Financial performance

Definition

The return generated on the capital that shareholders have in the business. This is calculated by dividing adjusted earnings by average tangible equity.

Aim

We aim to achieve at least a 15% RoTE.

Definition

The amount of cash paid to shareholders from the Group’s profit.

Aim

We have a progressive dividend policy and aim to grow regular dividend in line with business growth. Additionally, we look to return surplus capital to shareholders when appropriate.

Definition

This is calculated by dividing the earnings attributable to shareholders by the weighted average number of Ordinary Shares in issue.

Aim

We have not set a target. However, growing earnings per share is considered an indicator of a healthy business.

Definition

A measure of financial year underwriting profitability. It is the sum of the net claims, commissions and expenses divided by net earned premium. This excludes instalment and other operating income, and investment return. A combined operating ratio (“COR”) of less than 100% indicates profitable underwriting.

Aim

We aim to make an underwriting profit. For 2018, we expect to achieve a COR in the range of 93% to 95% for Ongoing operations, assuming a normal level of claims from major weather events and no further change to the Ogden discount rate.

Definition

A measure of the cost of doing business, including paying our people, marketing expenses, and spending on infrastructure and IT. This includes the costs we incur handling claims and any commissions we pay to brokers or partners.

Aim

We aim to reduce our expense ratio during 2018, absorbing our investment in future capability. We also aim to deliver a lower commission ratio in 2018, normalised for major weather events.

Definition

A risk-based measure expressing the level of capital resources held as a percentage of the level of capital that is required under Solvency II. 

Aim

We target a solvency capital ratio in the range of 140% to 180%.

Definition

Net Promoter Score (“NPS”) is an index that measures the willingness of customers to recommend products or services to others. It is used to gauge customers’ overall experience with a product or service, and customers’ loyalty to a brand.

Aim

We aim to improve this to achieve strong levels of customer loyalty and retention rates.

Definition

The number of complaints we received during the year as a proportion of the average number of in-force policies.

Aim

This measure indicates the level of customer service we provide. We aim to improve this over time.