Admiral Group plc

Welcome everybody to Admiral Group Alfear 2025 results. Once again, we deliver excellent financial performance, growth, and strategic progress across the group. As usual, I will be sharing our main highlights. Geraint will provide us more detail on our financial performance. Alistair will talk to us about the excellent results in UK insurance. And Constantino will bring to life for us our progress overseas. So in the first six months of the year, we deliver a record profit of £521 million, that is almost 70% increase year on year, while at the same time adding 1 million customers to our book, that is a 10% increase versus last year. The main driver of this profit increase was UK motor insurance that was also supported by positive claims trends. But it was nice to see material growing contribution coming from different parts of the business and in particular UK household and Admiral Money who both doubled their profits while at the same time growing and building on their strong track record. As we anticipated in March, we announced the sale of our U.S. business, Elephant, due to complete later this year. It will be sad to say goodbye to our colleagues, but we do think that's in the best interest of all our stakeholders. We also made great progress in enhancing our data and technology capability, as well as improved our customer experience, reflecting a strong net promoter score above 50%. As very typical and usual of Admiral, we maintain pricing discipline in a softening market. And this will put us on a strong footing for further growth when the cycle will turn and the time will be right. We have a strong capital position and strong fundamentals to continue to build on this strong track record. A bit more in detail now. The first six months of 2025 were very much a continuation of the second half of last year. We stay focused on our strategy and execute well across the board with progress in all the different parts of the business. In our largest business, UK Motor, we remained close and reacted fast to market trends. We decreased prices to reflect improved frequency and reduce claims inflation. But we did so with measure and less than the market. Our historical discipline resulted in three points improvement of combined ratio and a 5% customer growth year-on-year. Beyond motor, we are extremely pleased with our progress in the UK. We continue to deliver strongly on our dual strategic objective to grow at pace other lines of business with also 30% more customers in travel, household and pet insurance versus one year ago, while at the same time deliver good margins with a combined ratio for this half year of 88%. In Europe, we also successfully deliver on our two main objectives. First, to turn around Conte, our Italian business, with fast recovery toward profitability. And second, to continue growing profitably in France, where we can leverage on Olivier's strong position in the direct market. Overall, good continuous progress in our diversification strategy, with majority of our business increasing contribution to the bottom line and only a few still in the investment phase. A field rouge across the group is the relentless focus on ensuring that our data and tech capabilities are market-leading to continue to support our key competitive advantage in underwriting and in providing excellent service to our customers. In the last months, we have continued to optimize our machine learning models in production, not only in pricing, where we already had strong foundations and scale, but also beyond pricing, and with particular focus on claims, where the strong inflation of the last few years increase even more our sense of urgency to deliver innovation and to deliver most cost-effectively for our customers. We're excited about the potential of GenAI to improve our customer experience, to support our agents and increase automation. We're setting strong foundations for the adoption of it across the board with the first models in production and several live pilots with promising initial results. Foundational to data adoption excellence are stronger data platforms and those have been strengthened both in the UK and in Europe. Another pillar of our strategy is to continue growing our EV portfolio with strong financials and stay close to other relevant motor market trends. We're exploring new propositions for young driver with VEGO and developing new capabilities in commercial motor, also leveraging our partnership with Flock. But beyond financial and strategic progress, there is so much for us to be proud of. Primarily our customers that are recognizing our efforts with strong net promoter and feedback scores. Most importantly, we continue to deliver accessible and affordable products for the majority of the population. Second, our colleagues continue to rate us as one of the best places to work for, with Armour ranking top 25 worldwide and number two in the UK. Our people engagement is also reflected in the high retention of talent and competence. Our commitment to diversity also remain as strong as ever. Finally, it's been pleasing to see our AAA score reaffirmed by MSCI a few days ago, as we continue to progress on our net zero transition plan and on our science-based targets. Before closing this section, I would like to take a step back with you and look at Admiral's long-term trajectory. As you see in this graph, in the last 10 years, we delivered a 9% PBT CAGR and delivered a return to our shareholders that is four times the FTSE 100. This track record is built on five pillars. Number one, strong technical expertise in claims and underwriting, combined with sharp focus on expenses and continuous innovation, particularly in the use of data. This is what underpins our large combined ratio advantage versus market. Second, an extremely capital-efficient model enabled by strong, long-lasting reinsurance partnerships. This supports our growth and a great return on capital for our shareholders. Third, a disciplined approach to investment and a prudent reserving approach. We always value our shareholder money and are killed to being resilient in our account, managing the business as it was our own. And maybe that's also because we are all shareholders in Admiralty. Fourth, a proven agility and ability to navigate better than market, a strong industry cycle, changing regulations and other external challenges. Last few years have been an example of this. We managed to flex the business trajectory and navigated these changes successfully. Finally, or maybe first, our culture. I'm deeply convinced that this is the most important competitive advantage that we have, as it underpins all the points above. And it's our colleague commitment to our customer and the business that allow this strong set of results. And I would like to take, again, this opportunity to thank them for their great work. That's all from me for now, and Garant will share with us more detail on our financial performance. picture top left.

It's my weekend outfit. Thanks. Thanks, Milena. Morning, everyone. I'll cover some of the financial highlights from a quite positive first half of the year. I'll cover the main drivers of the group profit, plus a strong capital position and the much higher interim dividend. So let's get going with some of the highlights. So pre-tax profit was up by 69% to 521 million, and earnings per share was up similarly to 132.5 pence a share. Excluding the impact of Ogden on H2 last year, those are our highest six-month profit figures ever. UK Motor was the key driver, reporting a significantly higher underwriting result, and there were also pleasing contributions from around the group, as we'll see. And just to note, all these figures are now continuing operations basis, and so they exclude Elephant. Return on equity was extremely high, close to 60%, as the big profit increase significantly outweighed the higher equity. And we continue to report a robust and very satisfactory solvency position, net of a very large increase in the interim dividend of over 60% to 115 pence a share, maintaining our usual approach to dividends. So quite a positive set of results. The bottom half of the page shows turnover, customer numbers and loan balances. Turnover was just over 3 billion and was flat against the first half of last year, although that half was 43% up on the first half of 2023, and so it was a big comparative period. Through the presentation, we'll see that the drivers were reductions in turnover in Italy and UK motor, offset by a large increase in UK household. As Milena has mentioned, we added a million new customers to the group over the last 12 months, seeing growth in every business with the exception of Conte in Italy. As you know, the total focus of our team in Italy was on restoring profitability, and the consequence of that right now is a smaller portfolio. And last but definitely not least, Admiral Money's on-balance sheet loans increased by around a quarter to 1.3 billion in a very good first half. And that business also now services around £200 billion of off-balance sheet loans as well. Next, on to the components of group profit. And these next two pages will show the breakdown of the group pre-tax results by business against last year. Quick comment on the group ratios to start. We report a broadly flat and very positive loss ratio for the group at around 57%. And we saw a decent improvement in expense ratio period on period. UK Motor, UK Household and Europe all delivering better expense ratios in this first half, which is good to see. UK Insurance increased overall profit by £221 million, all lines delivering higher results. Home Insurance profit was more than double, a really pleasing first half with good growth in revenue and customers and another very decent combined ratio of 84%. Travel and pet in aggregate broke even, which was positive. And I'll talk about UK Motor shortly. In Europe, as you can see, the result was flat, half on half, just under break even. Within that total, European Motor, which is the very large majority of the business, was also flat, but just over break even. Costantino will cover in more detail. But the key points are continued profits and growth in France, good progress in Spain, notably on broker distributed business, and very encouraging signs of profit recovery in Italy. Admiral Money had an extremely positive first half, with profit more than doubling from 7 million to 16 million. The result did benefit from a 10 million pounds net profit impact from selling around 150 million pounds of previously originated loans. from the unsecured loan portfolio, and that won't repeat in H2, but selling newly originated loans will be an ongoing feature of the business, with 90 million of loans sold during H1. As I mentioned earlier, the on-balance sheet loans balance grew by around 25% over the 12 months to 1.3 billion, and that growth contributed to higher interest income in this half. We see promising early signs in terms of car finance volumes following the relaunch of that product last year. Admiral Money continues to see positive credit loss trends, and of course we retain an appropriate and prudent provision for losses on the balance sheet. The share scheme costs were higher because of the higher share price this half versus last, and the other items were positively distorted in H1 last year when we realised the profit on the sale of Insurify shares we received when we sold Compare.com. There's more analysis of that line in the appendix. Next, let's take a closer look at the really positive UK motor result. This is a summarized income statement plus the key ratios with some observations on the key changes. Starting with turnover, that was 2.3 billion in this half versus 2.4 last half. And there are two drivers of that small decrease. One is a shift in the sales mix in favour of renewals for away from new business, as the new business market was smaller in size and more competitive. And the second was our reduced prices over the last year or so, which leads to lower average premiums at new business and renewal. The main contributor to the much higher overall profit was the big increase in the underwriting result, which was up by 180 million. And that was mainly due to much higher premiums from the 2024 underwriting year earning through and consequently a better combined ratio as expected the quota share reinsurance cost was also notably lower this half due to the much lower reinsurance assets on the balance sheet at the start of the period compared to last and that 2024 underwriting year is also the main contributor to the higher profit commission income on the key ratios firstly we see a better expense ratio which benefits from the big increase in premiums A slightly better current period loss ratio, positively impacted again by 2024, and slightly lower but still strong reserve releases. Let's dig a bit deeper into UK Motor loss ratios. And this chart shows UK Motor booked loss ratios by underwriting year on a discounted basis. Alistair will cover the current claims trends shortly. But on the back years, we see continued good development. And as we reported back in March 2023, and in particular 2024, will be extremely good underwriting years. Our estimate of claims burn cost inflation for 25 versus 24 is somewhere in the 5 to 7% range, including a small reduction in frequency versus last H1. And because of the combination of that inflation and lower prices, 2025 will be a lower margin year than 2024 for Admiral and we believe the market. We still project a profitable year for Admiral, of course. And then on the book loss ratios, the first discounted booking of 2025 is at 73% or 79% undiscounted. And that's actually in line with 2024 at the same point. But because of the higher ultimate loss ratio we expect for 2025, The book ratio for 25 is very likely to increase in H2 as the lower premiums start to earn through. In the claims reserved, we've opted to hold the risk adjustment strength in the balance sheet at the maximum level, but we expect that to start moving modestly down within the coming year. And finally, reserve releases, they continue to be an important element in the income statement at 13% of earned premiums this half. Don't forget that earned premium was significantly higher in this half compared to last half, partly accounting for that lower percentage. Anyone that's panicking that they don't see the other chart on ultimate loss ratios that we normally show here, please refer to the appendix. Moving now to the capital position and interim dividend, and starting with capital on the left. These are the movements in the solvency ratio from full year to half year. Key points. Firstly, slightly lower capital generation as expected, given the lower underwriting margins in 2025. Second, growth, albeit lower growth in the capital requirements. And then thirdly, the interim dividend, which almost offsets the capital generated. Our closing position at 194% obviously is still very satisfactory. On the internal model, we continue to progress in line with our plan towards full application. And the next important piece of news will be when we make that step. And then on the right-hand side of the interim dividend, as you can see, we're paying 115 pence a share. That's around 60% higher than last year's interim and a nice round 50% CAGR over the past couple of halves. 115 pence, just under 90% of the first half earnings. There's no change to report in our approach to dividends, but just to note that we will start buying shares in the market for our share plans later either in the fourth quarter of this year or the first half of next year, in anticipation of share rewards and share vesting in 2026. And so as we flagged the special dividend, we'll start to see the impact of that in 2026. A couple of comments just to finish off. First, a very pleasing set of financials for the first half of 2025, led as usual by our UK motor business, but with further positive results in other parts of the group, notably UK Home Insurance and Admiral Money. And in line with that significantly higher profit, we've declared a much bigger interim dividend, but still, of course, maintain a very satisfactory and strong solvency position. And then on the outlook for the rest of 2025, in terms of top-lining customers, we expect to grow in all our operations, obviously subject to how markets play out, and probably with the exception of Italy. Turnover in H2 is likely to be a bit below H1, as was the case last year, and that's due to lower average premiums and some seasonality. And then in terms of profit, the group results will be well supported by the continuing earning through of the 2024 underwriting year in UK Motor. We project continued good results from the businesses highlighted just now, UK Home Insurance, Admiral Money, plus L'Olivier in France. And we expect a much better Italian result for the full year compared to last, subject to the profit recovery there continuing. Over now to Alistair to give us more insight into the UK insurance business and market.

Thank you, Gary. Good morning, everyone. Let's look at our excellent UK insurance results. We grew customer numbers by 13% year-on-year, maintained revenue and reported a 60% increase in profits. In Motor, we grew to 5.8 million customers and in Beyond Motor, we now insure over 3.5 million homes, holidays and pets for our customers. or driven by giving customers great value and service, which also resulted in our number one position on Trustpilot. We're very happy with the More Than integration, which is nearing completion. 339,000 home and pet customers have renewed with us in the last 12 months. The More Than brand is live for pet new business customers, and we expect a positive impact on earnings from H2 25 onwards. As a result, we delivered profits of 584 million, mostly driven by motor and contributed to by another record profit at home and continued profit growth for travel. Let's look at what drove our strong results in motor, starting with motor claims trends. There's a continuation of favourable 24 motor market claims trends, decreasing frequency and severity continuing to moderate. Frequency decreased year on year, reflecting vehicle safety features on more vehicles, increased road safety measures and favourable weather. Severity inflation continues to moderate. We estimate mid to high single digit inflation. Damage severity benefited from stable second-hand car prices and more normal repair cost inflation. Bodily injury inflation is stable. Together, frequency and severity trends drive claims burn costs, the average claims cost per policy. The resulting better than expected claims burn costs since the start of 24 has contributed to falling market premiums. Admiral continues to benefit from years of cumulative experience and expertise. We consistently achieve good outcomes and at motor claims MPS of over 55 whilst maintaining claims cost discipline. In line with the SCA multi-firm review, we've completed our analysis of total loss valuations. We will be taking action to rectify some historic cases and have increased our total provision to 50 million. This is around 3% of the total loss claims costs over the relevant period. Moving to motor pricing. Admiral managed margins and volumes well in H1. in the face of continued reductions in market prices. In the first half of 25, we saw the motor market continue to respond to better-than-expected claims trends by reducing prices, with slightly slower decreases in Q2 than in Q1, as you see on the left-hand side. The price indices use different data points, but the average reflects market movements this half, and it shows prices down 7%. Admiral Times Top, which is the percentage of times we are cheapest on price comparison sites, a measure of our competitiveness, is illustrated on the right-hand side. At the start of 24, we became very competitive when prices and new business volumes were at their peak. Since then, market premiums have fallen in response to improved claims experience. We've also reduced prices, but by slightly less than the market, somewhat reducing our competitiveness. We welcome that the FCA confirmed that motor premium increases in 23 and 24 were driven by claims costs and that their interim updates on premium finance recognise that premium finance allows customers to spread costs, helping affordability. We're confident our premium finance product provides fair value. We have a competitive APR of 15% and that compares favourably to other sources of finance. So a good first half for UK Motor. Let's move on to look at another step up for household, where we delivered a combined ratio of 84% and a record first half profit of £25 million. In the first half, household market claims burn costs continued to moderate due to lower frequency and relatively benign weather. As a result, after peaking in Q3 24, market premiums continue to decrease in the first half of 25. For Admiral, we're keen to maintain pricing discipline and our price decreases were more modest than the market. We continue to drive growth through a combination of more than strong retention and multi cover. And we're pleased to see an improved current year loss ratio. Although H1 weather has been relatively benign, it has been particularly dry, so we've included provision for elevated subsidence risk. This combination of good growth and margins resulted in a record half-year profit for household of £25 million. We're engaging with the FCA on their review into household claims handling. Admiral is well-placed to navigate both market and regulatory dynamics with strong pricing claims and customer centricity and a disciplined approach to balancing growth and margin. We're very pleased with our recent household performance. Just a reminder, save the dates. As we mentioned in March, we'll hold a deep dive session on our household business in November. A very strong first half across UK insurance overall. So now let's look ahead. Starting with motor. We expect market claims severity inflation in the second half to be similar to the first. Although macro volatility causes some uncertainty. We expect claims frequency to remain stable or gradually decrease due to the long term trend of improving vehicle technology. With some uncertainty due to weather. More positive than expected claims trends have led market premium decreases of more than 17% since the start of 24. Going forward, we expect premiums need to increase in the near future, or we'll see a marked deterioration in the 26 market combined ratio. A delay in market premium increases will mean larger increases are needed. In household, market claims inflation is broadly stable, but with an increased subsidence risk in H2. Assuming relatively benign weather, we expect to see continued reductions in market prices in the second half. For Admiral, our pricing will remain disciplined, reflecting market claims outlook, weather for home and our own trends. Looking beyond trading, we remain confident of driving sustainable, profitable growth over the medium term, driven by three areas of focus. First, our customer centricity, delivering great products and service with strong NPS and very competitive prices. Second, motor operational excellence, balancing continued growth with market leading combined ratio performance, both benefiting from strong retention. Third, building a strong track record of sustainable, profitable growth in home, travel and pet. Helping one and a half million customers with two or more products. So a great set of results and we remain confident of driving sustainable, profitable growth over the medium term. And now over to Kosti to talk more about our international results.