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ANNUAL REPORT AND ACCOUNTS 2021

Innovating for the future

Annual Report 2021

Our vision is to create a world where insurance is personal, inclusive and a force for good.

Our purpose is to help people carry on with their lives, giving them peace of mind now and in the future.

In 2021 we continued transforming our business by using technology, data and digital tools to deliver more for our customers, backed by powerful brands, great service and market leading claims capabilities.

As we build an insurance company of the future we are putting sustainability at the heart of how we do business because it allows great people to thrive, creates a better corporate culture, drives competitiveness, and provides a foundation for long-term rewards for our shareholders.

An exciting point for the business

Penny James, Chief Executive Officer

An exciting point for the business

As I reflect on 2021, I am delighted by the Group’s strong performance. I feel proud of the way we have navigated the complexities and uncertainties of a challenging market, impacted by the pandemic. Commercial, Home own brands and Rescue have grown, benefiting from the investments we have made in recent years in technology and pricing, whilst in Motor we have prepared for future growth while steering a smart path through a period of falling premium and uncertain claims frequency as the market seeks to predict the shape of the pandemic and its effect on customer driving behaviour.

Penny James Chief Executive Officer

Our core strengths and capabilities

Our core strengths combined with new technologies are design to deliver sustainable growth

Our core strengths and capabilities

Our core strengths combined with new technology are designed to deliver sustainable growth.

In an increasingly digital world, future success requires a relentless focus on customer needs, efficiency and innovation, combined with pricing and claims expertise to deliver an exceptional insurance experience.

Our diversified business model ensures that we remain focused on reaching customers through the four main routes to market: direct, price comparison websites, partnerships and brokers.

Innovating for the future

Aiming to take the long-term decisions that deliver benefits for our business and wider society.

Innovating for the future

During 2021 the Group delivered a strong financial performance and completed the main elements of its technology build to deliver greater pricing and data capability across the business. As we embed our tech capability it leaves the Group well positioned to build on our strong 2021 performance to deliver successful outcomes through 2022 and beyond.

Building a sustainable business

Working for a greener future

Building a sustainable business

As we build an insurance company of the future we are putting sustainability at the heart of how we do business because it allows great people to thrive, creates a better corporate culture, drives competitiveness, and provides a foundation for long-term rewards for our shareholders.

Working for all our stakeholders

Danuta Gray, Chair of the Board

Financial highlights

Profit before tax

£446.0m

(2020: £451.4m)
Combined operating ratio1,2

90.1%

(2020 91.0%)
Operating profit

£581.8m

(2020: £522.1m)
Return on tangible equity1

23.6%

(2020: 19.9%)
Solvency capital ratio1,3

176%

(2020: 191%)
Dividends and capital returns4

£401.3m

(2020: £595.2m) 5

Notes

1. See glossary on pages 248 to 250 for definitions and Appendix A – Alternative performance measures on pages 251 to 255 for reconciliation to financial statement line items.

2. A reduction in the ratio represents an improvement as a proportion of net earned premium, while an increase in the ratio represents a deterioration. See glossary on page 248 for definitions.

3. Estimates based on the Group’s Solvency II partial internal model.

4. See page 38 to 39 for the dividend policy.

5. Includes £195.5m special dividend in 2020 to replace the cancelled 2019 final.

Building a sustainable business

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