Half-yearly report
24 August 2011
Admiral announces another record half-year profit and continued strong growth.
Profit before tax at £160.6 million was 27% ahead of H1 2010, while turnover
rose 53% to £1.1 billion.
The Board is declaring a record interim dividend payment of 39.1p per share.
H1 2011 Highlights
* Group profit before tax up 27% at £160.6 million (H1 2010: £126.9 million)
* Earnings per share up 28% at 43.3p (H1 2010: 33.7p)
* Record interim dividend up 20% at 39.1p per share (2010 interim: 32.6p)
* Group turnover* up 53% at £1.1 billion (H1 2010: £720.5 million)
* Group vehicle count up 33% to 3.15 million from 2.37 million at 30 June 2010
* International Car Insurance turnover up 45% to £53.9 million (H1 2010: £37.1
million) and vehicles up 53% to 236,000 (H1 2010: 154,000)
* Group net revenue up 43% at £425.1 million (H1 2010: £296.4 million)
* Employee Share Scheme - over £8 million of shares will be distributed to
over 5,700 staff based on the H1 2011 result
* Turnover is defined as total premiums written (including co-insurers' share)
and Other Revenue
Comment from Henry Engelhardt, Chief Executive Officer
"Over £1 billion turnover in six months!  It wasn't so long ago that we were
pleased to report over £1 billion turnover for a full year.  This is an
incredible achievement and is credit to the hard work of everyone at Admiral.
"In the UK the momentum of vehicle growth and price rises from 2010 and Q1 2011
carried us through the first half of 2011, although injury claims and their
related costs continue to rise in the UK market, something to which we are not
immune.  As one of the lowest cost providers in a commoditised market we are
well placed for a future which is shaping up to be the survival of the fittest.
"Outside the UK we are continuing the tough job of building sustainable,
profitable and growing businesses from scratch. Â On a daily basis the new
customers we get from outside the UK are now over 15% of the UK's new business,
meanwhile consumer preference for price comparison shopping in our European
markets is growing.
"All in all we're pleased with the numbers for the first half of 2011. As a
result, every member of staff will receive £1,500 of free shares in the Group,
worth over £8 million in total."
Comment from Alastair Lyons, Chairman
"With a further advance in first half profits we are delighted once again to be
able to declare an increase in our interim dividend, up 20% to 39.1 pence per
ordinary share. This represents 90% of after-tax profits for the first six
months of 2011, testament to the strength of Admiral's business model which
delivers strong profits and a high return on capital.
"This August also marks the 20 year anniversary of our CEO and COO working
together to create Admiral. Â I would like to take this opportunity to thank
Henry and David for their hard work and unstinting commitment."
Interim dividend
The interim dividend of 39.1p per share will be paid on 21 October 2011. The ex-
dividend date is 28 September 2011, the record date 30 September 2011.
Management presentation
Analysts and investors will be able to access the Admiral Group management
presentation which commences at 9.00am on Wednesday 24 August 2011 by dialling
+44 (0)20 3059 5845 and using participant password "Admiral". Â A copy of the
presentation slides will be available atwww.admiralgroup.co.uk
A pdf version of this interim results announcement is also available at
www.admiralgroup.co.uk
Business Review
Group financial highlights and key performance indicators
 H1 2009 H1 2010 H1 2011  FY 2010
Turnover £540.1m £720.5m £1,104.4m  £1,584.8m
Net revenue £243.1m £296.4m £425.1m  £640.7m
Number of customers 1.92m 2.37m 3.15m  2.75m
Loss ratio 67.0% 67.8% 77.5% Â 69.4%
Expense ratio 22.0% 21.5% 16.7% Â 19.9%
Combined ratio 89.0% 89.3% 94.2% Â 89.3%
Profit before tax £105.3m £126.9m £160.6m  £265.5m
Earnings per share 28.5p 33.7p 43.3p  72.3p
Return on equity 54% 58% 63% Â 59%
Turnover comprises total premiums written and Other Revenue
The Group enjoyed another period of very strong growth in the first half of
2011, with a one-third increase in customer numbers to 3.15 million accompanied
by a 53% rise in turnover to £1,104.4 million.
Pre-tax profit rose by 27% to £160.6 million, while earnings per share increased
by 28% to 43.3p.
The Group's core UK Â Car Insurance business took further advantage of continuing
favourable market conditions to again grow substantially (by 33% in customer and
59% in premium terms) while still delivering high profits. Â This business
accounts for 90% of Group customers and turnover and remains the key driver
behind the overall growth figures.
The UK combined ratio for the first half of the year was 90.4% - up from 82.9%
in H1 2010. Â The increase is a result of lower levels of prior year reserve
releases (continuing the pattern emerging in the second half of last year), in
part offset by a lower expense ratio and a lower loss ratio on business earned
in the period. Â Despite the increased combined ratio, UK Car Insurance profit
rose strongly by 28% to £168.2 million from £131.5 million.
Outside the UK, the combined International Car Insurance businesses generated
turnover of £53.9 million (+ 45% v H1 2010) and ended the period with 236,000
insured vehicles (53% higher than 30 June 2010, despite the comparative figure
including the AdmiralDirekt business in Germany which was disposed of in January
2011).
These businesses recorded a loss of £3.2 million (£4.1 million in H1 2010) and a
combined ratio of 157% (183%).
In UK Price Comparison, Confused.com's market share held steady while turnover
increased by 10%. Â The market remains fiercely competitive however, and
Confused's pre-tax profit was down against H1 2010 to £8.2 million (H1 2010 £8.8
million). Â The Group's International Price Comparison businesses continued to
grow, with turnover up substantially to £5.0 million from £1.4 million in H1
2010.
The Directors have declared an interim dividend of 39.1 pence per share (£105.6
million), up 20% on the interim 2010 dividend (32.6p, £86.3 million).
The Group's results are presented in three key segments - UK Car Insurance,
International Car Insurance and Price Comparison. Â Other Group items are
summarised in a fourth section.
UK Car Insurance
Non-GAAP*1 format income statement
+---------+
£m H1 2009 H1 2010 | H1 2011 |  FY 2010
| |
   |  |
| |
Turnover*2 470.1 639.4 | 999.3 | Â 1,419.7
--------------------+---------+ ----------
Total premiums written*3 404.6 555.8 | 881.7 | Â 1,237.6
--------------------+---------+ ----------
   |  |
| |
Net insurance premium revenue 94.6 117.2 | 190.0 | Â 269.4
| |
Investment income 5.7 3.2 | 3.4 | Â 8.3
| |
Net insurance claims (63.6) (81.0) | (151.0) | Â (192.6)
| |
Net insurance expenses (14.2) (16.1) | (20.7) | Â (32.4)
--------------------+---------+ ----------
   |  |
| |
Underwriting profit 22.5 23.3 | 21.7 | Â 52.7
| |
Profit commission 22.7 36.9 | 45.3 | Â 67.0
| |
Net ancillary income 51.5 65.5 | 90.7 | Â 142.4
| |
Other revenue 4.5 5.8 | 10.5 | Â 13.7
--------------------+---------+ ----------
   |  |
| |
UK Car Insurance profit before tax 101.2 131.5 | 168.2 | Â 275.8
--------------------+---------+ ----------
   |  |
+---------+
*1 GAAP = Generally Accepted Accounting Practice
*2 Turnover (a non-GAAP measure) comprises total premiums written and other
revenue
*3 Total premiums written (non-GAAP) includes premium underwritten by co-
insurers
Key performance indicators
+-------+
 H1 2009 H1 2010|H1 2011| FY 2010
| |
   |  |
| |
Reported loss ratio 64.2% 65.9%| 76.3%|Â 68.3%
| |
Reported expense ratio 17.9% 17.0%| 14.1%|Â 15.2%
----------------+-------+ --------
Reported combined ratio 82.1% 82.9%| 90.4%|Â 83.5%
----------------+-------+ --------
   |  |
| |
Written basis expense ratio 16.7% 14.6%| 12.8%|Â 14.4%
| |
   |  |
| |
Claims reserve releases £18.4m £17.3m| £4.0m| £23.5m
| |
Releases as % of net premium 19.4% 14.8%| 2.1%|Â 8.7%
| |
Profit commission as % of net premium   |  |
24.0% 31.5%| 23.8%| 24.9%
| |
Vehicles insured at period-end 1.73m 2.12m| 2.83m|Â 2.46m
| |
Ancillary income per vehicle £70.8 £74.5| £78.9| £77.5
+-------+
UK Car Insurance - Co-insurance and Reinsurance
For the 2011 year of account, Admiral underwrote a net 27.5% of UK premiums (in
line with 2009 and 2010). Â 40% of the UK total is underwritten by the Munich Re
Group (specifically Great Lakes Reinsurance (UK) Plc) through a long-term co-
insurance agreement, with 32.5% being proportionally reinsured to a panel of
reinsurers: New Re (11.25%), Hannover Re (8.75%), Swiss Re (7.5%) and Mapfre Re
and XL Re (2.5% each).
The nature of the co-insurance is such that 40% of all motor premium and claims
for the 2011 year (45% for 2010) accrues directly to Great Lakes and does not
appear in the Group's income statement. Â Similarly, Great Lakes reimburses the
Group for its proportional share of expenses incurred in acquiring and
administering the motor business.
Arrangements for 2012 and beyond
The split of business over the following two years is as follows:
 2012 2013
Admiral net 25.0% 25.0%
Great Lakes 40.0% 40.0%
New Re 13.25% 13.25%
Hannover Re 8.75% -
Swiss Re 7.5% 7.5%
Mapfre Re 3.0% 3.0%
XL Re 2.5% 2.5%
To be allocated - 8.75%
TOTAL 100.0% 100.0%
The Great Lakes co-insurance contract will run until at least the end of 2016,
and will see Great Lakes co-insure 40% of the UK business for that remaining
period. Â Admiral has committed to retain at least 25% for the duration, whilst
the allocation of the balance is at Admiral's discretion.
UK Car Insurance Financial Performance
Market conditions in H1 2011 were broadly similar to the second half of 2010,
with a combination of poor underwriting results and low investment returns
continuing to push prices up across the market and encouraging a number of
insurers to scale back portfolios, especially in certain segments.
Admiral continued to grow and increase market share, ending the period with over
2.8 million vehicles insured in the UK - 33% higher than a year earlier and 15%
up on 31 December 2010. Â Price tracking surveys suggest the rate of price growth
has slowed into 2011 (and in Q2 v Q1), signalling a slowing in the hardening
phase of the cycle. Â Admiral's premium rates in H1 increased by around 11%
across new business and renewals (with data from the price surveys and internal
competiveness tracking suggesting Admiral's rates increased at a faster rate
than the market).
While customer numbers were up by a third year-on-year, rate changes have led to
significant increases in average premium and total premiums written increased by
59% to £881.7 million (H1 2010: £555.8 million).
The loss ratio on premium earned in H1 2011 (i.e. excluding the impact of
reserve releases from previous periods) was 78%, down from 81% in the first half
of 2010. Â The improvement reflects increases in premium rates over the period,
offsetting claims inflation (which has trended higher in the past year compared
to the recent past, as discussed further below).
During H1 2011, Admiral has seen less positive development of prior year claims
than historically has been the case, resulting in significantly lower reserve
releases being made compared with previous periods.  Releases totalled £4.0
million (2.1% of premium) compared to £17.3 million in H1 2010 (14.8% of
premium). Â This is a consequence of increases in the projections of ultimate
loss ratios on earlier underwriting years, in turn resulting from worse
development in average claim costs on those years than was previously projected.
After taking the lower level of releases into account, the reported loss ratio
for H1 2011 was 76% v 66% in H1 2010. Â The UK market loss ratio for the 2010
accident year (the most recent data available) was 92%. Â Our loss ratios remain
significantly lower than the market.
As usual with claims reserves, there remains some uncertainty in the projections
of recent underwriting years and the ratios above are subject to potentially
material change (positive or negative) over the coming periods.
Claims reserving
There has been no change in Admiral's reserving policy, which is initially to
reserve conservatively, above independent and internal projections of ultimate
loss ratios. Â This is designed to create a significant margin being held in
reserves to allow for unforeseen adverse development in open claims which would
typically result in Admiral making above industry average reserve releases.
As profit commission income is recognised in the income statement in line with
loss ratios accounted for on our own claims reserves, the reserving policy also
results in profit commission income being deferred and released over time.
In determining the quantum of releases from prior years, we seek to maintain a
consistent level of prudence in reserves (taken together with 'reserves' of
profit commission) based on actuarial projections of ultimate loss ratios.
Increasing average premiums further benefited the expense ratio in H1 2011, with
a reported ratio of 14.1% (compared to 17.0% in H1 2010). Â The underlying
written basis expense ratio in H1 2011 was around 13% - its lowest ever level.
The UK business combined ratio for H1 2011 was 90.4% compared to 82.9% in H1
2010 (and 84% in FY 2010). Â The improvement in the expense ratio of around 3%
was more than offset by a 10 percentage point worsening in the reported loss
ratio as discussed above. Â The most recently available market combined ratio in
2010 was around 124% (including the impact of prior year claims strengthening of
8%).
After adding investment income of £3.4 million (H1 2010: £3.2 million), the
total UK underwriting result was £21.7 million (H1 2010: £23.3 million) - the
significant increase in net insurance premium revenue of £72.8 million being
offset by the increase in the combined ratio.
Profit commission recognised on co- and reinsurance contracts amounted to £45.3
million, up from £36.9 million in H1 2010.  The increase results from the first
recognition of income on the 2010 underwriting year derived from reinsurance
contracts.
Ancillary income - analysis of contribution:
+---------+
£m H1 2009 H1 2010 | H1 2011 |  FY 2010
| |
   |  |
| |
Ancillary contribution 61.0 77.6 | 107.1 | Â 168.3
| |
Internal costs (9.5) (12.1) | (16.4) | Â (25.9)
--------------------+---------+ ----------
   |  |
| |
Net ancillary profit 51.5 65.5 | 90.7 | Â 142.4
--------------------+---------+ ----------
   |  |
| |
Ancillary contribution per vehicle   |  |
£70.8 £74.5 | £78.9 | £77.0
--------------------+---------+ ----------
   |  |
+---------+
Continued strong growth in customer numbers contributed to a further significant
increase in net ancillary profit, which rose 38% to £90.7 million.  The average
number of vehicles insured in the year to 30 June 2011 increased by 31% to 2.51
million (year to 30 June 2010: 1.91 million) leading to ancillary contribution
per average vehicle of £78.90 (H1 2010: £74.50).
Taking all of the above into account, profit from UK Car Insurance rose by 28%
to £168.2 million (H1 2010: £131.5 million).
International Car Insurance
Non-GAAP format income statement
+-------+
£m H1 2009 H1 2010|H1 2011| FY 2010
| |
   |  |
| |
Turnover 24.5 37.1| 53.9|Â 77.6
----------------+-------+ --------
Total premiums written 22.6 34.0| 49.5|Â 71.0
----------------+-------+ --------
   |  |
| |
Net insurance premium revenue   |  |
5.9 8.1| 11.5| 18.7
| |
Investment income 0.1 0.1| 0.1|Â 0.1
| |
Net insurance claims (6.5) (7.8)| (11.1)|Â (15.9)
| |
Net insurance expenses (5.2) (7.1)| (6.9)|Â (16.5)
----------------+-------+ --------
   |  |
| |
Underwriting profit (5.7) (6.7)| (6.4)|Â (13.6)
| |
Net ancillary income 1.4 2.4| 3.6|Â 5.3
| |
Other revenue and charges 0.2 0.2| (0.4)|Â 0.3
----------------+-------+ --------
   |  |
| |
International Car Insurance loss before tax   |  |
(4.1) (4.1)| (3.2)| (8.0)
----------------+-------+ --------
   |  |
+-------+
Note - Pre-launch costs excluded
Key performance indicators
+---------+
 H1 2009 H1 2010 | H1 2011 |  FY 2010
| |
   |  |
| |
Reported loss ratio 111% 96% | 97% | Â 85%
| |
Reported expense ratio 87% 87% | 60% | Â 88%
--------------------+---------+ ----------
Reported combined ratio 198% 183% | 157% | Â 173%
| |
   |  |
| |
Vehicles insured 100,500 154,100 | 235,900 | Â 195,000
| |
Ancillary income per vehicle £35.1 £37.6 | £35.4 |  £32.5
+---------+
International Co-insurance and Reinsurance
Extensive use of reinsurance is also a feature of the Group's insurance
operations outside the UK.
The arrangements in Spain and Italy involve Admiral retaining 35% of the risks,
the majority share of 65% being underwritten by Munich Re. Â In France, Admiral
retains a net 30%, with 70% reinsured among three reinsurers.
In the USA, Admiral retains one third of the underwriting, with the remaining
two thirds shared between two reinsurers. Â Both bear their proportional share of
expenses and underwriting, subject to certain caps on the reinsurers' total
exposures.
All contracts have profit commission terms that allow Admiral to receive a
proportion of the profit earned on the underwriting once the business reaches
cumulative profitability.
The contracts in place in Italy, France and the USA include proportional sharing
of ancillary profits.
International Car Insurance Financial Performance
The Group is active in four markets outside the UK - Spain (Admiral Seguros),
Italy (ConTe), the US (Elephant Auto) and France (L'olivier Assurances).
The combined businesses continued to grow and show improvement in their
operating results in the first half of 2011.  Total premium written of £49.5
million was over 45% higher than H1 2010, despite the comparative including £8.6
million of premium written by AdmiralDirekt, the German car insurance business
disposed of by the Group in January 2011. Â Excluding German premium, growth in
H1 2011 was over 90%.
The number of vehicles insured also rose significantly, ending June 2011 at
nearly 236,000 - 53% higher than a year earlier (92% higher excluding
AdmiralDirekt) and accounting for 7% of Group customers (up from 6% a year
earlier).
Although the reported loss ratio was in line with H1 2010, the combined ratio
showed notable improvement, reducing to 157% from 183% in H1 2010. Â This was due
to a falling expense ratio which improved to 60% from 87%, largely as a result
of the strong growth and increasing scale of the operations.
Loss before tax for the combined operations also improved, falling to £3.2
million from £4.1 million in H1 2010.
Price Comparison
Non-GAAP format income statement
+-------+
£m H1 2009 H1 2010|H1 2011| FY 2010
| |
   |  |
| |
Revenue: Â Â | Â |
| |
Motor 31.3 29.9| 36.7|Â 59.6
| |
Other 8.9 8.1| 8.7|Â 16.1
----------------+-------+ --------
Total 40.2 38.0| 45.4|Â 75.7
| |
   |  |
| |
Operating expenses (29.2) (30.9)| (40.4)|Â (63.6)
----------------+-------+ --------
   |  |
| |
Operating profit 11.0 7.1| 5.0|Â 12.1
----------------+-------+ --------
   |  |
| |
Confused.com profit 11.0 8.8| 8.2|Â 16.9
 | |
| |
International Price Comparison result   |  |
- (1.7)| (3.2)| (4.8)
+-------+
UK Price Comparison - Confused.com:
The UK price comparison market appeared to become even more competitive in H1
2011, with the four main competitors spending record amounts on advertising
during the period.
Against this backdrop, Confused had a relatively positive six months,
maintaining market share in its core car insurance comparison product at around
one quarter.  Revenue (at £40.4 million) in H1 was at its highest level in any
half-year period (car insurance accounting for 79% of revenue compared to 78% in
H1 2010).
As a result of the further increased marketing activity, Confused itself spent
more to maintain market share and consequently operating profit reduced to £8.2m
million (from £8.8 million in H1 2010, though was in line with H2 2010).
 Confused's operating margin was around 20% (H1 2010: 25%).
International Price Comparison:
The Group has three price comparison businesses outside the UK - in Spain
(Rastreator.com), France (LeLynx.fr) and Italy (Chiarezza.it).
The combined operations grew strongly in H1 2011, delivering revenue of £5.0
million, up substantially from the £1.4 million generated in H1 2010 and also
well up on the £2.5 million in H2 2010.
The combined loss of £3.2 million was up on the £1.7 million in the same period
last year (though was similar to the result for H2 2010).
Other Group Items
+---------+
£m H1 2009 H1 2010 | H1 2011 |  FY 2010
| |
   |  |
| |
Gladiator operating profit 1.4 1.5 | 1.2 | Â 2.7
| |
Group net interest income 1.1 0.3 | 1.6 | Â 1.1
| |
Share scheme charges (3.4) (7.5) | (10.8) | Â (15.0)
| |
Expansion costs (1.0) (0.9) | (0.4) | Â (1.1)
| |
Other central overhead (0.8) (1.0) | (1.0) | Â (2.1)
+---------+
Gladiator
Non GAAP income statement and key performance indicators
+---------+
£m H1 2009 H1 2010 | H1 2011 |  FY 2010
| |
   |  |
| |
Revenue 5.3 6.0 | 5.8 | Â 11.8
| |
Expenses (3.9) (4.5) | (4.6) | Â (9.1)
--------------------+---------+ ----------
   |  |
| |
Operating profit 1.4 1.5 | 1.2 | Â 2.7
--------------------+---------+ ----------
   |  |
| |
Operating margin 26% 25% | 19% | Â 23%
| |
Customer numbers 89,400 95,500 | 90,500 | Â 94,500
+---------+
Increased competition in the van insurance market contributed to a fall in the
number of customers at Gladiator, with the pressure on price also leading to a
fall in revenue.
Operating profit fell to £1.2 million from £1.5 million in H1 2010, whilst the
operating margin fell to 19% from 25%.
Share scheme charges
The share scheme charge increased to £10.8 million from £7.5 million in H1
2010, predominantly due to the increased share price.
Investments and Cash
Investment strategy
There has been no change in investment strategy, and the Group's funds continue
to be held either in money market funds, term deposits or as cash at bank.
The key focus of the Group's investment strategy is capital preservation, with
additional priorities focusing on low volatility of investment return and high
levels of liquidity.
Cash and investments analysis
 30 June 2011
-------------------------------------------------
 UK Car International Price Other Total
Insurance Car Comparison
Insurance
 £m £m £m £m £m
Money market funds 548.0 31.8 - - 579.8
Long-term cash deposits 289.7 3.6 - 10.0 303.3
Cash 128.0 58.3 12.7 82.4 281.4
-------------------------------------------------
Total 965.7 93.7 12.7 92.4 1,164.5
-------------------------------------------------
 31 December 2010
-----------------------------------------------
 UK Car International Price Other Total
Insurance Car Comparison
Insurance
 £m £m £m £m £m
Money market funds 333.8 29.8 - - 363.6
Long-term cash deposits 283.0 6.6 - 10.0 299.6
Cash 90.6 40.3 11.2 104.6 246.7
-----------------------------------------------
Total 707.4 76.7 11.2 114.6 909.9
-----------------------------------------------
 30 June 2010
-----------------------------------------------
 UK Car International Price Other Total
Insurance Car Comparison
Insurance
 £m £m £m £m £m
Money market funds  233.5  27.6 - - 261.1
Long-term cash deposits  249.0  3.9 -  39.0 291.9
Cash  102.5  23.0 7.3  32.6 165.4
-----------------------------------------------
Total  585.0  54.5 7.3  71.6 718.4
-----------------------------------------------
Cash and investment balances continue to grow strongly - rising by 62% from 30
June 2010 and 28% since the end of 2010. Â This remains largely due to the strong
growth in the size of the UK business.
The average rate of return on invested sterling funds (composing the vast
majority of total balances) was steady at just over 1%. Â At 30 June 2011, around
75% of funds were available without notice (30 June 2010: 60%), providing the
Group with substantial levels of liquidity.
Other financial items
Taxation
The taxation charge reported in the income statement is £44.1 million (H1 2010:
£36.9 million), which equates to 27.5% (H1 2010: 29.1%) of profit before tax.
Earnings per share
Basic earnings per share rose by 28% to 43.3p from 33.7p. Â The change is in line
with pre- and post-tax profit growth.
Dividend
The Directors have declared an interim dividend of 39.1p per share. Â The payment
date is 21 October 2011, ex-dividend date 28 September and record date 30
September.
This payment is 20% higher than the interim dividend for 2010 (32.6p) and
equates to 90% of earnings per share (H1 2010: 96%). Â The payout ratio is lower
in the current period due to retaining higher levels of earnings to fund growth
in solvency capital.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group's operations remain
consistent with those disclosed in the 2010 Annual Report.
Condensed consolidated income statement
  6 months ended Year ended
  30 June 30 June 31 December
2011 2010 2010
 Note £m £m £m
Insurance premium revenue 3 425.2 244.1 574.6
Insurance premium ceded to reinsurers 3 (223.7) (118.8) (286.5)
-----------------------------
Net insurance premium revenue  201.5 125.3 288.1
Other revenue 4 173.2 130.6 276.2
Profit commission 5 45.3 36.9 67.0
Investment and interest income 6 5.1 3.6 9.5
-----------------------------
Net revenue  425.1 296.4 640.8
Insurance claims and claims handling expenses  (340.0) (174.1) (416.7)
Insurance claims and claims handling  177.9 85.2 208.2
 expenses recovered from reinsurers
-----------------------------
Net insurance claims  (162.1) (88.9) (208.5)
Operating expenses 7 (91.6) (73.1) (151.8)
Share scheme charges 20 (10.8) (7.5) (15.0)
-----------------------------
Total expenses  (264.5) (169.5) (375.3)
Profit before tax  160.6 126.9 265.5
Taxation expense 8 (44.1) (36.9) (71.9)
-----------------------------
Profit after tax  116.5 90.0 193.6
Profit after tax attributable to:
Equity holders of the parent  116.5 90.3 193.8
Non-controlling interests  - (0.3) (0.2)
-----------------------------
  116.5 90.0 193.6
Earnings per share:
Basic 9 43.3p 33.7p 72.3p
Diluted 9 43.2p 33.7p 72.2p
+------------------------------------------------------------------------------+
|Dividends declared and paid (total) 10 94.5 78.3 164.7|
| |
|Dividends declared and paid (per share) 10 35.5p 29.8p 62.4p|
+------------------------------------------------------------------------------+
Condensed consolidated statement of comprehensive income
 6 months ended Year ended
 30 June 30 June 31 December
2011 2010 2010
 £m £m £m
Profit for the period 116.5 90.0 193.6
Other comprehensive income
Exchange differences on translation
  of foreign operations 2.6 (2.6) (0.8)
----------------------------------
Other comprehensive income for the
  period, net of income tax 2.6 (2.6) (0.8)
----------------------------------
Total comprehensive income for the period 119.1 87.4 192.8
Total comprehensive income for the period, attributable to:
Equity holders of the parent 119.1 87.7 193.0
Non-controlling interests - (0.3) (0.2)
------------------
 119.1 87.4 192.8
Condensed consolidated statement of financial position
  As at:
  30 June 30 June 31 December
2011 2010 2010
 Note £m £m £m
ASSETS
Property, plant and equipment 11 14.1 11.7 13.6
Intangible assets 12 84.2 79.1 82.9
Reinsurance assets 14 479.7 283.0 357.0
Financial assets 13 1,319.3 827.7 1,004.7
Deferred income tax 17 11.7 1.2 12.4
Trade and other receivables 15 75.5 45.9 47.9
Cash and cash equivalents 16 281.4 165.4 246.7
Assets held for sale 11 - - 1.5
----------------------------
Total assets  2,265.9 1,414.0 1,766.7
EQUITY
Share capital 20 0.3 0.3 0.3
Share premium account  13.1 13.1 13.1
Other reserves  6.8 2.4 4.2
Retained earnings  371.1 306.3 332.7
----------------------------
Total equity attributable to equity holders of
the parent 391.3 322.1 350.3
Non-controlling interests  0.4 0.3 0.4
----------------------------
Total equity  391.7 322.4 350.7
LIABILITIES
Insurance contracts 14 1,083.9 643.8 806.6
Trade and other payables 18 747.6 407.8 561.0
Current tax liabilities  42.7 40.0 48.4
----------------------------
Total liabilities  1,874.2 1,091.6 1,416.0
Total equity and total liabilities  2,265.9 1,414.0 1,766.7
Condensed consolidated cash flow statement
  6 months ended Year ended
  30 June 2011 30 June 2010 31 December 2010
  £m £m £m
Profit after tax  116.5 90.0 193.6
Adjustments for non-cash items:
- Depreciation  2.7 2.5 4.6
- Amortisation of software  1.6 1.0 2.7
- Change in unrealised gains on (1.6) (1.7) (1.3)
investments
- Other gains and losses  2.2 0.3 0.9
- Share scheme charge  14.8 9.9 18.5
Change in gross insurance contract 277.3 110.9 273.7
liabilities
Change in reinsurance assets  (122.7) (70.2) (144.0)
Change in trade and other
receivables, including from (124.1) (80.5) (152.9)
policyholders
Change in trade and other
payables, including tax and social 186.6 101.1 254.3
security
Taxation expense  44.1 36.9 71.9
-------------------------------------------
Cash flows from operating
activities, before movements in 397.4 200.2 522.0
investments
Net cash flow into investments (218.3) (130.5) (240.8)
-------------------------------------------
Cash flows from operating
activities, net of movements in 179.1 69.7 281.2
investments
Taxation payments  (47.4) (32.2) (69.5)
-------------------------------------------
Net cash flow from operating  131.7 37.5 211.7
activities
Cash flows from investing
activities:
Purchases of property, plant and
equipment  and software (5.1) (2.9) (11.1)
Proceeds from the disposals of  - - -
property, plant, equipment and
software
-------------------------------------------
Net cash used in investing  (5.1) (2.9) (11.1)
activities
Cash flows from financing
activities:
Capital element of new finance  - (0.1) 0.4
leases
Repayment of finance lease  - - (0.6)
liabilities
Equity dividends paid  (94.5) (78.3) (164.7)
-------------------------------------------
Net cash used in financing  (94.5) (78.4) (164.9)
activities
Net decrease in cash and cash  32.1 (43.8) 35.7
 equivalents
Cash and cash equivalents at 1 Â 246.7 211.8 211.8
January
Effects of changes in foreign  2.6 (2.6) (0.8)
exchange rates
-------------------------------------------
Cash and cash equivalents at end 16 281.4 165.4 246.7
of period
Condensed consolidated statement of changes in equity
 Share Share Foreign Retained Minority Total
capital premium exchange profit and interest equity
account reserve loss
 £m £m £m £m £m £m
At 1 January 2010 0.3 13.1 5.0 281.8 0.6 300.8
Profit for the period - - - 90.3 (0.3) 90.0
Other comprehensive income
Currency translation - - (2.6) - - (2.6)
differences
-----------------------------------------------------
Total comprehensive income - - (2.6) 90.3 (0.3) 87.4
for the period
-----------------------------------------------------
Transactions with equity-
holders
Dividends - - - (78.3) - (78.3)
Share scheme credit - - - 9.9 - 9.9
Deferred tax credit on    2.6 - 2.6
share scheme charge - - -
-----------------------------------------------------
Total transactions with - - - (65.8) - (65.8)
equity-holders
-----------------------------------------------------
As at 30 June 2010 0.3 13.1 2.4 306.3 0.3 322.4
At 1 January 2010 0.3 13.1 5.0 281.8 0.6 300.8
Profit for the period - - - 193.8 (0.2) 193.6
Other comprehensive income
Currency translation - - (0.8) - - (0.8)
differences
-----------------------------------------------------
Total comprehensive income - - (0.8) 193.8 (0.2) 192.8
for    the period
-----------------------------------------------------
Transactions with equity-
holders
Dividends - - - (164.7) - (164.7)
Share scheme credit - - - 18.5 - 18.5
Deferred tax credit on - - - 3.3 - 3.3
share scheme charge
-----------------------------------------------------
Total transactions with - - - (142.9) - (142.9)
equity-holders
-----------------------------------------------------
As at 31 December 2010 0.3 13.1 4.2 332.7 0.4 350.7
Condensed consolidated statement of changes in equity (continued)
 Share Share Foreign Retained Minority Total
capital premium exchange profit and loss interest equity
account reserve
 £m £m £m £m £m £m
At 1 January 2011 0.3 13.1 4.2 332.7 0.4 350.7
Profit for the period - - - 116.5 - 116.5
Other comprehensive
income
Currency translation - - 2.6 - - 2.6
differences
---------------------------------------------------------
Total comprehensive - - 2.6 116.5 - 119.1
income for the period
---------------------------------------------------------
Transactions with
equity-holders
Dividends - - - (94.5) - (94.5)
Share scheme credit - - - 14.8 - 14.8
Deferred tax credit on    1.6 - 1.6
share scheme charge - - -
---------------------------------------------------------
Total transactions with - - - (78.1) - (78.1)
equity-holders
---------------------------------------------------------
As at 30 June 2011 0.3 13.1 6.8 371.1 0.4 391.7
Notes to the condensed interim financial statements
1. General information and basis of preparation
Admiral Group plc is a Company incorporated in England and Wales. Â Its
registered office is at Capital Tower, Greyfriars Road, Cardiff CF10 3AZ and its
shares are listed on the London Stock Exchange.
The condensed interim financial statements comprise the results and balances of
the Company and its subsidiaries (the Group) for the six-month period ended 30
June 2011 and the comparative periods for the 6-month period ended 30 June 2010
and the year ended 31 December 2010. Â This condensed set of financial statements
has been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU. As required by the Disclosure and Transparency Rules of the
Financial Services Authority, the condensed set of financial statements has been
prepared applying the accounting policies and presentation that were applied in
the preparation of the company's published consolidated financial statements for
the year ended 31 December 2010.
The financial statements of the Company's subsidiaries are consolidated in the
Group financial statements. Â In accordance with IAS 24, transactions or balances
between Group companies that have been eliminated on consolidation are not
reported as related party transactions.
The comparative figures for the financial year ended 31 December 2010 are not
the company's statutory accounts for that financial year. Those accounts have
been reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
The accounts have been prepared on a going concern basis. Â In considering the
appropriateness of this assumption, the Board have reviewed the Group's
projections for the next twelve months and beyond, including cash flow forecasts
and regulatory capital surpluses. Â The Group has no debt.
Accounting policies
The condensed set of interim financial statements have been prepared applying
the accounting policies and presentation that were applied in the preparation of
the company's published consolidated financial statements for the year ended 31
December 2010. A number of other IFRS and interpretations have been endorsed by
the EU in the period to 30 June 2011 and although they have been adopted by the
Group, none of them has had a material impact on the Group's financial
statements.
Critical accounting judgements and estimates
The Group's 2010 annual report provides full details of significant judgements
and estimates used in the application of the Group's accounting policies. There
have been no significant changes to these judgements and estimates during the
period.
Estimation techniques used in calculation of claims provisions
Estimation techniques are used in the calculation of the provisions for claims
outstanding, which represents a projection of the ultimate cost of settling
claims that have occurred prior to the balance sheet date and remain unsettled
at the balance sheet date.
The key area where these techniques are used relates to the ultimate cost of
reported claims. Â A secondary area relates to the emergence of claims that
occurred prior to the balance sheet date, but had not been reported at that
date.
The estimates of the ultimate cost of reported claims are based on the setting
of claim provisions on a case-by-case basis, for all but the simplest of claims.
The sum of these provisions are compared with projected ultimate costs using a
variety of different projection techniques (including incurred and paid chain
ladder and an average cost of claim approach) to allow an actuarial assessment
of their likely accuracy. They include allowance for unreported claims.
The most significant sensitivity in the use of the projection techniques arises
from any future step change in claims costs, which would cause future claim cost
inflation to deviate from historic trends. Â This is most likely to arise either
from significant deviations in claims inflation compared to expectation, or from
a change in the regulatory or judicial regime that leads to an increase in
awards or legal costs for bodily injury claims that is significantly above or
below the historical trend.
The claims provisions are subject to independent review by the Group's actuarial
advisors.
Management's reserving policy is to reserve at a level above best estimate
projections to allow for unforeseen adverse claims development. Future changes
in claims reserves also impact profit commission income, as the recognition of
this income is dependant on the loss ratio booked in the financial statements,
and cash receivable is dependant on actuarial projections of ultimate loss
ratios.
Refer to note 14 for an analysis on the changes in estimates of claims
provisions for each underwriting year.
2. Operating segments
The Group has four reportable segments, as described below. These segments
represent the principal split of business that is regularly reported to the
Group's Board of Directors, which is considered to be the Group's chief
operating decision maker in line with IFRS 8, Operating Segments.
UK Car Insurance
The segment consists of the underwriting of car insurance and the generation of
ancillary income in the UK. The Directors consider the results of these
activities to be reportable as one segment as the activities carried out in
generating the income are not independent of each other and are performed as one
business. This mirrors the approach taken in management reporting.
International Car Insurance
The segment consists of the underwriting of car insurance and the generation of
ancillary income outside of the UK. It specifically covers the Group operations
Admiral Seguros in Spain, ConTe in Italy and Elephant Auto in the USA and
L'Olivier in France. None of these operations are reportable on an individual
basis, based on the threshold requirements in IFRS 8.
The results of our German car insurance business, AdmiralDirekt, which was sold
during the period are included in this segment.
Price Comparison
The segment relates to the Group's price comparison websites Confused.com in the
UK, Rastreator in Spain, LeLynx in France and Chiarezza in Italy. Each of the
Price Comparison businesses are operating in individual geographical segments
but are grouped into one reporting segment as LeLynx, Chiarezza and Rastreator
do not individually meet the threshold requirements in IFRS 8.
Other
The 'Other' segment is designed to be comprised all other operating segments
that do not meet the threshold requirements for individual reporting. Currently
there is only one such segment, the Gladiator commercial van insurance broking
operation, and so it is the results and balances of this operation that comprise
the 'other' segment.
Taxes are not allocated across the segments and, as with the corporate
activities, are included in the reconciliation to the Condensed Consolidated
Income Statement and Condensed Consolidated Statement of Financial Position.
Segment income, results and other information
An analysis of the Group's revenue and results for the period ended 30 June
2011, by reportable segment are shown below. Â The accounting policies of the
reportable segments are consistent with those presented in note 3 in the 2010
Group financial statements.
 30 June 2011
 UK Car International Price Other Eliminations Segment
Insurance Car Comparison total
Insurance
 £m £m £m £m £m £m
Turnover* 999.3 53.9 45.4 5.8 - 1,104.4
Net insurance 190.0 11.5 - - - 201.5
premium revenue
Other revenue and 162.9 4.4 45.4 5.8 - 218.5
profit commission
Investment and 3.4 0.1 - - - 3.5
interest income
--------------------------------------------------------------
Net revenue 356.3 16.0 45.4 5.8 - 423.5
Net insurance (151.0) (11.1) - - - (162.1)
claims
Expenses (37.1) (8.1) (40.4) (4.6) - (90.2)
--------------------------------------------------------------
Segment profit / 168.2 (3.2) 5.0 1.2 - 171.2
(loss) before tax
Other central revenue and expenses, including share scheme  (12.2)
charges
Interest income      1.6
--------
Consolidated profit before tax    160.6
Taxation expense    (44.1)
--------
Consolidated profit after tax    116.5
Reportable segment 2,045.3 151.9 20.4 15.0 (66.8) 2,165.8
assets
--------------------------------------------------------------
Unallocated assets and liabilities    100.1
Consolidated      2,265.9
assets
*Turnover is a non-GAAP measure and consists of total premiums written
(including co-insurers share) and other revenue.
Revenue and results for the corresponding reportable segments for the period
ended 30 June 2010 are shown below.
 30 June 2010
 UK Car International Price Other Eliminations Segment
Insurance Car Comparison total
Insurance
 £m £m £m £m £m £m
Turnover* 639.4 37.1 38.0 6.0 - 720.5
Net insurance 117.2 8.1 - - - 125.3
premium revenue
Other revenue and 120.3 3.1 38.0 6.0 - 167.4
profit commission
Investment and 3.2 0.1 - - - 3.3
interest income
--------------------------------------------------------------
Net revenue 240.7 11.3 38.0 6.0 - 296.0
Net insurance (81.0) (7.8) - - - (88.8)
claims
Expenses (28.2) (7.6) (30.9) (4.5) - (71.2)
--------------------------------------------------------------
Segment profit / 131.5 (4.1) 7.1 1.5 - 136.0
(loss) before tax
Other central revenue and expenses, including share scheme  (9.4)
charges
Interest income      0.3
--------
Consolidated profit before tax    126.9
Taxation expense    (36.9)
--------
Consolidated profit after tax    90.0
Reportable segment 1,319.6 104.4 18.9 15.5 (111.8) 1,346.6
assets
--------------------------------------------------------------
Unallocated assets and liabilities    67.4
Consolidated      1,414.0
assets
Revenue and results for the corresponding reportable segments for the year ended
31 December 2010 are shown below.
 31 December 2010
 UK Car International Price Other Eliminations Segment
Insurance Car Comparison total
Insurance
 £m £m £m £m £m £m
Turnover* 1,419.7 77.6 75.7 11.8 - 1,584.8
Net insurance 269.4 18.7 - - - 288.1
premium revenue
Other revenue and 249.0 6.7 75.7 11.8 - 343.2
profit commission
Investment and 8.3 0.1 - - - 8.4
interest income
--------------------------------------------------------------
Net revenue 526.7 25.5 75.7 11.8 - 639.7
Net insurance (192.6) (15.9) - - - (208.5)
claims
Expenses (58.3) (17.6) (63.6) (9.1) - (148.6)
--------------------------------------------------------------
Segment profit / 275.8 (8.0) 12.1 2.7 - 282.6
(loss) before tax
Other central revenue and expenses, including share scheme  (18.2)
charges
Interest income      1.1
--------
Consolidated profit before tax    265.5
Taxation expense    (71.9)
--------
Consolidated profit after tax    193.6
Reportable segment 1,597.7 125.9 12.5 12.2 (105.5) 1,642.8
assets
--------------------------------------------------------------
Unallocated assets and liabilities    123.9
Consolidated      1,766.7
assets
Segment revenues
The UK and International Car Insurance reportable segments derive all insurance
premium income from external policyholders. Revenue within these segments is not
derived from an individual policyholder that represents 10% or more of the
Group's total revenue.
The total of Price Comparison revenues from transactions with other reportable
segments is £8.5 million (2010 H1: £7.3million, 2010 FY: £15.0 million). These
amounts have not been eliminated in order to avoid distorting expense and
combined ratios which are key indicators of insurance business. There are no
other transactions between reportable segments.
Information about geographical locations
All material revenues from external customers, and net assets attributed to a
foreign country are shown within the International Car Insurance reportable
segment shown above. The revenue and results of the three International Price
Comparison businesses, Rastreator, LeLynx and Chiarezza are not yet material
enough to be presented as a separate segment.
3. Net insurance premium revenue
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Total motor insurance premiums before co- insurance 931.2 589.8 1,308.6
Group gross premiums written after co-insurance 568.0 335.1 738.5
Outwards reinsurance premiums (312.7) (172.9) (380.0)
-------------------------
Net insurance premiums written 255.3 162.2 358.5
Change in gross unearned premium provision (142.8) (91.0) (163.9)
Change in reinsurers' share of unearned premium
 provision 89.0 54.1 93.5
-------------------------
Net insurance premium revenue 201.5 125.3 288.1
The Group's share of the car insurance business was underwritten by Admiral
Insurance (Gibraltar) Limited (AIGL), Admiral Insurance Company Limited (AICL)
and Elephant Insurance Company. All contracts are short-term in duration,
lasting for 10 or 12 months.
4. Other revenue
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Ancillary revenue 111.3 80.6 174.6
Price Comparison revenue 45.4 38.0 75.7
Other revenue 16.5 12.0 25.9
---------------------------
Total other revenue 173.2 130.6 276.2
Ancillary revenue is primarily made up of commissions and fees earned on sales
of insurance products (underwritten by external parties) and services
complementing the car insurance policy.
5. Profit commission
 30 30 31
Jun June December
2011 2010 2010
 £m £m £m
Underwriting year:
2006 & prior 3.5 (0.6) (0.1)
2007 (2.0) 7.6 7.6
2008 (0.9) 18.4 20.4
2009 (0.2) 11.5 28.2
2010 41.6 - 10.9
2011 3.3 - -
---------------------------
 45.3 36.9 67.0
6. Investment and interest income
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Net investment return 3.5 3.3 8.4
Interest receivable 1.6 0.3 1.1
-------------------------
Total investment and interest income 5.1 3.6 9.5
7. Expenses
 30 June 2011  30 June 2010
 Insurance Other Total  Insurance Other Total
contracts contracts
 £m £m £m  £m £m £m
Acquisition of insurance 14.3 - 14.3 Â 10.1 - 10.1
 contracts
Administration and 13.3 64.0 77.3 Â 13.1 49.9 63.0
 marketing costs
----------------------- ----------------------
 27.6 64.0 91.6  23.2 49.9 73.1
Share scheme charges - 10.8 10.8 Â - 7.5 7.5
----------------------- ----------------------
Total expenses 27.6 74.8 102.4 Â 23.2 57.4 80.6
  31 December 2010
  Insurance Other Total
contracts
  £m £m £m
Acquisition of insurance contracts  20.9 - 20.9
Administration and marketing costs  28.0 102.9 130.9
----------------------------
 48.9 102.9 151.8
Share scheme charges  - 15.0 15.0
----------------------------
Total expenses  48.9 117.9 166.8
The £13.3 million (2010 H1: £13.1 million 2010 FY: £28.0 million) administration
and marketing costs allocated to insurance contracts is principally made up of
salary costs.
Analysis of other administration and marketing costs:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Ancillary sales expenses 17.0 12.6 26.9
Price Comparison operating expenses 40.4 30.9 63.6
Other expenses 6.6 6.4 12.4
-------------------------
Total 64.0 49.9 102.9
The gross amount of expenses, before recoveries from co-insurers and reinsurers
is £191.1 million (2010 H1: £157.8 million; 2010 FY: £333.2 million).  This
amount can be reconciled to the total expenses and share scheme charges above of
£102.4 million (2010 H1: £80.6 million; 2010 FY: £166.8 million) as follows:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Gross expenses 191.1 157.8 333.2
Co-insurer share of expenses (36.9) (46.4) (99.5)
-----------------------------
Expenses, net of co-insurer share 154.2 111.4 233.7
Adjustment for deferral of acquisition costs (8.3) (4.1) (7.9)
-----------------------------
Expenses, net of co-insurer share (earned basis) 145.9 107.3 225.8
Reinsurer share of expenses (earned basis) (43.5) (26.7) (59.0)
-----------------------------
Total expenses and share scheme charges 102.4 80.6 166.8
Reconciliation of expenses related to insurance contracts to reported expense
ratio:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Insurance contract expenses from above 27.6 23.2 48.9
Add: Â claims handling expenses 6.1 3.8 8.5
---------------------------
Adjusted expenses 33.7 27.0 57.4
Net insurance premium revenue 201.5 125.3 288.1
Reported expense ratio 16.7% 21.5% 19.9%
8. Taxation
 30 30 31
June June December
2011 2010 2010
 £m £m £m
UK Corporation tax
Current charge at 26.5% (2010: 28%) 41.8 40.9 87.4
Under / (Over) provision relating to prior periods - - 0.1 (0.7)
corporation tax
--------------------
Current tax charge 41.8 41.0 86.7
Deferred tax
Current period deferred taxation movement 2.3 (4.1) (15.3)
Under provision relating to prior periods - deferred  tax
- - 0.5
--------------------
Total tax charge per income statement 44.1 36.9 71.9
Factors affecting the tax charge are:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Profit before taxation 160.6 126.9 265.5
Corporation tax thereon at 26.5% (2010: 28%) 42.5 35.5 74.3
Expenses and provisions not deductible for tax purposes - - (0.1)
Difference in tax rates - - 0.2
Adjustments relating to prior periods - 0.1 (0.1)
Other differences 1.6 1.3 (2.4)
---------------------
Tax charge for the period as above 44.1 36.9 71.9
The UK corporation tax rate was reduced from 28% to 26% on 1 April 2011. The
current corporation tax rate used for the 6 months to 30 June 2011 is the
average effective rate for 2011, 26.5% (2010: 28%) Â Deferred tax balances have
been measured at 26% (2010 H1: 28%, 2010 FY: 27%).
A further reduction in the main UK corporation tax rate to 25% will be effective
from 1 April 2012, but has not been taken into account when calculating deferred
tax balances as it was not substantively enacted at the balance sheet date.
9. Earnings per share
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Profit for the period after taxation 116.5 90.0 193.6
Weighted average number of shares - basic 269,171,508 267,070,286 267,827,176
Earnings per share - basic 43.3p 33.7p 72.3p
Weighted average number of shares - diluted 269,584,934 267,434,687 268,221,829
Earnings per share - diluted 43.2p 33.7p 72.2p
The difference between the basic and diluted number of shares at the end of the
period (being 413,426, 2010 H1: 364,401, 2010 FY: 394,653) relates to awards
committed but not yet issued under the Group's share schemes.
10. Dividends
Dividends were declared and paid as follows:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
March 2010 Â (29.8p per share, paid April 2010) - 78.3 78.3
September 2010 (32.6p per share, paid October 2010) - - 86.4
March 2011 Â (35.5p per share, paid May 2011) 94.5 - -
-------------------------
Total dividends 94.5 78.3 164.7
The dividend declared in March 2010 represented the final dividend paid in
respect of the 2009 financial year (September 2010 - interim payment for 2010).
 The dividend declared in March 2011 was the final dividend paid in respect of
the 2010 financial year.
An interim dividend of 39.1p per share (£105.6 million) has been declared in
respect of the 2011 financial year. Refer to the Business Review for further
detail.
11. Property, plant and equipment
 Improvements Computer Office Furniture Total
to short equipment equipment and fittings
leasehold
buildings
 £m £m £m £m £m
Cost:
At 1 January 2010 5.0 20.1 7.7 3.2 36.0
Additions 0.3 1.2 0.4 0.2 2.1
Disposals - - - - -
----------------------------------------------------
At 30 June 2010 5.3 21.3 8.1 3.4 38.1
----------------------------------------------------
Depreciation:
At 1 January 2010 2.8 13.7 5.2 2.2 23.9
Charge for the year 0.5 1.3 0.5 0.2 2.5
Disposals - - - - -
----------------------------------------------------
At 30 June 2010 3.3 15.0 5.7 2.4 26.4
----------------------------------------------------
Net book amount
At 30 June 2010 2.0 6.3 2.4 1.0 11.7
Cost
At 1 January 2010 5.0 20.1 7.7 3.2 36.0
Additions 0.7 5.4 1.2 0.4 7.7
Disposals - (0.2) - - (0.2)
Transferred to 'assets held for sale' (0.5) (1.2) (0.4) (0.2) (2.3)
----------------------------------------
At 31 December 2010 5.2 24.1 8.5 3.4 41.2
----------------------------------------
Depreciation
At 1 January 2010 2.8 13.7 5.2 2.2 23.9
Charge for the year 0.9 2.4 0.9 0.4 4.6
Disposals - (0.1) - - (0.1)
Transferred to 'assets held for sale' (0.2) (0.5) (0.1) - (0.8)
----------------------------------------
At 31 December 2010 3.5 15.5 6.0 2.6 27.6
----------------------------------------
Net book amount
At 31 December 2010 1.7 8.6 2.5 0.8 13.6
----------------------------------------
Assets classified as held for sale 0.3 0.7 0.3 0.2 1.5
Cost
At 1 January 2011 5.2 24.1 8.5 3.4 41.2
Additions 0.3 1.5 1.1 0.5 3.4
Disposals - (0.2) - - (0.2)
----------------------------------
At 30 June 2011 5.5 25.4 9.6 3.9 44.4
----------------------------------
Depreciation
At 1 January 2011 3.5 15.5 6.0 2.6 27.6
Charge for the year 0.3 1.7 0.5 0.2 2.7
Disposals - - - - -
----------------------------------
At 30 June 2011 3.8 17.2 6.5 2.8 30.3
----------------------------------
Net book amount
At 30 June 2011 1.7 8.2 3.1 1.1 14.1
The net book value of assets held under finance leases is as follows:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Computer equipment 0.5 1.3 1.2
At 31 December 2010, a disposal group consisting of plant, property and
equipment assets, belonging to the Group's German operation, AdmiralDirekt, were
separately classified as 'held for sale'. These assets were transferred to
German Insurer, Itzehoer Versicherung during the period as part of the sale of
AdmiralDirekt. Refer to Note 21 of the Group 2010 financial statements for
further details.
12. Intangible assets
 Goodwill Deferred acquisition costs Software Total
 £m £m £m £m
Carrying amount:
At 1 January 2010 62.3 9.4 5.3 77.0
Additions - 13.2 0.9 14.1
Amortisation charge - (10.8) (1.0) (11.8)
Disposals - - (0.2) (0.2)
----------------------------------------------------
At 30 June 2010 62.3 11.8 5.0 79.1
At 1 January 2010 62.3 9.4 5.3 77.0
Additions - 28.9 3.4 32.3
Amortisation charge - (23.4) (2.7) (26.1)
Disposals - - (0.3) (0.3)
----------------------------------------------------
At 31 December 2010 62.3 14.9 5.7 82.9
Additions - 19.5 1.7 21.2
Amortisation charge - (18.3) (1.6) (19.9)
----------------------------------------------------
At 30 June 2011 62.3 16.1 5.8 84.2
Goodwill relates to the acquisition of Group subsidiary EUI Limited (formerly
Admiral Insurance Services Limited) in November 1999. It is allocated solely to
the UK Car Insurance segment. Â As described in the accounting policies within
the 2010 annual report, 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. No evidence has arisen
during the 6 month period to 30 June 2011 to suggest that an interim impairment
review is required.
13. Financial instruments
The Group's financial instruments can be analysed as follows:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Investments held at fair value 579.8 261.1 363.6
Held to maturity deposits with credit institutions 303.3 291.9 299.6
Receivables - amounts owed by policyholders 436.2 274.7 341.5
-------------------------
Total financial assets 1,319.3 827.7 1,004.7
Trade and other receivables 75.5 45.9 47.9
Cash and cash equivalents 281.4 165.4 246.7
-------------------------
 1,676.2 1,039.0 1,299.3
Financial liabilities:
Trade and other payables    747.6 407.8 561.0
All receivables from policyholders are due within 12 months of the balance sheet
date.
All investments held at fair value are invested in AAA-rated money market
liquidity funds. Â These funds target a short-term cash return with capital
security and low volatility and continue to achieve these goals.
14. Reinsurance assets and insurance contract liabilities
A) Analysis of recognised amounts:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Gross:
Claims outstanding 567.4 345.3 434.2
Unearned premium provision 516.5 298.5 372.4
-----------------------------
Total gross insurance liabilities 1,083.9 643.8 806.6
Recoverable from reinsurers:
Claims outstanding 201.7 131.3 165.2
Unearned premium provision 278.0 151.7 191.8
-----------------------------
Total reinsurers' share of insurance liabilities 479.7 283.0 357.0
Net:
Claims outstanding 365.7 214.0 269.0
Unearned premium provision 238.5 146.8 180.6
-----------------------------
Total insurance liabilities - net 604.2 360.8 449.6
B) Analysis of net claims reserve releases:
The following table analyses the impact of movements in prior year claims
provisions, in terms of their net value, and their impact on the reported loss
ratio. Â This data is presented on an underwriting year basis.
 Six months ended
 30 31 30 31 30
June December June December June
2009 2009 2010 2010 2011
 £m £m £m £m £m
Underwriting year:
2000 - 0.4 - - -
2001 0.5 - - - -
2002 0.3 - - 0.3 -
2003 0.7 0.6 - - -
2004 (0.6) (1.0) 0.8 - 0.8
2005 2.4 (0.6) (0.9) 0.9 2.7
2006 5.1 2.8 (1.0) - 3.0
2007 4.4 7.2 2.7 - (1.8)
2008 5.6 3.6 9.4 0.9 (1.5)
2009 - - 6.3 4.1 (1.5)
2010 - - - - 2.3
------------------------------------
Total net release 18.4 13.0 17.3 6.2 4.0
Net insurance premium revenue 100.5 111.4 125.3 162.8 201.5
Release as % of net premium revenue 18.3% 11.7% 13.8% 3.8% 2.0%
Profit commission is analysed in note 5.
B) Analysis of net claims reserve releases (continued)
 Financial year ended 31 December
 2006 2007 2008 2009 2010
 £m £m £m £m £m
Underwriting year:
2000 1.1 0.7 0.4 0.4 -
2001 1.9 1.5 0.5 0.5 -
2002 2.3 1.3 - 0.3 0.3
2003 5.1 3.2 2.3 1.2 -
2004 7.9 7.6 6.4 (1.6) 0.8
2005 2.6 12.6 11.0 1.8 -
2006 - 2.6 10.5 7.9 (1.0)
2007 - - 6.9 11.6 2.7
2008 - - - 9.2 10.3
2009 - - - - 10.4
----------------------------------------
Total net release 20.9 29.5 38.0 31.3 23.5
Net insurance premium revenue 145.0 142.2 169.8 211.9 288.1
Release as % of net premium revenue 14.4% 20.7% 22.4% 14.8% 8.2%
C) Reconciliation of movement in net claims reserve:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Net claims reserve at start of period 269.0 209.4 209.4
Net claims incurred 156.1 85.0 199.9
Net claims paid (59.4) (80.4) (140.3)
-----------------------------
Net claims reserve at end of period 365.7 214.0 269.0
D) Reconciliation of movement in net unearned premium provision:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Net unearned premium provision at start of period 180.6 110.6 110.6
Written in the period 255.3 162.2 358.5
Earned in the period (197.4) (126.0) (288.5)
-------------------------
Net unearned premium provision at end of period 238.5 146.8 180.6
15. Trade and other receivables
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Trade receivables 70.2 42.7 47.9
Prepayments and accrued income 5.3 3.2 -
-------------------------
Total trade and other receivables 75.5 45.9 47.9
16. Cash and cash equivalents
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Cash at bank and in hand 281.4 165.4 246.7
---------------------------
Total cash and cash equivalents 281.4 165.4 246.7
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.
17. Deferred tax
 30 30 31
June June December
2011 2010 2010
 £m £m £m
(Asset)/ Liability brought forward at start of period (12.4) 5.7 5.7
Movement in period 0.7 (6.9) (18.1)
----------------------
(Asset) carried forward at end of period (11.7) (1.2) (12.4)
The net balance provided at the end of the period is analysed as follows:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Tax treatment of share scheme charges (5.5) (5.0) (6.9)
Capital allowances (1.3) (1.5) (1.3)
Other differences (4.9) (1.4) (4.2)
Unremitted overseas income - 6.7 -
----------------------------
Deferred tax (asset) at end of period (11.7) (1.2) (12.4)
The UK corporation tax rate was reduced from 28% to 26% on 1 April 2011.
Deferred tax balances at 30 June 2011 have therefore been measured at 26%. (2010
H1: 28%, 2010 FY: 27%). Â The reduction to 25% effective from 1 April 2012, has
not been taken into account when calculating deferred tax balances as it was not
substantively enacted at the balance sheet date.
The amount of deferred tax (expense)/ income recognised in the income statement
for each of the temporary differences reported above is:
Amounts (charged)/ credited to income or expense 30 30 31
June June December
2011 2010 2010
 £m £m £m
Tax treatment of share scheme charges (1.6) (2.0) (0.8)
Capital allowances - 0.1 (0.3)
Other differences (0.7) 0.6 3.6
Unremitted overseas income - 5.6 12.3
---------------------------
Net deferred tax (charged)/ credited to income (2.3) 4.3 14.8
The difference between the total movement in the deferred tax balance above and
the amount charged to income relates to deferred tax on share scheme charges
that has been credited directly to equity.
18. Trade and other payables
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Trade payables 10.8 10.8 13.3
Amounts owed to co-insurers and reinsurers 460.2 218.2 327.4
Finance leases due within 12 months - 0.3 -
Finance leases due after 12 months 0.2 - 0.2
Other taxation and social security liabilities 25.9 19.0 16.5
Other payables 81.0 44.3 59.7
Accruals and deferred income (see below) 169.5 115.2 143.9
---------------------------
Total trade and other payables 747.6 407.8 561.0
Analysis of accruals and deferred income:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Premium receivable in advance of policy inception 105.2 66.3 82.3
Accrued expenses 53.5 45.7 46.2
Deferred income 10.8 3.2 15.4
---------------------------
Total accruals and deferred income as above 169.5 115.2 143.9
19. Obligations under finance leases
 At 30 June 2011| At 30 June 2010
|
Analysis of finance Minimum Interest Principal| Minimum Interest Principal
lease liabilities: lease | lease
payments |payments
|
 £m £m £m| £m £m £m
|
    |
|
Less than one year - - -| 0.3 - 0.3
|
Between one and five    |
 years 0.2 - 0.2| - - -
----------------------------+---------------------------
    |
|
 0.2 - 0.2| 0.3 - 0.3
 At 31 December 2010
 Minimum Interest Principal
lease
payments
 £m £m £m
Less than one year - - -
Between one and five years 0.2 - 0.2
----------------------------------
 0.2 - 0.2
All leases are on a fixed repayment basis and no arrangements have been entered
into for contingent rental payments.
The fair value of the Group's lease obligations approximates to their carrying
amount.
20. Share capital
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Authorised:
500,000,000 ordinary shares of 0.1p 0.5 0.5 0.5
Issued, called up and fully paid:
268,267,222 ordinary shares of 0.1p - 0.3 -
268,571,725 ordinary shares of 0.1p - - 0.3
270,352,960 ordinary shares of 0.1p 0.3 - -
-------------------------
 0.3 0.3 0.3
During the first half of 2011, 1,781,235 (2010 H1: 1,809,931) new ordinary
shares of 0.1p were issued to the trusts administering the Group's share
schemes.
281,235 (2010 H1: 309,931) of these were issued to the Admiral Group Share
Incentive Plan (SIP) Trust for the purposes of this share scheme. Â These shares
are entitled to receive dividends.
1,500,000 (2010 H1: 1,500,000) shares were issued to the Admiral Group Employee
Benefit Trust for the purposes of the Discretionary Free Share Scheme. The
Trustees have waived the right to dividend payments, other than to the extent of
0.001p per share, unless and to the extent otherwise directed by the Company
from time to time. Â Rights to dividends have now been waived on a total of
3,914,948 (2010 H1: 4,183,948) ordinary shares in issue.
Staff share schemes:
Analysis of share scheme costs (per income statement):
 30 30 31
June June December
2011 2010 2010
 £m £m £m
SIP charge 3.1 2.3 5.1
DFSS charge 7.7 5.2 9.9
-------------------------
Total share scheme charges 10.8 7.5 15.0
The share scheme charges reported above are net of the co-insurance share and
therefore differ from the gross credit to reserves reported in the statement of
changes in equity (£14.8 million; 2010 H1: £9.9 million, 2010 FY: £18.5
million).
The consolidated cashflow statement also shows the gross charge in the
reconciliation between 'profit after tax' and 'cashflows from operating
activities'. Â The co-insurance share of the charge is included in the 'change in
trade and other payables' line.
Number of free share awards committed at 30 June 2011:
 Awards outstanding* Vesting
date
SIP H1 08 scheme 352,732 September 2011
SIP H2 08 scheme 477,432 March 2012
SIP H1 09 scheme 396,200 September 2012
SIP H2 09 scheme 377,641 March 2013
SIP H1 10 scheme 352,100 September 2013
SIP H2 10 scheme 346,590 March 2013
DFSS 2008 scheme - 2nd Award 87,691 November 2011
DFSS 2009 scheme - 1st Award 1,311,686 April 2012
DFSS 2009 scheme - 2nd Award 127,020 August 2012
DFSS 2010 scheme - 1st Award 1,636,303 April 2013
DFSS 2010 scheme - 2nd Award 26,352 October 2013
DFSS 2011 scheme - 1st Award 1,513,144 April 2014
-----------------------
Total awards committed 7,004,891
* - being the maximum number of awards expected to be made before accounting for
expected staff attrition.
During the six months ended 30 June 2011, awards under the SIP H2 07 scheme and
the DFSS 2008 (1st award) scheme vested. The total number of awards vesting for
each scheme is as follows:
Number of free share awards vesting during the six months ended 30 June 2011:
  Original Awards Awards vested
SIP H2 07 scheme  337,770 294,030
DFSS 2008 scheme 1st award  1,306,381 1,226,951
21. Financial commitments
The Group was committed to total minimum obligations under operating leases on
land and buildings as follows:
 30 30 31
 June June December
Operating leases expiring: 2011 2010 2010
 £m £m £m
Within one years - 0.2 0.2
Within two to five years 16.6 13.0 11.1
Over five years 20.3 18.8 16.4
-------------------------
Total commitments 36.9 32.0 27.7
Operating lease payments represent rentals payable by the Group for its office
properties.
In addition, the Group had contracted to spend the following on property, plant
and equipment at the end of each period:
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Expenditure contracted to - - -
22. Related party transactions
a) Mapfre
In 2010, the Group participated in transactions with Mapfre S.A., during the
course of its Price Comparison operations. Â Mapfre is a related party of Admiral
Group due to its 25% minority interest in Group subsidiary Rastrator.com
Limited. Â Details of total transactions with Mapfre and balances outstanding are
given in the table below.
 30 30 31
June June December
2011 2010 2010
 £m £m £m
Total transactions 0.2 0.1 0.3
Balances outstanding 0.1 - -
b) Other
Details relating to the remuneration and shareholdings of key management
personnel were set out in the remuneration report of the 2010 Annual Report.
 Key management personnel are able to obtain discounted motor insurance at the
same rates as all other Group staff, typically at a reduction of 15%.
The Board considers that only the Board of Directors of Admiral Group plc are
key management personnel.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in accordance
with IAS 34 'Interim Financial Reporting' as adopted by the EU;
* the interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for
the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board,
Henry Engelhardt Kevin Chidwick
Chief Executive Officer Chief Financial Officer
23 August 2011 23 August 2011
Independent review report to Admiral Group plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2011 which comprises the Condensed consolidated income statement, the Condensed
consolidated statement of comprehensive income, the Condensed consolidated
statement of financial position, Condensed consolidated statement of cashflows,
the Condensed consolidated statement of changes in equity and the related
explanatory notes. Â We have read the other information contained in the half-
yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Services Authority
("the UK FSA"). Â Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. Â To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. Â The directors are responsible for preparing the half-yearly
financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the EU. Â The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the
EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. Â A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. Â A
review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Â Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2011 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
Salim Tharani
for and on behalf of KPMG Audit Plc
Chartered Accountants
3 Assembly Square
 Britannia Quay
Cardiff
CF10 4AX
23 August 2011
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Admiral Group PLC via Thomson Reuters ONE
[HUG#1540557]
Monday, 20th May 2024
COMPANIES COVERED:
Latest directors dealings
- 8 minutes ago Haleon
- 20 minutes ago Restore
- 23 minutes ago Tesco
- 23 minutes ago Keller Group
- 35 minutes ago Petra Diamonds Ltd.(DI)