Further informationFurther information Corporate websiteCorporate website Admiral GroupAdmiral businesses Group businesses The Group’sThe corporate Group’s website corporate is at website is at UK UK www.admiralgroup.co.uk.www.admiralgroup.co.uk. A range of information A range of informationCar Insurance: Car Insurance: about the Admiralabout theGroup Admiral is presented, Group is including presented, includingAdmiral Admiral the Group’s thehistory; Group’s fi nancial history; reports fi nancial and reportspress and presswww.admiral.com www.admiral.com releases; corporatereleases; responsibility corporate responsibility and governance. and governance. Bell Bell The websiteThe also website includes also contact includes details contact for investor details forwww.bell.co.uk investor www.bell.co.uk relations andrelations any other and information. any other information. Diamond Diamond plc Annual Report Admiral Group plc Annual Report Admiral Group Financial calendarFinancial calendar www.diamond.co.ukwww.diamond.co.uk Annual ReportAnnual 2011Report 2011 Final 2011 dividendFinal 2011 dividend 2 May 2012 –2 ExMay dividend 2012 – Exdate dividend date elephant elephant 4 May 2012 –4 RecordMay 2012 date – Record date www.elephant.co.ukwww.elephant.co.uk 1 June 2012 1– JunePayment 2012 date – Payment date Price Comparison:Price Comparison: Interim ManagementInterim Management Statement Statement Confused.comConfused.com 26 April 201226 April 2012 www.confused.comwww.confused.comConfused.comConfused.com Annual GeneralAnnual Meeting General Meeting Van Insurance:Van Insurance: 26 April 201226 April 2012 Gladiator Gladiator www.gladiator.co.ukwww.gladiator.co.uk Interim resultsInterim results 30 August 201230 August 2012 France France Car Insurance:Car Insurance: The Group doesThe Groupnot produce does not printed produce copies printed of copiesL’olivier of L’olivier interim resultsinterim for shareholders results for shareholders unless requested. unless requested.www.lolivier.fr www.lolivier.fr The interim resultsThe interim will be results available will beon availablethe on the Price Comparison:Price Comparison: corporate websitecorporate from website 30 August from 2012. 30 August 2012. LeLynx LeLynx www.lelynx.frwww.lelynx.fr 2011 2011 Head offi ceHead offi ce Capital TowerCapital Tower Spain Spain Greyfriars RoadGreyfriars Road Car Insurance:Car Insurance: Cardiff Cardiff Balumba Balumba CF10 3AZ CF10 3AZ www.balumba.eswww.balumba.es Price Comparison:Price Comparison: Rastreator Rastreator www.rastreator.comwww.rastreator.com Italy Italy Car Insurance:Car Insurance: ConTe ConTe www.conte.itwww.conte.it Price Comparison:Price Comparison: Chiarezza Chiarezza www.chiarezza.itwww.chiarezza.it USA USA Car Insurance:Car Insurance: Elephant Elephant www.elephant.comwww.elephant.com This report is printedThis report on Evolution is printed Business on Evolution Business that is manufacturedthat is from manufactured 100% post-consumer from 100% post-consumer Registered Number:Registered 03849958. Number: 03849958. ECF (ElementalECF Chlorine (Elemental Free) recycled Chlorine pulp Free) recycled pulp Admiral GroupAdmiral plc, Capital Group Tower,plc, Capital Tower, and meets the highestand meets environmental the highest standards.environmental standards. Greyfriars Road,Greyfriars Cardiff Road, CF10 Cardiff 3AZ CF10 3AZ Designed and producedDesigned byand Carnegie produced Orr by Carnegie Orr +44 (0)20 7610 6140+44 (0)20www.carnegieorr.co.uk 7610 6140 www.carnegieorr.co.uk www.admiralgroup.co.ukwww.admiralgroup.co.uk What we do: Admiral Group is a successful car insurer based in South Wales in the UK. The Group’s core UK Car Insurance business launched in 1993 and the Group has grown every year since. In the UK, the Group has an 11% share of private car insurance through four brands; Admiral, Elephant, Diamond, and Bell. It also owns Confused.com, one of the leading UK price comparison websites. Outside the UK, Admiral operates car insurance businesses in Spain, Italy, France and the USA which now insure over 300,000 vehicles. The Group also owns price comparison businesses in Spain, France and Italy. At the end of 2011 Admiral had 3.4 million customers in fi ve countries. It employs over 6,000 people in nine countries. Admiral’s Business Model: Highly profi table • Three-fold increase in profi ts to £299m (2004-2011) • Focussed on delivering profi t growth Consistently growing • 100% organic, controlled growth • Three-fold increase in number of customers to 3.4m (2004-2011) • Flexibility to adjust growth according to market conditions Effi cient and effective • Lower customer acquisition costs • Use sophisticated underwriting techniques • Run low cost operations with service-orientated culture • Cross-sell other products Low risk model • No debt and cash balances conservatively managed • Use of co and reinsurance • Test and learn approach Strongly cash generative • Strong earnings growth • Highly capital effi cient • Transparent dividend policy and high dividend payout ratio = High return on capital Financial highlights Profit before tax Earnings per share £299.1 m 81.9p 2010: £265.5m +13% 2010: 72.3p +13% Full year dividend Return on average equity 75.6p 59% 2010: 68.1p +11% 2010: 59% Turnover Net revenue £2.19bn £870.3m 2010: £1.58bn +38% 2010: £640.8m +36% UK Car Insurance profit UK Car Insurance customers £313.6m 2,966,000 2010: £275.8m +14% 2010: 2,459,000 +21% International Car Insurance customers* 306,000 2010: 162,900 +88% * Excludes AdmiralDirekt Contents 02 Our markets 25 Principal risks 56 Consolidated cash flow statement 05 Chairman’s statement and uncertainties 57 Consolidated statement of changes 09 Chief Executive’s statement 27 Corporate Responsibility in equity 11 Business review 32 The Admiral Group Board 58 Notes to the financial statements 11 Group financial highlights 34 Directors’ report 82 Parent Company financial statements 12 UK Car Insurance 37 Corporate Governance 83 Notes to the Parent Company financial 16 UK Car Insurance review 46 Remuneration report statements 18 International Car Insurance 52 Independent auditor’s report to 85 Consolidated financial summary 20 Price Comparison the members of Admiral Group plc 86 Directors and advisers 22 Other Group items 53 Consolidated income statement Further information 54 Consolidated statement of comprehensive income 55 Consolidated statement of financial position Admiral Group plc Annual Report 2011 01 Our markets Admiral is one of the largest and most profitable private car insurers in the UK. The Group also owns Confused.com, one of the UK’s leading price comparison websites and Gladiator, a commercial vehicle insurance broker. Outside the UK, the Group has four car insurance and three price comparison operations. UK Car Insurance International Car Insurance Highlights Highlights* Turnover Combined ratio Turnover Combined ratio £1,966m 91.3% £122m 164% 2010: £1,420m +38% 2010: 83.5% 2010: £78m +57% 2010: 173% Vehicles Pre-tax profit Vehicles Pre-tax loss 2.97m £313.6 m 306,000 £9.5m 2010: 2.46m +21% 2010: £275.8m +14% 2010: 195,000 +57% 2010: loss £8.0m • The Group’s core business is UK private car • The Group has four car insurers outside the insurance – it accounts for 90% of turnover UK, in Spain, Italy, the US and France and customers • Continued growth in turnover and customers • 2011 saw continued market gain in market in each business share (to around 11%) • Modest improvement in combined ratio • Profit increased by 14% to £313.6 million • Higher combined ratio primarily driven by lower reserve releases * figures include AdmiralDirekt, which was sold in January 2011 Admiral Group plc 02 Annual Report 2011 Price Comparison Other Group activites Confused.com UK Highlights Highlights UK revenue Operating profit Gladiator revenue Gladiator operating profit £ 77.6 m £16.1m £11.7m £2.8m 2010: £71.8m +8% 2010: £16.9m -5% 2010: £11.8m -1% 2010: £2.7m +4% Investment & Group cash plus International Highlights interest income investments International revenue International quotes £13.7m £1,393m £12.8m 3.8m 2010: £9.5m +44% 2010: £910m +53% 2010: £3.9m +230% 2010: 1.7m +120% • Gladiator increased profit to £2.8m in a difficult commercial vehicle market • Confused generated profit of £16.1m in • The Group remains low-risk in its investment a highly competitive UK market strategy. Investment and interest income • Confused’s share of car insurance comparison increased on higher total cash and investment market maintained in 2011 balances • International price comparison operations grew strongly in 2011 Admiral Group plc Annual Report 2011 03 Where we operate A key part of Group strategy is to exploit the knowledge, skills and resource in the established UK businesses to promote expansion overseas (in car insurance and price comparison). UK USA Admiral launched a private car insurance business The largest market in which the Group operates in 1993. At the end of 2011 Admiral was operating is the USA. Elephant Auto launched there in through four brands: Admiral, Elephant, Diamond October 2009. At the end of 2011 Elephant was and Bell. operating in: Gladiator, a commercial van insurer started • Virginia trading in 1998. • Maryland Confused.com, a price comparison website • Illinois started trading in 2002. • Texas France LeLynx, a price comparison website launched in January 2010. L’olivier Assurances, a French car insurer started trading in December 2010. Italy ConTe, an Italian car insurer launched in May 2008. Chiarezza, a price comparison website started trading