Strategy & Operations » Leadership & Management » Admiral Group CFO on driving car insurer’s rapid growth

Admiral Group CFO on driving car insurer's rapid growth

Geraint Jones, the long-serving CFO of the FTSE-100 insurer, reveals in an interview with Financial Director the role finance plays in supporting innovation across new sectors.

The motor insurance sector has gone through a dramatic shift in recent years, with telephone and then internet purchasing creating new brand leaders.  Amongst these is Cardiff-based Admiral Group, that in the 26 years since its launch has become a major player with 6.5m customers and 10,000 staff.

Geraint Jones, Admiral’s CFO, has been been part of a journey that has seen multiple brand launches from car insurance to many other business lines, comparison sites and overseas expansions. Having joined in 2002, Jones was on hand to play a key role in the rapid rise of Admiral, which sought new approaches to the market- such as offering reasonable pricing for young drivers with good records.

Its big leap forward was the launch of, which Jones says “created car insurance price comparison that we know today”, a year before he arrived. “That fueled a massive change in car insurance from being very traditional to being all done on the internet. The vast majority of car insurance policies today are sold via a price comparison site.,” he adds.

Although the initial proposition of the customer paying to gain access to the pricing didn’t work, flipping to a new business model in which insurers paid the comparison site when a product is bought, changed everything. “As a result, made a lot of money, and was the market leader for ages. It was also great for Admiral Group because it allowed the business to grow much more quickly than it would have probably done otherwise,” says Jones.

Now Admiral can boast a market value of over £6bn, based on a share price worth almost ten times the price of 230p the company was floated at in 2004. The only FTSE-100 company currently headquartered in Wales, Admiral came to Cardiff when the city responded to founder Henry Engelhardt’s letter  sent to cities and development agencies within two hours of London’s Paddington Station.

“Cardiff was the only council that he wrote to that replied. They gave Admiral pre-launch a £1m grant in the early 1990s. we reckon we’ve returned in value a thousand times,” says Jones. Admiral has since kept a high profile in Wales- sponsoring the national rugby team for many years, although the Admiral logo is no longer on players’ shirts.

Building a career

After graduating in 1997 in business studies at Aberystwyth University, Jones started work in audit at Ernst & Young’s Cardiff offices- not far from where he was born “up the valley” at a village called Nelson outside former industrial town Merthyr Tydfil.

The move, that followed advice from his accountant father, proved to be a good one as a relatively small audit function meant “doing a bit of everything”. He says: “It meant you were given your own jobs reasonably early on. All the people in the office knew who the trainees were and spent time with us, it was easy to get noticed and be given more responsibility.”

When a couple of years later Ernst & Young’s audit function in Cardiff closed, a transfer to the Bristol office proved challenging for Jones and his wife he met at the firm, so the chance to join KPMG’s audit office in the Welsh capital was taken up. Having taken accountancy exams at Ernst & Young, Jones arrived at KPMG as assistant manager and was soon given the chance to join the audit team working on Admiral, which had recently been through a management buy-out.

Although Jones had briefly undertaken due diligence work with the insurer while at Ernst & Young,  he only really got to understand Admiral when working on its audit. Some recommendations for Admiral to improve its technical competence led to being invited to apply for a role in finance in the group, and in June 2002 he joined the group’s management accounting team.

Things then moved quickly. “Pretty much from the first moment in there nothing was the same, my job title didn’t change for four years but the job changed very regularly, as there was so much going on,” says Jones.

Soon after undertaking refinancing work when reinsurer Munich Re, which still holds a big stake, acquired 15% of Admiral, Jones was soon working on the IPO, getting plenty of exposure to senior management. “Although I was reasonably junior in my career I was working with lawyers from both sides, writing parts of the prospectus- a really great experience,” he says.

Greater responsibility followed as Admiral began to diversify from being a car insurance company to a group with broader insurance interests. “As well as, we created a van insurance broker Gladiator which we recently brought in-house, then from 2006 onwards we launched an international expansion. The variety of all that-business planning, setting up a legal entity, addressing various areas of regulation- was all broadening  my experience,” he says.

Developing finance

Having accumulated a vast amount of know-how, Jones was promoted to be Admiral’s head of finance that year, with a mandate to help grow the business. even though finance was kept as lean as possible.

“A very important part of our culture is cost consciousness, we try very hard to keep things lean. In finance, on this floor we have one finance function which is split into two parts.

“There’s a group finance function that looks after the consolidations, does a lot of the technical stuff, financial accounting, regulatory reporting, lots of the technical areas, looks at how much capital we’ve got, where its deployed, legal entities, group tax. Separate to that, a very integrated UK insurance finance team looks at the plans, the budget and the accounting for the UK insurance business,” says Jones.

As Admiral has grown into separate business units, UK insurance, international and loans, each has built a separate finance function looking after its own products with a finance director for each reporting to their CEO.  “We’re quite strong believers in autonomous units. There’s dotted lines and regular catch-ups, but they don’t directly report to me apart from the head of finance of the group and the head of finance for UK insurance, which is the biggest unit by far and has the most risk attached to it- so I want to stay close to it,” says Jones.

The chance for career development came under CFO Kevin Chidwick who allowed him to take most of the finance reporting lines. Hands-on senior finance management grew as Chidwick gravitated to the commercial side of the business, as CEO of and then the group’s US business. “It left me to do most of the finance work- partly by chance but also because I’d demonstrated I was a safe pair hands,” he reveals.

As his career developed, becoming deputy CFO in 2012 and then group CFO five years ago, Jones has pursued an ethos of simplification for the group, especially as its structure and range of products grew by volume, customers and headcount. “Keep doing it simple is one of my guiding principles, so as not to complicate things,” says Jones.

“There’s a temptation in our industry, particularly with the complexity of regulation and some of the financial issues we get involved in, to unnecessarily complicate things, so I do like to try and keep things simple.

“It’s about breaking things down into understandable chunks. When you’ve got a major problem, or a piece of regulation comes out that you need to work at, you need to  work out what can be done internally versus what expertise we need to get from outside,” he says, referencing outsourcing in tax areas as well as transaction or restructuring work.

“Just because we’re big and in some senses quite complex, it doesn’t automatically mean that we should have a very large and expensive finance function, says Jones. “Finance has grown over the past five years from being 20-30 people to 50-60 people in the UK team, and with catching up we’re probably taking that to 60-70 people in the next 12-18 months or so,” he explains.

Innovating for the future

With a lean finance operation, Admiral has had to work hard to meet challenges along the way. That happened in early 2017 when the government changed the personal injury discount rate- how much compensation is paid to claimants in serious accidents. “They announced that new rate exactly a week before we were due to produce our financial results,” says Jones.

“It had a £200m negative impact and in a couple of weeks we had to get a full new set of results reported and audited, through the audit committee and Board. We were quite sell set up for it, we knew it was coming, but we don’t have teams of people if a bump in the road comes,” he advises.

For Brexit, which impacted Admiral’s three insurers and two comparison websites in mainland Europe,  a restructure costing £4m was undertaken so that they could trade under local licences. “Because they were historically traded through the UK regularity authority, we decided 24 months ago we were not going to take the risk of something messy happening that might impact customers and staff,” says Jones.

In order to take on the top finance role, Jones was advised by the combined regulators Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA ) to take on a mentor and a development plan. The latter included increasing investor relations work, “spending more time with investors and analysts,” often being asked at the last minute to present. “It was baptism by fire,” he comments.

His advice on presenting externally to institutional clients, which own around two thirds of the company (management owns around a quarter and Munich Re around 10%)? “I go in with a good idea of the clear points I want them to take away, so I’ve usually got bullet points either on an iPad or written down on my presentation pack. You’ve got to be very familiar with every part of the business, so we spend a lot of time preparing beforehand, with a lot of work on Q&A practice.”

A big area for development is technology-where the group has spent carefully to date. He says finance is not integrated fully into the main insurance business platform, and a significant part is still manually operated means which means its less efficient than it could be.

Despite an investment in robotics in the claims department, and machine learning and artificial intelligence (AI) in pricing and underwriting, there’s limited automation in finance. “But in the last couple of years we’ve realised that’s a bit out of date and we need some investment. There’s a process ongoing to look at UK and group finance user systems, whether they’re fit for purpose and whether we should look at some sort of transformation, to make it more efficient. We’re still in a discovery phase, looking at all options- from full integration to just a quick refresh of what we’ve got, so I think we’ll end up somewhere in the middle,” he says.

But given the data-heavy nature of the vast business, there is appetite for a joined-up approach between finance and each business area. “We need to understand where the opportunities are for improvement. All the time we’re trying to work out whether we should put our foot on the gas and take more business, or pull back a bit. That’s a decision that finance, particularly me, is involved in quite closely,” says Jones.

With so much data, cyber security is a major concern. “We’ve got a lot of money being pumped into making sure our defences are fit for purpose and we’re investing a lot in information security people,” says Jones.

Another challenge is being a company that takes most of its revenue from internet-savvy consumers who could move their business instantly. “We know that if they don’t like the price they’ll go somewhere else. You can spend the best part of 30 years building a big customer base, but if they don’t like the renewal price they’ll go straight away,” says Jones.


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