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Admiral Group PLC : Admiral Group plc results for the six months ended 30 June 2013



Admiral Group PLC : Admiral Group plc results for the six months ended 30 June
                                     2013

29 August 2013

H1 2013 Group Results

  * Profit before tax up 6% to £181.4 million (H1 2012: £171.8 million)
  * Earnings per share up 6% to 50.1 pence (H1 2012: 47.3 pence)
  * Interim dividend up 8% to 48.9 pence per share (2012 interim: 45.1 pence
    per share)
  * Turnover down 7% to £1,089 million (H1 2012: £1,169 million)
  * Number of vehicles up 3% to 3.6 million (H1 2012: 3.5 million)
  * Return on capital 57% (H1 2012: 61%)
  * Over 6,600 employees eligible to receive £1,500 of shares each via the
    Employee Share Scheme, based on the H1 2013 result
  * Named 2^nd Best Large Workplace in the UK and 2^nd Best Multinational
    Workplace in Europe by the Great Place to Work Institute

Henry Engelhardt, Chief Executive Officer, commented:
"I'm really pleased with our results in the first half of 2013.  Any time you
can increase profits by 6% when competitors are cutting prices you've got to
be happy.

"We didn't grow the UK insurance business, which was great news because of the
competitive environment.  We were able to increase profits largely due to
excellent claims experience.  In addition, Confused.com had a great first
half, increasing its profits by over 20%.

"Outside the UK all our operations made good progress towards their goal of
building profitable, growing and sustainable businesses.  Our insurance
operations in the US, Spain, Italy and France now account for more than 13% of
all our customers.  I'm particularly proud of our European price comparison
businesses, Rastreator in Spain and Le Lynx in France, both of which were
profitable in the period.  

"All in all it has been a busy, exciting and profitable first half of 2013 and
we are poised to meet our expectations for the full year.  We continue to give
great service and prices to millions of motorists which gives us great
confidence in the future."

Alastair Lyons, Chairman, said:
"Our policy remains to distribute available surpluses to shareholders, after
taking account of regulatory capital, funds to support our plans for growth
plus a prudent contingency.  With a further increase in profit in the first
half of 2013, our interim dividend increases to 48.9 pence per share, which
represents 98% of post-tax earnings."  

Interim dividend
The interim dividend of 48.9 pence per share will be paid on 11 October 2013.
The ex-dividend date is 11 September 2013 and the record date is 13 September
2013.  The dividend consists of a normal dividend of 22.5 pence per share and
a special dividend of 26.4 pence per share.

Management presentation
Analysts and investors will be able to access the Admiral Group management
presentation, which commences at 8.30am on Thursday 29 August 2013, by
dialling +44 203 059 8125.

A copy of the presentation slides and webcast, along with a PDF version of
this interim results announcement, will be available at www.admiralgroup.co.uk

Group key performance indicators

                     H1 2011   H1 2012   H1 2013    FY 2012
Turnover[*1]       £1,104.4m £1,169.3m £1,089.1m  £2,215.1m
Net revenue          £425.1m   £488.4m   £454.8m    £984.3m
Number of vehicles     3.15m     3.50m     3.60m      3.55m
Loss ratio[*2]         77.3%     79.7%     68.8%      79.2%
Expense ratio          16.7%     16.3%     20.2%      17.7%
Combined ratio[*2]     94.0%     96.0%     89.0%      96.9%
Profit before tax    £160.6m   £171.8m   £181.4m    £344.6m
Earnings per share     43.3p     47.3p     50.1p      95.1p
Dividend per share     39.1p     45.1p     48.9p      90.6p
Return on capital        63%       61%       57%        60%

[*1] Turnover comprises total premiums written and other revenue
[*2] Loss ratio restated to show the result only on premium originally
underwritten by Admiral. Result in H1 2013 including releases from commuted
reinsurance contracts would have been a loss ratio of 59.5% and the combined
ratio 79.7%.  Refer below for details.

Key Group Highlights

Admiral continued to grow Group pre-tax profit in the first half of 2013 to
£181.4 million, up 6% on the prior year (H1 2012: £171.8 million).  The growth
was driven by an improved combined ratio, primarily due to positive claims
experience in the Group's core UK Car Insurance business.  

Group turnover of £1,089.1 million decreased by 7% compared to the first half
of 2012 (£1,169.3 million).  This was mainly driven by reductions in average
premiums in the UK Car Insurance business.

During H1 2013, the Group increased its vehicle base by 50,000 to 3.60
million.  Year-on-year growth was nearly 100,000 (3%).  

The Group loss ratio improved to 68.8% (H1 2012: 79.7%), primarily due to
positive UK claims experience driving higher reserve releases.  There was also
an improvement in the International Insurance loss ratio. 

The Group expense ratio increased to 20.2% (H1 2012: 16.3%) mainly due to the
positive impact on the prior year figure of a one-off adjustment, along with
the increasing relative size of the International Insurance businesses (which
currently operate at a higher expense ratio than the UK).

Admiral's strategy in its core UK Car Insurance market is unchanged.  The
focus on margin over volume resulted in a flat vehicle count (3.02 million),
whilst pre-tax profit increased 5% to £192.7 million (H1 2012: £183.3 million)
due to an improvement in the Combined Ratio to 81.1% from 89.7%.  This was
against a backdrop of falling premium rates and intense competition as some
competitors sought to add market share.  

Admiral's International Car Insurance businesses continued to grow, delivering
an overall increase in turnover of 20% to £95.5 million and insuring 25% more
vehicles at 30 June 2013 compared with a year earlier.  These four operations
now account for 9% of total turnover and 13% of vehicles.  

During the first half of 2013, the International Car Insurance businesses lost
£10.8 million compared to £8.9 million in the first half of 2012.  This
reflected increased marketing spend, predominantly in Spain and the USA.  The
loss equated to 6% of the Group profit before tax for the period.

Admiral's Price Comparison businesses generated pre-tax profit of £9.9
million, 22% ahead of the £8.1 million result of H1 2012.  This was primarily
driven by a 21% increase in profit at Confused.com to £10.2 million (H1 2012:
£8.4 million).

Admiral's capital efficient and highly profitable business model led to return
on capital of 57% (H1 2012: 61%).  A key part of the business model is the
extensive use of co- and reinsurance across the Group.  During the first half
of 2013 Admiral announced extensions to its UK reinsurance arrangements until
at least the end of 2015, while its UK co-insurance agreement runs to at least
the end of 2016.  

Earnings per share increased by 6% to 50.1 pence (H1 2012: 47.3 pence) and an
interim dividend of 48.9 pence per share has been declared (8% higher than the
interim 2012 payment of 45.1 pence) - a payout ratio of 98% (H1 2012: 95%).  

At the core of Admiral's success is a skilled and motivated workforce and the
Group invests significant time and money in four key areas to underpin this:
communication; equality; reward and recognition; and fun.  During the first
half of 2013 the Group received numerous awards in recognition of this
investment:

  * Second Best Large Place to Work in the UK
  * Second Best Multinational Place to Work in Europe
  * Fifth Best Company to Work For in Spain
  * Eighth Best Large Workplace in Canada
  * Ninth Best Small to Medium Workplace in Italy
  * Eighteenth Best Workplace in Virginia USA

At 30 June 2013 the Group employed over 6,600 members of staff, of which
nearly 5,000 are employed in the UK.

The Group's results are presented in three key segments - UK Car Insurance,
International Car Insurance and Price Comparison.  Other Group items are
summarised in a fourth section.

UK Car Insurance
Non-GAAP[*1] format income statement

£m                                         H1 2011 H1 2012 H1 2013  FY 2012
Turnover[*2]                                 999.3 1,030.0   924.5  1,936.2
Total premiums written[*3]                   881.7   922.8   851.7  1,748.7
Net insurance premium revenue[*4]            190.0   226.8   214.6    455.6
Investment income                              3.4     5.9     5.6     13.9
Net insurance claims[*5]                   (151.0) (179.7) (125.2)  (355.1)
Net insurance expenses                      (20.7)  (21.9)  (26.3)   (50.0)
Underwriting profit                           21.7    31.1    68.7     64.4
Profit commission[*5]                         45.3    47.8    40.4    108.4
Underwriting profit plus profit commission    67.0    78.9   109.1    172.8
Net other income[*6]                          90.7    90.1    71.2    170.9
Instalment income                             10.5    14.3    12.4     29.1
UK Car Insurance profit before tax           168.2   183.3   192.7    372.8

[*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
[*4] Net insurance premium revenue in H1 2013 includes £6.8 million of premium
(H1 2012: £nil) related to additional products underwritten by Admiral - refer
to page 9 for details.
[*5] H1 2013 net insurance claims include £22.5 million of reserve releases
from commuted reinsurance contracts (H1 2012: £1.9 million).  Had these
contracts not been commuted, these releases would have been recognised through
profit commission.  Refer to Note 4c to the financial statements.  
[*6] H1 2013 number impacted by changes relating to motor legal expenses
insurance and vehicle commission - refer below for details.

Split of underwriting profit

£m                  H1 2011 H1 2012 H1 2013  FY 2012
Motor                  21.7    31.1    65.0     59.6
Additional products       -       -     3.7      4.8
Underwriting profit    21.7    31.1    68.7     64.4

Key performance indicators

                                  H1 2011 H1 2012 H1 2013  FY 2012
Reported motor loss ratio[*1]       76.1%   77.5%   67.2%    76.4%
Reported motor expense ratio[*2]    14.1%   12.2%   15.0%    13.6%
Reported motor combined ratio       90.2%   89.7%   82.2%    90.0%
Written basis motor expense ratio   12.8%   12.6%   13.7%    13.0%
Reported total combined ratio[*3]   90.2%   89.7%   81.1%    89.2%
Claims reserve releases[*4]         £4.0m  £10.9m  £52.2m   £17.6m
Vehicles insured at period-end      2.83m   3.02m   3.02m    3.02m
Other Revenue per vehicle             £86     £82     £73      £79

[*1] Motor loss ratio adjusted to exclude impact of reserve releases on
commuted reinsurance contracts.  Before adjustment, the reported loss ratio is
56.4% for H1 2013 (FY 2012: 76.1%; H1 2012:76.7%; H1 2011: 76.3%)
[*2] Motor expense ratio is calculated by including claims handling expenses
that are reported within claims costs.  Refer to Note 7b to the financial
statements
[*3] Reported total combined ratio includes additional products underwritten
by Admiral
[*4] H1 2013 claims reserve releases include £22.5 million of releases from
commuted reinsurance contracts. Refer to Note 4c to the financial statements

UK Underwriting Arrangements for 2013 to 2015
During the first half of 2013 the Group extended its UK reinsurance
arrangements such that capacity is fully placed until the end of 2015.  The
underwriting splits are as follows:
                        2013    2014    2015
Admiral                 25.00%  25.00%  25.00%
Great Lakes (Munich Re) 40.00%  40.00%  40.00%
New Re                  13.25%  13.25%  12.25%
Hannover Re             8.75%   8.75%   8.75%
Swiss Re                7.50%   9.00%   9.00%
Mapfre Re               3.00%   4.00%   5.00%
XL Re                   2.50%   -       -
Total                   100.00% 100.00% 100.00%
The proportion underwritten by Great Lakes (a UK subsidiary of Munich Re) is
on a co-insurance basis, such that 40% of all motor premium and claims for the
2013 year accrues directly to Great Lakes and does not appear in the Group's
income statement.  Great Lakes reimburses the Group for its proportional share
of expenses incurred in acquiring and administering the motor business.
That contract will run until at least the end of 2016, and will see Great
Lakes co-insure 40% of the UK business for the remaining period.  Admiral has
committed to retain at least 25% for the duration, whilst the allocation of
the balance is at Admiral's discretion.
All other agreements are quota share reinsurance.
Admiral has options to commute quota share reinsurance contracts and typically
does so after two or three years of an underwriting year's development.  There
is  little or no impact on profit or the timing of profit recognition from
commutation.
After commutation, movements in booked loss ratios result in reduced or
increased net claims costs (and not profit commission).
At 30 June 2013, all material UK quota share reinsurance contracts for
underwriting years up to and including 2010 have been commuted.  For the 2011
year, of the original 32.5% of the business that was reinsured, contracts
covering 27.5% of the business have been commuted.  All reinsurance for the
2012 and 2013 years remains in effect.  Refer below for further details.

UK Car Insurance Financial Performance
After two years of significant rate increases in 2010 and 2011, the UK market
is now in its second year of being more price competitive.  Admiral's UK
business has maintained a stable vehicle count and has focussed on margin
rather than seeking to grow market share.  

Profit from UK Car Insurance increased by 5% to £192.7 million (H1 2012:
£183.3 million).  Profit from underwriting and profit commission increased by
38% to £109.1 million (H1 2012: £78.9 million) driven predominantly by an
improved combined ratio and the change in arrangements related to motor legal
expenses insurance during H1 2012, which resulted in a reallocation of revenue
from Other Revenue to premium.  This latter change also contributed to a
reduction in net other income and instalment income of 20% to £83.6 million
(H1 2012: £104.4 million).  Refer below for further detail.

UK turnover of £924.5 million decreased by 10% compared to H1 2012 (£1,030.0
million).  This was primarily due to reductions in average premiums which led
to an 8% reduction in total premiums written (£851.7 million compared to
£922.8 million).  The closing vehicle count has been broadly flat at 3.02
million since the end of June 2012.  

The reduction in total premium was driven largely by rate cuts of around 7%
(year-on-year) on new business which, combined with portfolio mix changes
contributed to a 10% reduction in average premium for new business.

There was a significant improvement in the reported motor combined ratio,
which reduced to 82.2% from 89.7% (both figures exclude the impact of reserve
releases from commuted reinsurance contracts - refer below).

The improvement was driven by a material reduction in the reported loss ratio
to 67.2% from 77.5%, which was due to materially higher reserve releases
(£29.7 million v £9.0  million in H1 2012 excluding reserve releases from
commuted reinsurance contracts).  These higher releases were possible due to
the positive claims experience during 2012 and the first half of 2013, which
resulted in improvements in the projected ultimate loss ratios, especially for
the 2010 to 2012 underwriting years.

In addition to the reserve releases from the net share of the business
originally underwritten by Admiral (H1 2013: £29.7 million), there were
reserve releases of £22.5 million (H1 2012: £1.9 million) from business that
was originally ceded under quota share reinsurance contracts that have since
been commuted.  Refer to Note 4c for further detail.

Excluding reserve releases, the loss ratio was stable at around 81.5%.
 Admiral's booked claims reserves continue to include a significant margin
above projected best estimates of ultimate claims costs.  
The earned motor expense ratio increased to 15.0% from 12.2%, mainly due to
the prior year benefitting from a one-off adjustment relating to levy costs.
 The reduction in average written premiums was the main reason the written
basis expense ratio increased to 13.7% from 12.6%.

The projected ultimate combined ratio for Admiral for the 2012 accident year
is 84%, compared to 81% for 2011 (the increase was due to falling premium
rates in 2012).  The reported combined ratio for the UK market for 2012,
excluding reserve releases, was 108%.

Profit Commission
Admiral is potentially able to earn material amounts of profit commission
revenue from co- and reinsurance partners, depending on the profitability of
the business.  Revenue is recognised in the income statement in line with the
booked loss ratios on Admiral's retained underwriting.  
In H1 2013 Admiral recognised profit commission revenue of £40.4 million, down
from £47.8 million in H1 2012.  The decrease came despite a material
improvement in the reported combined ratio and is distorted by the impact of
commutations of reinsurance contracts (as referred to above).
When a quota share reinsurance contract is commuted (typically after two or
three years from the start of an underwriting year), further improvement or
deterioration in claims costs are reported within net claims.  If the
contracts were not commuted, the movement would be reported in profit
commission.
If releases, from business that was originally ceded under quota share
reinsurance contracts that have since been commuted, are added to profit
commission, the total for H1 2013 rises to £62.9 million compared to £49.7
million in H1 2012, an increase of 27%.

Other Revenue
Admiral generates Other Revenue from a portfolio of insurance products that
complement the core car insurance product, and also fees generated over the
life of the policy.  

Other Revenue (net of costs and including contribution from additional
products underwritten by Admiral) decreased by 16% to £87.3 million (H1 2012:
£104.4 million).  This was equivalent to £73 per vehicle (gross of costs) -
down from £79 at the end of 2012 and £82 at the end of H1 2012.  

The £6 reduction in Other Revenue per vehicle from FY 2012 to H1 2013 was due
to changing accounting recognition and treatment (-£5) and true economic
changes (-£1) as follows:

Changing accounting recognition and treatment

  * Change to accounting recognition and treatment of motor legal expenses
    insurance (MLEI) and vehicle commission (-£3), profit has been reallocated
    from Other Revenue to Underwriting.  
  * Change to underwriting arrangements for additional products impacting the
    timing of revenue recognition (-£2), which will reverse in time.

True economic changes

  * Reduction in income earned from personal injury referral fees (-£2)
  * Reduction in instalment income reflecting lower average premiums (-£1)
  * Other offsetting movements (+£2)

Other Revenue - analysis of contribution:

£m                                            H1 2011 H1 2012 H1 2013  FY 2012
Contribution from additional products and       107.1   108.0    86.2    205.2
fees
Contribution from additional products               -       -     3.7      4.8
underwritten by Admiral[*1]
Instalment income                                10.5    14.3    12.4     29.1
Other Revenue                                   117.6   122.3   102.3    239.1
Internal costs                                 (16.4)  (17.9)  (15.0)   (34.3)
Net Other Revenue                               101.2   104.4    87.3    204.8
Other Revenue per vehicle[*2]                     £86     £82     £73      £79

[*1] Included in underwriting profit in income statement but re-allocated to
Other Revenue for purpose of KPIs
[*2] Other Revenue (before internal costs) divided by average active vehicles,
rolling twelve month basis

Motor Legal Expenses Insurance (MLEI) and Vehicle Commission
As previously noted, with effect from 1 April 2012, Admiral no longer earns
Other Revenue from the sale of MLEI.  In addition, the Group began charging
its panel of co- and reinsurers a vehicle commission.  Admiral's car insurance
policies continue to include MLEI as an integral feature and there has been no
impact on customers in the level of cover or cost of policies as a result of
this change.  The overall economic impact of these two changes is not
significant although there are differences in the timing of revenue
recognition.

During the period the intra-group element of vehicle commission totalling £9.7
million was eliminated (from the insurance expenses and Other Revenue lines in
the income statement).  The accounting recognition and treatment of MLEI and
vehicle commission reduced Other Revenue per vehicle by approximately £3
during the first half of 2013 and an additional £3 during the second half of
2013.  There is no profit impact of the elimination as profit is reallocated
from Other Revenue to Underwriting.  Further details are provided in Note 3.  

Referral Fees
As previously reported, personal injury referral fees were banned with effect
from 1 April 2013.  The ban reduced Admiral's Other Revenue per vehicle by
around £2 compared to the end of 2012 and will reduce it by a further £3 by
the end of 2013.  Admiral expects this reduction in revenue will be offset by
reductions in claims costs.

In addition, in H1 2013 Admiral earned £7.3 million in credit hire referral
fees.  Admiral notes that the UK Competition Commission is undertaking a
review of the car insurance market and a potential outcome of the review is
regulatory change resulting in a reduction or elimination of these fees.
 Admiral expects any such reduction in revenue would be offset by reductions
in claims costs.

Additional Products Underwritten by Admiral
There are a number of products which are core to providing car insurance to
customers (including personal injury insurance, breakdown cover and car hire
cover).  During the second half of 2012 Admiral began to underwrite the
majority of these within the Group (they were previously underwritten by
external insurers).  The advantages of doing this include improved products
for customers and increased control and flexibility with regards to their
features and terms.  

Contribution from these products underwritten by Admiral during H1 2013 was
£3.7 million and this is included in underwriting profit in the income
statement, but reallocated to Other Revenue for the purpose of management key
performance indicators.  

The accounting recognition and treatment of additional products underwritten
by Admiral has reduced Other Revenue per vehicle by approximately £2 during
the first half of 2013, which will reverse by the end of 2013.  This is caused
by a change from recognising some of the revenue at the point of sale to
recognising revenue over the life of the policy.

Instalment Income
Instalment income is interest charged to customers paying for cover in
instalments.  During the first half of 2013 Admiral earned £12.4 million, down
13% on the prior period (H1 2012: £14.3 million) from instalment income.  This
reduced Admiral's Other Revenue per vehicle by around £1 compared to the end
of 2012.

Instalment charges are calculated as a percentage of premium and therefore a
reduction in average premium leads to a reduction in instalment income.  

Admiral Law and BDE Law
During H1 2013, Admiral entered into two joint ventures with law firms Lyons
Davidson and Cordner Lewis to form Admiral Law and BDE Law.  Both ventures
were granted alternative business structure (ABS) licenses by the Solicitors'
Regulation Authority.

Bringing the provision of legal services into the Group will allow Admiral to
administer a claim throughout the process and offer a materially better
quality of service.

New and proposed reforms to the handling of bodily injury claims mean that the
businesses are not expected to make a material contribution to Group profits
in the foreseeable future.

International Car Insurance
Non-GAAP format income statement

£m                                          H1 2011 H1 2012 H1 2013  FY 2012
Turnover                                       53.9    79.7    95.5    162.9
Total premiums written                         49.5    74.4    85.5    148.5
Net insurance premium revenue                  11.5    19.7    26.4     43.3
Investment income                               0.1     0.1       -      0.1
Net insurance claims                         (11.1)  (20.5)  (23.3)   (49.4)
Net insurance expenses                        (6.9)  (12.6)  (16.9)   (27.4)
Underwriting result                           (6.4)  (13.3)  (13.8)   (33.4)
Net other income                                3.6     4.3     2.9      8.9
Other revenue and charges                     (0.4)     0.1     0.1        -
International Car Insurance loss before tax   (3.2)   (8.9)  (10.8)   (24.5)

Key Performance Indicators

                                              H1 2011 H1 2012 H1 2013  FY 2012
Reported loss ratio                               97%    104%     88%     114%
Reported expense ratio                            60%     64%     64%      63%
Reported combined ratio[*1]                      157%    168%    152%     177%
Reported combined ratio, net of Other            125%    146%    141%     157%
Revenue[*2]
Vehicles insured at period-end                235,900 385,600 481,400  436,000

[*1] Reported combined ratio is calculated on Admiral's net share of premiums
and excludes Other Revenue.  
[*2] Reported combined ratio, net of Other Revenue is calculated on Admiral's
net share of premiums and includes Other Revenue.

Geographical Analysis
30 June 2013

                                 Spain   Italy France    USA   Total
Vehicles insured at period end 118,550 278,550 22,300 62,000 481,400
Turnover (£m)[*1]                 19.3    50.4    6.5   19.3    95.5

30 June 2012

                                Spain   Italy France    USA   Total
Vehicles insured at period end 98,300 237,900 10,000 39,400 385,600
Turnover (£m)[*1]                17.3    44.8    4.2   13.4    79.7

[*1] Turnover includes total premium written and income generated by the sale
of additional products and services and fees

International Car Insurance Financial Performance
The Group has car insurance businesses in four markets outside the UK - in
Spain (Admiral Seguros), Italy (ConTe), the USA (Elephant Auto) and France
(L'olivier Assurances).  The operations were launched between 2006 and 2010
and are at different stages in their development.  

Each operation continues to grow and make progress towards the Group's
strategic aim of establishing growing, sustainable, profitable car insurance
businesses outside the UK.  As these operations grow, it is expected that they
will make losses until appropriate scale has been achieved.  

The combined operations insured 481,400 vehicles at 30 June 2013 - 25% higher
than a year earlier (H1 2012: 385,600).  Turnover was £95.5 million, up almost
20% compared to H1 2012.  Vehicles and turnover from outside the UK represent
13% and 9% of the Group totals respectively, up from 11% and 7% in H1 2012.  

The total International Insurance loss was £10.8 million, up from £8.9 million
in H1 2012.  Growth in each business led to an increase in net insurance
premium revenue of 34% to £26.4 million (H1 2012: £19.7 million), whilst the
combined ratio improved to 152% from 168%.  The lower combined ratio was
driven by a 16 percentage point improvement in the loss ratio to 88% (H1 2012:
104%) whilst the expense ratio remained stable at 64% (H1 2012: 64%).

Admiral Seguros (Spain) was launched in 2006 and is the oldest of Admiral's
international operations.  During the first half of the year, Admiral Seguros
launched a second brand (Qualitas Auto) to complement its original Balumba
brand.  The business insured nearly 120,000 customers at the end of June 2013,
21% more than a year earlier.

The Group's largest international operation is ConTe in Italy which had nearly
280,000 vehicles at the end of June 2013, up 17% year-on-year.  ConTe was
launched in 2008 and is benefitting from a shift towards direct distribution
of car insurance in Italy, along with generally favourable market conditions
since launch.  Claims experience in ConTe in H1 2013 was more stable than
during 2012 and prior years.

Admiral's youngest and smallest international insurance business is L'olivier
Assurances, launched in 2010 in France.  L'olivier insured 22,000 vehicles at
the end of June 2013, up over 120% on a year earlier.  L'oliver was
established with a different start-up business model to Admiral's other
international operations, with certain functions outsourced in order to keep
expenses low in the initial phases of development.  

The consolidated result of Admiral's insurance operations in Spain, Italy and
France was a loss of £3.9 million compared to £4.2 million in H1 2012.  The
combined ratio[*1] improved to 116% from 133% primarily due to improved claims
experience.

In the USA, Admiral operates in four states (Virginia, Maryland, Illinois and
Texas) through its Elephant Auto business, which launched in 2009.  At the end
of June 2013, Elephant insured nearly 62,000 vehicles, up around 60%
year-on-year.  Elephant's expense ratio is currently high as the business is
spending significant amounts on advertising to develop the Elephant brand and
grow the portfolio.  Elephant's written combined ratio[*1] improved from 196%
in H1 2012 to 149% in H1 2013 primarily driven by an improved expense ratio
due to vehicle count growth.

[*1] European combined ratio is calculated on the earned basis, Elephant
combined ratio is calculated on the written basis.  Both combined ratios are
calculated on 100% of underwritten premium (including co and reinsurer's
share) and include the results from the sale of additional products and
services and fees.

Price Comparison
Non-GAAP format income statement

£m                 H1 2011 H1 2012 H1 2013  FY 2012
Revenue:
Motor                 36.7    43.0    45.3     82.5
Other                  8.7    10.3    12.2     21.0
Total                 45.4    53.3    57.5    103.5
Operating expenses  (40.4)  (45.2)  (47.6)   (85.5)
Operating profit       5.0     8.1     9.9     18.0

(note - all figures except H1 2013 include Chiarezza, sold in H1 2012)

 

UK Price Comparison - Confused.com
The UK market remains highly competitive, with four players continuing to
dominate market share and advertising spend.  Confused had a positive
half-year, held market share broadly steady in its core car insurance
comparison market and increased total revenue by 4% to £44.8 million (H1 2012:
£43.2 million).  Revenue from other products was stable at 20% of total
revenue.  Operating margin improved to 23%, resulting in profit for Confused
of £10.2 million - up from £8.4 million in H1 2012.

International Price Comparison
The Group operates three price comparison businesses outside the UK; in Spain
(Rastreator), France (LeLynx) and USA (comparenow.com).

The newest of these operations - comparenow.com - was launched in Virginia,
USA in March 2013.  In the first half of the year the operation has incurred
staff and IT costs and marketing expenses totalling £1.1 million.  Admiral
Group owns 79% of comparenow.com.  

Revenue from Rastreator and LeLynx increased 25% to £12.7 million in H1 2013
(H1 2012: £10.1 million) reflecting increased quote volumes and improved
conversion rates.  Total quotes generated across all products increased by 15%
to 2.6 million.  The combined result for Rastreator and LyLynx was a profit of
£0.8 million compared to a loss of £0.2 million in H1 2012.  Admiral Group
owns 75% of Rastreator.

The combined result for International Price Comparison was a loss of £0.3
million (H1 2012: £0.3 million).

Other Group Items

£m                                     H1 2011 H1 2012 H1 2013  FY 2012
UK Commercial Vehicle operating profit     1.2     1.3     1.4      2.5
Group net interest income                  1.6     0.9     1.1      1.9
Share scheme charges                    (10.8)   (9.9)  (10.5)   (20.6)
Business development costs               (0.4)   (0.8)   (0.8)    (2.1)
Other central overheads                  (1.0)   (2.2)   (1.6)    (3.4)

UK Commercial Vehicle
The Group operates a commercial vehicle insurance broker (Gladiator) offering
van insurance and associated products, typically to small businesses.  In a
very competitive market Gladiator was able to increase its customer base by
13% to 103,000 and increase operating profit to £1.4 million.

Share Scheme Charges
These costs relate to the Group's two share schemes.  The increase in the
charge is largely due to a higher share price at the end of H1 2013 compared
to 30 June 2012.

Business Development Costs
Business development costs of £0.8 million in H1 2013 primarily relate to
pre-launch costs of comparenow.com and initial running costs of UK Household
Insurance.

UK Household Insurance was launched in December 2012.  The product is
underwritten within the Group and common with other businesses it is supported
by proportional reinsurance covering 70% of the underwriting risk (shared
between Munich Re, 40% and Swiss Re, 30%).  Further detail will be provided as
the business grows.

Other Central Overheads
Other central overheads include Group Directors' remuneration and other Group
central costs  

Investments and Cash
Investment Strategy

There has been no change in the Group's cautious investment strategy.  Funds
continue to be held either in money market funds, short-dated debt securities,
in term deposits or as cash at bank.  The Group performs regular reviews of
this strategy to ensure it remains appropriate.

The key focus is capital preservation, with additional priorities being low
volatility of return and high levels of liquidity.  All objectives continue to
be met.

Cash and investments analysis

                                                30 June 2013
                                        International
                                 UK Car           Car      Price
                              Insurance     Insurance Comparison Other   Total
                                     £m            £m         £m    £m      £m
Money market funds and          1,312.3          91.9          -  57.8 1,462.0
  short-dated debt securities
Cash deposits                     307.2           4.0          -     -   311.2
Cash                              113.3          48.8       28.6  14.9   205.6
Total                           1,732.8         144.7       28.6  72.7 1,978.8

                                              31 December 2012
                                        International
                                 UK Car           Car      Price
                              Insurance     Insurance Comparison Other   Total
                                     £m            £m         £m    £m      £m
Money market funds and          1,074.5          76.7          -  74.6 1,225.8
  short-dated debt securities
Cash deposits                     370.5           5.3          -     -   375.8
Cash                              125.0          50.2       25.4  16.0   216.6
Total                           1,570.0         132.2       25.4  90.6 1,818.2

                                     30 June 2012
                             International
                      UK Car           Car      Price
                   Insurance     Insurance Comparison Other   Total
                          £m            £m         £m    £m      £m
Money market funds     906.5          48.5          -   5.2   960.2
Cash deposits          361.9           4.5          -  18.9   385.3
Cash                   148.0          68.4       24.6  36.1   277.1
Total                1,416.4         121.4       24.6  60.2 1,622.6

Money market funds and short-dated debt securities comprise the majority of
the total - 74% at 30 June 2013, up from 67% at 31 December 2012.    

Investment return and interest income totalled £6.7 million in H1 2013, down
compared to H1 2012 (£6.9 million), with a rate of return of just under 1%.

The Group continues to generate substantial amounts of cash, and its capital
efficient business model enables the distribution of the majority of post-tax
profits as dividends.

Other financial items

Taxation
The tax charge reported in the income statement is £44.4 million (H1 2012:
£43.6 million), which equates to 24.5% (H1 2012: 25.4%) of profit before tax.
 The lower effective rate of taxation compared to 2012 results from reductions
in the rate of UK corporation tax in 2012 and 2013.

Earnings per share
Basic earnings per share rose by 6% to 50.1 pence from 47.3 pence in H1 2012.
 The change is broadly in line with pre- and post-tax profit growth (the
difference being largely related to the lower effective rate of corporation
tax in H1 2013).

Dividends
The Directors have proposed an interim dividend for the financial year of 48.9
pence per share, which is 8% higher than the interim payment in 2012.  It is
equal to 98% of earnings per share.  

The dividend is made up of a 22.5 pence normal element, based on the stated
dividend policy of distributing 45% of post-tax profits, and a further special
element of 26.4 pence.  The special dividend is calculated with reference to
distributable reserves after considering capital that is required to be held
a) for regulatory purposes; b) to fund expansion activities; and c) as a
further prudent buffer.

The payment date is 11 October 2013, ex-dividend date 11 September and record
date 13 September.

Capital Structure, Financial Position
The Group continues to manage its capital to ensure that all entities within
the Group are able to continue as going concerns and also to ensure that
regulated entities comfortably meet regulatory capital requirements   Excess
capital above these levels within subsidiaries is paid up to the Group holding
company in the form of dividends on a regular basis.

Capital continues to be held in equity form, with no debt.

The majority of the Group's capital requirement is derived from its European
insurance operations, Admiral Insurance (Gibraltar) Limited (AIGL) and Admiral
Insurance Company Limited (AICL).  The minimum capital requirements and
surplus position at the end of H1 2013 for those companies, along with the
overall Group position was as follows:

£m                                                   AIGL AICL Group
Net assets less goodwill                            £187m £98m £428m
Minimum capital requirement                          £75m £25m £119m
Surplus over minimum requirement                    £112m £73m £309m
Total (current year) regulatory capital requirement            £225m
Surplus over regulatory capital requirement[*1]                £203m

[*1] Before accounting for the 2013 Interim Dividend of £134 million

Principal Risks and Uncertainties

The principal risks and uncertainties facing the Group are set out in Note 12
to this half-yearly financial report.

Condensed consolidated income statement

                                              6 months ended        Year ended
                                              30 June 30 June 31 December 2012
                                                 2013    2012
                                         Note      £m      £m               £m
Insurance premium revenue                 4     570.3   560.5          1,156.5
Insurance premium ceded to reinsurers     4   (328.9) (314.0)          (657.6)
Net insurance premium revenue                   241.4   246.5            498.9
Other revenue                             6     166.3   187.2            361.1
Profit commission                         4      40.4    47.8            108.4
Investment and interest income            5       6.7     6.9             15.9
Net revenue                                     454.8   488.4            984.3
Insurance claims and claims handling          (414.2) (456.7)          (929.1)
expenses
Insurance claims and claims handling            265.4   256.5            524.6
  expenses recoverable from reinsurers
Net insurance claims                          (148.8) (200.2)          (404.5)
Operating expenses                        7   (114.1) (106.5)          (214.6)
Share scheme charges                      7    (10.5)   (9.9)           (20.6)
Total expenses                                (273.4) (316.6)          (639.7)
Profit before tax                               181.4   171.8            344.6
Taxation expense                          8    (44.4)  (43.6)           (86.2)
Profit after tax                                137.0   128.2            258.4
Profit after tax attributable to:
Equity holders of the parent                    137.2   128.1            258.4
Non-controlling interests                       (0.2)     0.1                -
                                                137.0   128.2            258.4
Earnings per share:
Basic                                     10    50.1p   47.3p            95.1p
Diluted                                   10    50.0p   47.2p            94.9p
Dividends declared and paid (total)       10    123.1    98.0            219.3
Dividends declared and paid (per share)   10    45.5p   36.5p            81.6p

Condensed consolidated statement of comprehensive income

                                          6 months ended        Year ended
                                          30 June 30 June 31 December 2012
                                             2013    2012
                                               £m      £m               £m
Profit for the period                       137.0   128.2            258.4
Other comprehensive income
Exchange differences on translation    
   of foreign operations                      4.6   (1.1)            (2.7)
Other comprehensive income for the
   period, net of income tax                  4.6   (1.1)            (2.7)
Total comprehensive income for the period   141.6   127.1            255.7

Total comprehensive income for the period, attributable to:
Equity holders of the parent                                 141.6 127.0 255.9
Non-controlling interests                                        -   0.1 (0.2)
                                                             141.6 127.1 255.7

Condensed consolidated statement of financial position

                                                           As at:
                                              30 June 30 June 31 December 2012
                                                 2013    2012
                                         Note      £m      £m               £m
ASSETS
Property and equipment                    9      15.3    16.4             16.5
Intangible assets                         9      92.8    88.9             92.5
Deferred income tax                       8      15.9    10.0             15.2
Reinsurance assets                        4     733.3   723.6            803.0
Trade and other receivables               9      75.4    65.7             55.3
Financial assets                          5   2,194.0 1,793.6          2,005.1
Cash and cash equivalents                 5     205.6   277.1            216.6
Total assets                                  3,332.3 2,975.3          3,204.2
EQUITY
Share capital                             10      0.3     0.3              0.3
Share premium account                            13.1    13.1             13.1
Other reserves                                    5.1     2.1              0.7
Retained earnings                               471.9   419.6            443.0
Total equity attributable to equity             490.4   435.1            457.1
holders of the parent
Non-controlling interests                         3.2     5.2              3.6
Total equity                                    493.6   440.3            460.7
LIABILITIES
Insurance contracts                       4   1,836.8 1,586.4          1,696.9
Trade and other payables                  9     961.4   910.0          1,006.5
Current tax liabilities                          40.5    38.6             40.1
Total liabilities                             2,838.7 2,535.0          2,743.5
Total equity and total liabilities            3,332.3 2,975.3          3,204.2

Condensed consolidated cash flow statement

                                              6 months ended        Year ended
                                         30 June 2013 30 June 2012 31 December
                                                                          2012
                                    Note           £m           £m          £m
Profit after tax                                137.0        128.2       258.4
Adjustments for non-cash items:
- Depreciation                                    4.1          3.4         6.6
- Amortisation of software                        2.8          1.8         4.1
- Change in unrealised gains on
investments                                     (0.6)          2.6       (0.6)
- Other gains and losses                            -          0.1         0.6
- Share scheme charge                            12.6         10.7        23.7
Change in gross insurance contract              139.9        252.7       363.2
liabilities
Change in reinsurance assets                     69.7       (83.8)     (163.2)
Change in trade and other                      (39.8)       (39.7)        13.1
receivables, including from
policyholders
Change in trade and other payables,            (41.6)         53.5       149.9
including tax and social security
Taxation expense                                 44.4         43.6        86.2
Cash flows from operating                       328.5        373.1       742.0
activities, before movements in
investments
Net cash flow into investments                (171.6)      (189.0)     (441.9)
Cash flows from operating                       156.9        184.1       300.1
activities, net of movements in
investments
Taxation payments                              (42.5)       (33.4)      (79.7)
Net cash flow from operating                    114.4        150.7       220.4
activities
Cash flows from investing
activities:
Purchases of property and equipment             (6.5)        (3.7)      (10.9)
and software
Net cash used in investing                      (6.5)        (3.7)      (10.9)
activities
Cash flows from financing
activities:
Non-controlling interests capital                   -          4.6         4.6
contribution
Repayment of finance lease                      (0.2)            -       (0.1)
liabilities
Equity dividends paid                         (123.1)       (98.0)     (219.3)
Net cash used in financing                    (123.3)       (93.4)     (214.8)
activities
Net (decrease) / increase in cash
and cash  equivalents                          (15.4)         53.6       (5.3)
Cash and cash equivalents at 1                  216.6        224.6       224.6
January
Effects of changes in foreign                     4.4        (1.1)       (2.7)
exchange rates
Cash and cash equivalents at end of
period                                 5        205.6        277.1       216.6

Condensed consolidated statement of changes in equity

                              Share  Foreign  Retained
                     Share  premium exchange    profit Non-controlling   Total
                   capital  account  reserve  and loss       interests  equity
                        £m       £m       £m        £m              £m      £m
At 1 January 2012      0.3     13.1      3.2     377.3             0.5   394.4
Profit for the           -        -        -     128.1             0.1   128.2
period
Other
comprehensive
income
Currency                 -        -    (1.1)         -               -   (1.1)
translation
differences
Total
comprehensive
income for the
period                   -        -    (1.1)     128.1             0.1   127.1
Transactions with
equity-holders
Dividends                -        -        -    (98.0)               -  (98.0)
Share scheme             -        -        -      10.7               -    10.7
credit
Deferred tax             -        -        -
credit on share
scheme charge                                      1.5               -     1.5
Non-controlling          -        -        -
interests capital
contribution                                         -             4.6     4.6
Total
transactions with
equity-holders           -        -        -    (85.8)             4.6  (81.2)
As at 30 June          0.3     13.1      2.1     419.6             5.2   440.3
2012
At 1 January 2012      0.3     13.1      3.2     377.3             0.5   394.4
Profit for the           -        -        -     258.4               -   258.4
period
Other
comprehensive
income
Currency                 -        -    (2.5)         -           (0.2)   (2.7)
translation
differences
Total
comprehensive
income for      
the period               -        -    (2.5)     258.4           (0.2)   255.7
Transactions with
equity-holders
Dividends                -        -        -   (219.3)               - (219.3)
Share scheme             -        -        -      23.7               -    23.7
credit
Deferred tax                                                         -
charge on share
scheme charge            -        -        -       1.5                     1.5
Transactions with
non-controlling
interests                -        -        -       1.4             3.3     4.7
Total
transactions with
equity-holders           -        -        -   (192.7)             3.3 (189.4)
As at 31 December      0.3     13.1      0.7     443.0             3.6   460.7
2012

Condensed consolidated statement of changes in equity (continued)

                              Share  Foreign  Retained
                     Share  premium exchange    profit Non-controlling   Total
                   capital  account  reserve  and loss       interests  equity
                        £m       £m       £m        £m              £m      £m
At 1 January 2013      0.3     13.1      0.7     443.0             3.6   460.7
Profit for the           -        -        -     137.2           (0.2)   137.0
period
Other
comprehensive
income
Currency                 -        -      4.4         -             0.2     4.6
translation
differences
Total
comprehensive
income for the
period                   -        -      4.4     137.2               -   141.6
Transactions with
equity-holders
Dividends                -        -        -   (123.1)               - (123.1)
Share scheme             -        -        -      12.6               -    12.6
credit
Deferred tax             -        -        -
credit on share
scheme charge                                      2.2               -     2.2
Transactions with        -        -        -
non-controlling
interests                                            -           (0.4)   (0.4)
Total
transactions with
equity-holders           -        -        -   (108.3)           (0.4) (108.7)
As at 30 June          0.3     13.1      5.1     471.9             3.2   493.6
2013

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.  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 2013 and the comparative periods for the 6-month period ended 30 June
2012 and the year ended 31 December 2012.  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 FCA's Disclosure and
Transparency Rules, 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 2012.

The financial statements of the Company's subsidiaries are consolidated in the
Group financial statements.  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 2012 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.  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.  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 2012.  A number of other IFRS and interpretations have been
endorsed by the EU in the period to 30 June 2013 and although they have been
adopted by the Group, none of them has had a material impact on the Group's
financial statements.

2. Critical accounting judgements and estimates

The Group's 2012 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.  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.  This is most likely to
arise 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 4 for an analysis on the changes in estimates of claims
provisions for each underwriting year.

3. Operating segments
3a. Segment reporting

The Group has four reportable segments, as described below.  These segments
represent the principal split of business that is regularly reported to the
Group's Board of Directors, which is considered to be the Group's chief
operating decision maker in line with IFRS 8, Operating Segments.

UK Car Insurance
The segment consists of the underwriting of car insurance and other products
that supplement the car insurance policy. It also includes the generation of
ancillary income from underwriting car insurance in the UK. The Directors
consider the results of these activities to be reportable as one segment as
the activities carried out in generating the 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, L'olivier Assurances in
France and Elephant Auto in the USA.  None of these operations are reportable
on an individual basis, based on the threshold requirements in IFRS 8.

Price Comparison
The segment relates to the Group's price comparison websites Confused.com in
the UK, Rastreator in Spain, LeLynx in France and Comparenow in the USA.  Each
of the Price Comparison businesses are operating in individual geographical
segments but are grouped into one reporting segment as Rastreator, LeLynx and
Comparenow do not individually meet the threshold requirements in IFRS 8.

The results of the Group's Italian price comparison business, Chiarezza, which
was sold during the period to 30 June 2012, are included in this segment up to
the date of disposal in the comparative results.

Other
The 'Other' segment is designed to be comprised of all other operating
segments that do not meet the threshold requirements for individual reporting.
 It includes the Group's commercial van insurance broker, Gladiator, and other
insurance underwriting operations which are included in this segment for the
first time. It is the results and balances of these operations 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
2013, by reportable segment are shown below.  The accounting policies of the
reportable segments are consistent with those presented in Note 3 in the 2012
Group financial statements.

                                                                  30 June 2013
                  UK Car  International       Price                    Segment
               Insurance  Car Insurance  Comparison Other Eliminations   total
                      £m             £m          £m    £m           £m      £m
Turnover[*1]       924.5           95.5        57.5  11.6            - 1,089.1
Net insurance
premium
revenue            214.6           26.4           -   0.4            -   241.4
Other revenue
and profit
commission         139.0            3.4        57.5   6.8            -   206.7
Investment
and interest
income               5.6              -           -     -            -     5.6
Net revenue        359.2           29.8        57.5   7.2            -   453.7
Net insurance
claims           (125.2)         (23.3)           - (0.3)            - (148.8)
Expenses          (41.3)         (17.3)      (47.6) (5.8)            - (112.0)
Segment
profit /
(loss) before
tax                192.7         (10.8)         9.9   1.1            -   192.9
Other central revenue and expenses, including share
scheme charges                                                          (12.6)
Interest
income                                                                     1.1
Consolidated profit before tax                                           181.4
Taxation expense                                                        (44.4)
Consolidated profit after tax                                            137.0
Reportable
segment
assets           3,012.4          270.4        40.0 (9.0)       (52.0) 3,261.8
Unallocated assets                                                        70.5
Consolidated
assets                                                                 3,332.3

[*1] 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 2012 are shown below.

                                                                  30 June 2012
                  UK Car  International       Price                    Segment
               Insurance  Car Insurance  Comparison Other Eliminations   total
                      £m             £m          £m    £m           £m      £m
Turnover[*1]     1,030.0           79.7        53.3   6.3            - 1,169.3
Net insurance
premium
revenue            226.8           19.7           -     -            -   246.5
Other revenue
and profit
commission         170.1            5.3        53.3   6.3            -   235.0
Investment
and interest
income               5.9            0.1           -     -            -     6.0
Net revenue        402.8           25.1        53.3   6.3            -   487.5
Net insurance
claims           (179.7)         (20.5)           -     -            - (200.2)
Expenses          (39.8)         (13.5)      (45.2) (5.0)            - (103.5)
Segment
profit /
(loss) before
tax                183.3          (8.9)         8.1   1.3            -   183.8
Other central revenue and expenses, including share
scheme charges                                                          (12.9)
Interest
income                                                                     0.9
Consolidated profit before tax                                           171.8
Taxation expense                                                        (43.6)
Consolidated profit after tax                                            128.2
Reportable
segment
assets           2,682.9          241.8        35.3  71.9       (66.6) 2,965.3
Unallocated assets                                                        10.0
Consolidated
assets                                                                 2,975.3

[*1] 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 year
ended 31 December 2012 are shown below.

                                                              31 December 2012
                  UK Car  International      Price                     Segment
               Insurance  Car Insurance Comparison  Other Eliminations   total
                      £m             £m         £m     £m           £m      £m
Turnover[*1]     1,936.2          162.9      103.5   12.5            - 2,215.1
Net insurance
premium
revenue            455.6           43.3          -      -            -   498.9
Other revenue
and profit
commission         342.7           10.8      103.5   12.5            -   469.5
Investment
and interest
income              13.9            0.1          -      -            -    14.0
Net revenue        812.2           54.2      103.5   12.5            -   982.4
Net insurance
claims           (355.1)         (49.4)          -      -            - (404.5)
Expenses          (84.3)         (29.3)     (85.5) (10.0)            - (209.1)
Segment
profit /
(loss) before
tax                372.8         (24.5)       18.0    2.5            -   368.8
Other central revenue and expenses, including share
scheme charges                                                          (26.1)
Interest
income                                                                     1.9
Consolidated profit before tax                                           344.6
Taxation expense                                                        (86.2)
Consolidated profit after tax                                            258.4
Reportable
segment
assets           2,863.2          229.4       37.2   15.6       (41.4) 3,104.0
Unallocated assets                                                       100.2
Consolidated
assets                                                                 3,204.2

[*1] Turnover is a non-GAAP measure and consists of total premiums written
(including co-insurers share) and other revenue.

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 £7.4 million (H1 2012: £6.9million, FY 2012: £13.0 million).
 These amounts have not been eliminated as the Directors consider this to
result in a better overall presentation of the financial statements.  The
impact on the financial statements in the current and prior periods is not
material.  There are no other transactions between reportable segments.

Within the UK Car Insurance segment, transactions between the Group's
intermediary and the Group's insurance companies relating to vehicle
commission totalling £9.7m have been eliminated (from the insurance expenses
and other revenue lines in the income statement) on the basis that the
non-elimination would have materially distorted the presentation of key
performance indicators. The equivalent amounts in prior periods have not been
eliminated as there is no resulting material distortion of key performance
indicators.

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 above.  The revenue and results of the International Price Comparison
businesses, Rastreator, LeLynx and Comparenow are not yet material enough to
be presented as a separate segment.

4. Premium, Claims and Profit Commissions
4a. Net insurance premium revenue

                                                           30      30       31
                                                         June    June December
                                                         2013    2012     2012
                                                           £m      £m       £m
Total motor insurance premiums before co-insurance      942.0   997.2  1,897.2
Group gross premiums written after co-insurance         581.1   614.1  1,167.2
Outwards reinsurance premiums                         (329.4) (360.6)  (679.1)
Net insurance premiums written                          251.7   253.5    488.1
Change in gross unearned premium provision             (10.8)  (53.6)   (10.7)
Change in reinsurers' share of unearned premium           0.5    46.6     21.5
provision
Net insurance premium revenue                           241.4   246.5    498.9

The Group's share of the car insurance business was underwritten by Admiral
Insurance (Gibraltar) Limited, Admiral Insurance Company Limited and Elephant
Insurance Company.  All contracts are short-term in duration, lasting for 10
or 12 months.

4b. Profit commissions

                           30    30       31
                         June  June December
                         2013  2012     2012
                           £m    £m       £m
Underwriting year:
2009 & prior            (0.6) (0.6)    (2.3)
2010                     14.1   8.2      9.4
2011                     15.3  39.5     98.1
2012                     11.6   0.7      3.2
Total profit commission  40.4  47.8    108.4

4c. Reinsurance assets and insurance contract liabilities
i) Analysis of recognised amounts:

                                                      30      30       31
                                                    June    June December
                                                    2013    2012     2012
                                                      £m      £m       £m
Gross:
Claims outstanding                               1,273.9   969.1  1,147.7
Unearned premium provision                         562.9   617.3    549.2
Total gross insurance liabilities                1,836.8 1,586.4  1,696.9
Recoverable from reinsurers:
Claims outstanding                                 413.9   366.5    487.3
Unearned premium provision                         319.4   357.1    315.7
Total reinsurers' share of insurance liabilities   733.3   723.6    803.0
Net:
Claims outstanding[*1]                             860.0   602.6    660.4
Unearned premium provision                         243.5   260.2    233.5
Total insurance liabilities - net                1,103.5   862.8    893.3

[*1] Admiral typically commutes quota share reinsurance contracts in its UK
Car Insurance business 24 or 36 months following the start of the underwriting
year.  After commutation, claims outstanding from these contracts are included
in Admiral's net claims outstanding balance.  Refer to Note iii) below.

ii) Analysis of net claims reserve releases:

The following table analyses the impact of movements in prior year UK claims
provisions, in terms of their net value.  The data is presented on an
underwriting year basis.

                                                           30   30       31
                                                         June June December
                                                         2013 2012     2012
                                                           £m   £m       £m
Underwriting year:
2009 & prior                                              1.5    -    (5.5)
2010                                                     20.6  5.5      8.4
2011                                                     23.3  5.4     14.7
2012                                                      6.8    -        -
Total net reserve release                                52.2 10.9     17.6
Net releases on Admiral net share*1                      29.7  9.0     16.3
Releases on commuted quota share reinsurance contracts*1 22.5  1.9      1.3
Total net release as above                               52.2 10.9     17.6

[*1] Admiral typically commutes quota share reinsurance contracts in its UK
Car Insurance business 24 or 36 months following the start of the underwriting
year.  After commutation, any changes in claims costs on the commuted
proportion of the business are reflected within claims costs and are
separately analysed here.  £22.5 million of releases on commuted quota share
reinsurance contracts is split as follows: 2011: £11.7 million; 2010: £10.3
million; 2009 & prior: £0.5 million.

Profit commission is analysed in Note 4b.

iii) Reconciliation of movement in net claims reserve:

                                                         30      30       31
                                                       June    June December
                                                       2013    2012     2012
                                                         £m      £m       £m
Net claims reserve at start of period                 660.4   446.9    446.9
Net claims incurred (excluding releases)              195.8   205.3    411.3
Net reserve releases                                 (52.2)  (10.9)   (17.6)
Movement in net claims provision due to commutation   208.7   102.2    102.2
Net claims paid                                     (152.7) (140.9)  (282.4)
Net claims reserve at end of period[*1]               860.0   602.6    660.4

[*1] The increase in net claims reserve from £602.6 million at 30 June 2012 to
£860.0 million is partly  a result of  the increase in the  size of the  gross 
claims reserves but largely due to  the impact of commutations of  reinsurance 
contracts in the UK Car Insurance business.  

iv) Reconciliation of movement in net unearned premium provision:

                                                       30      30       31
                                                     June    June December
                                                     2013    2012     2012
                                                       £m      £m       £m
Net unearned premium provision at start of period   233.5   247.0    247.0
Written in the period                               251.7   253.5    488.1
Earned in the period                              (241.7) (240.3)  (501.6)
Net unearned premium provision at end of period     243.5   260.2    233.5

5. Investments
5a. Investment and interest income

                                       30   30       31
                                     June June December
                                     2013 2012     2012
                                       £m   £m       £m
Net investment return                 5.6  6.0     14.0
Interest receivable                   1.1  0.9      1.9
Total investment and interest income  6.7  6.9     15.9

5b. Financial assets and liabilities
The Group's financial instruments can be analysed as follows:

                                                        30      30       31
                                                      June    June December
                                                      2013    2012     2012
                                                        £m      £m       £m
Investments held at fair value                     1,260.4   760.2  1,025.4
Short dated debt securities held at fair value       201.6       -        -
Held to maturity deposits with credit institutions   311.2   385.3    375.8
Held to maturity short dated debt securities             -   200.0    200.4
Receivables - amounts owed by policyholders          420.8   448.1    403.5
Total financial assets                             2,194.0 1,793.6  2,005.1
Trade and other receivables                           75.4    65.7     55.3
Cash and cash equivalents                            205.6   277.1    216.6
                                                   2,475.0 2,136.4  2,277.0
Financial liabilities:
Trade and other payables                             961.4   910.0  1,006.5

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.  These funds target a short-term cash return with capital
security and low volatility and continue to achieve these goals.  The fair
value measurement at the end of the period for investments held at fair value
and short term debt securities equates to the book value of these assets, and
is based on an active quoted market value (level 1).  Short term debt
securities have been reclassified to fair value through profit and loss at the
start of the period following the adoption of IFRS 13 Fair value measurement
and subsequent level 1 classification.  The amortised cost carrying amount of
deposits and receivables is a reasonable approximation of fair value.

5c. Cash and cash equivalents

                                   30    30       31
                                 June  June December
                                 2013  2012     2012
                                   £m    £m       £m
Cash at bank and in hand        205.6 277.1    216.6
Total cash and cash equivalents 205.6 277.1    216.6

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.

6. Other revenue

                                                  30    30       31
                                                June  June December
                                                2013  2012     2012
                                                  £m    £m       £m
Contribution from additional products and fees  89.5 113.1    215.7
Price Comparison revenue                        57.5  53.3    103.5
Other revenue                                   19.3  20.8     41.9
Total other revenue                            166.3 187.2    361.1

7. Expenses
7a. Operating expenses and share scheme charges

                                  30 June 2013           30 June 2012
                         Insurance Other Total  Insurance Other Total
                         contracts              contracts
                                £m    £m    £m         £m    £m    £m
Acquisition of insurance      19.1     -  19.1       25.5     -  25.5
  contracts
Administration and            24.5  70.5  95.0        9.0  72.0  81.0
  marketing costs
                              43.6  70.5 114.1       34.5  72.0 106.5
Share scheme charges             -  10.5  10.5          -   9.9   9.9
Total expenses                43.6  81.0 124.6       34.5  81.9 116.4

                                         31 December 2012
                                    Insurance Other Total
                                    contracts
                                           £m    £m    £m
Acquisition of insurance contracts       50.6     -  50.6
Administration and marketing costs       26.7 137.3 164.0
                                         77.3 137.3 214.6
Share scheme charges                        -  20.6  20.6
Total expenses                           77.3 157.9 235.2

Analysis of other administration and marketing costs:

                                                    30   30       31
                                                  June June December
                                                  2013 2012     2012
                                                    £m   £m       £m
Expenses relating to additional products and fees 15.4 18.7     35.9
Price Comparison operating expenses               47.6 45.2     85.5
Other expenses                                     7.5  8.1     15.9
Total                                             70.5 72.0    137.3

Reconciliation of expenses related to insurance contracts to reported expense
ratio:

                                          30    30       31
                                        June  June December
                                        2013  2012     2012
                                          £m    £m       £m
Insurance contract expenses from above  43.6  34.5     77.3
Add:  claims handling expenses           5.2   5.8     10.8
Adjusted expenses                       48.8  40.3     88.1
Net insurance premium revenue          241.4 246.5    498.9
Reported expense ratio                 20.2% 16.3%    17.7%

7b. Staff share schemes
Analysis of share scheme costs (per income statement):

                             30   30       31
                           June June December
                           2013 2012     2012
                             £m   £m       £m
SIP charge                  3.8  3.6      6.6
DFSS charge                 6.7  6.3     14.0
Total share scheme charges 10.5  9.9     20.6

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 (£12.6 million; H1 2012: £10.7 million, FY 2012: £23.7
million).

The consolidated cashflow statement also shows the gross charge in the
reconciliation between 'profit after tax' and 'cashflows from operating
activities'.  The co-insurance share of the charge is included in the 'change
in trade and other payables' line.

8. Taxation
8a. Taxation

                                                              30   30       31
                                                            June June December
                                                            2013 2012     2012
                                                              £m   £m       £m
UK Corporation tax
Current charge at 23.25% (2012: 24.5%)                      43.0 41.8     88.4
Under provision relating to prior periods - corporation tax    -    -      1.2
Current tax charge                                          43.0 41.8     89.6
Deferred tax
Current period deferred taxation movement                    1.4  1.8    (2.8)
(Over) provision relating to prior periods - deferred  tax     -    -    (0.6)
Total tax charge per income statement                       44.4 43.6     86.2

Factors affecting the tax charge are:

                                                           30    30       31
                                                         June  June December
                                                         2013  2012     2012
                                                           £m    £m       £m
Profit before taxation                                  181.4 171.8    344.6
Corporation tax thereon at 23.25% (2012: 24.5%)          42.2  42.1     84.4
Expenses and provisions not deductible for tax purposes     -     -      1.4
Difference in tax rates                                     -     -      0.7
Adjustments relating to prior periods                       -     -    (0.4)
Other differences                                         2.2   1.5      0.1
Tax charge for the period as above                       44.4  43.6     86.2

The UK corporation tax rate was reduced from 24% to 23% on 1 April 2013.  The
current corporation tax rate used for the 6 months to 30 June 2013 is the
average effective rate for 2013 of 23.25% (2012: 24.5%).  

8b. Deferred tax

                                               30     30       31
                                             June   June December
                                             2013   2012     2012
                                               £m     £m       £m
(Asset) brought forward at start of period (15.2) (10.3)   (10.3)
Movement in period                          (0.7)    0.3    (4.9)
(Asset) carried forward at end of period   (15.9) (10.0)   (15.2)

The net balance provided at the end of the period is analysed as follows:

                                          30     30       31
                                        June   June December
                                        2013   2012     2012
                                          £m     £m       £m
Tax treatment of share scheme charges  (2.4)  (2.5)    (3.8)
Capital allowances                     (2.5)  (1.4)    (1.9)
Carried forward losses                 (7.6)  (3.7)    (5.7)
Other differences                      (3.4)  (2.4)    (3.8)
Deferred tax (asset) at end of period (15.9) (10.0)   (15.2)

The UK corporation tax rate was reduced from 24% to 23% on 1 April 2013.
 Deferred tax balances at 30 June 2013 have therefore been measured at 23% (H1
2012: 24%, FY 2012: 23%).

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
                                                   2013  2012     2012
                                                     £m    £m       £m
Tax treatment of share scheme charges             (3.6) (2.6)    (1.3)
Capital allowances                                  0.6 (0.1)      0.4
Carried forward losses                              1.9   1.1      3.1
Other differences                                 (0.3) (0.2)      1.2
Net deferred tax (charged)/ credited to income    (1.4) (1.8)      3.4

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.  

9. Other assets and liabilities
9a. Property and equipment

                   Improvements to      Computer      Office   Furniture Total
                   short leasehold     equipment   equipment         and
                         buildings                              fittings
                                £m            £m          £m          £m    £m
Cost:
At  1   January                6.7          28.3        11.4         4.9  51.3
2012
Additions                      0.4           1.0         0.8           -   2.2
At 30 June 2012                7.1          29.3        12.2         4.9  53.5
Depreciation
At  1   January                4.4          19.0         7.2         3.1  33.7
2012
Charge for  the                0.5           1.8         0.8         0.3   3.4
year
At 30 June 2012                4.9          20.8         8.0         3.4  37.1
Net book amount
At 30 June 2012                2.2           8.5         4.2         1.5  16.4
Cost
At  1   January                6.7          28.3    11.4             4.9  51.3
2012
Additions                      0.6           3.4     1.5             0.1   5.6
Disposals                        -         (0.1)       -               - (0.1)
At 31 December                 7.3          31.6    12.9             5.0  56.8
2012
Depreciation
At  1   January                4.4          19.0     7.2             3.1  33.7
2012
Charge for  the                0.9           3.6     1.5             0.6   6.6
year
Disposals                        -             -       -               -     -
At 31 December                 5.3          22.6     8.7             3.7  40.3
2012
Net book amount
At 31 December                 2.0           9.0     4.2             1.3  16.5
2012
Cost
At 1 January 2013        7.3          31.6          12.9       5.0        56.8
Additions                0.8           1.7           0.3       0.1         2.9
At 30 June 2013          8.1          33.3          13.2       5.1        59.7
Depreciation
At 1 January 2013        5.3          22.6           8.7       3.7        40.3
Charge for the year      0.5           2.3           0.9       0.4         4.1
At 30 June 2013          5.8          24.9           9.6       4.1        44.4
Net book amount
At 30 June 2013          2.3           8.4           3.6       1.0        15.3

9b. Intangible assets

                    Goodwill Deferred acquisition costs Software  Total
                          £m                         £m       £m     £m
Carrying amount:
At 1 January 2012       62.3                       16.4      8.8   87.5
Additions                  -                       22.0      1.7   23.7
Amortisation charge        -                     (20.2)    (1.8) (22.0)
Disposals                  -                          -    (0.3)  (0.3)
At 30 June 2012         62.3                       18.2      8.4   88.9
At 1 January 2012       62.3                       16.4      8.8   87.5
Additions                  -                       51.9      5.5   57.4
Amortisation charge        -                     (48.0)    (4.1) (52.1)
Disposals                  -                          -    (0.3)  (0.3)
At 31 December 2012     62.3                       20.3      9.9   92.5
Additions                  -                       47.0      3.6   50.6
Amortisation charge        -                     (47.4)    (2.8) (50.2)
Disposals                  -                          -    (0.1)  (0.1)
At 30 June 2013         62.3                       19.9     10.6   92.8

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.  As described in the accounting policies
within the 2012 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 2013 to suggest that an
interim impairment review is required.

9c. Trade and other receivables

                                    30   30       31
                                  June June December
                                  2013 2012     2012
                                    £m   £m       £m
Trade receivables                 74.3 64.9     54.8
Prepayments and accrued income     1.1  0.8      0.5
Total trade and other receivables 75.4 65.7     55.3

9d. Trade and other payables

                                                  30    30       31
                                                June  June December
                                                2013  2012     2012
                                                  £m    £m       £m
Trade payables                                  11.7   9.7     13.0
Amounts owed to co-insurers and reinsurers     662.7 613.6    723.5
Finance leases due within 12 months              0.6   0.7      0.8
Finance leases due after 12 months                 -   0.2        -
Other taxation and social security liabilities  27.3  27.5     22.9
Other payables                                 116.6  67.9     71.5
Accruals and deferred income (see below)       142.5 190.4    174.8
Total trade and other payables                 961.4 910.0  1,006.5

Analysis of accruals and deferred income:

                                                     30    30       31
                                                   June  June December
                                                   2013  2012     2012
                                                     £m    £m       £m
Premium receivable in advance of policy inception 117.0 123.9    115.4
Accrued expenses and deferred income               25.5  66.5     59.4
Total accruals and deferred income as above       142.5 190.4    174.8

10. Dividends, Earnings per share and Share capital
10a. Dividends
Dividends were declared and paid as follows:  

                                                   30   30       31
                                                 June June December
                                                 2013 2012     2012
                                                   £m   £m       £m
March 2012 (36.5p per share, paid June 2012)        - 98.0     98.0
August 2012(45.1p per share, paid October 2012)     -    -    121.3
March 2013 (45.5p per share, paid May 2013)     123.1    -        -
Total dividends                                 123.1 98.0    219.3

The dividend declared in March 2012 represented the final dividend paid in
respect of the 2011 financial year (August 2012 - interim dividend for 2012).
 The dividend declared in March 2013 was the final dividend paid in respect of
the 2012 financial year.

An interim dividend of 48.9 pence per share (£134 million) has been declared
in respect of the 2013 financial year.

10b. Earnings per share

                                                    30          30          31
                                                  June        June    December
                                                  2013        2012        2012
                                                    £m          £m          £m
Profit for the period after taxation             137.2       128.1       258.4
(equity holders)
Weighted average number of shares - basic  273,737,377 271,088,885 271,714,535
Earnings per share - basic                       50.1p       47.3p       95.1p
Weighted  average  number   of  shares   - 274,311,039 271,740,638 272,403,242
diluted
Earnings per share - diluted                     50.0p       47.2p       94.9p

The difference between the basic and diluted number of shares at the end of
the period (being 573,662, H1 2012: 651,753, FY 2012: 688,707) relates to
awards committed but not yet issued under the Group's share schemes.

10c. Share capital

                                      30   30       31
                                    June June December
                                    2013 2012     2012
                                      £m   £m       £m
Authorised:
500,000,000 ordinary shares of 0.1p  0.5  0.5      0.5
Issued, called up and fully paid:
271,318,837 ordinary shares of 0.1p    -  0.3        -
273,523,594 ordinary shares of 0.1p    -    -      0.3
273,906,710 ordinary shares of 0.1p  0.3    -        -
                                     0.3  0.3      0.3

During the first half of 2013, 383,116 (H1 2012: 529,762) new ordinary shares
of 0.1p were issued to the trusts administering the Group's share schemes.  

All of these (H1 2012: 529,762) were issued to the Admiral Group Share
Incentive Plan (SIP) Trust for the purposes of this share scheme.  These
shares are entitled to receive dividends.

No new shares (H1 2012: nil) 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.  

11. Related party transactions

i) Mapfre

In 2013, the Group participated in transactions with Mapfre S.A., during the
normal course of its Car Insurance and Price Comparison operations.  Mapfre is
a related party of Admiral Group due to its 25% non-controlling interests in
Group subsidiary Rastreator.com Limited.  Details of total transactions with
Mapfre and balances outstanding in respect of price comparison business are
given in the table below:

                       30   30       31
                     June June December
                     2013 2012     2012
                       £m   £m       £m
Total transactions    0.7  0.5      0.7
Balances outstanding  0.3  0.1      0.2

i) Lyons Davidson and Cordner Lewis Solicitors

In 2013, the Group participated in transactions with Lyons Davidson and
Cordner Lewis Solicitors during the normal course of its UK Car Insurance
operations.  These companies are related parties of Admiral Group due to their
10% non-controlling interests shares in Group subsidiaries Admiral Law Limited
and BDE Law Limited.  Details of total transactions with Lyons Davidson and
Cordner Lewis in respect of UK Car Insurance business are given in the table
below. There are no material outstanding balances at the end of the period.

                                      30
                                    June
                                    2013
                                      £m
Total transactions - Lyons Davidson  0.3
Total transactions - Cordner Lewis   0.3

i) Other

Details relating to the remuneration and shareholdings of key management
personnel were set out in the remuneration report of the 2012 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.

12. Principal risks and uncertainties

The table below sets out the principal risks and uncertainties currently faced
by the Group.  Those are:

Risk                   Impact                    Mitigating Factors
1. UK Car Insurance -  The impact on the         A wide range of factors
erosion of competitive business would be a worse contribute to Admiral's
advantage              UK Car Insurance result   combined ratio outperformance
Admiral has typically  and lower return on       of the UK market.
been able to produce a capital employed.
significant combined                               * Experienced and focused
ratio advantage over   A sustained and               senior management and
the UK market as a     uncorrected erosion of        teams in key business
whole. There is a risk competitive advantage         areas including pricing,
that this advantage    could affect the ability      claims management,
and/or the level of    of the Group to extend        operations, IT and
underwriting profit    its reinsurance               marketing
(and associated profit arrangements, which might   * A highly data-driven and
commission) generated  in turn mean the Group        analytical approach to
by Admiral could       having to hold more           business decisions
erode.                 capital.                    * Continuous appraisal of
                                                     and investment in staff,
                                                     systems and processes
                                                   * A track record of
                                                     innovation and an ability
                                                     to react quickly to
                                                     market conditions and
                                                     developments
                                                   * A keen focus on
                                                     maintaining a low-cost
                                                     infrastructure and
                                                     efficient acquisition
                                                     costs
2. UK & International  The impact on the Group   Many of the potential causes
Car Insurance - claims would be that claims      of claims shocks are outside
shocks                 costs could rise          the control of the Group and
                       significantly above       the focus is, therefore,
The Group is exposed   historic or expected      generally on how to prepare
to underwriting risk   levels, reducing the      for and react to the
through its            Group's profitability.    occurrence of such events.
underwriting of motor   This could arise from
insurance policies.    legislative changes,      For very large claims the
                       natural or man-made       Group purchases excess of
                       catastrophe events, large loss reinsurance, which
                       claims, fraud or          mitigates the loss to the
                       significant increases in  selected deductible amount
                       claims cost inflation.    (typically £5-7 million at
                                                 total claim level).

                                                 Management has an increased
                                                 focus on the identification
                                                 and prevention of claims
                                                 fraud, including material
                                                 investment in systems and
                                                 staff.

                                                 The Group holds a buffer in
                                                 booked reserves to cover
                                                 significant legislative
                                                 changes impacting existing
                                                 claims.

                                                 The Group continues to hold
                                                 an additional buffer in its
                                                 reserves in excess of the
                                                 projected ultimate outcomes
                                                 to cover other potential
                                                 claims shocks.
3. Geographic and      The impact on the Group   The Group's approach to
Product expansion -    could be higher than      expansion is cautious.  New
risk of failure        planned losses (and       insurance businesses tend to
                       potentially closure       start small and are all
There is an ongoing    costs) and distraction of backed by proportional
risk that one or more  key management.           reinsurance support which
of the Group's new                               provides substantial
operations fail to     A collective failure of   mitigation against start-up
become a sustainable   these businesses would    losses in the early years.
long-term business.    threaten the Group's
                       objective to diversify    New price comparison
                       its earnings by expanding businesses also focus on
                       in overseas locations.    modest starts with low set-up
                                                 costs and relatively small
                                                 initial media spend budgets.
                                                  This tends to mean that the
                                                 losses a new operation can
                                                 incur are minimised whilst
                                                 management assess the
                                                 likelihood of the business
                                                 succeeding.

                                                 The Directors are mindful of
                                                 management stretch and
                                                 regularly assess the
                                                 suitability of the management
                                                 structure in place for the
                                                 Group's international
                                                 operations.
4. Other revenue -     The impact on the Group   Admiral earns other revenue
potential diminution.  would be less profit      from a portfolio of products
                       earned on the car         and other sources and seeks
There is a risk that   insurance portfolios and  to minimise reliance on any
the level of profit    a lower return on capital single item.  This would
earned from additional employed.                 mitigate the impact of a
products and fees per                            regulatory change which might
customer will          The most immediate risk   affect a particular product
diminish.  This might  to other revenue arises   or income stream.  
be due to regulatory   from regulatory
or legal changes, or   intervention and most     Admiral continuously assesses
customer or market     notably the referral of   the value of the products it
behaviour.             UK motor insurance to the offers, and makes changes to
                       Competition Commission.   ensure the products continue
                        Whilst there are a range to offer value to
                       of possible outcomes from policyholders.
                       this study, Admiral is
                       supportive of any changes
                       that are likely to lead
                       to lower claims costs.
5. UK Price Comparison The impact on             The Group's ownership of
- effects of continued Confused.com of higher    Confused.com, one of the
competition            levels of competition in  leading UK price comparison
                       the price comparison      websites, and which operates
Admiral is dependent   market, either through    independently of the UK car
on the four main UK    the aggressive activities insurance business, helps to
price comparison       of existing players or    mitigate the risk of
websites as an         the entry of significant  over-reliance on this
important source of    new participants would be distribution channel.
new business and       to lower profits.          Admiral also contributes
growth.  The growth in  However, a more          materially to the revenues of
this distribution      competitive market might  the other price comparison
channel could slow,    benefit the car insurance businesses and therefore it
cease or reverse, or   business through lower    is not considered probable
Admiral could lose one acquisition costs.        that a material source of new
or more of the                                   business would be lost.
websites as a source   The impact on the UK Car
of leads.              Insurance business of     The management of
                       losing one or more of the Confused.com maintain an
                       websites would be a       awareness of the risks of
                       potentially material      continued competition.
                       reduction in new business Management analyse the
                       volumes.                  success or otherwise of all
                                                 media activity.  
6. Co-insurance and    The impact on the Group   Admiral mitigates risks to
reinsurance            would be the need to      its reinsurance arrangements
arrangements           raise additional capital  by ensuring that it has a
Admiral uses           to support underwriting.  strongly rated and diverse
proportional            This could be in the     range of partners.  Admiral
co-insurance and       form of equity or debt.   has enjoyed a long-term
reinsurance across its  Return on capital would  relationship with one of the
insurance businesses   likely be lower than      world's strongest reinsurers,
to reduce its own      current levels.           Munich Re, which has
capital needs (and                               supported Admiral since 2000.
increase return on the                            The Group also has strong
capital it does hold)                            relationships with a number
and to mitigate the                              of other reinsurers,
cost and risk of                                 including Amlin, Hannover Re,
establishing new                                 Mapfre Re, New Re, Swiss Re
operations.                                      and XL Re (avoiding reliance
                                                 on a single partner).
There is a risk that
such support will not                            In the UK, co- and
be available in the                              reinsurance arrangements have
future if the results                            been agreed up to the end of
and/or future                                    2015, reflecting confidence
prospects of either                              in the Admiral UK car
the UK business or                               insurance business.  Pricing
(more realistically)                             on these deals was in line
one or more of the                               with existing arrangements.
international                                     The long-term co-insurance
operations are not                               agreement with Munich Re will
satisfactory to the                              remain in place (at 40% of
co- and/or reinsurers.                           the business) until at least
                                                 the end of 2016.
7. Credit risk         The impact of the         The Group only conducts
                       materialisation of a      business with reinsurers of
Admiral is primarily   major credit event on the appropriate financial
exposed to credit risk Group may, dependent on   strength.  In addition, most
in the form of a)      its nature and severity,  reinsurance contracts are
default of reinsurer;  require additional        operated on a funds withheld
b) failure of banking  capital to be raised.     basis, which substantially
or investment           The Group would also     reduces credit risk, as the
counterparty.          need to ensure that it    Group holds the cash received
                       had sufficient liquid     as collateral.
                       assets to meet its claims
                       and other liabilities as  The Group considers
                       they fell due.            counterparty exposure
                                                 frequently and in significant
                                                 detail.  There are no
                                                 specific concentrations of
                                                 credit risk with respect to
                                                 investment counterparties due
                                                 to the structure of the
                                                 liquidity funds which invest
                                                 in a wide range of very short
                                                 duration, high quality
                                                 securities.  Cash balances
                                                 and deposits are placed only
                                                 with highly rated credit
                                                 institutions.

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; an
       * 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

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 2013 which comprises the Condensed consolidated income statement, the
Condensed consolidated statement of comprehensive income, the Condensed
consolidated statement of financial position, the Condensed consolidated
statement of cash flows, the Condensed consolidated statement of changes in
equity and the related explanatory notes. 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 Conduct Authority
("the UK FCA"). 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. 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. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.

The annual financial statements of the group are prepared in accordance with
IFRSs as adopted by the EU. 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. 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. 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. 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 2013 is not prepared, in all
material respects, in accordance with IAS 34 as adopted by the EU and the DTR
of the UK FCA.

Salim Tharani
For and on behalf of KPMG Audit Plc
Chartered Accountants

3 Assembly Square
Britannia Quay
Cardiff
CF10 4AX

28 August 2013

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information contained therein.

Source: Admiral Group PLC via Thomson Reuters ONE
HUG#1724629
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