

duration, lasting for between 6 and 12 months.

5c. Insurance service expenses

Insurance service expenses for the corresponding reportable segments for the period ended 31 December 2023 are shown below.

			31 December 2023
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Incurred claims
Claims incurred in the period	1,755.5	255.0	618.2	36.4	2,665.1
Changes to liabilities for incurred claims	(406.9)	(9.1)	(21.3)	(3.3)	(440.6)
Total incurred claims	1,348.6	245.9	596.9	33.1	2,224.5
Movement in onerous contracts	(18.6)	(2.4)	(2.4)	–	(23.4)
Directly attributable expenses
Administration expenses	377.8	73.5	184.0	19.0	654.3
Acquisition expenses	73.4	34.8	65.4	8.9	182.5
Insurance expenses	451.2	108.3	249.4	27.9	836.8
Share scheme expenses	43.2	2.4	8.9	0.8	55.3
Total insurance expenses and share scheme expenses	494.4	110.7	258.3	28.7	892.1
Total insurance service expenses	1,824.4	354.2	852.8	61.8	3,093.2

Financial Statements

247

Admiral Group plc Annual Report and Accounts 2023

5. Insurance service result continued

Insurance service expenses for the corresponding reportable segments for the period ended 31 December 2022 are shown below.

		31 December 2022 (restated)
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Incurred claims
Claims incurred in the period	1,620.4	214.8	516.0	21.1	2,372.3
Changes to liabilities for incurred claims	(437.2)	(16.9)	37.2	(3.6)	(420.5)
Total incurred claims	1,183.2	197.9	553.2	17.5	1,951.8
Movement in onerous contracts	(19.1)	0.4	(3.9)	–	(22.6)
Directly attributable expenses
Administration expenses	327.7	54.6	182.5	16.0	580.8
Acquisition expenses	61.9	31.5	72.1	8.7	174.2
Insurance expenses	389.6	86.1	254.6	24.7	755.0
Share scheme expenses	39.4	4.2	9.4	–	53.0
Total insurance expenses and share scheme expenses	429.0	90.3	264.0	24.7	808.0
Total insurance service expenses	1,593.1	288.6	813.3	42.2	2,737.2

5d. Net expenses from reinsurance contracts held

Net expenses from reinsurance contracts held for the corresponding reportable segments for the period ended 31 December 2023

are shown below.

			31 December 2023
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Allocation of reinsurance premiums	93.6	49.5	190.0	2.2	335.3
Amounts recoverable from reinsurers for incurred
insurance service expenses
Incurred claims	(173.8)	(52.0)	(270.3)	–	(496.1)
Changes to liabilities for incurred claims	135.1	(1.4)	95.9	(0.1)	229.5
Net expense from reinsurance contracts excluding
movement in onerous loss component	54.9	(3.9)	15.6	2.1	68.7
Other reinsurance recoveries including movement in loss
recovery component	14.5	2.2	1.7	–	18.4
Net expenses/(income) from reinsurance contracts held	69.4	(1.7)	17.3	2.1	87.1

Net expenses from reinsurance contracts held for the corresponding reportable segments for the period ended 31 December 2022

are shown below.

		31 December 2022 (restated)
	UK Motor	UK Non-motor	Int. Insurance	Other	Total Group
	£m	£m	£m	£m	£m
Allocation of reinsurance premiums	69.8	44.4	161.3	1.4	276.9
Amounts recoverable from reinsurers for incurred
insurance service expenses
Incurred claims	(182.8)	(43.5)	(232.6)	0.2	(458.7)
Changes to liabilities for incurred claims	136.7	0.8	64.2	–	201.7
Net expense from reinsurance contracts excluding
movement in onerous loss component	23.7	1.7	(7.1)	1.6	19.9
Other reinsurance recoveries including movement in loss
recovery component	13.9	(0.3)	4.9	–	18.5
Net expenses/(income) from reinsurance contracts held	37.6	1.4	(2.2)	1.6	38.4

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

248 Financial Statements248

Admiral Group plc Annual Report and Accounts 2023

5e. Finance (expenses)/income from insurance contracts held and reinsurance contracts issued

	31 December 2023	31 December 2022
	£m	£m
Amounts recognised through the Income Statement
Insurance finance expenses from insurance contracts issued	(94.5)	(52.0)
Finance expenses from insurance contracts issued	(94.5)	(52.0)
Insurance finance income from reinsurance contracts held	28.9	13.6
Finance income from reinsurance contracts issued	28.9	13.6
Net finance expense from insurance / reinsurance contracts issued	(65.6)	(38.4)
Amounts recognised in Other Comprehensive Income
(Losses)/gains due to changes in discount rates – insurance contracts	(128.1)	274.0
Gains/ (losses) due to changes in discount rates – reinsurance contracts	49.2	(96.2)
Total gains before tax recognised in Other Comprehensive Income	(78.9)	177.8

5f. Insurance Liabilities and Reinsurance assets

(i) Analysis of recognised amounts

		2023			2022
	Assets	Liabilities	Net	Assets	Liabilities	Net
	£m	£m	£m	£m	£m	£m
Insurance contracts issued
UK Motor	–	3,315.7	3,315.7	–	2,953.3	2,953.3
UK Non-Motor	–	353.7	353.7	–	267.7	267.7
International Motor	–	862.5	862.5	–	776.7	776.7
Other	–	49.8	49.8	–	27.7	27.7
Total insurance contracts issued	–	4,581.7	4,581.7	–	4,025.4	4,025.4
Reinsurance contracts held
UK Motor	519.9	–	519.9	457.5	–	457.5
UK Non-Motor	191.6	–	191.6	126.5	–	126.5
International Motor	481.8	–	481.8	432.2	–	432.2
Other	–	(1.4)	(1.4)	–	(0.8)	(0.8)
Total reinsurance contracts held	1,193.3	(1.4)	1,191.9	1,016.2	(0.8)	1,015.4
Net
UK Motor	–	2,795.8	2,795.8	–	2,495.8	2,495.8
UK Non-Motor	–	162.1	162.1	–	141.2	141.2
International Motor	–	380.7	380.7	–	344.5	344.5
Other	–	51.2	51.2	–	28.5	28.5
Total insurance contracts issued	–	3,389.8	3,389.8	–	3,010.0	3,010.0

Financial Statements

249

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

(ii) Roll-forward of net asset or liability for insurance contracts issued

UK Motor

The following tables reconcile the opening and closing balances of the LRC and LIC for UK Motor.

2023		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(534.1)	(8.1)	(542.2)	(1,984.5)	(426.6)	(2,411.1)	(2,953.3)
Net opening balance	(534.1)	(8.1)	(542.2)	(1,984.5)	(426.6)	(2,411.1)	(2,953.3)
Insurance revenue	2,250.2	–	2,250.2	–	–	–	2,250.2
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(2,105.1)	(144.8)	(2,249.9)	(2,249.9)
Changes to liabilities for incurred claims	–	–	–	140.1	266.8	406.9	406.9
Losses and reversals of losses
on onerous contracts	–	18.6	18.6	–	–	–	18.6
Insurance service result	2,250.2	18.6	2,268.8	(1,965.0)	122.0	(1,843.0)	425.8
Insurance finance income/
(expense) recognised in profit or loss	–	(4.1)	(4.1)	(59.0)	(12.3)	(71.3)	(75.4)
Insurance finance income/
(expense) recognised in OCI	–	(9.4)	(9.4)	(60.5)	(27.0)	(87.5)	(96.9)
Total changes in comprehensive income	2,250.2	5.1	2,255.3	(2,084.5)	82.7	(2,001.8)	253.5
Other changes	–	–	–	–	–	–	–
Cashflows
Premiums received	(2,482.1)	–	(2,482.1)	–	–	–	(2,482.1)
Claims and other insurance
service expenses paid	–	–	–	1,866.2	–	1,866.2	1,866.2
Other movements	–	–	–	–	–	–	–
Total cashflows	(2,482.1)	–	(2,482.1)	1,866.2	–	1,866.2	(615.9)
Net closing balance	(766.0)	(3.0)	(769.0)	(2,202.8)	(343.9)	(2,546.7)	(3,315.7)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(766.0)	(3.0)	(769.0)	(2,202.8)	(343.9)	(2,546.7)	(3,315.7)

250 Financial Statements250

Admiral Group plc Annual Report and Accounts 2023

2022		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(473.1)	(28.8)	(501.9)	(1,993.7)	(507.8)	(2,501.5)	(3,003.4)
Net opening balance	(473.1)	(28.8)	(501.9)	(1,993.7)	(507.8)	(2,501.5)	(3,003.4)
Insurance revenue	1,909.7	–	1,909.7	–	–	–	1,909.7
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(1,836.9)	(212.5)	(2,049.4)	(2,049.4)
Changes to liabilities for incurred claims	–	–	–	175.6	261.6	437.2	437.2
Losses and reversals of losses
on onerous contracts	–	19.1	19.1	–	–	–	19.1
Insurance service result	1,909.7	19.1	1,928.8	(1,661.3)	49.1	(1,612.2)	316.6
Insurance finance income/
(expense) recognised in profit or loss	–	(1.8)	(1.8)	(36.5)	(8.4)	(44.9)	(46.7)
Insurance finance income/
(expense) recognised in OCI	–	3.4	3.4	191.9	40.5	232.4	235.8
Total changes in comprehensive income	1,909.7	20.7	1,930.4	(1,505.9)	81.2	(1,424.7)	505.7
Other changes	–	–	–	(1.7)	–	(1.7)	(1.7)
Cashflows
Premiums received	(2,000.8)	–	(2,000.8)	–	–	–	(2,000.8)
Claims and other insurance
service expenses paid	–	–	–	1,516.8	–	1,516.8	1,516.8
Other movements	30.1	–	30.1	–	–	–	30.1
Total cashflows	(1,970.7)	–	(1,970.7)	1,516.8	–	1,516.8	(453.9)
Net closing balance	(534.1)	(8.1)	(542.2)	(1,984.5)	(426.6)	(2,411.1)	(2,953.3)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(534.1)	(8.1)	(542.2)	(1,984.5)	(426.6)	(2,411,1)	(2,953.3)

Financial Statements

251

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

UK Non-Motor

The following tables reconcile the opening and closing balances of the LRC and LIC for other UK insurance (UK Household, Pet and Travel).

2023		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(100.9)	(0.1)	(101.0)	(141.2)	(25.5)	(166.7)	(267.7)
Net opening balance	(100.9)	(0.1)	(101.0)	(141.2)	(25.5)	(166.7)	(267.7)
Insurance revenue	346.6	–	346.6	–	–	–	346.6
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(363.6)	(2.1)	(365.7)	(365.7)
Changes to liabilities for incurred claims	–	–	–	4.3	4.8	9.1	9.1
Losses and reversals of losses
on onerous contracts	–	2.4	2.4	–	–	–	2.4
Insurance service result	346.6	2.4	349.0	(359.3)	2.7	(356.6)	(7.6)
Insurance finance income/
(expense) recognised in profit
or loss	–	–	–	(5.4)	(0.9)	(6.3)	(6.3)
Insurance finance income/
(expense) recognised in OCI	–	(2.3)	(2.3)	(1.4)	(0.2)	(1.6)	(3.9)
Total changes in comprehensive income	346.6	0.1	346.7	(366.1)	1.6	(364.5)	(17.8)
Other changes	–	–	–	–	–	–	–
Cashflows
Premiums received	(381.9)	–	(381.9)	–	–	–	(381.9)
Claims and other insurance
service expenses paid	–	–	–	313.7	–	313.7	313.7
Other movements	–	–	–	–	–	–	–
Total cashflows	(381.9)	–	(381.9)	313.7	–	313.7	(68.2)
Net closing balance	(136.2)	–	(136.2)	(193.6)	(23.9)	(217.5)	(353.7)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(136.2)	–	(136.2)	(193.6)	(23.9)	(217.5)	(353.7)

252 Financial Statements252

Admiral Group plc Annual Report and Accounts 2023

2022		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(125.6)	–	(125.6)	(74.2)	(16.0)	(90.2)	(215.8)
Net opening balance	(125.6)	–	(125.6)	(74.2)	(16.0)	(90.2)	(215.8)
Insurance revenue	264.5	–	264.5	–	–	–	264.5
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(281.4)	(23.7)	(305.1)	(305.1)
Changes to liabilities for incurred claims	–	–	–	2.5	14.4	16.9	16.9
Losses and reversals of losses
on onerous contracts	–	(0.4)	(0.4)	–	–	–	(0.4)
Insurance service result	264.5	(0.4)	264.1	(278.9)	(9.3)	(288.2)	(24.1)
Insurance finance income/
(expense) recognised in profit
or loss	–	(0.4)	(0.4)	(2.0)	(0.4)	(2.4)	(2.8)
Insurance finance income/
(expense) recognised in OCI	–	0.7	0.7	1.4	0.2	1.6	2.3
Total changes in comprehensive income	264.5	(0.1)	264.4	(279.5)	(9.5)	(289.0)	(24.6)
Other changes	–	–	–	–	–	–	–
Cashflows
Premiums received	(239.8)	–	(239.8)	–	–	–	(239.8)
Claims and other insurance
service expenses paid	–	–	–	212.5	–	212.5	212.5
Other movements	–	–	–	–	–	–	–
Total cashflows	(239.8)	–	(239.8)	212.5	–	212.5	(27.3)
Net closing balance	(100.9)	(0.1)	(101.0)	(141.2)	(25.5)	(166.7)	(267.7)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(100.9)	(0.1)	(101.0)	(141.2)	(25.5)	(166.7)	(267.7)

Financial Statements

253

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

International Insurance

The following tables reconcile the opening and closing balances of the ARC and AIC for International Insurance.

2023		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(200.7)	(4.7)	(205.4)	(495.2)	(76.1)	(571.3)	(776.7)
Net opening balance	(200.7)	(4.7)	(205.4)	(495.2)	(76.1)	(571.3)	(776.7)
Insurance revenue	842.6	–	842.6	–	–	–	842.6
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(835.7)	(40.8)	(876.5)	(876.5)
Changes to liabilities for incurred claims	–	–	–	(22.6)	43.9	21.3	21.3
Losses and reversals of losses
on onerous contracts	–	2.4	2.4	–	–	–	2.4
Insurance service result	842.6	2.4	845.0	(858.3)	3.1	(855.2)	(10.2)
Insurance finance income/
(expense) recognised in profit or loss	–	–	–	(8.2)	(1.7)	(9.9)	(9.9)
Insurance finance income/
(expense) recognised in OCI	–	(0.7)	(0.7)	(12.7)	(3.4)	(16.1)	(16.8)
Foreign exchange impact	2.3	0.1	2.4	15.7	2.0	17.7	20.1
Total changes in comprehensive income	844.9	1.8	846.7	(863.5)	–	(863.5)	(16.8)
Other changes	–	–	–	–	0.1	0.1	0.1
Cashflows
Premiums received	(862.3)	–	(862.3)	–	–	–	(862.3)
Claims and other insurance
service expenses paid	–	–	–	793.2	–	793.2	793.2
Other movements	–	–	–	–	–	–	–
Total cashflows	(862.3)	–	(862.3)	793.2	–	793.2	(69.1)
Net closing balance	(218.1)	(2.9)	(221.0)	(565.5)	(76.0)	(641.5)	(862.5)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(218.1)	(2.9)	(221.0)	(565.5)	(76.0)	(641.5)	(862.5)

2022		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	–	–	–	–	–	–
Opening liabilities	(164.6)	(8.4)	(173.0)	(421.8)	(58.4)	(480.2)	(653.2)
Net opening balance	(164.6)	(8.4)	(173.0)	(421.8)	(58.4)	(480.2)	(653.2)
Insurance revenue	750.0	–	750.0	–	–	–	750.0
Insurance service expenses
Incurred claims and insurance
service expenses	–	–	–	(794.8)	(12.4)	(807.2)	(807.2)
Changes to liabilities for incurred claims	–	–	–	(3.8)	(4.7)	(8.5)	(8.5)
Losses and reversals of losses
on onerous contracts	–	3.9	3.9	–	–	–	3.9
Insurance service result	750.0	3.9	753.9	(798.6)	(17.1)	(815.7)	(61.8)
Insurance finance income/
(expense) recognised in profit or loss	–	(0.1)	(0.1)	(2.2)	(0.3)	(2.5)	(2.6)
Insurance finance income/
(expense) recognised in OCI	–	0.2	0.2	27.4	3.8	31.2	31.4

254 Financial Statements254

Admiral Group plc Annual Report and Accounts 2023

(iii) Roll-forward of net asset or liability for reinsurance contracts held

UK Motor

The following tables reconcile the opening and closing balances of the ARC and AIC for UK Motor.

2023	Asset for remaining coverage			Asset for incurred claims
	Excluding loss	Loss-recovery		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	20.2	6.3	26.5	255.4	175.6	431.0	457.5
Opening liabilities	–	–	–	–	–	–	–
Net opening balance	20.2	6.3	26.5	255.4	175.6	431.0	457.5
Allocation of reinsurance
premiums	(93.6)	–	(93.6)	–	–	–	(93.6)
Amounts recoverable from reinsurers for incurred
claims
Incurred claims	–	–	–	96.7	77.1	173.8	173.8
Changes to liabilities for incurred claims	–	–	–	(43.1)	(92.0)	(135.1)	(135.1)
Changes in the loss recovery
component	–	(14.5)	(14.5)	–	–	–	(14.5)
Net income/(expense) from reinsurance contracts held	(93.6)	(14.5)	(108.1)	53.6	(14.9)	38.7	(69.4)
Reinsurance finance income/
(expense) recognised in profit
or loss	–	3.2	3.2	9.4	7.5	16.9	20.1
Reinsurance finance income/
(expense) recognised in OCI	–	7.3	7.3	12.5	15.4	27.9	35.2
Total changes in comprehensive income	(93.6)	(4.0)	(97.6)	75.5	8.0	83.5	(14.1)
Cashflows
Premiums paid	94.2	–	94.2	–	–	–	94.2
Claims recoveries	–	–	–	(2.2)	–	(2.2)	(2.2)
Recoveries as a result of commutations	–	–	–	(15.5)	–	(15.5)	(15.5)
Total cashflows	94.2	–	94.2	(17.7)	–	(17.7)	76.5
Net closing balance	20.8	2.3	23.1	313.2	183.6	496.8	519.9
Closing assets	20.8	2.3	23.1	313.2	183.6	496.8	519.9
Closing liabilities	–	–	–	–	–	–	–

2022		Liability for remaining coverage		Liability for incurred claims
	Excluding loss	Loss		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Foreign exchange impact	(6.9)	(0.3)	(7.2)	(32.2)	(4.1)	(36.3)	(43.5)
Total changes in comprehensive income	743.1	3.7	746.8	(805.6)	(17.7)	(823.3)	(76.5)
Other changes	–	–	–	–	–	–	–
Cashflows
Premiums received	(779.2)	–	(779.2)	–	–	–	(779.2)
Claims and other insurance
service expenses paid	–	–	–	732.2	–	732.2	732.2
Other movements	–	–	–	–	–	–	–
Total cashflows	(779.2)	–	(779.2)	732.2	–	732.2	(47.0)
Net closing balance	(200.7)	(4.7)	(205.4)	(495.2)	(76.1)	(571.3)	(776.7)
Closing assets	–	–	–	–	–	–	–
Closing liabilities	(200.7)	(4.7)	(205.4)	(495.2)	(76.1)	(571.3)	(776.7)

Financial Statements

255

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

2022	Asset for remaining coverage				Asset for incurred claims
	Excluding loss	Loss-recovery		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	24.7	21.7	46.4	250.7	203.1	453.8	500.2
Opening liabilities	–	–	–	–	–	–	–
Net opening balance	24.7	21.7	46.4	250.7	203.1	453.8	500.2
Allocation of reinsurance
premiums	(69.8)	–	(69.8)	–	–	–	(69.8)
Amounts recoverable from reinsurers for incurred
claims
Incurred claims	–	–	–	91.9	90.9	182.8	182.8
Changes to liabilities for incurred claims	–	–	–	(36.7)	(100.0)	(136.7)	(136.7)
Changes in the loss recovery
component	–	(13.9)	(13.9)	–	–	–	(13.9)
Net income/(expense) from reinsurance contracts held	(69.8)	(13.9)	(83.7)	55.2	(9.1)	46.1	(37.6)
Reinsurance finance income/
(expense) recognised in profit or loss	–	1.3	1.3	5.1	3.9	9.0	10.3
Reinsurance finance income/
(expense) recognised in OCI	–	(2.8)	(2.8)	(44.8)	(22.3)	(67.1)	(69.9)
Total changes in comprehensive income	(69.8)	(15.4)	(85.2)	15.5	(27.5)	(12.0)	(97.2)
Other changes	–	–	–	1.8	–	1.8	1.8
Cashflows
Premiums paid	65.3	–	65.3	–	–	–	65.3
Amounts received	–	–	–	(12.6)	–	(12.6)	(12.6)
Total cashflows	65.3	–	65.3	(12.6)	–	(12.6)	52.7
Net closing balance	20.2	6.3	26.5	255.4	175.6	431.0	457.5
Closing assets	20.2	6.3	26.5	255.4	175.6	431.0	457.5
Closing liabilities	–	–	–	–	–	–	–

256 Financial Statements256

Admiral Group plc Annual Report and Accounts 2023

UK Non-Motor

The following tables reconcile the opening and closing balances of the ARC and AIC for UK Non-motor insurance (Household, Travel and Pet).

2023	Asset for remaining coverage				Asset for incurred claims
	Excluding loss	Loss-recovery		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	11.7	0.1	11.8	98.6	16.1	114.7	126.5
Opening liabilities	–	–	–	–	–	–	–
Net opening balance	11.7	0.1	11.8	98.6	16.1	114.7	126.5
Allocation of reinsurance
premiums	(49.5)	–	(49.5)	–	–	–	(49.5)
Amounts recoverable from reinsurers for incurred
claims
Incurred claims	–	–	–	53.3	(1.3)	52.0	52.0
Changes to liabilities for incurred claims	–	–	–	1.7	(0.3)	1.4	1.4
Changes in the loss recovery
component	–	(2.2)	(2.2)	–	–	–	(2.2)
Net income/(expense) from reinsurance contracts held	(49.5)	(2.2)	(51.7)	55.0	(1.6)	53.4	1.7
Reinsurance finance income/
(expense) recognised in profit or loss	–	–	–	3.6	0.6	4.2	4.2
Reinsurance finance income/
(expense) recognised in OCI	–	2.1	2.1	0.9	0.2	1.1	3.2
Total changes in comprehensive income	(49.5)	(0.1)	(49.6)	59.5	(0.8)	58.7	9.1
Reinsurance investment
components	(111.7)	–	(111.7)	111.7	–	111.7	–
Cashflows
Premiums paid	170.9	–	170.9	–	–	–	170.9
Claims recovered	–	–	–	(91.2)	–	(91.2)	(91.2)
Recoveries as a result
of commutations	–	–	–	(23.7)	–	(23.7)	(23.7)
Total cash flows	170.9	–	170.9	(114.9)	–	(114.9)	56.0
Net closing balance	21.4	–	21.4	154.9	15.3	170.2	191.6
Closing assets	21.4	–	21.4	154.9	15.3	170.2	191.6
Closing liabilities	–	–	–	–	–	–	–

Financial Statements

257

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

2022	Asset for remaining coverage				Asset for incurred claims
	Excluding loss			Present value of	Risk adj. for non-
£ million	component	Loss component	Total	future cashflows	financial risk	Total	Total
Opening assets	8.4	–	8.4	66.6	3.1	69.7	78.1
Opening liabilities	–	–	–	–	–	–	–
Net opening balance	8.4	–	8.4	66.6	3.1	69.7	78.1
Allocation of reinsurance
premiums	(44.4)	–	(44.4)	–	–	–	(44.4)
Amounts recoverable from reinsurers for incurred
claims
Incurred claims	–	–	–	31.6	11.9	43.5	43.5
Changes to liabilities for incurred claims	–	–	–	(1.8)	1.0	(0.8)	(0.8)
Changes in the loss recovery
component	–	0.3	0.3	–	–	–	0.3
Net income/(expense) from reinsurance contracts held	(44.4)	0.3	(44.1)	29.8	12.9	42.7	(1.4)
Reinsurance finance income/
(expense) recognised in profit or loss	–	0.3	0.3	1.4	0.2	1.6	1.9
Reinsurance finance income/
(expense) recognised in OCI	–	(0.5)	(0.5)	(0.7)	(0.1)	(0.8)	(1.3)
Total changes in comprehensive income	(44.4)	0.1	(44.3)	30.5	13.0	43.5	(0.8)
Reinsurance investment
components	(78.4)	–	(78.4)	78.4	–	78.4	–
Cashflows
Premiums paid	126.1	–	126.1	–	–	–	126.1
Amounts received	–	–	–	(76.9)	–	(76.9)	(76.9)
Total cashflows	126.1	–	126.1	(76.9)	–	(76.9)	49.2
Net closing balance	11.7	0.1	11.8	98.6	16.1	114.7	126.5
Closing assets	11.7	0.1	11.8	98.6	16.1	114.7	126.5
Closing liabilities	–	–	–	–	–	–	–

258 Financial Statements258

Admiral Group plc Annual Report and Accounts 2023

International Insurance

The following tables reconcile the opening and closing balances of the ARC and AIC for International Insurance.

2023	Asset for remaining coverage			Asset for incurred claims
	Excluding loss	Loss-recovery		Present value of	Risk adj. for non-
£ million	component	component	Total	future cashflows	financial risk	Total	Total
Opening assets	–	3.4	3.4	412.7	35.1	447.8	451.2
Opening liabilities	(19.0)	–	(19.0)	–	–	–	(19.0)
Net opening balance	(19.0)	3.4	(15.6)	412.7	35.1	447.8	432.2
Allocation of reinsurance
premiums	(190.0)	–	(190.0)	–	–	–	(190.0)
Amounts recoverable from reinsurers for incurred
claims
Incurred claims	–	–	–	243.7	26.6	270.3	270.3
Changes to liabilities for incurred claims	–	–	–	(69.8)	(26.1)	(95.9)	(95.9)
Changes in the loss recovery
component	–	(1.7)	(1.7)	–	–	–	(1.7)
Net income/(expense) from reinsurance contracts held	(190.0)	(1.7)	(191.7)	173.9	0.5	174.4	(17.3)
Reinsurance finance income/
(expense) recognised in profit or loss	–	–	–	4.0	0.6	4.6	4.6
Reinsurance finance income/
(expense) recognised in OCI	–	0.5	0.5	7.4	1.9	9.3	9.8
Foreign exchange impact	6.3	–	6.3	(11.7)	(0.7)	(12.4)	(6.1)
Total changes in comprehensive income	(183.7)	(1.2)	(184.9)	173.6	2.3	175.9	(9.0)
Reinsurance investment
components	(148.9)	–	(148.9)	148.9	–	148.9	–
Cashflows
Premiums paid	328.4	–	328.4	–	–	–	328.4
Amounts received	–	–	–	(269.8)	–	(269.8)	(269.8)
Total cashflows	328.4	–	328.4	(269.8)	–	(269.8)	58.6
Net closing balance	(23.2)	2.2	(21.0)	465.4	37.4	502.8	481.8
Closing assets	–	2.2	2.2	465.4	37.4	502.8	505.0
Closing liabilities	(23.2)	–	(23.2)	–	–	–	(23.2)

Financial Statements

259

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

5. Insurance service result continued

2022	Asset for remaining coverage			Asset for incurred claims
				Risk adj. for
	Excluding loss	Loss recovery		Present value of	non-financial
£ million	component	component	Total	future cashflows	risk	Total	Total
Opening assets	13.8	8.0	21.8	322.8	25.4	348.2	370.0
Opening liabilities	–	–	–	–	–	–	–
Net opening balance	13.8	8.0	21.8	322.8	25.4	348.2	370.0
Allocation of reinsurance
premiums	(161.3)	–	(161.3)	–	–	–	(161.3)
Amounts recoverable from reinsurers for incurred claims
Incurred claims	–	–	–	227.0	5.6	232.6	232.6
Changes to liabilities for incurred claims	–	–	–	(69.2)	5.0	(64.2)	(64.2)
Changes in the loss recovery
component	–	(4.9)	(4.9)	–	–	–	(4.9)
Net income/(expense) from reinsurance contracts held	(161.3)	(4.9)	(166.2)	157.8	10.6	168.4	2.2
Reinsurance finance income/
(expense) recognised in profit
or loss	–	0.1	0.1	1.3	0.1	1.4	1.5
Reinsurance finance income/
(expense) recognised in OCI	–	–	–	(18.6)	(2.0)	(20.6)	(20.6)
Foreign exchange impact	(11.4)	0.2	(11.2)	28.1	1.0	29.1	17.9
Total changes in comprehensive income	(172.7)	(4.6)	(177.3)	168.6	9.7	178.3	1.0
Reinsurance investment
component	(129.6)	–	(129.6)	129.6	–	129.6	–
Cashflows
Premiums paid	269.5	–	269.5	–	–	–	269.5
Amounts received	–	–	–	(208.3)	–	(208.3)	(208.3)
Total cashflows	269.5	–	269.5	(208.3)	–	(208.3)	61.2
Net closing balance	(19.0)	3.4	(15.6)	412.7	35.1	447.8	432.2
Closing assets	–	3.4	3.4	412.7	35.1	447.8	451.2
Closing liabilities	(19.0)	–	(19.0)	–	–	–	(19.0)

(iv) Claims development

The tables below illustrate how estimates of cumulative claims for UK Motor, UK Non-Motor and International Insurance have developed

over time on a gross and net of reinsurance basis.

Each table shows how the Group’s estimates of total claims for each underwriting year have developed over time and reconciles the

cumulative claims to the amount included in the Statement of Financial Position. Balances have been translated at the exchange rates

prevailing at the reporting date. The Group has not disclosed information for underwriting years 2017 and prior for the international

insurance and UK Non-Motor insurance businesses, given that the claims that remain outstanding on those years are immaterial.

IFRS 17 does not require an entity to disclose claims development information for which uncertainty about the amount and timing of

the claims payments is typically resolved within one year. Therefore, the Group has not disclosed information about the claims in its other

lines of business or related directly attributable expenses.

260 Financial Statements260

Admiral Group plc Annual Report and Accounts 2023

Gross claims development

							Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
UK Motor (core)
At end of year one		382	394	436	552	686	701	552	688	845	973
At end of year two		675	701	829	1,144	1,175	1,067	985	1,326	1,584
At end of year three		659	707	788	994	1,109	1,010	954	1,294
At end of year four		689	680	727	947	1,064	996	921
At end of year five		643	636	713	912	1,008	981
At end of year six		635	619	690	890	1,000
At end of year seven		619	606	656	865
At end of year eight		604	594	652
At end of year nine		593	585
Ten years later		590
Gross best
estimates of undiscounted
claims	3,225	590	585	652	865	1,000	981	921	1,294	1,584	973	12,670
Cumulative gross
claims paid	(3,075)	(576)	(560)	(616)	(747)	(893)	(770)	(662)	(826)	(971)	(395)	(10,091)
Gross undiscounted
best estimate
liabilities	150	14	25	36	118	107	211	259	468	613	578	2,579
Risk adjustment
(undiscounted)												411
Effect of discounting												(537)
Gross claims
liabilities												2,453
Ancillary claims
liabilities and expense liabilities												94
UK Motor Gross
liabilities for incurred claims												2,547
UK Non-motor
(core)
At end of year one				26	29	56	55	53	58	116	146
At end of year two			34	50	78	102	105	96	128	224
At end of year three		18	35	47	76	102	103	95	124
At end of year four		19	34	47	75	102	102	90
At end of year five		19	33	47	76	102	93
At end of year six		19	33	47	76	100
At end of year seven		19	33	47	75
At end of year eight		19	33	48
At end of year nine		19	33
Ten years later		19
Gross best
estimates of undiscounted
claims	5	19	33	48	75	100	93	90	124	224	146	957
Cumulative gross
claims paid	(5)	(19)	(33)	(48)	(75)	(97)	(90)	(85)	(109)	(147)	(50)	(758)

Financial Statements

261

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

							Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Gross undiscounted
best estimate
liabilities	–	–	–	–	–	3	3	5	15	77	96	199
Risk adjustment
(undiscounted)												22
Effect of discounting												(7)
Gross claims
liabilities												214
Ancillary claims
liabilities and expense liabilities												4
UK Non-motor
Gross liabilities for incurred claims												218
International
Insurance
At end of year one						177	236	204	270	313	338
At end of year two					259	356	382	368	496	601
At end of year three				237	304	349	388	364	498
At end of year four			181	253	300	350	384	365
At end of year five		138	211	251	300	350	364
At end of year six		143	211	251	300	339
At end of year seven		143	211	251	296
At end of year eight		143	212	248
At end of year nine		143	233
Ten years later		151
Gross best
estimates of undiscounted
claims	399	151	233	248	296	339	364	365	498	601	338	3,832
Cumulative gross
claims paid	(398)	(149)	(193)	(244)	(281)	(320)	(336)	(316)	(412)	(414)	(155)	(3,218)
Gross undiscounted
best estimate
liabilities	1	2	40	4	15	19	28	49	86	187	183	614
Risk adjustment
(undiscounted)												88
Effect of discounting												(98)
Gross claims
liabilities												604
Ancillary claims
liabilities and expense liabilities												38
International
Insurance Gross
liabilities for incurred claims												642

5. Insurance service result continued

262 Financial Statements262

Admiral Group plc Annual Report and Accounts 2023

Claims development net of XoL reinsurance

					Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
UK Motor (core)
At end of year one		373	378	427	510	646	675	520	661	825	951
At end of year two		659	682	783	1,053	1,123	1,033	949	1,292	1,550
At end of year three		644	667	743	917	1,053	986	927	1,257
At end of year four		659	637	692	883	1,024	969	892
At end of year five		623	607	677	860	974	950
At end of year six		619	599	663	840	978
At end of year seven		606	586	640	820
At end of year eight		597	579	635
At end of year nine		589	577
Ten years later		589
Net of XoL best
estimates of undiscounted
claims	3,190	589	577	635	820	978	950	892	1,257	1,550	951	12,389
Cumulative
claims paid	(3,075)	(576)	(560)	(616)	(747)	(893)	(770)	(662)	(826)	(971)	(395)	(10,091)
Net of XoL
undiscounted best
estimate liabilities	115	13	17	19	73	85	180	230	431	579	556	2,298
Risk adjustment
(undiscounted)												331
Effect of discounting												(420)
Net of XoL claims
liabilities												2,209
Ancillary claims
liabilities and expenses												94
UK Motor Net of XoL liabilities for incurred claims												2,303
UK Non-motor
(core)
At end of year one				26	29	56	54	50	57	116	127
At end of year two			34	50	78	102	96	91	126	220
At end of year three		18	35	47	75	101	94	90	124
At end of year four		19	34	47	75	101	93	90
At end of year five		19	33	47	76	101	93
At end of year six		19	33	47	75	100
At end of year seven		19	33	47	75
At end of year eight		19	33	48
At end of year nine		19	33
Ten years later		19
Gross best
estimates of undiscounted
claims	4	19	33	48	75	100	93	90	124	220	127	933
Cumulative
claims paid	(4)	(19)	(33)	(48)	(75)	(97)	(90)	(85)	(109)	(148)	(50)	(758)

Financial Statements

263

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

					Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Net of XoL
undiscounted best
estimate liabilities	–	–	–	–	–	3	3	5	15	72	77	175
Risk adjustment
(undiscounted)												19
Effect of discounting												(7)
Net of XoL claims
liabilities												187
Ancillary claims
liabilities and expense liabilities												3
UK Non-motor Net
of XoL liabilities for incurred claims												190
International
Insurance
At end of year one						177	236	204	270	313	335
At end of year two					259	356	382	368	496	559
At end of year three				237	304	349	388	364	477
At end of year four			181	253	300	350	384	355
At end of year five		138	211	251	300	350	360
At end of year six		143	211	251	300	337
At end of year seven		143	211	251	290
At end of year eight		143	212	248
At end of year nine		143	210
Ten years later	397	151
Gross best
estimates of undiscounted
claims	397	151	210	248	290	337	360	355	477	559	335	3,719
Cumulative gross
claims paid	(397)	(149)	(193)	(244)	(280)	(320)	(336)	(316)	(412)	(414)	(155)	(3,216)
Gross undiscounted
best estimate
liabilities	–	2	17	4	10	17	24	39	65	145	180	503
Risk adjustment
(undiscounted)												73
Effect of discounting												(46)
Gross claims
liabilities												530
Ancillary claims and expense liabilities												38
International
Insurance Gross
liabilities for incurred claims												568

5. Insurance service result continued

264 Financial Statements264

Admiral Group plc Annual Report and Accounts 2023

Claims development net of reinsurance

							Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
UK Motor (core)
At end of year one		373	378	427	493	625	626	520	657	762	939
At end of year two		659	682	783	1,016	1,086	1,033	949	1,259	1,442
At end of year three		644	667	743	886	1,018	986	927	1,239
At end of year four		659	637	692	853	990	969	892
At end of year five		623	607	677	830	957	950
At end of year six		619	599	663	811	944
At end of year seven		606	586	640	793
At end of year eight		597	579	635
At end of year nine		589	577
Ten years later		589
Net best estimates
of undiscounted
claims	3,190	589	577	635	793	944	950	892	1,239	1,442	939	12,190
Cumulative net
claims paid	(3,076)	(576)	(560)	(616)	(719)	(864)	(770)	(662)	(826)	(971)	(395)	(10,035)
Net undiscounted
best estimate
liabilities	114	13	17	19	74	80	180	230	413	471	544	2,155
Risk adjustment
(undiscounted)												172
Effect of discounting												(365)
Net claims
liabilities												1,962
Ancillary claims
liabilities and expenses												88
UK Motor Net
liabilities for incurred claims												2,050
UK Non-motor
(core)
At end of year one				7	6	20	18	16	16	43	68
At end of year two			10	14	22	34	25	12	41	94
At end of year three		5	10	12	24	33	31	19	36
At end of year four		6	9	12	22	37	30	18
At end of year five		6	9	12	24	37	29
At end of year six		6	8	12	24	36
At end of year seven		6	9	12	24
At end of year eight		6	9	13
At end of year nine		6	9
Ten years later		6
Net best estimates
of undiscounted
claims	2	6	9	13	24	36	29	18	36	94	68	335
Cumulative net
claims paid	(2)	(6)	(9)	(13)	(23)	(34)	(28)	(16)	(28)	(87)	(55)	(301)

Financial Statements

265

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

							Financial year ended 31 December 2023
	2013 &	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	To t a l
Underwriting year	prior	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Net undiscounted
best estimate
liabilities	–	–	–	–	1	2	1	2	8	7	13	34
Risk adjustment
(undiscounted)												6
Effect of discounting												(2)
Net claims
liabilities												38
Ancillary claims
liabilities
and expenses												8
UK Non-motor
Net liabilities for incurred claims												46
International
Insurance
At end of year one						61	79	83	100	114	140
At end of year two					85	120	129	145	185	218
At end of year three				115	97	117	129	144	187
At end of year four			92	132	96	119	130	144
At end of year five		71	82	131	101	119	123
At end of year six		76	83	86	101	115
At end of year seven		77	70	86	99
At end of year eight		47	70	85
At end of year nine		46	83
Ten years later		52
Net best estimates
of undiscounted
claims	295	52	83	85	99	115	123	144	187	218	140	1,541
Cumulative net
claims paid	(298)	(51)	(68)	(83)	(95)	(109)	(114)	(129)	(163)	(223)	(100)	(1,433)
Net undiscounted
best estimate
liabilities	(3)	1	15	2	4	6	9	15	24	(5)	40	108
Risk adjustment
(undiscounted)												24
Effect of discounting												(20)
Net claims
liabilities												112
Ancillary claims
liabilities and expenses												27
International
Insurance net
liabilities for incurred claims												139

5. Insurance service result continued

266 Financial Statements266

Admiral Group plc Annual Report and Accounts 2023

(v) UK Motor loss ratios and changes to liabilities for incurred claims

The table below shows the development of UK Motor Insurance loss ratios for the past three financial periods, presented on an

underwriting year basis, both using undiscounted amounts (i.e. cashflows) and discounted amounts.

UK Motor Insurance loss ratio development –		31 December
undiscounted, gross net of excess of loss reinsurance	2021	2022	2023
Underwriting year
2018	73%	68%	65%
2019	73%	71%	67%
2020	68%	65%	58%
2021	95%	91%	86%
2022	–	104%	96%
2023	–	–	94%

* Booked undiscounted loss ratios presented from the transition date of IFRS 17 (1 January 2022) onwards.

		31 December
UK Motor Insurance loss ratio development –
discounted*, gross net of excess of loss reinsurance	2021	2022	2023
Underwriting year
2018	71%	67%	64%
2019	71%	69%	65%
2020	67%	63%	57%
2021	92%	86%	81%
2022	–	97%	88%
2023	–	–	86%

* Loss ratios using discounted locked-in curves, excluding finance expenses are presented from the transition date of IFRS 17 (1 January 2022) onwards.

The following table analyses the impact of movements in changes to liabilities from incurred claims by underwriting year on a gross and

net of excess of loss reinsurance basis for UK Motor.

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Gross
Underwriting year
2018 & prior	91.5	262.4
2019	61.4	34.3
2020	98.2	84.4
2021	76.4	56.1
2022	79.4	–
2023	–	–
Total UK Motor gross changes to liabilities for incurred claims	406.9	437.2
Net
Underwriting year
2018 & prior	80.6	187.2
2019	65.0	29.0
2020	97.7	62.8
2021	80.1	48.2
2022	69.4	–
2023	–	–
Total UK Motor net of excess of loss changes to liabilities for incurred claims	392.8	327.2

Financial Statements

267

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

6. Investment income and finance costs

6a. Accounting policies

i) Financial assets

Classification and measurement

The classification and subsequent measurement of the financial asset under IFRS 9 depends on:

a. The Group’s business model for managing the financial assets, and

b. The contractual cashflow characteristics of the financial asset.

Based on these factors, the financial asset is classified into one of the following categories:

Amortised cost

These comprise assets which are held in order to collect contractual cashflows and the contractual terms of the financial asset give

rise to cashflows which are solely payments of principal and interest on the principal amount outstanding (SPPI), where the asset is not

designated as fair value through profit or loss (FVTPL).

For the Group, these include deposits with credit institutions, cash and cash equivalents, insurance receivables, trade and other

receivables and loans and advances to customers.

The interest income generated from these assets is included in investment returns, with the exception of loans and advances to

customers and cash and cash equivalents relating to the loans business, where the interest receivable is recognised in interest income.

Fair value through Other Comprehensive Income (FVOCI)

These comprise assets which are held both to collect contractual cashflows and to sell the asset, where the contractual terms of the

financial asset give rise to cashflows which are solely payments of principal and interest on the principal amount outstanding (SPPI),

where the asset is not designated as FVTPL.

For the Group, these assets include corporate, government and private debt securities. These assets are held to match policyholder

liabilities or interest on debt liabilities. If sold before maturity, gains or losses on these assets impact the consolidated Income Statement.

In addition, IFRS 9 allows an irrevocable election at initial recognition to designate equity investments at FVOCI that otherwise would be

held at FVTPL, provided these are not held for trading. The Group has made this election for certain investments which are not held for

trading and are strategic investments to be designated as being reported through FVOCI.

Movements in the carrying amount are taken through OCI, with the exception of recognition of impairment gains or losses, interest

revenue, dividend income and foreign exchange gains or losses which are recognised in profit or loss.

A gain or loss on disposal of an investment measured at FVOCI is presented within investment return in the period in which it arises.

Fair value through profit or loss (FVTPL)

These are assets which do not meet the criteria for amortised cost or FVOCI, or which are designated as FVTPL.

For the Group these assets include liquidity funds investing in short duration assets, other funds and derivative financial instruments.

The regulatory capital within the Group is used to invest in these instruments in addition to any surplus funds which may be held.

Buying and selling activity occurs depending on timing of different cashflows.

Impairment

The expected credit loss model (ECL) is used to calculate any impairment to be recognised for all assets measured at amortised cost,

as well as financial investments measured at FVOCI. The general approach, which utilises the three-stage model, is used for loans and

advances to customers (see note 7) whilst impairment for the remaining assets is measured using the simplified approach.

This simplified approach is based on an assessment made based on an external credit rating agency or an assessment from the Group’s

external asset managers, to assess whether there has been a significant increase in credit risk, combined with other external data

as follows:

• Financial assets in stage 1 are those where the credit risk has not increased significantly since initial recognition. A 12-month ECL is

recognised. To determine the default rate, the average of external rates using Standard & Poor and Moody’s is used, together with

consideration of any overlay based on qualitative criteria

• Financial assets in stage 2 are those where credit risk has increased significantly since initial recognition, with the provision reflecting

a lifetime loss. A significant increase in credit risk is defined as public assets that are downgraded outside of investment grade, or for

a bond purchased at sub-investment grade, a fall in of a full credit banding i.e. BB to B; and private assets which have been flagged on

watchlists for significant credit deterioration. For assets in stage 2, the lifetime credit loss is calculated by multiplying the default rate

by the number of years from maturity. For assets in stage 1 and stage 2, a recovery rate is also applied to the loss given default, based

on an average of a number of external and internal sources.

• Financial assets in stage 3 are credit impaired, which typically occurs when the asset has defaulted, restructured or is not expected to

return full proceeds. Each asset in this category is reviewed to assess the recoverable amount based on the information available .

268 Financial Statements268

Admiral Group plc Annual Report and Accounts 2023

The credit rating of all assets is regularly monitored. As at the year-end reporting date, the majority of financial assets are of investment

grade and considered low risk under IFRS 9. These therefore remain within stage 1 and a 12-month expected loss is used to calculate the

impairment provision required.

The impairment provision at 31 December 2023 is £6.9 million (£9.4 million at 31 December 2022).

The calculated impairment loss within the fair value is recognised through the Income Statement whilst fair value movements are

recognised in Other Comprehensive Income.

Given there is no material change in the credit quality or type of financial assets in the year and the movement in provision is immaterial,

no further disclosure has been made.

Derecognition

A financial asset is derecognised when the rights to receive cashflows from that asset have expired, or when the Group transfers the asset

and all the attached substantial risks and rewards relating to the asset to a third party .

ii) Financial liabilities

Classification and subsequent measurement

All financial liabilities are classified as subsequently measured at amortised cost using the effective interest method, except for

derivatives that are classified at fair value through profit or loss and subsequently measured at fair value.

Movements in the amortised cost are recognised through the Income Statement.

Derecognition

A financial liability is derecognised when the obligation under that liability is discharged, cancelled or expires.

iii) Investment return and finance costs

Investment return from financial assets comprises distributions as well as net realised and unrealised gains on financial assets classified as

FVTPL, interest income and net realised gains from financial assets classified as FVOCI, and interest income from financial assets classified

as amortised cost.

Finance costs from financial liabilities comprise interest expense on subordinated notes, loan backed securities, credit facilities and

lease liabilities, calculated using the effective interest rate method. The effective interest rate method calculates the amortised cost

of a financial asset or liability (or group of financial assets or financial liabilities) and allocates the interest income or expense over the

expected life of the asset or liability .

6b. Investment return

		31 December 2023			31 December 2022
		£m			£m
	At EIR	Other	Total	At EIR	Other	Total
Investment return
On assets classified as FVTPL	–	43.3	43.3	–	8.4	8.4
On assets classified as FVOCI	77.0	(3.6)	73.4	50.3	2.3	52.6
On assets classified as amortised costs	4.1	–	4.1	2.0	–	2.0
Net unrealised losses
Unrealised (loss) / gain on forward
contracts	–	(0.2)	(0.2)	–	0.5	0.5
Share of associate profit/ loss	–	(1.3)	(1.3)	–	(0.1)	(0.1)
Interest receivable on cash and cash
equivalents	–	3.6	3.6	–	1.2	1.2
Total investment and interest income	81.1	41.8	122.9	52.3	12.3	64.6

*1*3

*1. Interest received during the year was £76.8 million (2022: £58.7 million).

*2. Total investment return excludes £3.2 million of intra-group interest (2022: £2.2 million).

*3. Realised losses on sales of debt securities classified as FVOCI are £0.9 million (2022: £2.2 million gain) .

Financial Statements

269

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

6. Investment income and finance costs continued

6c. Finance costs

	31 December 2023	31 December 2022
	£m	£m
Interest payable on subordinated loan notes and other credit facilities	18.5	11.5
Interest payable on lease liabilities	2.0	2.0
Interest recoverable from co and re-insurers	(0.4)	(1.5)
Total finance costs	20.1	12.0

*1*2

*1. Interest paid during the year was £20.5 million (2022: £13.4 million).

*2. See note 7e for details of credit facilities.

Finance costs represent interest payable on the £305.1 million (2022: £200.0 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.

6d. Expected credit losses

		31 December 2023	31 December 2022
	Note	£m	£m
Expected credit (gains)/losses on financial investments	6f	(2.5)	(1.8)
Expected credit losses on loans and advances to customers	7b	33.5	20.7
Total expense for expected credit losses		31.0	18.9

*1. Includes £15.0 million (2022: £7.2 million) of write offs, with total movement in the expected credit loss provision being £33.5 million (2022: £20.7 million).

See note 6a and note 7b for details of the impairment methodology.

270 Financial Statements270

Admiral Group plc Annual Report and Accounts 2023

6e. Financial assets and liabilities

The Group’s financial assets and liabilities can be analysed as follows:

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Financial investments measured at FVTPL
Money market funds	587.5	706.5
Other funds	301.3	188.8
Derivative financial instruments	17.6	33.0
Equity Investments (designated FVTPL)	12.4	6.4
	918.8	934.7
Financial investments classified as FVOCI
Corporate debt securities	2,040.6	1,701.2
Government debt securities	519.6	479.8
Private debt securities	242.7	166.6
	2,802.9	2,347.6
Equity investments (designated FVOCI)	23.0	25.1
	2,825.9	2,372.7
Financial assets measured at amortised cost
Deposits with credit institutions	116.7	101.4
Investment in Associates	1.0	2.4
Total financial investments	3,862.4	3,411.2
Other financial assets (measured at amortised cost)
Insurance receivables	272.7	187.6
Trade and other receivables	75.0	87.6
Insurance and other receivables	347.7	275.2
Loans and advances to customers (note 7)	879.4	823.9
Cash and cash equivalents	353.1	297.0
Total financial assets	5,442.6	4,807.3
Financial liabilities
Subordinated notes	315.2	204.4
Loan backed securities	759.6	714.7
Other borrowings	55.0	20.0
Derivative financial instruments	–	–
Subordinated and other financial liabilities	1,129.8	939.1
Trade and other payables	305.8	254.9
Lease liabilities	81.2	88.5
Total financial liabilities	1,516.8	1,282.5

*1. Other funds include fixed income securities recognised as fair value through profit and loss .

Financial Statements

271

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

6. Investment income and finance costs continued

6f. Fair value measurement

IFRS 13 requires assets and liabilities that are held at fair value to be classified according to a hierarchy which reflects the observability of

significant market inputs, based on three levels. The Group policy is to recognise transfer between fair value hierarchy levels as at the end

of the reporting period. There were no transfers between fair value hierarchy levels in the reporting period (2022: none).

The table below shows how the financial assets held at fair value have been measured using the fair value hierarchy:

	31 December 2023		31 December 2022
	FVTPL	FVOCI	FVTPL	FVOCI
	£m	£m	£m	£m
Level one (quoted prices in active markets)	888.8	2,560.1	900.2	2,180.9
Level two (use of observable inputs)	17.6	–	28.1	–
Level three (use of significant unobservable inputs)	12.4	265.8	6.4	191.8
Total	918.8	2,825.9	934.7	2,372.7

*1. Gains through the Income Statement are recognised within Investment return. See note 6b for further information.

Fair value measurement using significant unobservable inputs (level three)

Level three investments consist of debt securities and equity securities.

Debt securities are comprised primarily of investments in debt funds which are valued at the proportion of the Group’s holding of the

Net Asset Value (NAV) reported by the investment vehicle. These include funds that invest in corporate direct lending, residential and

commercial mortgages, and other private debt. In addition, there is a small allocation of privately placed bonds which do not trade on

active markets, these are valued using discounted cash-flow models designed to appropriately reflect the credit and illiquidity of these

instruments; these valuations are performed by the external fund managers. The key unobservable input across private debt securities is

the discount rate which is based on the credit performance of the assets. A deterioration of the credit performance or expected future

performance will result in higher discount rates and lower values.

Equity securities are primarily comprised of investments in Private Equity and Infrastructure Equity funds, which are valued at the

proportion of the Group’s holding of the NAV reported by the investment vehicle. These are based on several unobservable inputs

including market multiples and cashflow forecasts.

There were no significant inter-relationships between unobservable inputs that materially affect fair values.

The table below presents the movement in the period relating to financial instruments valued using a level three valuation:

		31 December 2023
	Equity Securities	Debt Securities	To t a l
Level Three Investments	£m	£m	£m
Balance as at 1 January 2023	31.6	166.6	198.2
Gains / (losses) recognised in IS	(0.1)	10.0	9.9
Gains / (losses) recognised in OCI	(1.0)	0.8	(0.2)
Purchases	6.1	89.6	95.7
Disposals	(1.1)	(24.3)	(25.4)
Balance as at 31 December 2023	35.5	242.7	278.2

		31 December 2022
	Equity Securities	Debt Securities	To t a l
Level Three Investments	£m	£m	£m
Balance as at 1 January 2022	21.5	125.5	147.0
Gains / (losses) recognised in IS	1.8	3.9	5.7
Gains / (losses) recognised in OCI	1.1	(9.6)	(8.5)
Purchases	9.4	74.4	83.8
Disposals	(2.5)	(27.6)	(30.1)
Translation differences	0.3	–	0.3
Balance as at 31 December 2022	31.6	166.6	198.2

272 Financial Statements272

Admiral Group plc Annual Report and Accounts 2023

6g. Cash and cash equivalents

	31 December 2023	31 December 2022
	£m	£m
Cash at bank and in hand	353.1	297.0
Total cash and cash equivalents	353.1	297.0

*1 Cash at bank and in hand includes £38.9 million (2022: £36.6 million) related to special purpose entities which is not available for use by the Group.

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.

An assessment has been completed for impairment purposes in line with that set out in note 6a above. Given the short-term duration of

these assets and low risk of these assets, no impairment provision has been recognised.

For cash at bank and cash deposits and other receivables, the fair value approximates to the book value due to their short maturity.

6h. Other assets

Insurance and other receivables

	31 December 2023	31 December 2022
	£m	£m
Insurance receivables	272.7	187.6
Trade and other receivables	75.0	87.6
Prepayments and accrued income	62.2	41.2
Total insurance and other receivables	409.9	316.4

Insurance receivables

Insurance receivables are measured at historic cost. Given that non-repayment would result in a withdrawn policy and the short-term

duration of these assets, no bad debt provision has been recognised.

Insurance receivables reported within other receivables are comprised of the external coinsurer’s share of premium receivable, with the

related liability in respect of written premium presented within amounts owed to the coinsurer.

Trade and other receivables

Classification. Trade and other receivables are measured at amortised cost, being made up of multiple types of receivable balances.

Impairment. Where a provision is required for these receivables, it is calculated in line with the simplified method for trade receivables

per IFRS 9, whereby lifetime expected credit losses are recognised irrelevant of the credit risk. In this case, the provision is based on a

combination of

(i) Aged debtor analysis

(ii) Historic experience of write offs for each receivable

(iii) Any specific indicators of credit deterioration observed, and

(iv) Management judgement.

The level of provision is immaterial.

The amortised cost carrying amount of receivables is a reasonable approximation of fair value.

Contract balances

The following table provides information about receivables and contract assets from contracts with customers. Both balances are

included in Trade and other receivables.

	31 December 2023	31 December 2022
	£m	£m
Receivables	14.9	20.0
Contract assets	17.0	19.3

The contract asset relates to the Group’s right to consideration for work undertaken in the law companies on behalf of clients which is

ongoing or where the final fee has not yet been billed. The contract asset is transferred to trade receivables once the fee has been billed.

Financial Statements

273

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

6. Investment income and finance costs continued

Significant changes in the contract asset balance during the period are as follows:

	31 December 2023
Contract asset balance	£m
At 1 January 2022	23.8
Revenue recognised	16.3
Transferred to trade receivables	(20.2)
Write offs	(0.6)
At 31 December 2022	19.3
Revenue recognised	18.9
Transferred to trade receivables	(20.6)
Write offs	(0.6)
At 31 December 2023	17.0

The amount of revenue recognised in 2023 from performance obligations satisfied (or partially satisfied) in previous periods in relation to

the above contract balances is £nil (2022: £nil).

6i. Financial and lease liabilities

			31 December 2023
	Subordinated	Loan backed	Other borrowings	Lease
	notes	securities	and derivatives	liabilities	To t a l
	£m	£m	£m	£m	£m
Financial liability at the start of the period	204.4	714.7	20.0	88.5	1,027.6
Interest payable per Income Statement	17.5	40.6	5.4	2.0	65.5
Cashflows	94.2	4.3	29.6	(10.7)	117.4
Other foreign exchange and non-cash
movements	(0.9)	–	–	1.4	0.5
Financial liability at the end of the period	315.2	759.6	55.0	81.2	1,211.0

*1. Cash amounts relating to the interest proportion of the lease liability were £1.9 million.

			31 December 2022
	Subordinated	Loan backed	Other borrowings	Lease
	notes	securities	and derivatives	liabilities	To t a l
	£m	£m	£m	£m	£m
Financial liability at the start of the period	204.4	446.5	20.0	105.3	776.2
Interest payable per Income Statement	11.0	11.7	1.3	2.0	26.0
Cashflows	(11.0)	256.5	(0.9)	(11.3)	233.3
Other foreign exchange and non-cash
movements	–	–	(0.4)	(7.5)	(7.9)
Financial liability at the end of the period	204.4	714.7	20.0	88.5	1,027.6

*1. Cash amounts relating to the interest proportion of the lease liability were £2.1 million.

Subordinated notes

Financial liabilities are inclusive of two separate issuances of subordinated notes totalling £305.1 million. The first subordinated notes

were issued on 25 July 2014 at a fixed rate of 5.5% per annum and a total value of £200 million. In July 2023 these notes were tendered

with a take-up of 72.45%, with the remaining amount retaining the original redemption date of 25 July 2024.

The second subordinated notes were issued on 6 July 2023 at a fixed rate of 8.5% per annum, with a total value of £250 million and a

redemption date of 6 January 2034 (subject to various provisions of the terms and conditions governing the notes).

The notes are unsecured subordinated obligations of the Group and rank pari passu without any preference among themselves. In the

event of a winding-up or bankruptcy, they are to be repaid only after the claims of all other senior creditors have been met.

There have been no defaults on any of the notes during the year. The Group has the requirement to defer interest payments on the notes

in certain circumstances but to date none of these circumstances has arisen.

The fair value of subordinated notes (level one valuation based on quoted prices in active markets) at 31 December 2023 is £329.8 million

(2022: £196.4 million).

274 Financial Statements274

Admiral Group plc Annual Report and Accounts 2023

Other borrowings

The Group holds various revolving credit facilities including a £300.0 million facility which expires in April 2026, a £20.0 million facility

which expires in August 2024 and a €100.0 million facility which expires in August 2024. As at 31 December 2023 £55.0 million was

drawn under these facilities (2022: £20.0 million), which is shown within other borrowings in the table above. This is made up of

£35.0 million from the facility expiring April 2026 (2022: £nil) and £20.0 million from the pound sterling facility expiring August 2024

(2022: £20.0 million).

The carrying value is a reasonable approximation of fair value.

Loan backed securities

Asset backed senior loan note facilities of £1,000.0 million have been established in relation to the Admiral Money business (see note

2 for details of the accounting treatment of SPEs). As at the year end, £759.6 million (2022: £714.7 million) of these facilities had

been utilised.

The carrying value is a reasonable approximation of fair value.

Lease liabilities

The Group leases various properties, with rental contracts typically for fixed periods of 5 to 25 years although these may have extension

options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease

agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

For each lease, a right-of-use asset and corresponding lease liability is recognised at the date at which the leased asset becomes available

for use by the Group.

The lease liability is initially measured at the present value of remaining lease payments, which include the following:

• Fixed payments (including in-substance fixed payments), less any lease incentives receivable

• Variable lease payments that are based on an index or a rate

• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s

incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of

a similar value in a similar economic environment, with similar terms and conditions. Generally, the Group uses its incremental borrowing

rate as the discount rate.

Subsequently, lease payments are allocated to the lease liability, split between repayments of principal and interest. A finance cost is

charged to the profit and loss so as to produce a constant period rate of interest on the remaining balance of the lease liability.

Whereby a change in lease term is identified, the lease liability is recalculated based on the present value of the remaining

lease payments.

Financial Statements

275

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

7. Loans and Advances to Customers

7a. Accounting policies

Loans and advances to customers consist of unsecured personal loans and car finance products.

Classification

Loans and advances to customers are measured at amortised cost. This is because assets are held in order to collect contractual cashflows

and the contractual terms of the financial asset demand cash inflows which are solely payments of principal and interest on the principal

amount outstanding.

Interest income and expense

Interest income received in relation to loans and advances to customers is calculated using the effective interest method which

allocates interest, direct and incremental fees and costs over the expected lives of the assets and liabilities. There has been no change in

recognition of interest income from the comparative period.

Interest expense is calculated using the process appropriate to each source of funding, which is not linked to individual accounts.

Finance leases

Included within loans and advances to customers are personal contract purchase (PCP) and hire purchase (HP) arrangements which are

classified as finance leases under IFRS 16. A receivable equal to the net investment in the lease has been recognised. The net investment

is equal to the gross investment in the lease discounted at the rate implicit in the lease.

Lease interest income is recognised within interest income in the Income Statement over the term of the lease using the effective

interest rate method.

The title to the underlying vehicle remains with the Group until the lessee has made all contractual payments, at which point ownership

is transferred to the lessee. In the event of breach of contract, such as non-payment, the vehicle itself acts as collateral for the finance

lease, becoming available for repossession in most cases.

Some of the ways in which the Group maintains its rights to the vehicle, and thus manages the risk of loss associated with the finance

lease, include:

• The Group does not enter into any finance leases with a maximum loan-to-value limit, reducing the risk of shortfall on termination of

the contract

• The Group requires the lessee to insure the underlying vehicle at all times, reducing the risk of non-recovery if the asset is stolen

or destroyed

• The estimated future value of each vehicle, which is sourced externally, is considered in the pricing of the lease contracts to provide

protection against deterioration in that value.

7b. Loans and advances to customers

	31 December 2023	31 December 2022
	£m	£m
Loans and advances to customers – gross carrying amount	956.8	887.4
Loans and advances to customers – provision	(81.7)	(63.7)
Total loans and advances to customers – Admiral Money	875.1	823.7
Total loans and advances to customers – Other	4.3	0.2
Total loans and advances to customers	879.4	823.9

Loans and advances to customers are comprised of the following:

	31 December 2023	31 December 2022
	£m	£m
Unsecured personal loans	937.7	855.8
Finance leases	19.1	31.6
Other	4.4	0.2
Total loans and advances to customers, gross	961.2	887.6

276 Financial Statements276

Admiral Group plc Annual Report and Accounts 2023

Fair value measurement

The loans and advances are recognised at fair value at the point of origination and then subsequently on an amortised cost basis.

This carrying value is deemed a reasonable approximation of fair value, which is calculated based on estimates using the present value of

future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

Expected credit losses

The expected credit loss model is a three-stage model based on forward looking information regarding changes in the credit quality since

origination. Credit risk is measured using a Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD) defined

as follows:

• Probability of Default (PD): The likelihood of an account defaulting; calibrated through analysis of historic customer behaviour.

Where customers have already met the definition of default this is 100%. For customers that are not in default the PD is determined

through analysis of historic default data using external and internal data sources available at the reporting date.

• Exposure at Default (EAD): The amount of balance at the time of default. For loans that are in arrears the EAD is taken as the current

balance plus any expected interest arrears. For up-to-date loans the EAD is calculated as the expected balance 3 months prior to each

period, plus 3 months of interest arrears to account for the time it takes to default following falling into arrears.

• Loss Given Default (LGD): The amount of the asset not recovered following a borrower’s default, determined through analysis of

historic recovery performance.

The PD is applied to the EAD to calculate the expected loss excluding recoveries. The LGD is then applied to this loss to calculate the total

expected loss including recoveries. A forward-looking provision is also calculated, as set out later in this note.

Loan assets are segmented into three stages of credit impairment:

• Stage 1 – no significant increase in credit risk of the financial asset since inception;

• Stage 2 – significant increase in credit risk of the financial asset since inception;

• Stage 3 – financial asset is credit impaired.

For assets in stage 1, the allowance is calculated as the expected credit losses from events within 12 months after the reporting date.

For assets in stages 2 and 3 the allowance is calculated as the expected credit loss from events in the remaining lifetime of each asset.

The allowance is calculated for each loan at an individual level.

Significant increase in credit risk (SICR) (stage 2)

As explained above, stage 1 assets have an ECL allowing for losses in the next twelve months, and stage 2 or 3 assets have an ECL allowing

for losses over the remaining lifetime of the contract. An asset moves to stage 2 when its credit risk has increased significantly since initial

recognition. IFRS 9 does not prescribe a definition of significant increase in credit risk but does include a rebuttable presumption that this

does occur for loan assets which are 30 days past due (which the Group does not rebut).

The Group has deemed a significant increase in credit risk to have occurred where:

• The loan is in arrears, or

• The behavioural PD has moved outside a specified threshold from the application PD

• The customer is identified as being two or more payments in arrears on a credit product with a third party and reported to the credit

reference agency.

The Group maintains two probation periods:

• Where a customer is up to date but previously has been 30+ days past due they will be held in stage 2 for 6 months;

• Where a customer is up to date but previously Credit impaired (stage 3) they will be held in stage 2 for 12 months.

A range of metrics including accuracy rates, false positive rates, oscillation rates and the Mathews corelation are monitored in relation to

loans which are held in the above probation periods.

Credit impaired (stage 3)

The Group does not rebut the presumption within IFRS 9 that default has occurred when an exposure is greater than 90 days past due,

which is consistent with a customer being three or more payments in arrears. In addition, a loan is deemed to be credit impaired where:

• There is an Individual Voluntary Arrangement (IVA) agreement confirmed or proposed, or

• Customer has started or progressed bankruptcy action, or

• A repayment plan is in place, or

• A customer is deceased.

As at 31 December 2023, there were 7,300 loans totalling £40.1m that were subject to forbearance (2022: 4,400 loans totalling

£21.5m). Significant categories of forbearance arrangements include Bankruptcy, Debt Management Plans and Individual

Voluntary Arrangements.

Financial Statements

277

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

7. Loans and Advances to Customers continued

Judgements required - Post Model Adjustments (‘PMA’s)

As at 31 December 2023, the expected credit loss allowance included PMAs totalling £9.2 million (2022: £11.3 million).

	31 December 2023	31 December 2022
Post Model Adjustments	£m	£m
Model performance	2.0	3.9
Cost of Living	6.5	6.5
Economic scenarios	0.7	0.9
	9.2	11.3

PMAs are calculated using management judgement and analysis. The key categories of PMAs are as follows:

Model performance

The model has been calibrated on historical data that may not fully reflect the risk of losses in the recent and ongoing, highly volatile

macro-economic period. In addition, interest rate rises in 2023 have created the potential for performance uncertainty. For this reason

a Model Performance PMA has been made. It effectively recalibrates the modelled probability of default of the loans to reflect recent

monitored performance. A refresh of the PD model during 2023 has reduced the PMA in comparison to the previous year end.

Cost of Living

This PMA captures the risk of customers falling into a negative affordability position, whereby customers are no longer able to meet their

credit commitments due to higher expenditure driven by higher prices and increased mortgage payments, when their standard variable

or fixed term rate comes to an end. A PMA is held to acknowledge this, using both external and internal data.

Economic scenarios

An uncertainty factor determined by management judgment has been added to reflect the recent volatility in unemployment forecasts.

This factor has been reduced as variability between successive forecasts has fallen.

Write off policy

Loans are written off where there is no reasonable expectation of recovery. The Group’s policy is to write off balances to their

estimated net realisable value. Write offs are actioned on a case-by-case basis taking into account the operational position and the

collections strategy.

Forward-looking information

Under IFRS 9 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 analysis.

Management judgment has been used to define the weighting and severity of the different scenarios based on available data.

The key economic driver of credit losses from the scenarios is the likelihood of a customer entering hardship through unemployment.

Unemployment forecasts include a risk grade split of 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

31 December 2023.

	31 December 2023		31 December 2022
	Scenario peak		Scenario peak
	Unemployment	31 December 2023	Unemployment	31 December 2022
	rate	Weighting	rate	Weighting
Base	4.7%	50%	4.8%	40%
Upturn	3.5%	10%	3.5%	10%
Downturn	6.0%	30%	6.0%	40%
Severe	8.0%	10%	7.9%	10%

The economic scenarios and forecasts have been updated in conjunction with a third party economics provider. The probability

weightings reflect the view that there is a probability of 90% attached to recessionary outcomes.

278 Financial Statements278

Admiral Group plc Annual Report and Accounts 2023

Sensitivities to key areas of estimation uncertainty

The key areas of estimation uncertainty identified, as per note 3 to the financial statements, are in the PD and the forward-

looking scenarios.

		31 December 2023		31 December 2022
	31 December 2023	Sensitivity	31 December 2022	Sensitivity
	Weighting	£m	Weighting	£m
Base	50%	(1.1)	40%	(1.3)
Upturn	10%	(5.2)	10%	(6.9)
Downturn	30%	2.5	40%	1.4
Severe	10%	8.2	10%	5.7

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 31 December 2023 the implied weighted peak unemployment rate is 5.2%: the table

shows that in a downturn scenario with a 6.0% peak unemployment rate the provision would increase by £2.5 million, whilst the upturn

would reduce the provision by £5.2 million, base case reduce by £1.1 million and severe increase the provision by £8.2 million.

Stage 1 assets represent 81% of the total loan assets; 0.1% increase in the stage 1 PD, i.e. from 2.2% to 2.3% would result in a £0.6 million

increase in ECL.

Amounts arising from ECL: loans and advances to customers

The following table sets out information about the credit quality of the loans and advances to customers measured at amortised cost.

Credit grades are used to segment customers by apparent credit risk at the time of acquisition. Higher grades are the lowest credit risk

with each subsequent grade increasing in expected credit risk. The Group does not have any purchased or originated credit impaired

assets. These tables are inclusive of the finance lease assets which are held by the Group, further analysis of these balances can be found

in note 7c.

All probability of default figures included in this paragraph allow for forward-looking information, i.e. the PDs are a weighted average from

the economic scenarios considered and relate to the Admiral Money consumer lending business. The average probability of default in

for stage 1 assets is 2.2% (2022: 2.7%) reflecting the expectation of defaults within 12 months of the reporting date. The average PD for

assets in stage 2 is 36.8% (2022: 36.6%) reflecting expected losses over the remaining life of the assets. The PD for assets in stage 3 is

100% (2022: 100%) as these assets are deemed to have defaulted.

				31 December 2023	31 December 2022
	Stage 1	Stage 2	Stage 3
	12- month ECL	Lifetime ECL	Lifetime ECL	To t a l	To t a l
	£m	£m	£m	£m	£m
Credit Grade
Higher	566.0	83.3	–	649.3	600.2
Medium	155.8	30.8	–	186.6	200.0
Lower	53.6	11.8	–	65.4	53.2
Credit impaired	–	–	55.5	55.5	34.0
Gross carrying amount	775.4	125.9	55.5	956.8	887.4
Expected credit loss allowance	(12.8)	(29.1)	(39.2)	(81.1)	(63.1)
Other loss allowance	(0.5)	(0.1)	–	(0.6)	(0.6)
Carrying amount – Admiral Money	762.1	96.7	16.3	875.1	823.7
Carrying amount – Other	4.3	–	–	4.3	0.2
Carrying amount	766.4	96.7	16.3	879.4	823.9

*1. Credit grade is the internal credit banding given to a customer at origination. This is based on external credit rating information.

*2 Other loss allowance covers losses due to a reduction in current or future vehicle value or costs associated with recovery and sale of vehicles and those as a result of changes in the performance of

.the EIR asset.

Financial Statements

279

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

7. Loans and Advances to Customers continued

The following tables reconcile the opening and closing gross carrying amount and expected credit loss allowance. Loans originated in the

year are initially classified as Stage 1. In the following tables, the loans are presented in line with their staging as at each year end.

	Stage 1	Stage 2	Stage 3
	12- month ECL	Lifetime ECL	Lifetime ECL	To t a l
2023	£m	£m	£m	£m
Gross carrying amount as at 1 January 2023	728.3	125.3	34.0	887.6
Transfers
Transfers from stage 1 to stage 2	(60.2)	60.2	–	–
Transfers from stage 1 to stage 3	(19.4)	–	19.4	–
Transfers from stage 2 to stage 1	51.7	(51.7)	–	–
Transfers from stage 2 to stage 3	–	(10.8)	10.8	–
Transfers from stage 3 to stage 1	0.3	–	(0.3)	–
Transfers from stage 3 to stage 2	–	0.8	(0.8)	–
Principal redemption payments	(315.0)	(48.8)	(5.5)	(369.3)
Write offs	–	–	(15.6)	(15.6)
EIR adjustment	0.3	0.2	0.2	0.7
New financial assets originated or purchased	393.6	50.8	13.4	457.8
Gross carrying amount as at 31 December 2023	779.6	126.0	55.6	961.2

Of the amounts written off during the year, £8.3m related to loans which were still subject to enforcement activity (2022: £NIL). The loss

allowance in place in relation to these loans at the time of writing off totalled £7.9m (2022: £NIL).

280 Financial Statements280

Admiral Group plc Annual Report and Accounts 2023

The EIR adjustment represents incremental acquisition costs incurred when advancing loans. These costs are spread over the expected

economic lives of the loans under the effective interest rate method.

	Stage 1	Stage 2	Stage 3
	12- month ECL	Lifetime ECL	Lifetime ECL	To t a l
2022	£m	£m	£m	£m
Gross carrying amount as at 1 January 2022	510.6	68.4	28.0	607.0
Transfers
Transfers from stage 1 to stage 2	(62.6)	62.6	–	–
Transfers from stage 1 to stage 3	(9.4)	–	9.4	–
Transfers from stage 2 to stage 1	25.3	(25.3)	–	–
Transfers from stage 2 to stage 3	–	(4.2)	4.2	–
Transfers from stage 3 to stage 1	0.2	–	(0.2)	–
Transfers from stage 3 to stage 2	–	0.4	(0.4)	–
Principal redemption payments	(235.3)	(39.9)	(5.9)	(281.1)
Write offs	–	–	(7.2)	(7.2)
EIR adjustment	3.4	0.4	–	3.8
New financial assets originated or purchased	496.1	62.9	6.1	565.1
Gross carrying amount as at 31 December 2022	728.3	125.3	34.0	887.6

	Stage 1	Stage 2	Stage 3
	12- month ECL	Lifetime ECL	Lifetime ECL	To t a l
2023	£m	£m	£m	£m
Expected credit loss allowance
as at 1 January 2023	13.4	23.5	26.2	63.1
Movements with a profit and loss impact
Transfers
Transfers from stage 1 to stage 2	(1.9)	5.0	–	3.1
Transfers from stage 1 to stage 3	(0.7)	–	1.9	1.2
Transfers from stage 2 to stage 1	3.4	(7.4)	–	(4.0)
Transfers from stage 3 to stage 1	–	–	(0.1)	(0.1)
Changes in PDs/LGDs/EADs	(9.5)	(1.4)	13.6	2.7
New financial assets originated or purchased	8.0	12.5	9.8	30.3
Total net profit and loss charge in the period	(0.7)	8.7	25.2	33.2
Write offs	–	–	(15.0)	(15.0)
Transfers
Transfers from stage 2 to stage 3	–	(3.2)	3.2	–
Transfers from stage 3 to stage 2	–	0.3	(0.3)	–
Expected credit loss allowance as at 31 December 2023	12.7	29.3	39.3	81.2

Financial Statements

281

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

7. Loans and Advances to Customers continued

	Stage 1	Stage 2	Stage 3
	12- month ECL	Lifetime ECL	Lifetime ECL	To t a l
2022	£m	£m	£m	£m
Expected credit loss allowance as at 1 January 2022	13.7	12.7	23.5	49.9
Movements with a profit and loss impact
Transfers
Transfers from stage 1 to stage 2	(1.5)	4.4	–	2.9
Transfers from stage 1 to stage 3	(0.4)	–	1.0	0.6
Transfers from stage 2 to stage 1	1.8	(3.9)	–	(2.1)
Transfers from stage 3 to stage 1	–	–	(0.1)	(0.1)
Changes in PDs/LGDs/EADs	(10.1)	(2.4)	4.4	(8.1)
New financial assets originated or purchased	9.9	12.7	4.6	27.2
Total net profit and loss charge in the period	(0.3)	10.8	9.9	20.4
Write offs	–	–	(7.2)	(7.2)
Expected credit loss allowance as at 31 December 2022	13.4	23.5	26.2	63.1
Other movements with no profit and loss impact
Transfers
Transfers from stage 2 to stage 3	–	(1.3)	1.3	–
Transfers from stage 3 to stage 2	–	–	–	–

7c. Finance lease receivables

Loans and advances to customers include the following finance leases. The Group is the lessor for leases of cars

	31 December 2023	31 December 2022
	£m	£m
Gross investment in finance leases, receivable
Less than 1 year	7.0	9.8
Between 1 to 5 years	14.3	25.7
More than 5 years	–	–
	21.3	35.5
Unearned finance income	(2.2)	(4.0)
Net investment in lease receivables	19.1	31.5
Less impairment allowance	(0.3)	(0.8)
	18.8	30.7
Net investment in finance leases, receivable
Less than 1 year	5.7	7.9
Between 1 to 5 years	13.4	23.7
More than 5 years	–	–
	19.1	31.6

The net investment in finance leases shown above includes an unguaranteed residual value of £0.2 million (2022: The net investment in

finance leases shown above is net of the unguaranteed residual value of £0.3 million).

282 Financial Statements282

Admiral Group plc Annual Report and Accounts 2023

7d. Interest income

	31 December 2023	31 December 2022
	£m	£m
From loans and advances to customers	90.2	56.1
From finance leases	2.0	2.6
From bank interest	2.7	–
	94.9	58.7

Interest income receivable 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.

7e. Interest expense

	31 December 2023	31 December 2022
	£m	£m
Interest payable on loan backed securities	23.4	11.7
Interest payable on other credit facilities	3.4	0.9
Total interest expense	26.8	12.6

*1. Interest paid in total net of swaps during the year was £25.6 million (2022: £11.9 million).

8. Other revenue and co-insurer profit commission

8a. Accounting policy

(i) Composition of Other revenue and co-insurer profit commission

Other revenue falling within the scope of IFRS 15 Revenue from Contracts with Customers is generated from:

• Fee and commission revenue related to the sale of insurance contracts (see notes 2 and 5)

• Where additional fee and commission revenue is generated from the sale of insurance contracts, but that revenue separable from

the host insurance contract in accordance with the principles of IFRS 17, and the goods or services provided to the policyholder are

distinct, the revenue is recognised applying IFRS 15

• Revenue from the Group’s law firm

• Comparison income

Other revenue also includes instalment income on insurance premium paid via instalments, where it is not recognised under IFRS 17

(see notes 2 and 5) due to the income being separable from the host insurance contract. This instalment income is recognised using the

effective interest rate method, and as such is not within the scope of IFRS 15.

Co-insurer profit commission revenue falling within the scope of IFRS 15 Revenue from Contracts with Customers relates primarily to a

contractual arrangement between the Group’s insurance intermediary EUI Limited, and an external co-insurer (Great Lakes, a subsidiary

of Munich Re) which underwrites a share of the UK Car Insurance business generated by EUI Limited.

Financial Statements

283

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

8. Other revenue and co-insurer profit commission continued

(ii) Nature of goods and services

The following is a description of the principal activities within the scope of IFRS 15 from which the Group generates its other revenue.

Products and services	Nature, timing of satisfaction of performance obligations and significant payment terms
Fee and commission revenue,	The performance obligation is the provision of insurance intermediary services, at which point
including administration fees:	the performance obligation is met. Revenue is therefore recognised at a point in time, matching
where the income is separable	the Group’s provision of services. Where the Group has no remaining obligations, the revenue is
from the underlying	recognised immediately. An allowance is made for expected cancellations where the customer may
insurance contract	be entitled to a refund of amounts charged.
	Payment from revenue generated from policyholders is due immediately, or in line with direct debit
	instalments. Payments from external parties is due within 30 days of the period close.
Revenue from	The performance obligation is the pursuit of the compensation from the at fault party’s insurer
law firm	on behalf of the customer. Once the case is settled the performance obligation is fully satisfied.
	Revenue is therefore recognised over time using the expected value method. This method values
	revenue by multiplying hours incurred on open cases by a 12-month realisable rate. The realisable
	rate is a probability weighted transaction price based on settled cases. The expected value method
	therefore results in revenue recognised being constrained to that where there is a high probability of
	no significant reversal.
	Revenue is recognised over time because the Group has an enforceable right to payment for
	performance completed to date and the work performed to date has no alternative use to the Group.
	A contract asset is recognised equal to the work performed up to the balance sheet date but not yet
	billed. Refer to note 6h for further detail of this balance.
	Payment is due within 28 days of invoice.
Profit commission	Profit commission is generated if an individual year is profitable, based on the premiums written,
from co-insurers	and expenses and claims costs incurred. It is therefore a variable consideration, recognised at a
	point in time.
	The cumulative profit commission recognised is calculated in aggregate across the contract, in line
	with contract terms, based on a number of detailed inputs for each individual underwriting year, the
	most material of which are as follows:
	•	Premiums, defined as gross premiums ceded including any instalment income, less reinsurance
	premium (for excess of loss reinsurance)
	•	Insurance expenses incurred
	•	Claims costs incurred.
	Whilst the premiums and insurance expenses related to an underwriting year are typically fixed
	at the conclusion of each underwriting year and are not subject to judgement, the claims cost is
	subject to inherent uncertainty. This results in the co-insurer profit commission recognised under
	IFRS 15 being a variable amount.
	As such:
	•	The Group uses the expected value method for the initial calculation of profit commission
	revenue, based on known premiums and expenses, and the best estimate of claims costs.
	•	The variable revenue estimated using the expected value method above is constrained through
	the inclusion of the risk adjustment within the claims cost element of the calculation, with the
	profit commission recognised aligned to the IFRS 17 booked loss ratios, discounted at locked-
	in rates, and inclusive of finance expense. The inclusion of the risk adjustment constrains the
	cumulative profit commission revenue recognised to a level where there is a high probability of no
		significant reversal.
	The key methods, inputs and assumptions used to estimate the variable consideration of profit
	commission are therefore in line with those used for the calculation of claims liabilities, as set out in
	note 3 to the financial statements, with further detail also included in note 5. There are no further
	critical accounting estimates or judgements in relation to the recognition of profit commission.
Comparison	The performance obligation is the provision of insurance intermediary services, at which point the
	performance obligation is met. Revenue is therefore recognised at a point in time.

284 Financial Statements284

Admiral Group plc Annual Report and Accounts 2023

Profit commission from reinsurers is within the scope of IFRS 17, and not within the scope of IFRS 15 Revenue from Contracts with

Customers due to the nature of the income.

The adoption of IFRS 17 has resulted in a presentational change whereby a significant proportion of “Other revenue” is now recognised

under IFRS 17. The prior year comparatives have been restated from those previously reported as a result.

During the period, there has been a change in accounting estimate in relation to the calculation of co-insurer profit commission within

the scope of IFRS 15. The underwriting year loss ratio inputs to the calculation were previously based on IFRS 4 financial statement loss

ratios in line with the Group’s insurance accounting. The transition from IFRS 4 to IFRS 17 has resulted in a change to the underwriting

year loss ratio inputs to the calculation, such that the new basis of estimation results in the recognition of co-insurer profit commission

aligned to the IFRS 17 loss ratios, including risk adjustment, as set out above. The impact of the change in estimation basis in the period

and in future is not expected to have a material impact on the Group’s financial statements.

There has been no further change in revenue recognition from the restated comparative period.

8b. 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 £205.8 million (2022: £256.4 million) represents total other revenue and co-insurer profit commission

and is disaggregated into the segments included in note 4.

			31 December 2023
		International
	UK Insurance	Insurance	Admiral Money	Other	To t a l
	£m	£m	£m	£m	£m
Major products/service line
Fee and commission revenue	107.2	–	0.1	–	107.3
Revenue from law firm	18.3	–	–	–	18.3
Comparison income	–	–	–	1.6	1.6
Total other revenue	125.5	–	0.1	1.6	127.2
Profit commission from co-insurers	76.5	2.0	–	–	78.5
Total other revenue and co-insurer profit
commission	202.0	2.0	0.1	1.6	205.7
Timing of revenue recognition
Point in time	160.4	2.0	0.1	1.6	164.1
Over time	20.1	–	–	–	20.1
Revenue outside the scope of IFRS 15	21.5	–	–	–	21.5
	202.0	2.0	0.1	1.6	205.7

		31 December 2022 (restated)
		International
	UK Insurance	Insurance	Admiral Money	Other	To t a l
	£m	£m	£m	£m	£m
Major products/service line
Fee and commission revenue	104.3	–	0.3	0.2	104.8
Law firm revenue	15.8	–	–	–	15.8
Comparison income*1	–	–	–	8.3	8.3
Total other revenue	120.1	–	0.3	8.5	128.9
Profit commission from co-insurers	127.5	–	–	–	127.5
Total other revenue and co-insurer profit
commission	247.6	–	0.3	8.5	256.4
Timing of revenue recognition
Point in time	209.0	–	0.3	8.5	217.8
Over time	17.8	–	–	–	17.8
Revenue outside the scope of IFRS 15	20.8	–	–	–	20.8
	247.6	–	0.3	8.5	256.4

*1. Comparison revenue excludes £nil million (31 December 2022: £0.3 million) of income from other Group companies.

Financial Statements

285

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

8. Other revenue and co-insurer profit commission continued

Profit commission analysis

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Underwriting year
2019 & prior	48.8	105.9
2020	27.7	24.5
2021	–	–
2022	–	(2.9)
2023	–	–
Total UK motor profit commission	76.5	127.5

9. Directly attributable and other expenses

9a. Accounting policies

(i) Directly attributable insurance expenses

Directly attributable expenses are cashflows that are directly attributable to a portfolio of insurance contracts and recognised as incurred

insurance service expenses. See note 5a for details of the types of expenses recognised as directly attributable insurance expenses.

(ii) Other operating expenses

All other operating expenses are charged to the Income Statement in the period that they are incurred.

(iii) Employee benefits

As detailed in the Remuneration Committee Report, the key elements of employee remuneration are:

• Base salaries and pension contributions;

• Share based incentive plans;

• A discretionary bonus, (the ‘DFSS Bonus’), rather than an annual cash bonus, that is based on the number of DFSS awards held and

actual dividends paid out to shareholders.

Within note 9b, the charges for base salaries and pension contributions (and the related social security costs) are recognised within

Administration and acquisition expenses, Expenses relating to additional products and fees and Other expenses based on the role of

the employee.

Charges for the share-based incentive plans (and related social security costs) and discretionary bonus are included within share scheme

charges. These charges are not shown as part of the result for each reportable segment, or within the expense ratio, due to them being

materially comprised of an accounting charge in line with IFRS 2 Share-based payments which does not result in a cash payment to

employees but instead results in an issue of new shares (resulting in a dilution of existing shares).

The rules of the share schemes ensure that the actual dilution level does not exceed 10% in any rolling ten-year period.

Base salaries and pension contributions

Base salaries and the related employer social security costs are charged to the Income Statement in the period that they are incurred.

The Group contributes to defined contribution personal pension plans for its employees. The contributions payable to these schemes are

charged in the accounting period to which they relate.

Share based incentive plans and related social security costs

The Group operates a number of equity and cash settled compensation schemes for its employees, the main ones being:

• A Share Incentive Plan (SIP), which is in place for all UK employees encouraging wide share ownership across employees, and

• The Discretionary Free Share Scheme (DFSS). DFSS shares are typically awarded to managers, and for the majority of employees 50%

of the DFSS shares awarded are subject to three performance conditions being Earnings per Share growth, Return on Equity and Total

Shareholder Return vs. the FTSE 350 (excluding investment companies) over a three-year period. The other 50% are guaranteed with

continued employment.

For both schemes, employees must remain in employment three years after the award date (i.e. at the vesting date), otherwise the

shares are forfeited.

The majority of these schemes are classed as equity settled under IFRS 2, due to the employees receiving shares (rather than cash) as

consideration for the services provided.

286 Financial Statements286

Admiral Group plc Annual Report and Accounts 2023

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 Consolidated statement of changes in equity

(2023: £63.3 million; 2022: £57.3 million).

For the cash settled schemes, the expense recognised for the fair value of services received results in a corresponding increase

in liabilities.

The key drivers and assumptions used to calculate the charge for the schemes over the three year vesting period are:

• The number of shares awarded, which is set at the start of each scheme. Details of the number of shares awarded for each scheme

where shares remain unvested is set out in note 9f (iii)

• The fair value of the shares;

– For the SIP, the fair value of the shares awarded is the share price at the award date. Awards under the SIP are entitled to receive

dividends, and hence no adjustment is made to this fair value

– For the DFSS equity settled awards, awards are not eligible for dividends, although a discretionary bonus is currently paid equivalent

to the dividend that would have been paid on the shareholding, hence the fair value of the shares is revised downwards to take

account of these expected dividends

– For the DFSS cash settled awards, the fair value is based on the share price at the vesting date. The closing share price at the end of

each reporting period is used as an approximation for the closing price at the end of the vesting period.

• Employee attrition rates, which impact the ultimate number of shares that vest.

• In the case of the DFSS, the vesting rates based on the performance conditions, which also impact the ultimate number of shares

that vest.

The number of shares that have ultimately vested compared to those originally awarded is set out in note 9f(iv).

At each balance sheet date, the Group revises its assumptions on the number of shares which will ultimately vest based on the latest

forecast information for attrition rates and, for the DFSS, the extent to which the performance conditions are met.

The financial impact as a result of any change in the assumptions is recognised through the Income Statement. Any significant changes

in assumptions may therefore result in an increased/decreased charge in an accounting period as a result of this true-up of the expected

cumulative charge required.

Social security costs on share-based incentive plans

Social security costs are incurred by the Group in respect of the share-based incentive plans, with the expense recognised over the

vesting period for each share scheme. For the SIP, these costs are paid when the employees sell the shares after vesting (typically 3–5

years after the grant date). For the DFSS, the costs are paid immediately upon vesting.

The total social security costs are calculated based on the following:

• The taxable value of the shares, being:

– For the SIP, the lower of the share price at award date and the share price at the balance sheet date

– For the DFSS, the share price at the balance sheet date

• The number of shares expected to vest for each scheme, driven by the number of shares awarded, attrition rates and, for the DFSS, the

vesting rate based on performance conditions

• The appropriate social security rate.

These assumptions are updated at the end of each reporting period. The financial impact as a result of any change in the assumptions

is recognised through the Income Statement. Any significant changes in assumptions may therefore result in an increased/decreased

charge in an accounting period as a result of this true-up of the expected cumulative charge required.

Discretionary bonus on shares allocated but unvested

The cost of the DFSS bonus is recognised and paid in each period equivalent to the dividends on shares allocated to employees that are

still entitled to vest but have not yet vested. The cost shown also includes the social security costs on the discretionary bonus. No accrual

is made for future discretionary bonus payments due to there being no contractual obligation for such a bonus at the balance sheet date.

Financial Statements

287

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

9. Directly attributable and other expenses continued

9b. Operating expenses and share scheme charges

		31 December 2023
	Directly
	attributable	Other operating
	expenses	expenses	Total expenses
	£m	£m	£m
Administration and acquisition expenses	836.8	100.8	937.6
Expenses relating to additional products and fees	–	41.4	41.4
Share scheme expenses	55.3	28.5	83.8
Loan expenses (excluding movement on ECL provision)	–	23.0	23.0
Movement in expected credit loss provision	–	31.0	31.0
Other	–	57.1	57.1
To t al	892.1	281.8	1,173.9

	31 December 2022 (restated)
	Directly
	attributable	Other operating
	expenses	expenses	Total expenses
	£m	£m	£m
Administration and acquisition expenses	755.1	83.8	838.9
Expenses relating to additional products and fees	–	38.5	38.5
Share scheme expenses	53.0	26.3	79.3
Loan expenses (excluding movement on ECL provision)	–	22.2	22.2
Movement in expected credit loss provision	–	18.9	18.9
Other	–	33.8	33.8
To t al	808.1	223.5	1,031.6

*1. Other includes centralised costs (2023: £34.5 million, 2022: £15.0 million) , business development costs (2023: £15.3 million, 2022: £8.8 million) and other costs (2023: £7.3 million,

2022: £10.0 million).

9c. Employee costs and other expenses

	31 December 2023	31 December 2022
	To t a l	To t a l
	£m	£m
Salaries	439.4	397.0
Social security charges	45.5	41.4
Pension costs	16.5	14.6
Share scheme charges (see note 9f)	83.8	79.3
Total employee expenses	585.2	532.3
Depreciation charge:
– Owned assets	11.2	10.1
– ROU assets	7.0	8.1
Amortisation charge:
– Software	40.3	23.7
Auditor’s remuneration (including VAT) (total Group):
– Fees payable for the audit of the Company’s annual accounts	0.3	0.1
– Fees payable for the audit of the Company’s subsidiary accounts	3.0	1.7
– Fees payable for audit related assurance services pursuant to legislation or regulation	1.1	1.0

£146,600 (inclusive of VAT) (2022: £10,800) was payable to the auditor for other services in the year.

Refer to the Corporate Governance Report for details of the Audit Committee’s policy on fees paid to the Company’s auditor for non-

audit services. Audit fees are 74% (2022: 65%) of total fees and 26% (2022: 35%) of total fees are for non-audit services, which are classed

as audit related assurance services under the FRC rules on non-audit services.

The majority of amortisation of software is charged to directly attributable expenses in the Income Statement

288 Financial Statements288

Admiral Group plc Annual Report and Accounts 2023

9d. Employee numbers (including Directors)

	Average for the year
	2023	2022
	Number	Number
Direct customer contact employees	8,365	7,490
Support employees	4,276	3,845
To t al	12,641	11,335

9e. Directors’ remuneration

(i) Directors’ remuneration

	31 December	31 December
	2023	2022
	£m	£m
Directors’ emoluments	1.2	1.1
Amounts receivable under SIP and DFSS share schemes	2.1	2.2
Company contributions to money purchase pension plans	–	–
Total* 1	3.3	3.3

*1. Directors’ remuneration is stated as that of the Executive Directors. For information on Non-Executive Directors’ remuneration see the remuneration report

(ii) Number of Directors

	2023	2022
	Number	Number
Retirement benefits are accruing to the following number of Directors under:
– Money purchase schemes	2	2

9f. Employee share schemes

Total share scheme costs for the Group are analysed below:

		31 December 2023
	SIP charge (i) £m	DFSS charge (ii) £m	Total charge £m
IFRS 2 charge for equity settled share schemes	17.0	46.3	63.3
IFRS 2 charge for cash settled share schemes	–	3.2	3.2
Total IFRS 2 charge	17.0	49.5	66.5
Social security costs on IFRS 2 charge	1.3	7.3	8.6
Discretionary bonus on shares allocated but unvested	–	8.7	8.7
Total share scheme charges	18.3	65.5	83.8
Amounts recovered from co-and reinsurance arrangements			(29.4)
Net share scheme charges			54.4

		31 December 2022
	SIP charge (i) £m	DFSS charge (ii) £m	Total charge £m
IFRS 2 charge for equity settled share schemes	18.0	39.3	57.3
IFRS 2 charge for cash settled share schemes	–	0.2	0.2
Total IFRS 2 charge	18.0	39.5	57.5
Social security costs	0.7	0.4	1.1
Discretionary bonus on shares allocated but unvested	–	20.7	20.7
Total share scheme charges	18.7	60.6	79.3
Amounts recovered from co-and reinsurance arrangements			(27.6)
Net share scheme charges			51.7

Share scheme charges are presented on a net basis within the strategic report, after allocations to co-insurers (in the UK and Italy) and

reinsurers (in the International Insurance businesses), in line with internal management reporting. The proportion of net to gross share

scheme charges would be expected to be consistent in each period, at approximately 65%.

Financial Statements

289

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

9. Directly attributable and other expenses continued

		Financial year ended 31 December
					Total cumulative
	2020 and prior	2021	2022	2023	charge to date
Analysis of gross cost	£m	£m	£m	£m	£m
Year of share scheme – SIP
2019	9.4	6.4	4.1	–	19.9
2020	3.1	6.7	5.4	3.1	18.3
2021	–	4.4	5.4	5.3	15.1
2022	–	–	3.1	5.3	8.4
2023	–	–	–	3.3	3.3
Gross IFRS 2 costs – SIP			18.0	17.0
Year of share scheme – DFSS
2019	14.3	15.8	8.0	–	38.1
2020	4.7	13.0	14.6	10.0	42.3
2021	–	4.9	13.4	19.2	37.5
2022	–	–	3.5	14.9	18.4
2023	–	–	–	5.4	5.4
Gross IFRS 2 costs – DFSS			39.5	49.5
Total IFRS 2 costs			57.5	66.5

*1. Awards are made in March and September of each year, and vest over 36 months from award date. On the 2021 scheme, an average of 5 months’ charge remains outstanding, on the 2022 scheme

an average of 17 months’ charge remains outstanding, and on the 2023 schemes an average of 29 months’ charge remains outstanding.

*2. The main award is made in September of each year, with smaller awards made at other points through the year. The shares vest over 36 months from award date. On the 2021 main DFSS,

9 months’ charge remains outstanding; on the 2022 main DFSS 21 months’ charge remains outstanding, and on the 2023 main DFSS, 33 months’ charge remains outstanding.

(i) The Approved Share Incentive Plan (the SIP)

Eligible UK based employees qualify for awards under the SIP based upon the performance of the Group in each half-year period.

The maximum award for each year is £3,600 per employee and the maximum number of shares that can vest relating to the 2023

schemes is 1,045,697 (2022 schemes: 872,728; 2021 schemes: 688,384).

The awards are made at the discretion of the Remuneration Committee, taking into account the Group’s performance.

(ii) The Discretionary Free Share Scheme (the DFSS)

Under the DFSS, details of which are contained in the remuneration policy section of the Directors’ Remuneration Report, individuals

receive an award of free shares at no charge.

The maximum number of shares that can vest relating to the 2023 schemes is 3,360,665 (2022 scheme: 3,070,323; 2021

scheme: 2,850,114).

The vesting percentage for most employees for the 2020 DFSS scheme which vested during 2023 was 78.25% (2019 DFSS

scheme: 98.9%).

(iii) Number of free share awards committed at 31 December 2023

	Awards
	outstanding
SIP 2021	688,384
SIP 2022	872,728
SIP 2023	1,045,697
DFSS 2021	2,850,114
DFSS 2022	3,070,323
DFSS 2023	3,360,665
Total awards committed	11,887,911

*1. Being the maximum number of awards committed before accounting for expected employee attrition and vesting conditions.

*2. Shares are awarded in March and September of each year, and vest three years later.

*3. The main award is made in September of each year, with smaller awards made at other points through the year.

290 Financial Statements290

Admiral Group plc Annual Report and Accounts 2023

(iv) Number of free share awards vesting during the year ended 31 December 2023

	Original awards	Awards vested
SIP 2020 schemes	982,643	819,861
DFSS 2020 schemes	2,795,261	1,898,249

The difference between the original and vested awards reflects employee attrition (SIP schemes) and both employee attrition and the

vesting outcomes based on performance conditions noted above (DFSS schemes).

The weighted average fair value of the shares granted in the year was £20.48 (2022: £19.45).

The weighted average market share price at the date of exercise for shares exercised during the year was £23.28 (2022: £21.51).

10. Taxation

10a. Accounting policy

Income tax on the profit or loss for the periods presented comprise of current and deferred tax.

(i) Current tax

Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively

enacted by the balance sheet date, and includes any adjustment to tax payable in respect of previous periods.

Current tax related to items recognised in Other Comprehensive Income is also recognised in Other Comprehensive Income and not in

the Income Statement.

(ii) Deferred tax

Deferred tax is provided in full using the balance sheet liability method, providing for temporary differences arising between the carrying

amount of assets and liabilities for accounting purposes and the amounts used for taxation purposes.

Deferred tax is calculated at the tax rates that have been enacted or substantively enacted by the balance sheet date and that are

expected to apply in the period when the liability is settled, or the asset is realised.

The principal temporary differences arise from carried forward losses, differences between tax capital allowances and depreciation of

property, plant and equipment, reserve movements and share scheme charges.

The resulting deferred tax is charged or credited in the Income Statement, except to the extent it relates to items that are recognised in

Other Comprehensive Income or directly in equity, in which case the deferred tax is also recognised in Other Comprehensive Income or

directly in equity respectively.

Deferred tax liabilities are recognised for all taxable temporary differences, and deferred tax assets (including those relating to carried

forward losses) are recognised only to the extent that it is probable that future taxable profits will be available against which the assets

can be utilised. The probability of the availability of future taxable profits is determined by a combination of the existence of taxable

temporary differences and reviewing future profit projections for the businesses.

10b. Taxation

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Current tax
Corporation tax on profits for the year	91.6	107.6
Under/(over) provision relating to prior periods	21.3	(0.8)
Current tax charge	112.9	106.8
Deferred tax
Current period deferred taxation movement	0.7	(31.6)
(Over)/Under provision relating to prior periods	(8.0)	0.7
Total tax charge per Consolidated Income Statement	105.6	75.9

Financial Statements

291

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

10. Taxation continued

Factors affecting the total tax charge are:

	31 December	31 December
	2023	2022 (restated)
	£m	£m
Profit before tax	442.8	361.2
Corporation tax thereon at effective UK corporation tax rate of 23.5% (2022: 19.0%)	104.1	68.6
Expenses and provisions not deductible for tax purposes	3.0	2.2
Non-taxable income	(13.4)	(6.0)
Impact of change in UK tax rate on deferred tax balances	(0.4)	(5.6)
Adjustments relating to prior periods	13.5	(0.2)
Impact of different overseas tax rates	(8.9)	3.6
Unrecognised deferred tax	7.7	13.3
Total tax charge for the period as above	105.6	75.9

Corporation tax assets as at 31 December 2023 totalled £20.4 million, with corporation tax liabilities of £4.9 million (2022: £13.9 million

liability and £9.1 million asset).

The UK corporation tax rate for 2023 is 23.5% (2022: 19.0%). An increase to the main rate of corporation tax in the UK from 19% to 25%

was announced in the 2021 Budget and has come into effect from 1 April 2023.

Adjustments relating to prior periods are higher than previous periods, with £11.7 million of the above total impact of £13.5 million

due to the Group deciding to settle a historic Italian tax matter, relating mainly to cross border matters. Further costs of £6.8 million

relating to this inspection, such as interest and penalties, are included in Other Group costs within the Income Statement. These costs are

expected to be non-recurring.

In 2021, over 130 countries reached a historic agreement to reform the international tax framework. The main aim of the agreement was

to ensure that large, multinational corporations pay their fair share of tax in the countries in which they operate and this included the

introduction of a new global minimum corporate income tax rate of 15% - referred to as the Pillar Two rules.

Legislation has now been enacted in various countries (including the United Kingdom) and draft legislation or announcements have

been made in others, with the rules first coming into effect for the Group from 1 January 2024. Under the new rules, the Group may be

required to pay top-up taxes either in the UK ultimate parent location or in the overseas jurisdiction if a jurisdiction has an effective tax

rate of less than 15%, as calculated under the rules.

The Group expects top-up tax to arise in relation to our operations in Gibraltar, where the statutory corporate tax rate is 12.5%. However,

since the enacted Pillar Two legislation is only effective from 1 January 2024, the Group has no related current tax impact for the year

ended 31 December 2023. If the Pillar Two rules had applied in the year ended 31 December 2023, top-up tax arising in relation to the

profits in Gibraltar would have been immaterial to the Group.

The Pillar Two rules are complex and the Group continues to monitor ongoing developments in legislation and guidance to assess the

impact for future periods. Current modelling indicates that the top-up tax will primarily be dependent on the profits arising in Gibraltar.

Based on current forecasts and the expected profit mix across the Group for the next two financial years (2024 and 2025), it is not

expected that the Pillar Two rules will result in a material increase in the Group effective tax rate compared to the average of the last

three years (2021-2023: 21% average).

The Group has applied the temporary mandatory exception to recognising and disclosing information about deferred tax assets and

liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.

In addition to the Pillar Two legislation, the Government of Gibraltar announced on 24 January 2024 that the taxation of interest income

as trading income is to be extended to include that of insurers for accounting periods beginning on or after 1 February 2024. This change

would result in additional investment and interest income of the Group’s subsidiary, Admiral Insurance (Gibraltar) Limited becoming

taxable from 1 January 2025 at the Gibraltar corporation tax rate of 12.5%.

If the change in treatment had taken effect for the current financial year ended 31 December 2023, the impact to the Group on current

tax and deferred tax is estimated to be immaterial. The Group are continuing to review the draft legislation against the particular nature

of the investments held in Gibraltar to determine how widely it applies.

It should be noted that there will be interactions between these two legislative changes. Additional corporation tax in Gibraltar payable

as a result of the proposed changes to the taxation of interest income will correspondingly reduce the Pillar Two top-up tax required to

be paid by the Group for periods ending 31 December 2025 onwards .

292 Financial Statements292

Admiral Group plc Annual Report and Accounts 2023

10c. Deferred income tax asset/(liability)

Analysis of deferred tax asset/(liability)

	Tax
	treatment		Carried			Insurance
	of share	Capital	forward	Fair value	Hedging	finance	Other
	schemes	allowances	losses	reserve	reserve	reserve	differences	To t a l
	£m	£m	£m	£m	£m	£m	£m	£m
Balance brought forward at 1 January 2022 (restated)	8.5	7.8	8.4	(5.8)	–	3.0	(1.2)	20.7
Tax treatment of share scheme
charges through income or expense	1.2	–	–	–	–	–	–	1.2
Tax treatment of share scheme
charges through reserves	(6.3)	–	–	–	–	–	–	(6.3)
Capital allowances	–	(0.7)	–	–	–	–	–	(0.7)
Carried forward losses	–	–	29.2	–	–	–	–	29.2
Movement in fair value reserve	–	–	–	13.0	–	–	–	13.0
Movement in hedging reserve	–	–	–	–	(7.0)	–	–	(7.0)
Movement in insurance
finance reserve	–	–	–	–	–	(22.8)	–	(22.8)
Other difference	–	–	–	(0.3)	–	–	1.4	1.1
Balance carried forward at 31 December 2022 (restated)	3.4	7.1	37.6	6.9	(7.0)	(19.8)	0.2	28.4
Tax treatment of share scheme
charges through income or expense	1.7	–	–	–	–	–	–	1.7
Tax treatment of share scheme
charges through reserves	2.1	–	–	–	–	–	–	2.1
Capital allowances	–	(11.0)	–	–	–	–	–	(11.0)
Carried forward losses	–	–	15.9	–	–	–	–	15.9
Movement in fair value reserve	–	–	–	(5.7)	–	–	–	(5.7)
Movement in hedging reserve	–	–	–	–	4.5	–	–	4.5
Movement in insurance
finance reserve	–	–	–	–	–	9.7	–	9.7
Other difference	–	–	–	–	–	–	0.5	0.5
Balance carried forward at 31 December 2023	7.2	(3.9)	53.5	1.2	(2.5)	(10.1)	0.7	46.1

Positive amounts presented above relate to a deferred tax asset position.

The deferred tax asset has increased during the year, mainly relating to unused tax losses in the UK and Gibraltar which are recognised as

it is considered probable that there are sufficient future taxable profits available to utilise the losses.

At 31 December 2023, the Group had unused tax losses amounting to £233.0 million (2022: £322.0 million, including losses of compare.

com which was disposed of in 2023) and other deductible timing differences of £43.4 million, relating primarily to the Group’s businesses

in the US and Spain for which no deferred tax assets have been recognised. This is due to uncertainty over the availability and timing of

future taxable profits against which to utilise these deferred tax assets. The earliest expiry date for the US tax losses is 2029, with no

expiry for the losses in Spain.

Financial Statements

293

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

11. Other Assets and Other Liabilities

11a. Accounting policy

(i) Property and equipment, and depreciation

All property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method

to write off the cost less residual values of the assets over their useful economic lives. These useful economic lives are as follows:

Improvements to short leasehold buildings	– four to ten years
Computer equipment	– two to four years
Office equipment	– four years
Furniture and fittings	– four years
Right-of-use assets	– two – twenty years, aligned to lease agreement

As set out further in note 6i to the financial statements, a right-of-use asset is established in relation the Group’s lease arrangements.

The right-of-use asset is measured at cost, which comprises the following:

• The amount of the initial measurement of lease liability (note 6i to the financial statements)

• Any lease payments made at or before the commencement date less any lease incentives received

• Any initial direct costs, and

• Restoration costs.

The right-of-use asset is subsequently depreciated over the shorter of the lease term and the asset’s useful life on a straight-line basis.

The Group does not have any significant leases which qualify for the short-term leases or leases of low-value assets exemption.

(ii) Impairment of property and equipment

In the case of property and equipment, carrying values are reviewed at each balance sheet date to determine whether there are

any indicators of impairment. If any such indicators exist, the asset’s recoverable amount is estimated and compared to the carrying

value. The carrying value is the higher of the fair value of the asset less costs to sell and the asset’s value in use. Impairment losses are

recognised through the Income Statement.

(iii) Intangible assets

Goodwill

All business combinations are accounted for using the acquisition method. Goodwill has been recognised in acquisitions of subsidiaries

and represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.

The classification and accounting treatment of acquisitions occurring before 1 January 2004 have not been reconsidered in preparing

the Group’s opening IFRS balance sheet at 1 January 2004 due to the exemption available in IFRS 1 (First time adoption). In respect of

acquisitions prior to 1 January 2004, goodwill is included at the transition date on the basis of its deemed cost, which represents the

amount recorded under UK GAAP, which was tested for impairment at the transition date. On transition, amortisation of goodwill has

ceased as required by IAS 38.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units (CGUs) according to

business segment and is reviewed annually for impairment.

The goodwill held on the balance sheet at 31 December 2023 and 2022 is allocated solely to the UK Insurance segment.

294 Financial Statements294

Admiral Group plc Annual Report and Accounts 2023

Impairment of goodwill

The annual impairment review involves comparing the carrying amount to the estimated recoverable amount (by allocating the goodwill

to CGUs) and recognising an impairment loss if the recoverable amount is lower. Impairment losses are recognised through the Income

Statement and are not subsequently reversed.

The recoverable amount is the greater of the fair value of the asset less costs to sell and the value in use of the CGU.

The value in use calculations use cashflow projections based on financial budgets approved by management covering a period of up to

three years. Cashflows beyond this period are considered, but not included in the calculation.

The key assumptions used in the value in use calculations are those regarding revenue growth, along with expected changes in pricing

and expenses incurred during the forecast period. Management estimates revenue growth rates and changes in pricing based on past

practices and expected future changes in the market.

The headroom above the goodwill carrying value is very significant, and there is no foreseeable event that would eliminate this margin.

Software

Purchased software is recognised as an intangible asset and amortised over its expected useful life (generally the licence term which

is typically between 2 and 4 years). Internally generated software is recognised as an intangible asset, with directly attributable costs

incurred in the development stage capitalised. The internally generated software assets are amortised over the expected useful life of

the systems and amortisation commences when the software is available for use.

The carrying value of software is reviewed every six months for evidence of impairment, with the value being written down if any

impairment exists. Impairment may be reversed if conditions subsequently improve.

Customer contracts and relationships

Customer contracts and relationships are recognised as an intangible asset and amortised over its expected useful life (generally the

term of the contract), amortisation commences when the contract begins.

The carrying value of customer contracts and relationships are reviewed every six months for evidence of impairment, with the value

being written down if any impairment exists. Impairment may be reversed if conditions subsequently improve.

(iv) Provisions, contingent liabilities and contingent assets

Provisions are recognised when a legal or constructive obligation arises as a result of an event that occurred before the balance sheet

date, when a cash-outflow relating to this obligation is probable and when the amount can be estimated reliably.

Where a material obligation exists, but the likelihood of a cash outflow or the amount is uncertain, or where there is a possible obligation

arising from a past event that is contingent on a future event, a contingent liability is disclosed.

Contingent assets are possible assets that arise from past events, whose existence will be confirmed only by the occurrence or non-

occurrence of future events. Where it is probable that a cash inflow will arise from a contingent asset, this is disclosed.

Financial Statements

295

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

11. Other Assets and Other Liabilities continued

11b. Property and equipment

	Improvements to				ROU
	short leasehold	Computer	Office	Furniture and	Asset – Leasehold
	buildings	equipment	equipment	fittings	buildings	To t a l
	£m	£m	£m	£m	£m	£m
Cost
At 1 January 2022	37.0	68.9	21.9	9.9	103.3	241.0
Additions	1.7	7.0	0.6	0.7	1.3	11.3
Impairment	–	–	–	–	(1.3)	(1.3)
Disposals	(1.6)	(2.7)	(1.5)	(0.1)	(9.7)	(15.6)
Foreign exchange and other movements	0.4	0.7	0.4	0.2	1.4	3.1
At 31 December 2022	37.5	73.9	21.4	10.7	95.0	238.5
Depreciation
At 1 January 2022	26.3	57.3	19.9	8.5	25.8	137.8
Charge for the year	3.2	5.5	0.8	0.6	8.1	18.2
Impairment	–	–	–	–	(0.7)	(0.7)
Disposals	(1.6)	(2.4)	(1.5)	–	(3.2)	(8.7)
Foreign exchange and other movements	0.2	0.7	0.3	0.1	0.8	2.1
At 31 December 2022	28.1	61.1	19.5	9.2	30.8	148.7
Net book amount
At 1 January 2022	10.7	11.6	2.0	1.4	77.5	103.2
Net book amount
At 31 December 2022	9.4	12.8	1.9	1.5	64.2	89.8
Cost
At 1 January 2023	37.5	73.9	21.4	10.7	95.0	238.5
Additions	3.5	4.9	0.2	0.7	3.3	12.6
Impairment	–	–	–	–	6.1	6.1
Disposals	(10.9)	(20.8)	(2.8)	(1.9)	(5.6)	(42.0)
Foreign exchange and other movements	(0.4)	(0.7)	(0.5)	0.1	1.1	(0.4)
At 31 December 2023	29.7	57.3	18.3	9.6	99.9	214.8
Depreciation
At 1 January 2023	28.1	61.1	19.5	9.2	30.8	148.7
Charge for the year	3.1	6.4	0.9	0.8	7.0	18.2
Impairment	–	–	–	–	(0.2)	(0.2)
Disposals	(9.5)	(20.8)	(2.8)	(1.7)	(5.4)	(40.2)
Foreign exchange and other movements	(0.1)	(0.9)	(0.4)	0.1	(0.5)	(1.8)
At 31 December 2023	21.6	45.8	17.2	8.4	31.7	124.7
Net book amount
At 31 December 2023	8.1	11.5	1.1	1.2	68.2	90.1

296 Financial Statements296

Admiral Group plc Annual Report and Accounts 2023

11c. Intangible assets

		Customer	Software
		contracts and	– Internally	Software
	Goodwill	relationships	generated	– Other	To t a l
	£m	£m	£m	£m	£m
At 1 January 2022	62.3	–	64.4	25.0	151.7
Additions	–	–	83.4	5.2	88.6
Amortisation charge	–	–	(18.3)	(5.4)	(23.7)
Foreign exchange movement	–	–	6.9	(5.9)	1.0
At 31 December 2022	62.3	–	136.4	18.9	217.6
Additions	–	7.9	51.1	7.7	66.7
Amortisation charge	–	–	(34.8)	(5.5)	(40.3)
Disposals	–	–	(0.1)	–	(0.1)
Impairment	–	–	(0.2)	–	(0.2)
Transfers	–	–	–	–	–
Foreign exchange movement & other	–	–	(0.4)	(0.4)	(0.8)
At 31 December 2023	62.3	7.9	152.0	20.7	242.9

Goodwill relates to the acquisition of Group subsidiary EUI Limited (formerly Admiral Insurance Services Limited) in November 1999.

As described in the accounting policies, 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.

Internally generated software includes a new claims system implemented within the UK business during 2022 which has a net carrying

amount of £24.1 million as at 31 December 2023 (2022: £33.4 million) and a remaining amortisation period of 3 years.

Only one year of forecasts is required to support the recoverable value of goodwill above. Given the short time period used to support the

recoverable amount, no terminal growth rate or discounting is applied.

Refer to the accounting policy for goodwill for further information.

11d. Trade and other payables

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Trade payables	42.3	22.7
Other tax and social security	11.9	14.9
Amounts owed to co-insurers	156.9	115.8
Other payables	42.5	38.2
Accruals and deferred income	52.2	63.3
Total trade and other payables	305.8	254.9
Analysis of accruals and deferred income
Accruals	28.3	41.0
Deferred income	23.9	22.3
Total accruals and deferred income as above	52.2	63.3

11e. Leases

The Group occupies various properties under leasing arrangements that are now recognised as right of use assets and lease liabilities.

Amounts recognised in the Statement of Financial Position are as follows:

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Lease liabilities
Current	13.7	8.3
Non-Current	67.5	80.2
To t al	81.2	88.5

See note 11b for right of use assets depreciation and the carrying amount of right of use assets at the end of the reporting period.

Only one class of underlying assets is identified as leasehold buildings. Total cash outflows in relation to leases is disclosed under 6i.

The Group has no significant financial commitments other than those accounted for as right of use assets and lease liabilities under

IFRS 16.

Financial Statements

297

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

11. Other Assets and Other Liabilities continued

11f. 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 Group’s 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 £22 million.

No material provisions have 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 or form a reliable estimate of its financial effect. In these

circumstances, specific disclosure of a contingent liability and an estimate of its financial effect will be made where material, unless it is

not practicable to do so.

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 cashflows, and as such, no material provisions are currently held in relation to such matters.

A number of the Group’s contractual arrangements with reinsurers include features that, in certain scenarios, allow for reinsurers to

recover losses incurred to date. The overall impact of such scenarios would not lead to an overall net economic outflow from the Group.

12. Dividends, Earnings and Share Capital

The Group’s capital includes share capital and the share premium account, other reserves which are comprised of the fair value reserve,

insurance finance reserve, hedging reserve and foreign exchange reserve, and retained earnings.

12a. Accounting policies

(i) Share capital

Shares are classified as equity when there is no obligation to transfer cash or other assets.

(ii) Fair value reserve

For investments recognised as Fair Value through Other Comprehensive Income (FVOCI), changes in fair value are accumulated within

the fair value reserve within equity. The accumulated changes in fair value are transferred to profit or loss when the investment is

derecognised or impaired.

(iii) Hedging reserve

The hedging reserve includes the cash flow hedge reserve. The cash flow hedge reserve is used to recognise the effective portion of

gains or losses on derivatives that are designated and qualify as cash flow hedges. Amounts are subsequently reclassified to profit or loss

as appropriate.

(iv) Insurance finance reserve

The insurance finance reserve relates to the impact of changes in market interest rates on the value of the insurance and reinsurance

assets and liabilities. These changes are reflected in the insurance finance reserve in order to minimise accounting mismatches between

the accounting for financial assets and insurance assets and liabilities.

(v) Dividends

Dividends are recorded in the period in which they are declared and paid .

(vi) Earnings per share

Basic earnings per share is calculated by dividing profit or loss attributable to equity holders of the Group Parent Company, Admiral Group

plc by the weighted average number of ordinary shares during the period.

Diluted earnings per share is calculated by dividing profit or loss attributable to equity holders of the Group Parent Company by the

weighted average number of ordinary shares outstanding, adjusted for the effects of all dilutive potential ordinary shares.

298 Financial Statements298

Admiral Group plc Annual Report and Accounts 2023

12b. Dividends

Dividends were proposed, approved and paid as follows:

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Proposed March 2022 (118.0 pence per share, approved April 2022 and paid June 2022)	–	348.1
Declared August 2022 (105.0 pence per share, paid October 2022)	–	310.2
Proposed March 2023 (52.0 pence per share, approved April 2023 and paid June 2023)	154.9	–
Declared August 2023 (51.0 pence per share, paid October 2023)	152.2	–
Total dividends	307.1	658.3

The dividends proposed in March (approved in April) represent the final dividends paid in respect of the 2021 and 2022 financial years.

The dividends declared in August are interim distributions in respect of 2022 and 2023.

A 2023 final dividend of 52.0 pence per share (approximately £156.2 million) has been proposed. Refer to the financial narrative for

further detail.

12c. Earnings per share

		31 December2022
	31 December 2023	(restated)
	£m	£m
Profit for the financial year after taxation attributable to equity shareholders	338.0	286.5
Weighted average number of shares – basic	303,989,170	300,207,330
Unadjusted earnings per share – basic	111.2p	95.4p
Weighted average number of shares – diluted	305,052,941	301,543,390
Unadjusted earnings per share – diluted	110.8p	95.0p

The difference between the basic and diluted number of shares at the end of 2023 (being 1,063,771; 2022: 1,336,060) relates to awards

committed, but not yet issued under the Group’s share schemes. Refer to note 9 for further detail.

12d. Share capital

		31 December 2022
	31 December 2023	(restated)
	£m	£m
Authorised
500,000,000 ordinary shares of 0.1 pence	0.5	0.5
Issued, called up and fully paid
306,304,676 ordinary shares of 0.1 pence	0.3	–
302,837,726 ordinary shares of 0.1 pence	–	0.3
	0.3	0.3

During 2023, 3,466,950 (2022: 3,283,006) new ordinary shares of 0.1 pence were issued to the trusts administering the Group’s

share schemes.

806,950 (2022: 675,927) of these were issued to the Admiral Group Share Incentive Plan Trust for the purposes of this share scheme

resulting in cumulative shares issued to the Trust at 31 December 2023 of 14,500,249 (31 December 2022: 13,693,299). Of the shares

issued, 4,028,579 remain in the Trust at 31 December 2023 (2022: 3,851,967). These shares are entitled to receive dividends.

2,660,000 (2022: 2,607,079) shares were issued to the Admiral Group Employee Benefit Trust for the purposes of the Discretionary

Free Share Scheme resulting in cumulative shares issued to the Trust of 33,209,027 (31 December 2022: 30,549,027). Of the shares

issued 5,868,352 remain in the Trust at 31 December 2023 (2022: 5,111,601) to be used for future vesting, the remaining issued shares

having vested.

The balance of awards made to employees under the Discretionary Free Share Scheme that have not either vested or lapsed is 8,755,431

(2022: 8,302,363).

The Trustees have waived the right to dividend payments, other than to the extent of 0.001 pence per share, unless and to the extent

otherwise directed by the Company from time to time.

There is one class of share with no unusual restrictions.

Financial Statements

299

Admiral Group plc Annual Report and Accounts 2023

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

12. Dividends, Earnings and Share Capital continued

12e. Group related undertakings

The Parent Company’s subsidiaries are as follows:

	Class of
Subsidiary	shares held	% ownership	Principal Activity
Incorporated in England and Wales
Registered office: Ty Admiral, David Street, Cardiff, United Kingdom, CF10 2EH
Admiral Law Limited	Ordinary	95	Legal Company
			Insurance
Able Insurance Services Limited	Ordinary	100	Intermediary
			Insurance
EUI Limited*	Ordinary	100	Intermediary
			Insurance
Admiral Insurance Company Limited	Ordinary	100	Company
Admiral Syndicate Limited	Ordinary	100	Dormant*
Admiral Syndicate Management Limited	Ordinary	100	Dormant*
Bell Direct Limited*	Ordinary	100	Dormant*
Diamond Motor Insurance Services Limited*	Ordinary	100	Dormant*
Elephant Insurance Services Limited*	Ordinary	100	Dormant*
Admiral Life Limited*	Ordinary	100	Dormant*
			Financial
			Services
Admiral Financial Services Limited	Ordinary	100	Company
Incorporated in Gibraltar
Registered office: 2Aa 2nd Floor, Leisure Island Business Centre, 23, Ocean Village
Promenade, Gibraltar, GX11 1AA			Insurance
Admiral Insurance (Gibraltar) Limited	Ordinary	100	Company
Incorporated in France
Registered office: la Boétie, 75008 Paris			Insurance
Pioneer Intermediary Europe Services	Ordinary	100 (indirect)	intermediary
Incorporated in Italy
Registered office: Via Della Bufalotta 374, 00139 Roma			Financial
			services
Admiral Financial Services Italia S.P.A.	Ordinary	100	Company
Incorporated in Spain
Registered office: Calle Rodríguez Marín 61 1ª Planta, 28016 Madrid			Insurance
Admiral Europe Compañía de Seguros, S.A.	Ordinary	100	Company
Registered office: Calle Albert Einstein, 10 41092 Sevilla			Insurance
Admiral Intermediary Services S.A. *3	Ordinary	100	Intermediary

300 Financial Statements300

Admiral Group plc Annual Report and Accounts 2023

	Class of
Subsidiary	shares held	% ownership	Principal Activity
Incorporated in the United States of America
Registered office: 8801 Park Central Drive, Suite 500, Richmond, VA 23227			Insurance
Elephant Insurance Company	Ordinary	100 (indirect)	company
			Insurance
Grove General Agency Inc	Ordinary	100 (indirect)	intermediary
			Insurance
Platinum General Agency Inc	Ordinary	100 (indirect)	intermediary
Registered office: Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801			Insurance
Elephant Insurance Services LLC	Ordinary	100 (indirect)	intermediary
			Holding
Elephant Holding Company LLC	Ordinary	100	Company
Subsidiaries by virtue of control
The related undertakings below are subsidiaries in accordance with IFRS 10, as Admiral can exercise dominant influence or control over them:
Registered office: 10th Floor, 5 Churchill Place, London, E14 5HU			Special purpose
Seren One Limited	n/a	0	entity
			Special purpose
Seren Two Limited	n/a	0	entity
Associates
Registered office: Tramshed Tech, Pendyris Street, Capital Tower, Greyfriars Road, Cardiff, Wales, CF10 3AD
Wagonex Limited	Ordinary	23.56 (indirect)	Internet-based
			Subscription
			Platform

*1. Exempt from audit under S480 of Companies Act 2006.

*2. EUI Limited has branches in India and Canada.

*3. Admiral Intermediary Services S.A. has branches in Italy and France.

*4. At the balance sheet date Admiral Life Limited, Bell Direct Limited, Diamond Motor Insurance Services Limited and Elephant Insurance Services Limited were in the process of being dissolved.

For further information on how the Group conducts its business across the UK, Europe and the US, refer to the Strategic Report .

12f. Related party transactions

The Board considers that only the Executive and Non-Executive Directors of Admiral Group plc are key management personnel.

A summary of the remuneration of key management personnel is as follows, with further detail relating to the remuneration and

shareholdings of key management personnel set out in the Directors’ Remuneration Report.

Key management personnel received short term employee benefits in the year of £2,900,278 (2022: £3,058,170), post-employment

benefits of £30,000 (2022: £30,000) and share based payments of £1,608,776 (2022: £1,561,768). Key management personnel are able to

obtain discounted motor insurance at the same rates as all other Group employees, typically at a reduction of 15%.

12g. Post balance sheet events

No events have occurred since the reporting date that materially impact these financial statements.

Financial Statements

301

Admiral Group plc Annual Report and Accounts 2023

13. Reconciliation of turnover to reported insurance premium and other revenue as per the financial statements

The following table reconciles turnover, a significant Key Performance Indicators (KPIs) and non-GAAP measure presented within the

Strategic Report, to insurance revenue, as presented in note 4 to the financial statements

			31 December 2022
		31 December 2023	(restated)
	Note	£m	£m
Insurance premium revenue	5b	3,283.3	2,782.1
Movement in unearned premium		528.3	142.7
Premiums written after co-insurance		3,811.6	2,924.8
Co-insurer share of written premiums		577.8	393.4
Total premiums written		4,389.4	3,318.2
Other insurance revenue	5b	202.8	174.8
Other revenue	8	127.2	128.9
Interest income		92.1	58.7
Turnover as per note 4b of financial statements		4,811.5	3,680.6
Intra-group income elimination		–	0.3
Total turnover		4,811.5	3,680.9

*1. Total insurance revenue of £3,486.1 million (2022: £2,956.9 million), comprised of insurance premium revenue of £3,283.3 million (2022: £2,782.1 million) and Other insurance revenue of

£202.8 million (2022: £174.8 million).

*2. Intra-group income elimination relates to comparison income earned by compare.com from other Group entities.

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

302 Financial Statements302

Admiral Group plc Annual Report and Accounts 2023

APPENDIX 1 TO THE GROUP FINANCIAL STATEMENTS (unaudited)

The following tables reconcile significant Key Performance Indicators (KPIs) and non-GAAP measures included in the Strategic Report to

items included in the financial statements.

1a. Reconciliation of reported loss and expense ratios: Group

			31 December 2023
	Consolidated
	financial	Core	Ancillary	Total	Total, net of XoL
£m	statement note	product	income	gross	reinsurance
Insurance premium revenue		3,152.3	131.0	3,283.3	3,170.6
Administration fees, instalment income and non-separable ancillary commission		–	202.8	202.8	202.8
Insurance revenue (A)	5b/5d	3,152.3	333.8	3,486.1	3,373.4
Insurance expenses (B)	5c	(795.2)	(41.6)	(836.8)	(836.8)
Claims incurred (C)	5c/5d	(2,624.6)	(40.5)	(2,665.1)	(2,605.8)
Claims releases (D)	5c/5d	440.6	–	440.6	447.3
Quota share reinsurance result					(40.4)
Onerous loss component movement					4.9
Underwriting result (E)					342.6
Net share scheme costs					(36.8)
Insurance service result					305.8
Reported loss ratio ((C+D)/A)					63.9%
Reported expense ratio (B/A)					24.8%
Insurance service margin (E/A)					10.2%

			31 December 2022 (restated)
	Consolidated
	financial	Core	Ancillary	Total	Total, net of XoL
£m	statement note	product	income	gross	reinsurance
Insurance premium revenue		2,646.5	135.6	2,782.1	2,704.0
Administration fees, instalment income and non-separable ancillary commission		–	174.8	174.8	174.8
Insurance revenue (A)	5b/5d	2,646.5	310.4	2,956.9	2,878.8
Insurance expenses (B)	5c	(710.4)	(44.6)	(755.0)	(755.0)
Claims incurred (C)	5c/5d	(2,339.3)	(33.0)	(2,372.3)	(2,341.0)
Claims releases (D)	5c/5d	420.5	–	420.5	309.8
Quota share reinsurance result					117.4
Onerous loss component movement					4.1
Underwriting result (E)					214.1
Net share scheme costs					(32.8)
Insurance service result					181.3
Reported loss ratio ((C+D)/A)					70.6%
Reported expense ratio (B/A)					26.2%
Insurance service margin					7.4%

*1. Quota share reinsurance result excludes quota share reinsurers’ share of share scheme costs and movement in onerous loss-recovery component.

*2. Onerous loss component movement is shown net of all reinsurance.

*3. Net share scheme costs of £36.8 million (2022: £32.8 million), being gross costs of £55.3 million (2022: £53.0 million, see note 5c) less reinsurers’ share of share scheme costs of £18.5 million

(2022: £20.2 million) are excluded from the underwriting result.

Financial Statements

303

Admiral Group plc Annual Report and Accounts 2023

1b. Reconciliation of reported loss and expense ratios: UK Motor

			31 December 2023
	Consolidated				Total, net	Core product
	financial	Core	Ancillary	Total	of XoL	net of XoL
£m	statement note	product	income	gross	reinsurance	reinsurance
Total premiums written		3,004.3	113.9	3,118.2	3,016.8	2,903.0
Gross premiums written		2,453.9	113.9	2,567.8	2,485.0	2,371.1
Insurance premium revenue		2,007.6	107.8	2,115.4	2,053.8	1,946.0
Instalment income		–	99.0	99.0	99.0	–
Administration fees non-separable
ancillary commission		–	35.8	35.8	35.8	–
Insurance revenue (A)	5b/5d	2,007.6	242.6	2,250.2	2,188.6	1,946.0
Insurance expenses (B)	5c	(416.8)	(34.4)	(451.2)	(451.2)	(416.8)
Claims incurred (C)	5c/5d	(1,719.9)	(35.6)	(1,755.5)	(1,729.0)	(1,693.4)
Claims releases (D)	5c/5d	406.9	–	406.9	392.8	392.8
Current period loss ratio (C/A)					79.0%	87.0%
Claims releases (D/A)					(17.9%)	(20.2%)
Reported loss ratio ((C+D)/A)					61.1%	66.8%
Reported expense ratio (B/A)					20.6%	21.4%

			31 December 2022 (restated)
	Consolidated				Total, net	Core product
	financial	Core	Ancillary	Total	of XoL	net of XoL
£m	statement note	product	income	gross	reinsurance	reinsurance
Total premiums written		2,157.7	113.6	2,271.3	2,213.5	2,099.9
Gross premiums written		1,772.8	113.6	1,886.4	1,838.9	1,725.3
Insurance premium revenue		1,682.4	113.3	1,795.7	1,751.1	1,637.8
Instalment income		–	75.3	75.3	75.3	–
Administration fees and non- separable ancillary commission		–	38.7	38.7	38.7	–
Insurance revenue (A)	5b/5d	1,682.4	227.3	1,909.7	1,865.1	1,637.8
Insurance expenses (B)	5c	(354.4)	(35.2)	(389.6)	(389.6)	(354.4)
Claims incurred (C)	5c/5d	(1,592.2)	(28.2)	(1,620.4)	(1,596.0)	(1,567.8)
Claims releases (D)	5c/5d	437.2	–	437.2	327.2	327.2
Current period loss ratio (C/A)					85.5%	95.7%
Claims releases (D/A)					(17.5%)	(20.0%)
Reported loss ratio ((C+D)/A)					68.0%	75.7%
Reported expense ratio (B/A)					20.9%	21.6%

*1. Ancillary income combined with other net income is presented as part of UK motor insurance other revenue in reporting “Other revenue per vehicle”.

Total other revenue was £247.3 million (2022: £236.8 million).

Notes to the Consolidated Financial Statements

For the year ended 31 December 2023

continued

304 Financial Statements304

Admiral Group plc Annual Report and Accounts 2023

Parent Company Financial Statements

Parent Company Income Statement

Year ended

Note

31 December 2023

£m

To t a l

31 December 2022

£m

To t a l

Administrative expenses 2 (29.9) (26.3)

Operating loss (29.9) (26.3)

Investment and interest income 3 362.8 320.1

Impairment expense 4 (37.2) (37.0)

Gain/(loss) on disposal of subsidiaries (3.2) –

Interest payable 6 (20.4) (12.0)

Profit before tax 272.1 244.8

Taxation credit 7 12.1 5.7

Profit after tax 284.2 250.5

Parent Company Statement of Comprehensive Income

Year ended

Note

31 December 2023

£m

31 December 2022

£m

Profit for the period 284.2 250.5

Other Comprehensive Income

Items that are or may be reclassified to profit or loss

Movements in fair value reserve 13.4 (20.9)

Deferred tax in relation to movement in fair value reserve 7 (3.4) 5.2

Other Comprehensive Income for the period, net of income tax 10.0 (15.7)

Total Comprehensive income for the period 294.2 234.8

Financial Statements

305

Admiral Group plc Annual Report and Accounts 2023

Parent Company Financial Statements

For the year ended 31 December 2023

Parent Company Statement of Financial Position

As at

Note

31 December 2023

£m

31 December 2022

£m

ASSETS

Investments in group undertakings 4 426.2 421.6

Intangible assets 5 – 0.4

Financial investments 6 220.2 167.5

Corporation tax asset 7 9.0 4.6

Deferred tax asset 7 10.0 0.9

Trade and other receivables 8 227.6 184.5

Cash and cash equivalents 6 5.0 3.5

Total assets 898.0 783.0

EQUITY

Share capital 10 0.3 0.3

Share premium account 13.1 13.1

Fair value reserve 10 8.4 (1.6)

Retained earnings 137.2 96.7

Total equity 159.0 108.5

LIABILITIES

Subordinated and other financial liabilities 6 370.2 224.4

Trade and other payables 9 368.8 450.1

Total liabilities 739.0 674.5

Total equity and total liabilities 898.0 783.0

The accompanying notes form part of these financial statements.

These financial statements were approved by the Board of Directors on 6 March 2024 and were signed on its behalf by:

Geraint Jones

Chief Financial Officer

Admiral Group plc

Company Number: 03849958

306 Financial Statements306

Admiral Group plc Annual Report and Accounts 2023

Parent Company Statement of Changes in Equity

Note

Share capital

£m

Share premium

account

£m

Fair Value

Reserve

£m

Retained

earnings

£m

Total equity

£m

At 1 January 2022 0.3 13.1 14.1 447.3 474.8

Profit for the period – – – 250.5 250.5

Other Comprehensive Income

Movements in fair value reserve 10 – – (20.9) – (20.9)

Deferred tax charge in relation to

movements in fair value reserve 7 – – 5.2 – 5.2

Total comprehensive income/(expense)

for the period – – (15.7) 250.5 234.8

Transactions with equity holders

Dividends 10–––(658.3) (658.3)

Issues of share capital 10–––––

Share scheme credit – – – 57.3 57.3

Deferred tax on share scheme credit – – – (0.1) (0.1)

Total transactions with equity holders – – – (601.1) (601.1)

As at 31 December 2022 0.3 13.1 (1.6) 96.7 108.5

At 1 January 2023 0.3 13.1 (1.6) 96.7 108.5

Profit for the period – – – 284.2 284.2

Other Comprehensive Income

Movements in fair value reserve 10 – – 13.4 – 13.4

Deferred tax charge in relation to

movements in fair value reserve 7 – – (3.4) – (3.4)

Total comprehensive income

for the period – – 10.0 284.2 294.2

Transactions with equity holders

Dividends 10 – – – (307.1) (307.1)

Issues of share capital 10–––––

Share scheme credit – – – 63.3 63.3

Deferred tax on share scheme credit – – – 0.1 0.1

Total transactions with equity holders – – – (243.7) (243.7)

As at 31 December 2023 0.3 13.1 8.4 137.2 159.0

Financial Statements

307

Admiral Group plc Annual Report and Accounts 2023

1. Accounting policies

1.1 Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS

101). The financial statements are prepared on the historical cost basis except for the revaluation of financial assets classified as fair value

through the profit or loss or as fair value through Other Comprehensive Income. The Parent Company financial statements are presented

alongside the consolidated financial statements which can be found on page 437.

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of

International Financial Reporting Standards as adopted by the UK (“Adopted IFRSs”) but makes amendments where necessary in order to

comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

Admiral Group plc is considered to be the parent entity and the ultimate parent Company of the Group.

1.2 Changes to accounting policies

No changes to accounting policies have been made in the period which have a material impact.

1.3 Disclosure exemptions applied under FRS 101

The Company has taken advantage of the following disclosure exemptions under FRS 101:

• FRS 101.8 (a): the requirements of paragraph 45(b) and 46 to 52 of IFRS 2 Share-based payment

• FRS 101.8 (d): the requirement of IFRS 7 Financial Instruments: Disclosure to make disclosures about financial instruments

• FRS 101.8 (f): the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in

respect of:

– paragraph 118(3) of IAS 38 Intangible Assets

• FRS 101.8 (g): the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation

of Financial Statements to produce a cashflow statement, a third balance sheet and to make an explicit and unreserved statement of

compliance with IFRSs

• FRS 101.8 (h): the requirements of IAS 7 Statements of Cashflows to produce a cashflow statement

• FRS 101.8 (i): the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to

include a list of new IFRSs that have been issued but that have yet to be applied

• FRS 101.8 (k): the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or

more members of a group, provided that any subsidiary which is a party to transaction is wholly owned by such a member

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these

financial statements.

1.4 Going concern

The financial statements have been prepared on a going concern basis. In considering the appropriateness of this assumption, the

Board have reviewed the Company’s projections for the next twelve months and beyond, including cashflow forecasts and regulatory

capital surpluses.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the

foreseeable future. Thus, they continue to adopt the going concern basis in preparing the annual financial statements.

1.5 Critical accounting judgements and key source of estimation uncertainty

In applying the Company’s accounting policies as described below, management consider there to be a key source of estimation

uncertainty within the impairment testing of the Company’s investments in group undertakings. Management recognises the estimation

involved in determining whether the carrying value of the investment may be supported by the recoverable amount calculation based on

the ‘value in use’ of the asset (the net present value of future cashflows arising from the asset).

In calculating the net present value of future cashflows, Management has made assumptions over the timing and amount of underlying

profit projections of the relevant undertakings, long term growth rates in those projections and the discount rate applied to these

projections that is appropriate to reflect the market’s view of the risk of the relevant investment. Sensitivity of these assumptions is also

considered in calculating the net present value and suitably incorporated in Management’s valuations.

No key accounting judgements have been made in the process of applying the Company’s accounting policies.

1.6 Shares in Group undertakings

Shares in Group undertakings are valued at cost less any provision for impairment in value.

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the

Company’s investments in subsidiaries. When necessary, the entire carrying amount of the investment is tested for impairment in

accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value

less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment.

Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment

subsequently increases. See note 4 to these financial statements for further detail.

Notes to the Parent Company Financial Statements

For the year ended 31 December 2023

continued

308 Financial Statements308

Admiral Group plc Annual Report and Accounts 2023

1.7 Employee share schemes

The Company operates a number of share schemes for employees of the Group’s subsidiaries. For equity settled schemes, the fair value

of the employee services received in exchange for the grant of free shares under the schemes is recognised as an increase in equity in the

Company. A corresponding intercompany charge is made to the subsidiaries whose employees receive the free shares. For further detail,

see note 9 in the consolidated financial statements.

1.8 Taxation

The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences

between the treatment of certain items for taxation and accounting purposes.

Deferred tax assets are recognised to the extent that they are regarded as recoverable. They are regarded as recoverable to the extent

that, on the basis of all available evidence, it can be regarded as more likely than not that there will be sufficient taxable profits from

which the future reversal of the underlying timing differences can be deducted.

1.9 Financial assets and financial liabilities

Under IFRS 9, classification and subsequent measurement of financial assets depend on:

• The Company’s business model for managing the asset; and

• The cashflow characteristics of the asset.

Based on these factors, the Company classifies its financial assets into one of the three categories below:

• Amortised cost: assets held for collection of contractual cashflows where the cashflows represent solely payments of principal and

interest, that are not designated as FVTPL.

• Fair value through Other Comprehensive Income (FVOCI): Financial assets that are held for collection of contractual cashflows and

selling the assets, where the assets’ cashflows represent solely payments of principal and interest, and that are not designated

at FVTPL.

• Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVOCI, or which are designated as

FVTPL at initial recognition.

In line with the above:

• Gilts and other debt securities are measured at FVOCI. Unrealised changes in the fair value of these assets are recognised in Other

Comprehensive Income (OCI). The recognition of impairment gains or losses and interest revenue are recognised in the profit or loss.

• Investments measured at FVTPL are primarily money market funds. Interest income is recognised in the Income statement.

The expected credit loss model is used to calculate any impairment to be recognised for all assets measured at amortised cost, as well as

financial investments measured at FVOCI. Impairment is measured using the simplified approach.

Cash and cash equivalents include cash in hand and deposits held at call with banks. All cash and cash equivalents are measured at

amortised cost.

The Company’s financial liabilities comprise of subordinated notes and revolving credit facilities which are held at amortised cost using

the effective interest method.

1.10 Intangible Assets

Purchased software licences are classified as an intangible asset and stated in the balance sheet at a cost less accumulated amortisation.

Software is amortised from the point at which the asset is operational and is amortised over the licence period.

1.11 Trade and other receivables

Trade and other receivables are measured at amortised cost, less any impairment.

1.12 Trade and other payables

Trade and other payables are measured at amortised cost.

2. Administrative expenses

Included within administrative expenses are re-charges of £7.1 million (2022: £6.1 million) relating to employees within the Group who

perform services on behalf of the Company. No employees are directly employed by the Company.

Financial Statements

309

Admiral Group plc Annual Report and Accounts 2023

3. Investment and interest income

31 December 2023

£m

31 December 2022

£m

Dividend income from subsidiary undertakings 357.5 310.0

Interest income - other 7.1 1.3

Interest (expense)/income at effective interest rate

(1.8) 8.8

Total investment and interest income 362.8 320.1

*1. Interest income at effective interest rate in 2023 includes £3.6 million loss on disposal of gilts (2022: £4.7 million gain).

4. Investments in Group undertakings

£m

Investments in subsidiary undertakings:

At 1 January 2022 315.1

Additions 143.5

Disposals –

Impairment (37.0)

At 31 December 2022 421.6

Additions 41.7

Disposals –

Impairment (37.1)

At 31 December 2023 426.2

A full list of the Company’s subsidiaries is disclosed in note 12 of the consolidated financial statements.

The additions to investments in the period of £41.7 million relate to the following:

• Further investment in Admiral Europe Compañía de Seguros (‘AECS’) (£30.7 million);

• Further investment in Able Insurance Services Limited (‘Able’) (£5.0 million);

• Further investment in Admiral Financial Services Italia S.P.A (‘AFSI’) (£6.0 million)

An annual impairment review is performed over the carrying value of the investments in subsidiary undertakings, which involves

comparing the carrying amount to the estimated recoverable amount. The recoverable amount is the greater of the fair value of the

asset less costs to sell, and the value in use of the subsidiary, calculated using cashflow projections based on financial budgets approved

by the Group Board.

Elephant

In 2023 a non-cash impairment loss of £19.5 million (2022: £35.2 million) has been recognised by the Parent Company in respect of its

investment in the Group’s US Insurance business Elephant. The impairment charge is to reflect the loss incurred during 2023 to bring the

value of the investment to its recoverable amount, being its fair value less costs to sell (equivalent to net asset value), of £36.9 million

(2022: £56.3 million). The impairment charge is presented within the “Impairment losses” line of the Parent Company Income Statement.

The carrying value is based on fair value less costs of disposal, for which the net assets has been used as a reasonable approximation, using

tier 3 of the fair value hierarchy. Due to limitations on evidential market information and restrictions in readily available information, net

assets have been used to estimate fair value less costs to sell.

As the valuation is based on net assets, any movement in future profits will impact the investment held.

Able

In 2023 a non-cash impairment loss of £7.9 million (2022: £nil) has been recognised by the Parent Company in respect of its investment in

the Group’s UK based insurance business Able. The impairment charge is to bring the value of the investment to its recoverable amount,

being its fair value less costs to sell (equivalent of net asset value), of £6.1 million (2022: £9.0 million).

AFSI

In 2023 a non-cash impairment loss of £9.8 million (2022: £nil) has been recognised by the Parent Company in respect of its

investment in the Group’s Italian loans business AFSI. The impairment charge is to reflect the loss incurred during 2023 to bring the

value of the investment to its recoverable amount, being its fair value less costs to sell (equivalent of net asset value), of £4.7 million

(2022: £8.5 million).

The Board continues to explore new adventures and is committed to supporting Able and AFSI in its diversification strategy.

Impairment charges is presented within the “Impairment losses” line of the Parent Company Income Statement.

Notes to the Parent Company Financial Statements

For the year ended 31 December 2023

continued

310 Financial Statements310

Admiral Group plc Annual Report and Accounts 2023

5. Intangible Assets

Software

£m

To t a l

£m

Cost

At 1 January 2023 0.4 0.4

Additions ––

Disposal ––

At 31 December 2023 0.4 0.4

Amortisation

At 1 January 2023 ––

Charge for the year 0.4 0.4

Disposal ––

At 31 December 2023 0.4 0.4

Net Book Value

At 31 December 2022 0.4 0.4

At 31 December 2023 ––

6. Financial assets and liabilities

The Company’s financial instruments can be analysed as follows:

31 December 2023

£m

31 December 2022

£m

Investments classified as FVOCI

Gilts and government debt securities 134.6 143.6

Corporate debt securities 78.2 –

212.8 143.6

Investments classified as FVTPL

Money market and other similar funds (level 1 of the IFRS 13 hierarchy) 7.4 23.9

7.4 23.9

Total financial investments 220.2 167.5

Financial assets held at amortised cost

Trade and other receivables (note 8) 227.6 184.5

Cash and cash equivalents 5.0 3.5

Total financial assets 452.8 355.5

Financial liabilities

Subordinated notes 315.2 204.4

Other borrowings 55.0 20.0

Trade and other payables (note 9) 368.8 450.1

Total financial liabilities 739.0 674.5

The amortised cost carrying amount of deposits and receivables is a reasonable approximation of fair value.

Financial Statements

311

Admiral Group plc Annual Report and Accounts 2023

6. Financial assets and liabilities continued

The table below compares the carrying value of subordinated notes (as per the Statement of Financial Position) with the fair value of the

subordinated notes using a level one valuation:

31 December 2023 31 December 2022

Carrying

amount

£m

Fair

value

£m

Carrying

amount

£m

Fair

value

£m

Financial liabilities

Subordinated notes 315.2 329.8 204.4 196.4

The subordinated notes consist of two separate issuances. The first subordinated notes were issued on 25 July 2014 at a fixed rate of 5.5%

and a total value of £200 million. In July 2023 these notes were tendered with a take-up of 72.45%, with the remaining amount retaining

the original redemption date of 25 July 2024.

The second subordinated notes were issued on 6 July 2023 at a fixed rate of 8.5%, with a total value of £250 million and a redemption

date of 6 January 2034.

Total interest payable of £20.4 million (2022: £12.0 million) was recognised, of which £17.5 million (2022: £11.1 million) was in relation to

the subordinated loan notes.

7. Taxation

7a. Taxation credit

31 December 2023

£m

31 December 2022

£m

Current tax

Corporation tax credit on profits for the year 9.0 4.6

Change in provision relating to prior periods (9.3) 1.0

Current tax credit (0.3) 5.6

Deferred tax

Current period deferred taxation movement 0.2 0.1

Change in provision relating to prior periods 12.2 –

Total tax credit per income statement 12.1 5.7

The UK corporation tax rate for 2023 is 23.5% (2022: 19.0%). An increase to the main rate of corporation tax in the UK from 19% to 25%

was announced in the 2021 Budget and has come into effect from 1 April 2023.

Factors affecting the total tax credit are:

31 December 2023

£m

31 December 2022

£m

Profit before tax 272.1 244.8

Corporation tax thereon at effective UK corporation tax rate of 23.5% (2022: 19.0%) 63.9 46.5

Expenses and provisions not deductible for tax purposes 10.9 6.2

Adjustments relating to prior periods (2.9) –

Non-taxable income (84.0) (58.4)

Total tax credit for the period as above (12.1) (5.7)

At the year end, the corporation tax asset was £9.0 million (2022: £4.6 million).

Notes to the Parent Company Financial Statements

For the year ended 31 December 2023

continued

312 Financial Statements312

Admiral Group plc Annual Report and Accounts 2023

7b. Deferred income tax (asset)/liability

Analysis of deferred tax (asset)/liability

Tax

treatment

of share

schemes

£m

Capital

allowances

£m

Carried

forward losses

£m

Fair value

reserve

£m

Other

differences

£m

To t a l

£m

Balance brought forward at 1 January 2022 (0.3) – – 4.6 – 4.3

Tax treatment of share scheme charges

through income or expense (0.1) – – – – (0.1)

Tax treatment of share scheme charges

through reserves 0.1––– –0.1

Movement in fair value reserve – – – (5.2) – (5.2)

Balance carried forward at

31 December 2022 (0.3) – – (0.6) – (0.9)

Tax treatment of share scheme charges

through income or expense (0.2) – – – – (0.2)

Tax treatment of share scheme charges

through reserves (0.1) – – – – (0.1)

Carried forward losses – – (12.2) – – (12.2)

Movement in fair value reserve – – – 3.4 – 3.4

Balance carried forward at

31 December 2023 (0.6) – (12.2) 2.8 – (10.0)

The recognition of deferred tax assets is supported by the expected future taxable profits of the UK group.

Legislation to introduce a global minimum effective tax rate of 15% known as the Pillar Two rules was substantively enacted in the

UK on 20 June 2023 under Finance (No.2) Act 2023. The rules introduce a domestic top-up tax and multinational top-up tax effective

for accounting periods starting on or after 31 December 2023. There is therefore no related current tax impact for the year ended

31 December 2023. The Parent Company has applied the temporary mandatory exception to recognising and disclosing information

about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.

Further information can be found in note 10 of the consolidated financial statements.

8. Trade and other receivables

31 December 2023

£m

31 December 2022

£m

Trade and other receivables 2.8 1.2

Amounts owed by subsidiary undertakings 224.8 183.3

Total trade and other receivables 227.6 184.5

Held within amounts owed by subsidiary undertakings is £223.7 million (2022: £182.2 million) which relate to loans with formal

agreements in place between the parent and the subsidiary. The estimated credit losses of these loans has been considered and any

expected credit loss is considered to be immaterial due to the assessment of credit risk being low due to the positive net value of assets

of the subsidiaries and future trading projections.

Of the above amount, £28.5 million is due in greater than one year (2022: £155.1 million).

9. Trade and other payables

31 December 2023

£m

31 December 2022

£m

Trade and other payables 10.3 7.2

Amounts owed to subsidiary undertakings 358.5 442.9

Total trade and other payables 368.8 450.1

Held within amounts owed to subsidiary undertakings is £201.4 million (2022: £198.2 million) which relate to loans with formal

agreements in place between the parent and the subsidiary.

Financial Statements

313

Admiral Group plc Annual Report and Accounts 2023

10. Share capital and reserves

Capital within the Company is comprised of share capital and the share premium account, the fair value reserve (which reflects

movements in the fair value of assets classified as FVOCI) and retained earnings. Further information can be found within note 12 of the

consolidated financial statements.

10a. Share capital

31 December 2023

£m

31 December 2022

£m

Authorised

500,000,000 ordinary shares of 0.1 pence 0.5 0.5

Issued, called up and fully paid

306,304,680 (2022: 302,837,726) ordinary shares of 0.1 pence 0.3 0.3

0.3 0.3

10b. Dividends

Dividends were proposed, approved and paid as follows:

31 December 2023

£m

31 December 2022

£m

Proposed March 2022 (118.0 pence per share, approved April 2022 and paid June 2022) – 348.1

Declared August 2022 (105.0 pence per share, paid October 2022) – 310.2

Proposed March 2023 (52.0 pence per share, approved April 2023 and paid June 2023) 154.9 –

Declared August 2023 (51.0 pence per share, paid October 2023) 152.2 –

Total dividends 307.1 658.3

The dividends proposed in March (approved in April) represent the final dividends paid in respect of the 2021 and 2022 financial years.

The dividends declared in August are interim distributions in respect of 2022 and 2023.

A final dividend of 52.0 pence per share (£156.2 million) has been proposed in respect of the 2023 financial year. Refer to the Chair’s

Statement and Strategic Report for further detail.

The profit and loss account of the Parent Company does not include any unrealised profits, therefore the amount available for

distribution by reference to these accounts is £137.2 million. Interim accounts will be laid before Companies House prior to payment

of the 2023 Final Dividend in order to demonstrate that profits are available for distribution.

The Group also has substantial retained profits in its subsidiary companies which are expected to flow up to the Parent Company in due

course, such that surplus cash generated can continue to be returned to shareholders.

11. Related party transactions

The Company has taken advantage of the exemptions permitted by Financial Reporting Standard 101.8 (k) and not disclosed details of

transactions with other wholly owned group undertakings. Transactions with group undertakings that are not wholly owned by Admiral

Group plc are disclosed below.

Transaction

Value

2023

£m

Balance at

31 December 2023

due/(to) related

party

£m

Transaction

Value

2022

£m

Balance at

31 December 2022

due/(to) related

party

£m

compare.com Insurance Agency LLC (Subsidiary undertaking) ––0.3 2.6

Notes to the Parent Company Financial Statements

For the year ended 31 December 2023

continued

314 Financial Statements314

Admiral Group plc Annual Report and Accounts 2023

12. Guarantees and contingent liabilities

During 2018, a Special Purpose Entity (SPE) was set up in order to secure additional funding for the Admiral Money business, with a

second such SPE set up in October 2021. The Company acts as guarantor for certain operational performance conditions of its subsidiary,

AFSL, as seller and servicer for the SPEs, and indemnifies AFSL in respect of any amount that would have been payable by AFSL for non-

compliance with such performance conditions.

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 £22 million.

A number of the Group’s contractual arrangements with reinsurers include features that, in certain scenarios, allow for reinsurers to

recover losses incurred to date. The overall impact of such scenarios would not lead to an overall net economic outflow from Admiral

Group plc.

13. Post balance sheet events

No events have occurred since the reporting date that materially impact these financial statements.

14. Continued application of Financial Reporting Standard (FRS) 101 – Reduced Disclosure Framework

Following the first time application of FRS 101 Reduced Disclosure Framework in 2015, the Board considers that it is in the best interests

of the Group for Admiral Group plc to continue to apply the FRS 101 Reduced Disclosure Framework in future periods. A shareholder or

shareholders holding in aggregate 5% or more of the total allotted shares in Admiral Group plc may serve objections to the use of the

disclosure exemptions on Admiral Group plc, in writing, to its registered office (Tŷ Admiral, David Street, Cardiff, CF10 2EH) no later than

30 June 2024.

Financial Statements

315

Admiral Group plc Annual Report and Accounts 2023

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 insurance revenue, Other revenue and

interest income from Admiral Money. It is reconciled to financial statement line items in note 13 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 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.

Total Premiums

Written

Total premiums written are the total forecast premiums, 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 13 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.

Earnings per share

Earnings per share represents the profit after tax attributable to equity shareholders, divided by the weighted

average number of basic shares.

Underwriting result

(profit or loss)

For each insurance business an underwriting result is presented. This shows the insurance segment result before

tax excluding investment income, finance expenses, co-insurer profit commission and other net income. It

excludes both gross share scheme costs and any assumed quota share reinsurance recoveries on those share

scheme costs.

Loss Ratio

Loss ratios are reported as follows:

Reported loss ratios are expressed as a percentage, of claims incurred, on a gross basis net of XoL reinsurance,

divided by insurance revenue net of XoL reinsurance premiums ceded.

The reported loss ratios use the total claims, and earned premium loss ratios, we use the total claims, and earned

premium and related income (instalment income, administration fees and ancillary income where it is highly

correlated to the core product). It is understood that this is consistent with the approach taken by peers, and

reflects the true profitability of products sold.

Core product loss ratios use the total claims and earned premiums for the core product only. This measure is

more consistent with that used previously, and are reflective of the performance of the core product in a line

of business.

The calculations and compositions of the loss ratios are presented within Appendix 1a and Appendix 1b to these

financial statements.

Glossary

316 Additional Information316

Admiral Group plc Annual Report and Accounts 2023

Expense Ratio

Expense ratios are reported as follows:

Reported expense ratios are expressed as a percentage, of expenses incurred, on a gross basis excluding share

scheme costs, divided by insurance revenue net of XoL reinsurance premiums ceded.

The reported expenses ratios use the total expenses ratios, we use the total expenses (excluding share scheme

costs), and earned premium and related income (instalment income, administration fees and ancillary income

where it is highly correlated to the core product). It is understood that this is consistent with the approach taken

by peers, and it is considered to be reflect the true profitability of products sold.

Core product expense ratios use the total expenses (excluding share scheme costs) and earned premiums

for the core product only. This measure is more consistent with that used previously, and are reflective of the

performance of the core product in a line of business.

Written expense ratios are calculated using total expenses (excluding share scheme costs) and written

premiums, net of cancellation provision, for the core product only.

The calculations of the reported expense ratios are presented within Appendix 1a and Appendix 1b to the

financial statements.

Combined Ratio

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 Appendix 1a and Appendix 1b.

Insurance service

margin

This is the reported insurance segment underwriting result, divided by insurance revenue net of excess of loss

premiums ceded.

Quota share result The total result (ceded premiums minus ceded recoveries) from contractual quota share arrangements,

excluding the quota share reinsurer’s share of share scheme expenses, finance expenses and onerous

loss component.

Segment result

The profit or loss before tax reported for individual business segments, which exclude net share scheme costs and

other central expenses.

Return on Equity

Return on equity is calculated as profit after tax 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. This average is determined by

dividing the opening and closing positions for the year by two. It excludes the impact of discontinued operations.

Group Customers

Group customer numbers reflect the total number of cars, vans, households and pets on cover at the end of the

year, across the Group, and the total number of travel insurance and Admiral Money 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.

The measure has been restated from 2022 onwards to exclude Veygo policies, given the significant fluctuations

that can arise at a point in time as a result of the short-term nature of the product.

Effective Tax Rate

Effective tax rate is defined as the approximate tax 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 Information

317

Admiral Group plc Annual Report and Accounts 2023

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. Claims incurred may be presented on an accident year basis or an

underwriting year basis, the latter sees the claims attach to the year in which the insurance policy incepted.

Actuarial best

estimate

The probability-weighted average of all future claims 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 calculating the 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 their

proportional share.

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 cycle

The tendency for the insurance market to swing between highs and lows of profitability over time, with the

potential to influence premium rates (also known as the “underwriting cycle”).

Claims net of XoL

reinsurance

The cost of claims incurred in the period, less any claims costs recovered via salvage and subrogation arrangements

or under XoL reinsurance contracts. It includes both claims payments and movements in claims reserves.

Excess of Loss (‘XoL’)

reinsurance

Contractual arrangements whereby the Group transfers part or all of the insurance risk accepted to another

insurer on an excess of loss (‘XoL’) basis (full reinsurance for claims over an agreed value).

Insurance premium

revenue net of XoL

The element of premium, less XoL reinsurance premium, earned in the period.

Insurance revenue Gross earned premium (excluding any co-insurer share) plus Other insurance revenue.

Net promotor score NPS is currently measured based on a subset of customer responding to a single question: On a scale of 0–10

(10 being the best score), how likely would you recommend our Company to a friend, family or colleague

through phone, online or email. Answers are then placed in 3 groups; Detractors: scores ranging from 0 to 6;

Passives/neutrals: scores ranging from 7 to 8; Promoters: scores ranging from 9 to 10 and the final NPS score is :

% of promoters - % of detractors.

Ogden discount rate The discount rate used in calculation of personal injury claims settlements in the UK.

Other insurance

revenue

Revenue that is considered non-separable from the core insurance product sold and therefore under IFRS 17 is

reported as insurance revenue. For the Group, this is typically the instalment income, administration fees and

any other non-separable income related to the Group’s retained share of the underwritten products.

Periodic Payment

Order (PPO)

A compensation award as part of a claims settlement that 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 commission A clause found in some reinsurance and co-insurance agreements that provides for profit sharing. Co-insurer

profit commission is presented separately on the Income Statement whilst reinsurer profit commissions are

presented within the reinsurance result, as a part of any recovery for incurred claims.

Glossary continued

318 Additional Information318

Admiral Group plc Annual Report and Accounts 2023

Regulatory Solvency

Capital Requirement

(‘SCR’)

The Group’s Regulatory Solvency Capital Requirement (SCR) is an amount of capital that it should hold in addition

to its liabilities in order to provide a cushion against unexpected events. In line with the rulebook of the Group’s

regulator, the PRA, the Group’s SCR is calculated using the Solvency II Standard Formula, and includes a fixed

capital add-on to reflect limitations in the Standard Formula with respect to Admiral’s risk profile (predominately

in respect of co-and reinsurance profit commission arrangements and risks relating to Periodic Payment Orders

(PPOs). The Group’s current fixed capital add-on of £24 million was approved by the PRA during 2023.

The Group is required to maintain eligible Own Funds ( Solvency II capital) equal to at least 100% of the Group SCR.

Both eligible Own Funds and the Group SCR are reported to the PRA on a quarterly basis and reported publicly on

an annual basis in the Group’s Solvency and Financial Condition Report.

Admiral separately calculates a ‘dynamic’ capital add-on and has used this to report a solvency capital requirement

and solvency ratio at the date of this report. A reconciliation between the regulatory solvency ratio and that

calculated on a dynamic basis is included in note 3 to the Group financial statements.

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 (‘XoL’) basis (full reinsurance for claims over an agreed value).

Scaled Agile Scaled Agile is a framework that uses a set of organisational and workflow patterns for implementing agile

practices at an enterprise scale. Scaled agile at Admiral represents the ability to drive agile at the team level

whilst applying the same sustainable principles of the Group.

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.

Solvency ratio A ratio of an entity’s Solvency II capital (referred to as Own Funds) to Solvency Capital Requirement.

Unless otherwise stated, Group solvency ratios include a reduction to Own Funds for a foreseeable dividend (i.e.

dividends relating to the relevant financial period that will be paid after the balance sheet date).

Special Purpose

Entity (SPE)

An entity that is created to accomplish a narrow and 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 ratio A projected actuarial best estimate loss ratio for a particular accident year or underwriting year.

Underwriting year The year in which an insurance policy was incepted.

Underwriting

year basis

Also referred to as the written basis. Claims incurred 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 basis An insurance policy can be written in one calendar year but earned over a subsequent calendar year.

Designed and produced by Radley Yeldar www.ry.com

This annual report is printed on Revive 100 which is 100% recycled. The manufacturers

of Revive 100 hold ISO 9001 & ISO 14001 certifications and are also FSC & PEFC certified.

This report is printed by Pureprint a CarbonNeutral® company. Both manufacturing mill

and the printer are registered to the Environmental Management System ISO14001 and

are Forest Stewardship Council® (FSC) chain-of-custody certified. If you have finished

reading the Report and no longer wish to retain it, please pass it on to other interested

readers or dispose of it in your recycled paper waste.

Registered Oﬃce

Tŷ Admiral

David Street

Cardiﬀ

CF10 2EH

www.admiralgroup.co.uk

TO ALL OUR

COLLEAGUES

OVER THE LAST

30 YEARS

Thank you