annual report 2007 - the Admiral Group plc

6 CHAIRMAN’S STATEMENT“A highlight of2007 was ouradmission inDecember to theFTSE 100Alastair Lyons CBE“Chairman's statementI ended my statement last year bysaying that our strategy remained clearand straightforward – to continueto grow our share of the UK directprivate motor market, maximising thevalue derived from each customerrelationship, whilst also identifyingprofitable opportunities, in particularour expansion overseas, to exploitthe knowledge, skills and resourcesattaching to our core business. AsHenry Engelhardt sets out in detail inhis statement, 2007 was a year in whichthe Group made significant progress inthat strategic direction.In the UK, despite market conditionsremaining challenging, Admiralincreased both underwriting andancillary profits whilst substantiallygrowing the number of vehiclesinsured. At the end of the year ourbrands covered 1.49 million vehicles,16% up on December 2006. The 13%increase achieved in profit derivedfrom ancillary products and servicesis testament to the success wecontinue to derive from our focus onmaximising the value of each customerrelationship.An upward trend in pricing does nowseem to have become establishedwith a general increase of 4% over theyear as a whole. Whilst only sufficientto offset general claims inflation,this breaks a 5 year pattern of flat oreven slightly falling rates. Against thisbackdrop we were happy to take back5% of the underwriting risk when itcame available at the end of last year,increasing the proportion of grosspremiums underwritten by Admiral in2008 from 22½% to 27½%.We have made significant progressduring 2007 with our internationalstrategy. Balumba.es, the on-lineSpanish motor insurer that welaunched in October 2006, ended2007 with 47,000 customers – a greatachievement in little over a yearfrom a standing start. We followedthis with the launch in October 2007