Agenda Kevin Chidwick, Finance Director Introduction Q3 Group - PowerPoint PPT Presentation

Agenda  Kevin Chidwick, Finance Director  Introduction  Q3 Group Highlights  Henry Engelhardt, Group Chief Executive Officer  International, A long term strategy  Cristina Nestares (Balumba.es CEO) and Christophe Sanchez (Balumba.es COO)  Spanish Car Insurance Market  Balumba.es  Elena Betés (Rastreator.com CEO)  Spanish Price Comparison Market  Rastreator.com 1

A quick reminder... Admiral is different  Strong underwriting profits Highly Profitable  High ancillary revenue per vehicle  Consistent year on year revenue & profit growth Fast Growing  UK car insurance currently the key driver  Low risk balance sheet Low Risk Profits  Use of reinsurance reducing underwriting risk  Return on Capital 54% (H1 09) Strongly Cash  Dividend yield 5% Generative 2

How are we doing? Q3 2009 Highlights Group turnover year to date increased by x% v Q3 2008 to £xm  Total number of customers increased x% to x.xm  UK vehicles insured rose x% to X.xm  UK ancillary income per vehicle steady at £x  Confused.com increased turnover increased x%, margins remain under  pressure. Turnover from non-UK car insurance at £xm with X,000 vehicles insured.  Launched Elephant, our new US car insurance operation, on 5 th October  2009. Figures quoted are for the quarter ended 30 September 2009, with the percentage movements reflecting the movement from the comparative position in Q3 2008. 3

Success of UK Car insurance enables long term international strategy Combined Ratio – Admiral vs Market H1 09 UK car insurance PBT was £101.2m,  96% of group profits. 117 115 110 UK car insurance will be the key profit  102 99 99 97 driver for 2009: 96 UK vehicles increased X% in Q3  Increasing premium rates whilst 90  89 89 87 simultaneously growing 80 Ancillary income stable at X in Q3. 73  72 68 65 7% market share, plenty of room for  2001 2002 2003 2004 2005 2006 2007 2008 H1 09 continued, profitable growth Market (excl Admiral) reported loss ratio* at Dec 08 plus expense ratio In H1 09, invested £4.1m in international  Admiral projected ultimate loss ratio** at Jun 09 plus whilst achieving a dividend yield of 5%. expense ratio * Reported accident year loss ratio with reserve releases allocated back to relevant accident year, source: EMB Analysis of FSA returns ** Ernst & Young projected ultimate loss ratios 4

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Admiral Investor Day 16 October 2009

Simple strategy THE INTERNET IS AN IRRESISTIBLE FORCE Take what we know and do well and do it elsewhere  Direct car insurance  Price comparison Target large, mature markets  Channel conflict  Small slice for a happy life Modest investment  Take it slowly  Don’t spend a lot Create profitable, growing, sustainable businesses 7

German Market German Market – “Expense plus Loss” Ratio** 122  Cyclical market, currently deteriorating 118 117 114  37m vehicles, € 13bn premium** 113 111 110 106 105  Around 20% of customers shop* 102 104  A little over 10% of customers switch*  Direct and online are growing 98 99 00 01 02 03 04 05 06 07 08 Gross of reserve releases: averaged 10% in period shown, 08 CR was 98% net of reserve releases Direct share of New Business (%)*** Growth of Price Comparison (%)****  Online growth is being driven by aggregators 13% 14% 10%  ~20% new business 10% sales are on line 6% 7% 3% 2000 2004 2006 2008 2006 2007 2008 * Source market research study “Wechseltatigkeit in der Ktz -Versicherung 2008 ** GDV Bruttoergebnisse Zeitreihe 1976 – 2008 *** Management estimate based on competitor reports **** Management estimate based on price comparison businesses’ reports 8

Italian Market Italian Market Combined Ratio*  Cyclical market, deteriorating from a good 115 113 point 109  38m vehicles, € 17.6bn premium* 103 98  Around 20% of customers shop** 96 95 94 94 93 93  A little over 10% of customers switch** Direct Share of New Business Sales (%)*** 98 99 00 01 02 03 04 05 06 07 08  Growth of Direct continues in 2009  Online is growing; online direct and 4.6% 4.3% broker is ~3%** 3.7% 2.4%  Price comparison is very small ~0.2%**, 1.3% but set to grow, three PC sites, two launched in 2009. 2000 2002 2004 2006 2008 * Source: Ania “L’assiccurazione Italiana ” ** Management estimate *** Ania - "Premi del lavoro diretto italiano 2008" 9

US Market US Market Combined Ratio*  Cyclical market, deteriorating from a good point 110 108  250m vehicles, $162bn premium 104 104 102 101 101 101 101 100  Around 30% of customers shop 98 98 94 95 96  Around 15% of customers switch  Direct and online are growing  Online is dominated by direct specialists 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 Insurers’ shares of online sales (%)*** Direct share of market (%)** Online sales (millions) *** 2 1 3 5 8 11 12 10 8 7 37 39 49 50 47 2.3 22% 2.2 20% 1.5 1.6 17% 1.0 51 47 0.7 38 37 38 2004 2005 2006 2007 2008 H1 09 2005 2006 2007 2008 2009 2003 2005 2007 Progressive Geico Esurance Other * Source: AM Best ** Source: IIA BA (2006), AM Best (2007) 10 *** Source: Comscore 2009 Online Auto Insurance Report

French Market Online share of New Business Sales (%)*  31m vehicles, € 17.7bn premium**  Around 30% of customers shop***  Around 15% of customers switch**  Direct & online is growing 10% 8.0%  Price comparison is ~7% of NB distribution*** 6.5% 5.0%  Dominated by Assurland, 200,000 sales, € 15m revenue. 2% 2004 2005 2006 2007 2008 * Source: Management estimate based on Forrester’s & Benchmark Group data ** FFSA – Association of French Insurers *** Management estimate (based on market research) 11

Planting seeds.... Oct 09 Mar 09 Oct 06 Oct 07 May 08 Virginia, USA PC in Spain Germany Italy Spain PC operations in Italy & France Vehicles 0 48,100 37,500 N/A 14,800 Jun 09 Admiral Pre-launch Pre-launch ( € 1.1m) ( € 2.5m) ( € 1.0m) Result costs <£1.5m costs ~£250k (PBT)  Modest investment  Organic growth takes time 12

Building insurance operations takes time LINEA DIRECTA BALUMBA Age PAT* PAT Year Year Yrs € m € m 12m to June 2.5 1997 (7) (1.5) 2009 3.5 1998 (3) ... ... ... ... ... ... 12.5 2007 61 * PAT has been adjusted to today’s values using annual Retail Prices Index: annual index numbers of retail prices 1948 -2008 (RPI) 13

Here to tell you a little bit more - The Spanish team Cristina Nestares Christophe Sanchez Elena Betés 14

Investor’s Day London, October 16th, 2009 15 15

Meeting agenda Spanish Market Part 1 Balumba Part 2 16

Meeting agenda Spanish Market Part 1 Balumba Part 2 17

Consumers are ready to welcome insurance comparison sites AVERAGE PREMIUM on auto insurance PRICE is the main motive given to has decreased select the auto insurance 445 63% 58% 435 52% 420 2006 2007 2008 2007 2008 2009 SWITCHERS increased as COMPARING has become a popular % from the new business activity before buying 63% 76% 53% 62% 49% 55% 2007 2008 2009 2007 2008 2009 Source: Estudio Integral Clientes de Seguro de Autos. Reciente Contratación. ICEA

Insurers are already present on Price Comparison 90% 10% On price comparison in some form Not on price comparison Part of the same group

Multiple models to price comparison but all small volumes Online Broker Aggregator Mix (80-20) Leader Launched 2002 2002 (content), 2008 2007 Profitable Profitable Not profitable Product range Auto, motorbike All insurances Auto (insurances+finance) Relations with Close on its site, Only helping to generate customers Mix administration and claims the sale Call center Yes No Mix Insurers on the panel 8 20 15 Revenues Portfolio One time per sale Mix Marketing Expenses Online, low budget Online, mainly free traffic Online, high budget Number of competitors 5-20 1 2+ white labels

The one aggregator is still small but growing  Indexed to 100 in May 07, shows growth in quotes generated to Balumba from Arpem the leading aggregator on the market

Agenda 1. Price comparisons: Spanish market 2. About Rastreator.com 3. Summary

Transfer Confused.com business model Free to customer “on your side” Revenue based on sales to insurer Scalability Initial focus on car insurance, then expanding into other products First on TV Customer database Cost conscious culture People

The team, the team, the team…. Previous experience:  Suppliers: Linea Directa, puntoseguro.com  Mkt: ya.com, British Airways, Cepsa, Grupo Publicis, Carat  IT: ebookers, firseuropa Set up cost: £250k

IN HOUSE technology to maximize flexibility • We leverage on new .net platform developed from Confused • We set up a strong technology team based in New Delhi, giving us speed and quality on a competitive cost • We developed business information from Insurers based on Confused Business Intelligent (Corbis) • Focus on usability and reducing drop off

One question per page….

Fast process…

Mouse driven…

Making it easy to the customer to buy…