Admiral Group plc

Good morning everyone and welcome and thank you for joining us as we review Admiral 2025 year-end results. Today we'll be announcing another remarkable year of financial results and strategic progress. So I will start with the key highlight before handing over to Geraint on the financials and to Alistair on UK insurance and Kosti on Europe. I will then come back to reflect on what we have achieved over the last five years and finally explain how the evolution of our strategy positioned us to create even more value in the years ahead. So let's start with the main achievement for 2025. We delivered record profit of 958 million. This was up 16% year on year, reflecting discipline execution and growth across the group. 2025 also marked exciting progress across data, technology, and AI, and the evolution of our model proposition, including the acquisition of Flock, subject to regulatory approval. Today, we'll also outline the evolution of our group strategy. This strategy builds on a very strong platform, a more diversified customer base, and the competitive advantage we already have to deliver higher long-term value for all our stakeholders. We'll also cover our new capital distribution framework, including share by backs. Garant will take you through that later. So more in detail, as already mentioned, 2025 was a year of records. Our customer base increased 7% while we continue delivering strong customer outcomes with a group net promoter score over 50. Group profit reached a new high, driven by record UK motor profit, passing now the bar of 1 billion pounds. following another record year in 2024. This was achieved in a challenging market environment thanks to positive evolution of recent years and continued underwriting discipline across the cycle. Importantly, this was not just a UK motor story. All parts of the group contributed. In the UK, other personal lines, Admiral Money combined, delivered a profit of $88 million. Europe also performed strongly, with a fast return to profitability in Italy and great results in France, which Costi will cover shortly. 2025 was also a year of strong shareholder returns, supported by a 7% increase in dividend per share, a very strong capital position with a solvency ratio of 193%, and another stellar return on equity of 53%. Beyond the financial results, 2025 marked an acceleration in our strategic progress. We are pleased with our rapid advancement on artificial intelligence, particularly with the value delivered by machine learning models and the new GenAI Center of Excellence to scale priority use case, train our people, and provide them with the right tools. We are managing more than 150 GenAI initiatives across the group, including support to over 4,000 colleagues, some agentic models with promising initial results, and more potential to come. Selling more product to our existing customers remains a key growth driver, with our multi-risk customer now exceeding 1.6 million. Across Europe, we continue to evolve our broker propositions with stronger segmentation and more customised offering, driving better margin, as Costi will explain later. We also continue to innovate in motor. An example is our partnership with Octopus that positions us well in the fast-growing salary sacrifice scheme for electric vehicles, with a tailored risk-based proposition aligned with our ambition to support customers in making greener choices. And in Admiral Money, completing our first forward flow deal was an important milestone as it opened up a more capital-efficient growth path and supported higher returns and lower volatility. On M&A, the integration of Morden is now fully completed and contributed positively. Elephant disposal is also completed. And finally, early this year, we announced our intention to acquire Flock, a company we had invested in since 2024. Flock offers a telemetry-based fleet proposition with an effective feedback loop to improve safety and performance. It's an excellent strategic fit with our UK motor expertise, with promising underwriting and claim synergies, and closely aligned with our joint ambition to improve safety on the roads. And by combining admiral data ambition to admiral strengths with Flock technology, we see an opportunity to develop a differentiated fleet business in an underserved market. So in summary, 2025 was a record year for Admiral with strong profits, customer growth and progress in technology and strategy. Now, before handing over to Geraint, I want to take a moment because this will be the last time that you join me on stage to present results. And I think it's fair to say that the strength and discipline of the performance for about a year are a good reflection of his leadership, his judgment, and his consistency over the last 12 years as CFO. A period during which Admiral tripled his turnover and grew profit from 350 million to almost 1 billion. And please join me to congratulate Rachel, who is here with us today, and will succeed to guarantee bringing deep knowledge of Admiral, a strong track record within the group, and a great skill set for the role. So thank you, Geraint, and congratulations, Rachel.

Thank you. Good morning, everyone. 12 years of not being found out. One last time, let me talk you through the main drivers of an excellent 2025 result. Lots of positives, lots of good milestones. I cover the UK motor loss ratios, the dividend, strong capital position, and as Milena mentioned, I'll talk you through the change in the approach to capital return that we've announced today. To start with, though, let's look at the component parts of the group profits and the main ratios. The group combined ratio was very positive again. It's 80%. That was three points higher than 2024, though the impact of Ogden accounted for around two points of that difference. So in reality, only a very small change. And that in turn is made up of a slightly improved expense ratio and a slightly higher loss ratio. The latter, as expected, due to the higher loss ratio 2025 underwriting year in the UK motor having an impact. On to the results then. In UK insurance, overall profit was £1.1 billion. That's £110 million higher than 2024, including Ogden, or £180 million higher if Ogden is excluded. Very big increase. The UK motor results I'll cover shortly, but the result there was record profit, just over £1 billion. And we're very pleased with a really strong year for the UK, other personal lines, home insurance, travel and pet insurance, all profitable, strong growth, and the combined profit there of 62 million was nearly treble 2024's result. In Europe, we're reporting a much better result, improving by nearly 30 million versus 2024. We see growth and higher profits in France, small loss in Spain, impacted by new reinsurance arrangements, and a recovery to profits in Italy. Good to see that happen so swiftly. And worth reminding that we continue to hold prudent booked reserves in Europe in the upper end of our range. The best estimates are also conservative. Admiral Money had a great year. Profit was double 2024's, benefiting firstly from good growth in the balance sheet, but also, as we talked about at the 2025 half year, from profit generated from selling some back book loans in the first half and selling newly originated loans which don't hit Admiral's balance sheet. That will be a continuing, we think, attractive feature of the Admiral Money business model. We continue to see good margins on the unsecured loans business, which makes up the big majority of the balances, but the results from car finance, which was relaunched in late 2024, are also encouraging. Credit loss experience remains very solid and we hold an appropriately prudent provision for losses. There are some other comments on the page which cover the movement in the share scheme costs and the other line, and you've got the usual extra information in the back of the pack. All in all, group profit was up 16% or 28% if you exclude the impact of Ogden on both years. Let's take a look at the very impressive UK Motor result. So this is a summarised income statement plus some of the key ratios and some commentary. Both years include the impact of the Ogden discount rate change, and so some of those year-on-year comparisons you see look a little less strong than they really are. We show the pounds and the percentage impacts of Ogden in the table. And starting with the top line, customer numbers increased by 2% year-on-year, 50,000 added in the first half and around 80,000 in the second half, so 1% increases half-on-half. As Alistair will talk a bit more about later, we reduced our prices in H1 last year, and hence average premiums have fallen. And so despite our bigger portfolio, turnover was down by 7%, as the team took a disciplined approach in the competitive UK market and reflecting the claims trends that we were seeing. As a result of the reduced premiums and continued claims inflation, the current year loss ratio for 25 is three points higher than 24. And of course, we also don't see quite the same positive impact of Ogden in 25 than we did last year, And those two items are the main drivers of the higher combined ratio you see at the bottom, which was as we expected. The underwriting result improved by around 40 million, with higher in premiums and a much lower reinsurance charge offsetting the higher net claims cost. You'll remember that we had much more limited share recovery assets coming into 2025. And we see a similar picture as we exit 2025 too. Net investment income was higher, up to a record level, due mainly to higher invested assets. at a similar rate of return. Profit commission was notably higher as we started now to recognize income on the high profitability 2024 underwriting year, though we still haven't yet recognized income on 21 to 23 or on 2025. We do expect to see revenue coming through on 21 and 25 very soon. I already mentioned the main drivers of the higher combined ratio we see at the bottom, but within that mix, reserve releases were 10% year on year basically the same like for like. Next up, we'll take a quick look at the main UK motor loss ratios, which as always are a key driver of this result. The chart shows the UK motor discounted book loss ratios, and there are generally positive and consistent messages to report here. We see continued strong improvements in 23, and especially on 24 over the last year. 2024 is clearly a very good margin year on a very large premium base. In 2025, we see burn cost inflation around mid single digits level. And that's a small improvement in H2 versus where we saw things at the half year point. The first discounted booked loss ratio for 25 is at 78. That's seven points up versus 24 at its equivalent point. And that's, again, basically in line with our expectation. On an undiscounted basis, 2025 is 85% compared to 77% for 24%. Now we expect 25 will be a good profitable year. You can see it looks healthy on the chart at the 12 month point, and it should develop positively from here, though obviously won't end as profitably as 2024. We maintained very high reserve strength. It's very close to the maximum percentile, and we expect that will reduce a bit further in 2026 towards the middle of our range. Overall on claims, positive experience in line with our expectations, usual trends, And there's more information in the back of the document. Moving now to look at the capital position. So this is the bridge of the solvency ratio from half year to full year 25. A couple of observations. Firstly, the capital generation in the second half is largely offset by the final dividend. And secondly, you may need a pretty flat revenue in 25 versus 24. We see a much smaller change in the capital requirements in 25 than we did in 24, and particularly in the second half. And then the change in the capital requirements and the other items in the middle almost cancel each other out, leaving the group with a healthy, very healthy, almost flat ratio of 193%. Short update on the internal model. Lots of hard work by our team, as usual, over the past few months since we last updated you. We now expect to make our application for approval shortly. Post-approval, we'll target solvency coverage in the 150% to 170% range. probably at the upper end, in part to give us flexibility for smaller M&A opportunities. We'll give more information on the post-model approval capital position at the appropriate time. Speaking of M&A, briefly, Milena mentioned earlier the FLOC acquisition. As we said in the press release, if that gets regulatory approval and completes in the second quarter, we estimate the impact on sovereignty will be a bit less than 10 percentage points, and is therefore largely absorbed by the strong position. Next up is the dividend. So these are the details of the dividends split between interim and final. And for 2024, we call out the impact of the Ogden change, which was obviously significant on the dividend for last year. The proposed final dividend is 90p per share. That brings the total for the year to 205 pence, over 620 million, and that's 7% higher than 2024's. The difference in the payout ratios year on year is due to us starting to use capital to purchase shares for the share schemes. which we said back in August would start in the second half of 2025. You'll remember that historically we issued new shares each year for those share schemes rather than purchasing the market, but we haven't done that since 2023. In the fourth quarter of last year, the Trusts bought about a million shares for just over £30 million, and the capital that we used for dividend and the share scheme purchases equated to basically the same percentage of earnings across both years, close to the 90% level. And in 2026, we expect the trust to buy around 3 million shares. Next up, we'll cover the change in the capital return approach. On the left, we show a summary of our capital allocation framework. Milena will talk a bit more about point one later, which covers how we allocate capital to our businesses. We're generally comfortable that around 10% of earnings is a fair guide of what we need to retain to fund and invest in growth. And that's meant an average dividend payout over the last five or six years of 90%. Step two, we know the importance of strong cash returns to our shareholders, so the laudry dividend remains at 65% of earnings. Step three, as Justin mentioned, we've purchased shares for the share plans. And final, and step four, not finally, using some surplus capital is an option for funding M&A. And then that leaves the surplus capital, and that's what's changing today. Historically, as you know, we've returned this to shareholders in the form of special dividends. But from the interim 2026 dividend, we'll change that step five to be either buy back and cancel shares or pay a special dividend, depending on what the board believes is the best option. For 2026, subject to regulatory approval, we expect to buy shares at the interim and final dividend dates. The 90% guidance we've given out over the past few years to cover the ordinary, plus the special or buyback, plus the share schemes purchase should generally hold moving forward. And then one final slide for me to sum up. Looking back on 2025, clearly it was a really strong year. Record profits, record returns to shareholders, lots of positive results and developments across the group. For UK, the personal lines and admiral money, great results. Strong and swift turnaround in Europe. Progress on the internal model, very pleasing stuff. And looking ahead, a few comments on what we might expect in 2026. On growth, in summary, we plan to grow everywhere. That's obviously subject to how the markets develop, in particular when prices in UK motor start to increase. For turnover, I'd expect a bit more growth in 2026 than we saw in 2025. And in general, of course, we expect faster growth from the newer businesses, UK, the personal lines, Admiral Money and Europe. And then a few comments in respect to the group profit. Firstly, obviously, we will see more of an impact of the less profitable 25 underwriting year feeding into the 2026 results. But we will still benefit from good releases and profit commission coming through on 2024 and 23 and some of the earlier years too. Secondly, we project continued improvements in the results in aggregate for the newer businesses that we've talked about. And finally, we expect group profit in 26 to be quite flat versus 25 after a really very strong last couple of years where profits have more than doubled. And all those comments, of course, subject to the usual caveat of some markets, geopolitics, war and weather. That's it from me. I shall hand you to Alistair now to talk to us about UK insurance.

Thank you Geraint. Good morning. I'm very pleased to take you through an excellent set of UK insurance results. 2025 has been a record year across all our lines of business, underpinned by disciplined execution, customer centricity and strong operational delivery. Starting with the headlines. Customer numbers reached 9.6 million, up 9% year on year, with strong contributions from motor, household, travel and pet. We delivered 5 billion of turnover and 1.1 billion of profit, passing the 1 billion profit milestone for the first time. We continue to deliver competitive prices, great service, and good customer outcomes, which is recognized in customer feedback. We remain number one on Trustpilot and achieve an NPS over 55. Importantly, 1.6 million customers now hold two or more products with us, a 14% increase year on year. Customers buying more products gives us better data to improve risk selection for all products, is a driver of our retention advantage in motor and growth in new lines of business. Overall, an efficient source of growth that contributes to improved expense ratios. Recent announcements are leading to a more predictable regulatory landscape. Outcomes from the Motor Insurance Task Force and Premium Finance Review were in line with expectations, and the Home and Travel Claims Handling Review is now complete, and we have no significant concerns. Let's turn to the motor market. Starting with claims trends, frequency was largely flat following the marked decline we saw in 2024, and severity has returned to more normal mid-single-digit levels. Our expectation is that these trends continue, but the current macro environment introduces some uncertainty. The graph on the left shows a dark line for claims burn costs. Claims burn costs increased steeply through 2022 and then continued to increase, but more modestly. The light line for market average premiums shows a lagging response to claims costs. increasing rapidly in 2023, outpacing claims costs and then declining. Both lines are indexed to 2021 and you see they cross in 2025 as increases in claims costs now exceed increases in premiums over the period. Let's focus on recent market prices. On the right, you see prices continue to decline through the second half of 2025, though at a slower rate than in the first half. We estimate average premiums declined by around 10% in 2025, broadly in line with movements reflected in ABI data. Since the start of 26, market prices are relatively flat, with some differences in strategy between market participants. Market prices need to increase imminently. EY forecasts the motor market combined ratio of 111% for 2026. This is on an earned basis, and EY assume price increases through 2026. So delays in market price increases will put more pressure on this 2026 market combined ratio. Turning to Admiral UK Motor. In 2025, we focused on disciplined cycle management and maintaining our strong advantage in pricing claims and customer attention. In 2025, we reduced rates by around half as much as the market. All the decreases were in H1. In H2, our prices were broadly flat. The left-hand graph shows that this led to a decline in new business market share in the second half of 25. Lower new business was more than offset by strong retention, resulting in modest policy growth, though lower average premiums resulted in a drop in turnover. In 26, we've started increasing premiums with low single digit increases at the start of the year to reflect the claims outlook and maintain good written margins. Taking a longer view, our disciplined approach results in varying growth through the cycle, but maximises value and growth over the medium term. The graph on the right shows our year-on-year vehicle growth rate in blue. In yellow is our written loss ratio. Our loss ratio is consistently better than the market, but still fluctuates within a range due to the cycle. We respond quickly to claims trends, even if it results in slower growth in the short term. It then enables us to grow quickly when loss ratios are low, for example by 15% in 2024. Since the start of 2020, our vehicles covered has grown at a CAGR of 5% and with an average combined ratio advantage of around 20% versus the market. We continue to invest in strengthening our pricing claims and claims capabilities, including embracing predictive AI and Gen AI, which Milena will talk more about. Electric vehicles is a great example of our pricing and claims focus. We lead in this growing segment. We're very competitive whilst delivering comparable loss ratios to high levels of repairability. Our overall approach is to be disciplined and grow when the time is right, whilst focusing on driving advantage in pricing, claims and customer retention. We're confident this will result in growth and maximising value over the medium term. Let's move to our other UK insurance lines, where we've had an outstanding year. We welcomed 650,000 new customers, year-on-year growth of 21%, and trebled profits across household, travel and pet. In household, market premiums softened further and subsidence claims were elevated in the second half of the year. Our own pricing remained more disciplined than the market and weather adjusted loss ratios improved by about two percentage points. This combined with top line growth meant that although prior year reserve releases normalised from the 2024 exceptional levels, we still delivered a record household profit. The more than integration is complete with around 380,000 home and pet customers transferred successfully. This has accelerated growth and enhanced capability, particularly in PET. Travel grew customers by 29% and continued its positive profit trajectory. PET grew even faster and reached breakeven just three years after launch. All three lines are now profitable with clear momentum and strong positions across their markets. So, Oh, I'm going on too fast. So in summary, in 2025, we've delivered record profits. But in addition, motor remains disciplined and well positioned ahead of the market. Pricing increases expected in 2026. Household, travel and pet are performing extremely well with growing scale and margin. And customer satisfaction and retention are excellent, with more customers choosing to buy more products from us. We enter 2026 with confidence that we'll continue to deliver sustainable, profitable growth over the medium term. Milena will talk more about this shortly. Now, I'll hand over to Kosti for Europe.