Hastings Group Holdings PLC Prospectus With Disclaimer

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the attached document to any other person. The Prospectus has been prepared solely in connection with the proposed offer to certain institutional and
professional investors (the “Offer”) of ordinary shares (the “Shares”) of the Company. The Prospectus has been published in connection with the
admission of the Shares to the Official List of the UK Financial Conduct Authority (the “Financial Conduct Authority”) and to trading on the London
Stock Exchange plc’s main market for listed securities (together, “Admission”). The Prospectus has been approved by the Financial Conduct Authority
as a prospectus prepared in accordance with the Prospectus Rules made under section 73A of the FSMA. The Prospectus has been published and is
available from the Company’s registered office and on the Company’s website at www.hastingsplc.com. Pricing information and other related
disclosures have also been published on this website. Prospective investors are advised to access such information prior to making an investment
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THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT MAY ONLY BE DISTRIBUTED IN “OFFSHORE
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AND THE ATTACHED DOCUMENT CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS
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THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR WITH ANY SECURITIES
REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF
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TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
This electronic transmission and the attached document and the Offer when made are only addressed to and directed at persons in member states of the
European Economic Area who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC)
(“Qualified Investors”). In addition, in the United Kingdom, this electronic transmission and the attached document is being distributed only to, and is
directed only at, Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and Qualified Investors falling within Article 49(2)(a) to
(d) of the Order, and (ii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This
electronic transmission and the attached document must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons,
and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any
investment or investment activity to which this document relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any member
state of the European Economic Area other than the United Kingdom, Qualified Investors, and will be engaged in only with such persons.
Confirmation of Your Representation: This electronic transmission and the attached document is delivered to you on the basis that you are deemed
to have represented to the Company and Credit Suisse International, Credit Suisse Securities (Europe) Limited (“Credit Suisse”), Goldman Sachs
International (“Goldman Sachs”), Barclays Bank PLC (“Barclays”), HSBC Bank plc (“HSBC”), Stifel Nicolaus Europe Limited (trading as Keefe,
Bruyette & Woods) (“Keefe, Bruyette & Woods”) and Peel Hunt LLP (“Peel Hunt”) (collectively, the “Banks”) that (i) you are (a) a QIB acquiring such
securities for its own account or for the account of another QIB or (b) acquiring such securities in “offshore transactions”, as defined in, and in reliance
on, Regulation S under the Securities Act; (ii) if you are in the UK, you are a relevant person, and/or a relevant person who is acting on behalf of, relevant
persons in the United Kingdom and/or Qualified Investors to the extent you are acting on behalf of persons or entities in the UK or the EEA; (iii) if you
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institutional investor that is eligible to receive this document and you consent to delivery by electronic transmission.
You are reminded that you have received this electronic transmission and the attached document on the basis that you are a person into whose possession
this document may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not nor are you authorised
to deliver this document, electronically or otherwise, to any other person. This document has been made available to you in an electronic form. You are
reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither
the Company, the Banks nor any of their respective affiliates accepts any liability or responsibility whatsoever in respect of any difference between the
document distributed to you in electronic format and the hard copy version. By accessing the attached document, you consent to receiving it in electronic
form. None of the Banks nor any of their respective affiliates accepts any responsibility whatsoever for the contents of the attached document or for any
statement made or purported to be made by it, or on its behalf, in connection with the Company or the Shares. The Banks and each of their respective
affiliates, each accordingly disclaims all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of
such document or any such statement. No representation or warranty express or implied, is made by any of the Banks or any of their respective affiliates
as to the accuracy, completeness or sufficiency of the information set out in the attached document.
The Banks are acting exclusively for the Company and no one else in connection with the Offer. They will not regard any other person (whether or not
a recipient of this document) as their client in relation to the Offer and will not be responsible to anyone other than the Company for providing the
protections afforded to its clients nor for giving advice in relation to the Offer or any transaction or arrangement referred to in the attached document.
This document comprises a prospectus (the “Prospectus”) for the purposes of Article 3 of European Union Directive 2003/71/EC, as LR 3.3.2(2)
amended (the “Prospectus Directive”) relating to Hastings Group Holdings plc (the “Company”) prepared in accordance with the
Prospectus Rules of the Financial Conduct Authority (the “FCA”) made under section 73A of the Financial Services and Markets Act
2000 (the “FSMA”). The Prospectus will be made available to the public in accordance with the Prospectus Rules.
Application will be made to the FCA for all of the ordinary shares of the Company (the “Shares”) issued and to be issued in connection (iii) 6.1
with the Offer to be admitted to the premium listing segment of the Official List of the FCA and to London Stock Exchange plc (the (iii) 4.7
“London Stock Exchange”) for all of the Shares to be admitted to trading on the London Stock Exchange’s main market for listed LR 2.2.10(2)(a)
securities (the “Main Market”) (together, “Admission”). Conditional dealings in the Shares are expected to commence on the London
LR 2.2.3
Stock Exchange on 12 October 2015. It is expected that Admission will become effective, and that unconditional dealings in the Shares
will commence on 15 October 2015. All dealings before the commencement of unconditional dealings will be on a “when issued” LR 2.2.9(1)
basis and of no effect if Admission on the London Stock Exchange at 8.00 a.m. (London time) does not take place and such
dealings will be at the sole risk of the parties concerned. No application is currently intended to be made for the Shares to be
admitted to listing or dealt with on any other exchange. The New Shares issued by the Company will rank pari passu in all respects
with the Existing Shares.
The directors of the Company, whose names appear on page 55 of this Prospectus (the “Directors”), and the Company accept (i) 1.1
responsibility for the information contained in this Prospectus. To the best of the knowledge of the Directors and the Company (each (i) 1.2
of whom has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance (iii) 1.1
with the facts and contains no omission likely to affect the import of such information.
(iii) 1.2
Prospective investors should read this Prospectus in its entirety. See in Part 1 (Risk Factors) for a discussion of certain risks
and other factors that should be considered prior to any investment in the Shares.
(i) 5.1.1
(i) 5.1.2
(i) 5.1.4
Hastings Group Holdings plc

(Incorporated under the Companies Act 2006 and registered in England and Wales with registered number 09635183) (iii) 4.4
(iii) 5.3.1
Offer of 123,529,412 Shares

at an Offer Price of 170 pence per Share
and admission to the premium listing segment of the Official List
and to trading on the Main Market of the London Stock Exchange
Joint Global Co-ordinators and Joint Bookrunners (iii) 5.4.1
Credit Suisse Goldman Sachs International
Sponsor
Credit Suisse International
Joint Bookrunners
Barclays HSBC
Senior Lead Manager Lead Manager

Keefe, Bruyette & Woods, Peel Hunt
A Stifel Company
ORDINARY SHARE CAPITAL IMMEDIATELY FOLLOWING ADMISSION

Issued and fully paid
Number Nominal Value
657,217,641 £13,144,353
Each of Credit Suisse International, Credit Suisse Securities (Europe) Limited (“Credit Suisse”), Goldman Sachs International (iii) 6.5.1
(“Goldman Sachs”), Barclays Bank PLC (“Barclays”), HSBC Bank plc (“HSBC”), authorised by the Prudential Regulation Authority (iii) 6.5.2
(“PRA”) and regulated by the PRA and the Financial Conduct Authority in the United Kingdom, and Stifel Nicolaus Europe Limited
(iii) 6.5.3
(trading as Keefe, Bruyette & Woods) (“Keefe, Bruyette & Woods”) and Peel Hunt LLP (“Peel Hunt”, and together with Credit Suisse
International, Credit Suisse, Goldman Sachs, Barclays, HSBC and Keefe, Bruyette & Woods, the “Banks”), authorised and regulated (iii) 6.5.4
by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no one else in connection with
the Offer. None of the Banks will regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the
Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients
or for the giving of advice in relation to the Offer or any transaction, matter, or arrangement referred to in this Prospectus. Apart from
the responsibilities and liabilities, if any, which may be imposed on the Banks by FSMA or the regulatory regime established
thereunder or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would
be illegal, void or unenforceable, none of the Banks nor any of their respective affiliates accepts any responsibility whatsoever for the
contents of this Prospectus including its accuracy, completeness and verification or for any other statement made or purported to be
made by it, or on its behalf, in connection with the Company, the Shares or the Offer. Each of the Banks and each of their respective
affiliates accordingly disclaim, to the fullest extent permitted by applicable law, all and any liability whether arising in tort, contract
or otherwise (save as referred to above) which they might otherwise be found to have in respect of this Prospectus or any such
statement. No representation or warranty express or implied, is made by any of the Banks or any of their respective affiliates as to the
accuracy, completeness, verification or sufficiency of the information set out in this Prospectus, and nothing in this Prospectus will be
relied upon as a promise or representation in this respect, whether or not to the past or future.
This Prospectus does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase
or subscribe for, any securities other than the securities to which it relates or any offer or invitation to sell or issue, or any solicitation
of any offer to purchase or subscribe for, such securities by any person in any circumstances in which such offer or solicitation is
unlawful.
Notice to overseas shareholders
The Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “US Securities Act”). The
Shares offered by this Prospectus may not be offered or sold in the United States, except to qualified institutional buyers (“QIBs”), as
defined in, and in reliance on, the exemption from the registration requirements of the US Securities Act provided in Rule 144A under
the US Securities Act (“Rule 144A”) or another exemption from, or in a transaction not subject to, the registration requirements of the
US Securities Act. Prospective investors are hereby notified that the sellers of the Shares may be relying on the exemption from the
provisions of section 5 of the US Securities Act provided by Rule 144A. No actions have been taken to allow a public offering of the
Shares under the applicable securities laws of any jurisdiction, including Australia, Canada or Japan. Subject to certain exceptions, the
Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen of any
jurisdiction, including Australia, Canada or Japan. This Prospectus does not constitute an offer of, or the solicitation of an offer to
subscribe for or purchase any of the Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation
in such jurisdiction.
The Shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan. Subject to
certain exceptions, the Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident
or citizen in Australia, Canada or Japan. The Shares have not been recommended by any US federal or state securities commission or
regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this
Prospectus. Any representation to the contrary is a criminal offence in the United States.
The distribution of this Prospectus and the offer and sale of the Shares in certain jurisdictions may be restricted by law. No action has
been or will be taken by the Company, the Selling Shareholders, the Banks to permit a public offering of the Shares under the
applicable securities laws of any jurisdiction. No action has been taken or will be taken to permit the possession or distribution of this
Prospectus (or any other offering or publicity materials relating to the Shares) in any jurisdiction where action for that purpose may
be required or where doing so is restricted by law. Accordingly, neither this Prospectus, nor any advertisement, nor any other offering
material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any
applicable laws and regulations. Persons into whose possession this Prospectus comes should inform themselves about and observe
any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such
jurisdiction.
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN
FILED UNDER CHAPTER 421 B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW
HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN
THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF
NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA421 B IS TRUE, COMPLETE AND NOT
MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE
FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW
HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR
GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO
BE MADE TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
Available information
For so long as any of the Shares are in issue and are “restricted securities” within the meaning of Rule 144(a)(3) under the US
Securities Act, the Company will, during any period in which it is not subject to Section 13 or 15(d) under the US Securities Exchange
Act of 1934, as amended (the “US Exchange Act”), nor exempt from reporting under the US Exchange Act pursuant to Rule 12g3-
2(b) thereunder, make available to any holder or beneficial owner of a Share, or to any prospective purchaser of a Share designated
by such holder or beneficial owner, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the US
Securities Act.
2
CONTENTS
PART PAGE
Summary............................................................................................................................................. 4
Part 1 Risk Factors........................................................................................................................ 19
Part 2 Presentation of Financial and Other Information .............................................................. 42
Part 3 Directors, Secretary, Registered and Head Office and Advisers ....................................... 55
Part 4 Expected Timetable of Principal Events and Offer Statistics ............................................ 57
Part 5 Industry Overview.............................................................................................................. 58
Part 6 Business Description.......................................................................................................... 68
Part 7 Regulation .......................................................................................................................... 91
Part 8 Directors, Senior Managers and Corporate Governance ................................................... 96
Part 9 Selected Financial Information .......................................................................................... 103
Part 10 Operating and Financial Review ........................................................................................ 107
Part 11 Capitalisation and Indebtedness......................................................................................... 146
Part 12 Historical Financial Information ........................................................................................ 148
Part 13 Unaudited Pro Forma Financial Information..................................................................... 236
Part 14 Independent External Actuaries’ Statement....................................................................... 240
Part 15 Details of the Offer ............................................................................................................ 243
Part 16 Additional Information....................................................................................................... 251
Part 17 Definitions .......................................................................................................................... 290
Part 18 Glossary.............................................................................................................................. 295
3
SUMMARY
Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in PR 2.1.2
Sections A–E (A.1–E.7). This summary contains all the Elements required to be included in a summary for PR 2.1.7
this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps
in the numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities and
issuer, it is possible that no relevant information can be given regarding the Element. In this case a short
description of the Element is included in the summary with the mention of “not applicable”.
Section A—Introduction and Warnings
A.1 Warning
This summary should be read as an introduction to the prospectus.
Any decision to invest in the securities should be based on consideration of the prospectus as a whole
by the investor. Where a claim relating to the information contained in the prospectus is brought
before a court, the plaintiff investor might, under the national legislation of the Member States, have
to bear the costs of translating the prospectus before the legal proceedings are initiated.
Civil liability attaches only to those persons who have tabled the summary including any translation
thereof, and applied its notification, but only if the summary is misleading, inaccurate or inconsistent
when read together with the other parts of the prospectus or it does not provide, when read together
with the other parts of the prospectus, key information in order to aid investors when considering
whether to invest in such securities.
A.2 Subsequent resale of securities or final placement of securities through financial intermediaries
Not applicable. No consent has been given by the Company or any person responsible for drawing up
this prospectus (the “Prospectus”) to the use of the Prospectus for subsequent resale or final placement
of securities by financial intermediaries.
Section B—Issuer
B.1 Legal and commercial name

Hastings Group Holdings plc (the “Company”).
B.2 Domicile and legal form

The Company is a public limited company with registered number 09635183, incorporated on 11 June
2015 as Hastings Group 123 Limited a private company limited by shares in the United Kingdom,
renamed as Hastings Group Holdings Limited on 17 July 2015 and re-registered as a public company
limited by shares and renamed as Hastings Group Holdings plc on 23 September 2015 with its registered
office situated in England and Wales. The Company operates under the Companies Act 2006.
B.3 Current operations and principal activities

Hastings is a fast growing, agile, digital general insurance provider operating principally in the UK
motor market. It provides private car and other forms of personal insurance cover in the UK. In recent
years, the Group has achieved significant growth within its chosen markets through a combination of
heightened strategic focus, optimised digital distribution, superior data generation and utilisation,
sophisticated risk selection and advanced fraud detection and claims management. As at 30 June
2015, the Group had a 5.5 per cent. share of the UK private car insurance market (Source: UK
Department for Transport and Company data) and 1.88 million live customer policies, having grown
the number of live customer policies at a compound annual growth rate of 22.5 per cent. across the
last three financial years. The Group’s success in capturing market share has been combined with
consistently strong underwriting performance and growing retail profitability, and as a result has
translated into significant bottom line growth with the Group achieving a compound average growth
rate of 22.6 per cent. in operating profit between 2012 and 2014. Group Operating Profit for the six
4
months ended 30 June 2015 was £59.2 million (for the year ended 31 December 2014: £105.7 million;
for the year ended 31 December 2012: £70.3 million).
Additionally, in the six months ended 30 June 2015, the Group generated £222.6 million of net
revenue (in the year ended 31 December 2014: £383.0 million; in the year ended 31 December 2012:
£234.0 million).
The Group operates as an integrated, direct insurance provider with strategic coverage of the UK
insurance value chain through two principal segments. The Group’s retail business (“Retail”) is
responsible for end customer pricing, product design, distribution and the management of the
underlying customer relationship. The Group’s underwriting business (“Underwriting”) engages in
risk selection, underlying technical pricing, fraud management, reserving and claims handling. Retail
is supported by, and benefits from, Underwriting’s prudent approach to risk and reserving and a
conservative and capital efficient reinsurance programme, as detailed further below. The Retail
business also benefits from the Group’s panel insurance partners who can provide underwriting
capacity where Underwriting declines to quote on a policy or is uncompetitive. The Group’s
integrated model deliberately separates underlying product manufacturing from its distribution.
Detail on operating segments

The Retail business, which is UK based and FCA regulated, is one of the UK’s leading personal lines
insurance intermediaries. Retail operates across a number of products, the largest of which being
private car insurance, which are distributed through an extensive suite of brands, including Hastings
Direct, Hastings Essential, Hastings Direct SmartMiles and Hastings Premier. Retail has full
flexibility and responsibility for managing the relationships with the Group’s customers, including
policy sales, customer service and customer retention. Within Retail, the Group’s quote delivery
systems are designed for price comparison websites (“PCWs”) and direct distribution, with PCWs
having in recent years become the most important distribution channel for customers seeking to
purchase a new private car insurance policy. Retail’s customer acquisition model is optimised in
particular for PCW distribution, with the Group having a significant share of new business private
motor insurance sales on PCWs (11.0 per cent. for the six months ended 30 June 2015
(Source: eBenchmarkers)), strong and balanced distribution across all the major PCWs, and superior
customer retention rates. This is facilitated through Retail’s advanced pricing capabilities, agile and
highly responsive implementation, and data sophistication. The Group generates revenue in Retail
primarily through fee and commission income, the provision of ancillary products, including, for
example, breakdown insurance and substitute vehicle coverage, and the provision of premium
financing, where customers choose to pay for their policies in monthly instalments instead of in one
single, upfront payment, for an additional credit charge. In the six months ended 30 June 2015, Retail
generated revenue of £115.0 million (in the year ended 31 December 2014: £205.5 million and in the
year ended 31 December 2012: £144.0 million) and Retail operating profit of £40.6 million (in the year
ended 31 December 2014: £69.9 million and in the year ended 31 December 2012: £43.0 million).
The Underwriting business, which is Gibraltar based and Financial Services Commission (the “FSC”)
regulated, is responsible for the Group’s risk selection, underlying technical policy pricing, fraud
management, reserving and claims handling. Underwriting manages risk appetite through adopting a
sophisticated data-driven approach to risk selection and risk pricing, optimised for the PCW
marketplace, resulting in a high quality underwriting portfolio. Underwriting’s primary goal is the
delivery of consistent underwriting profitability. This is achieved through prudent, dynamic footprint
selection (i.e. management of the risks that Underwriting will accept) and where risks lie within the
footprint, through a sophisticated determination of the technical net rate (the premium passed through
to Retail). This sophisticated data-driven approach includes the consideration of both traditional
underwriting data sources such as historic loss probability, customer and vehicular characteristics,
overlaid with significant data enrichment (the Group’s proprietary method of supplementing
traditional broking and underwriting analysis with both external data sources and internally created
data sets), and consideration of real-time behavioural data. Underwriting further manages the risks
underwritten through claims cost control as well as through use of the Group’s proprietary counter-
fraud analysis both by increasing premiums through identification of manipulation at point of quote
5
and sale as well as reducing claims costs through identification of fraud at point of claim.
Additionally, fraudulent claims are sought to be prevented during the quote manipulation process by
cancelling policies as appropriate. Like Retail, these processes are optimised for PCW distribution,
with rapid execution capabilities and a culture of continuous improvement – Underwriting regularly
monitors and assesses pricing accuracy and refines risk selection and pricing modelling. The Group
generates income and profit in Underwriting principally through underwriting premiums and, to a
lesser extent, through profit commission from its reinsurance partners and income generated on
invested assets. In the six months ended 30 June 2015, Underwriting generated gross written
premiums (“GWP”) of £292.7 million (in the year ended 31 December 2014: £496.2 million and in
the year ended 31 December 2012: £354.2 million) and Underwriting operating profit of £17.0 million
(in the year ended 31 December 2014: £37.4 million and in the year ended 31 December 2012: £21.2
million).
The bifurcation of technical net rate pricing from ultimate PCW quote delivery has, together with
various of the Group’s other capabilities, facilitated the Group’s ability to grow significantly whilst
maintaining strong and consistent loss ratios on both an accident year and calendar year basis. For the
six months ended 30 June 2015, the Group calendar year loss ratio was 73.6 per cent. and its
combined ratio was 90.0 per cent., with the Group also reporting calendar year loss ratios of 73.9, 71.5
and 72.4 per cent. for the years ended 31 December 2012, 2013 and 2014, respectively. The Group
believes that Underwriting employs a prudent claims reserving policy, as demonstrated by its reserves
being consistently above both the internal actuarial best estimate of its insurance contract liabilities
and that of the half yearly claims reserves reviews performed by an independent third-party actuary.
The Group’s underwriting performance benefits from the purchase of non-proportional reinsurance,
whereby all risk of loss on a single claim exceeding an inflation-adjusted £1.0 million (£0.5 million
pre-2014 underwriting year) is ceded to a high quality panel of reinsurers, and from naturally lower
large loss frequency driven by the Group’s approach to risk selection, with the Group only having two
claims currently that have settled as periodical payment orders (“PPOs”). Underwriting’s capital
efficiency is also enhanced by the Group’s proportional reinsurance strategy, whereby the Group
cedes 50 per cent. of underwritten premiums and attaching claims to its reinsurance partners. The
Group typically receives cost contributions and profit commission from its reinsurance partners,
resulting in strong returns on deployed capital (for the year ended 31 December 2014 the Group
returned a return on capital employed of 38.8 per cent.). The Group’s cost of reinsurance has declined
materially since the inception of the programme, with the Group’s reinsurance partners having access
to, and validating, the Group’s underwriting.
With offices in Bexhill, Newmarket, Leicester and Gibraltar, the Group had approximately 1,800 full-
time employees on average during the six months ended 30 June 2015.
Key Performance Indicators (“KPIs”)

The Group reviews several KPIs to track the financial and operating performance of its business.
These measures are derived from the Group’s internal operating and financial systems and are not
determined in accordance with generally accepted accounting principles, and are not audited or
presented in accordance with IFRS unless noted.
Year ended 31 December Six months ended 30 June
–––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––
2012 2013 2014 2014 2015
–––––– –––––– –––––– –––––– ––––––
KPIs
––––––––––––––––––––––––––––––––––
Group Operating Profit (£m)(1) ................. 70.3 90.1 105.7 49.8 59.2
Group Operating Profit margin(2).............. 24.2% 26.2% 26.4% 26.0% 26.6%
Group calendar year loss ratio(3) ............... 73.9% 71.5% 72.4% 73.8% 73.6%
Group expense ratio(3) ............................... 13.8% 17.4% 16.3% 16.6% 16.4%
Group combined operating ratio(3) ............ 87.7% 88.9% 88.7% 90.4% 90.0%
Share of total stock (private car)(4) ........... 3.6% 4.3% 5.1% 4.8% 5.5%
Solvency I coverage ratio(5) ...................... 196% 280% 268% 262% 259%
Net leverage multiple(6) ............................. – 4.6x 3.6x 4.1x 3.2x
6
Notes:
(1) Group Operating Profit is defined as profit before taxation expense, interest expense, amortisation and depreciation,
revaluation of property, certain non-trading costs and the effects of accounting for business combinations. Audited for
the years ended 31 December 2012, 2013 and 2014 and the six months ended 30 June 2015.
(2) Group Operating Profit margin represents Group Operating Profit divided by adjusted Group net revenue.
(3) The Group combined ratios, and their constituent components, are presented on a basis the Company believes to be broadly
comparable to the Group’s peers and to adjust for changes to the structure of the Group’s 2015 quota share contracts.
(4) Source: UK Department for Transport and Company data.
(5) Represents AICL’s solvency I coverage ratio as stipulated by the FSC, calculated as net admissible assets divided by the
required minimum margin (“RMM”), both as at the end of the period.
(6) Net leverage multiple refers to net debt expressed relative to Group Operating Profit. The net debt used represents gross
debt less Retail free cash, Underwriting dividend capacity and corporate free cash. The Group’s net leverage multiple
represents the Group’s net debt divided by last twelve month (“LTM”) operating profit at each period end. Preference
shares, and associated dividends and interest accrued thereon, are excluded for the year ended 31 December 2014 and
the six months ended 30 June 2014 and 2015.
B.4a Significant recent trends affecting the Group and the industry in which it operates
The Company operates in the UK private motor insurance market, which is one of the largest
insurance markets in Europe by premiums, and with approximately 29 million private car policies as
at 31 December 2014 (Source: Department of Transport), the UK car insurance market is the largest
insurance market in the United Kingdom in terms of net written premiums (“NWP”) (Source:
Association of British Insurers (“ABI”)). In 2014, the UK private motor insurance market was
estimated to be worth £9.6 billion based on GWP (Source: ABI). The UK private motor insurance
market is highly competitive, but relatively unconcentrated, with the five largest competitors
accounting for approximately 57.2 per cent. of the overall market in terms of GWP in 2013 (Source:
ABI).
The UK private motor insurance market experiences pricing cyclicality, with periods where the
increasing supply of insurance capacity has resulted in intense competition in relation to price and
legislative changes, as well as periods where reductions in insurance capacity result in more
favourable underwriting conditions. Claims activity within the home insurance market is driven
principally by the incidence of weather-related events. This has historically resulted in less cyclicality
and greater profitability of underwriting in the home insurance market than has been experienced in
UK private motor insurance market.
Over the last decade, the way in which customers buy general insurance has changed significantly,
driven by the increased digitalisation of customers’ shopping habits. Whereas previously customers
used to buy their insurance cover either directly from an insurer or via a broker, today, the internet and
PCWs are the dominant distribution channel accounting for 84 per cent. of new policies sold in 2014,
being the average of six month rolling datasets to April and October 2014 for the UK private car
market (Source: eBenchmarkers). Hastings’ distribution model is built for this ‘new world’, whereas
traditional insurers with large legacy portfolios have found it more difficult to respond. The prevalence
of PCWs raises key strategic challenges for traditional insurers confronted by disruptive, agile players
such as Hastings. Consequently, over the past several years, disruptive players have been able to
capture significant market share from incumbents, whilst simultaneously demonstrating superior
levels of profitability than wider market averages.
In recent years, the UK insurance industry broadly, and the UK motor insurance industry specifically,
have experienced a number of regulatory changes and have been subject to substantial investigation
and review by various regulatory bodies. Such reforms and reviews include the gender neutral pricing
directive introduced by the European Commission in December 2012; a ban on legal referral fees and
other reforms to civil litigation recommended as part of the package of reforms advised by Lord
Justice Jackson (the “Jackson Review”) and substantially implemented in April 2013, including
through the Legal Aid, Sentencing and Punishment of Offenders Act (2012) (the “LASPO Act”);
various Thematic Reviews undertaken by the FCA including in relation to the sale of add-on insurance
products, the role of PCWs, and the provision of premium finance to customers; and changes to
solvency capital requirements and insurance risk management legislation for insurers known as
Solvency II, which will enter into force on 1 January 2016. The Directors believe the Group benefits
7
by taking proactive steps with regulators and the separation of Retail and Underwriting in the Group’s
business model.
The UK home insurance market is a key market within the UK general insurance sector and amongst the
largest in Europe. In the year ended 31 December 2014, UK home insurers have underwritten 17.4
million contents insurance policies, and 14.7 million buildings insurance policies (Source: ABI). In 2014,
the UK property insurance market was estimated to be worth £8.3 billion based on NWP (Source: ABI).
B.5 Group structure
The Company has been the holding company of the Group since 12 August 2015. The Company
indirectly, through wholly-owned subsidiaries, owns all the issued share capital of all of the Group’s
operating companies.
B.6 Major shareholders
The Company’s principal shareholder, currently owning 71.6 per cent. of the Company’s issued share
capital, is Hastings Investco Limited (the “Principal Shareholder”). All the voting shares in the Principal
Shareholder are held by Hastings Holdco Limited (“Holdco”). The voting shares of Holdco are owned
by Hastings A, L.P., which is under the control of the Goldman Sachs Merchant Banking Division (with
71.8 per cent. of the voting rights) and Ted Limited(1), Keith Charlton and Narmali Utley (being three of
the “Founder Shareholders”, the others being Neil Utley (and certain members of his immediate family)
and Richard Brewster) (with, in aggregate, 28.2 per cent. of the voting rights). Holdco will direct the
Principal Shareholder to cast the votes it has at general meetings of the Shareholders of the Company as
directed by each holder of voting shares in Holdco, in proportion to their holding of voting shares in
Holdco, or as otherwise agreed between the holders of voting shares in Holdco.
In addition to the Principal Shareholder, the other three shareholders in the Company are Hastings
Nominees G Limited (which holds 3.3 per cent. of the Company’s issued share capital on behalf of
certain of the Executive Directors, Senior Managers, other employees and former employees of the
Group and other investors); Hastings Nominees F Limited (which holds 25.0 per cent. of the
Company’s issued share capital on behalf of certain of the Founder Shareholders (being Neil Utley
(and certain members of his immediate family) and Richard Brewster), Thomas Duggan (and certain
members of his family), Ian Donald (and certain members of his immediate family), David Saville
and Elian Employee Benefit Trustee Limited as trustee for the Hastings Direct Employee Benefit
Trust (which holds 0.1 per cent. of the Company’s issued share capital).
The economic value in the Principal Shareholder and Holdco comprises (i) preference shares held by
Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co., the Founder Shareholders (other than
Neil Utley (and certain members of his immediate family) and Richard Brewster), Gary Hoffman,
certain of the Senior Managers, other managers of the Group and Elian Employee Benefit Trustee
Limited (as trustee of the Hastings Direct Employee Benefit Trust) (“Preference Shares”); (ii) the
voting shares in Holdco referred to above; and (iii) non-voting ordinary shares in Holdco held by
certain of the Senior Managers, other managers of the Group and Elian Employee Benefit Trustee
Limited (as trustee of the Hastings Direct Employee Benefit Trust).
The Preference Shares in the Principal Shareholder (£240,315,876 in principal value at 12 August
2015) are entitled to an annual cumulative dividend at the rate of 11.5 per cent. per annum. As at the
date of this document, these Preference Shares are held in the following proportions:
Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. ........................ 61.1%
Ted Limited(1) ..................................................................................................... 13.2%
Holdco ................................................................................................................ 12.8%
Other Founder Shareholders (other than Neil Utley (and certain members
of his immediate family) and Richard Brewster) .......................................... 10.9%
Gary Hoffman .................................................................................................... 0.9%
Certain of the other Senior Managers................................................................ 0.6%
Other managers of the Group ............................................................................ 0.4%
Elian Employee Benefit Trustee Limited........................................................... 0.1%
Note to B.6
(1) Ted Limited is a company incorporated and managed in Jersey, which is wholly owned by the New Largo Settlement,
a Jersey discretionary trust that was settled by Edward Fitzmaurice, a Director.
8
The Preference Shares in Holdco (£31,192,480 in principal value at 12 August 2015) are entitled to
an annual cumulative dividend at the rate of 16 per cent. per annum. As at the date of this document,
these Preference Shares are held in the following proportions:
Ted Limited(1) ..................................................................................................... 15.1%
Gary Hoffman .................................................................................................... 1.0%
The non-voting ordinary shares in Holdco include certain shares which are subject to vesting conditions
as to time and performance. These shares are held by Gary Hoffman, Richard Hoskins, certain of the
Senior Managers, other managers of the Group and Elian Employee Benefit Trustee Limited (as trustee
of the Hastings Direct Employee Benefit Trust). The remaining non-voting ordinary shares in Holdco
are held by Hastings B, L.P. and Goldman, Sachs & Co., Gary Hoffman, certain of the Senior
Managers, other managers of the Group and Elian Employee Benefit Trustee Limited (as trustee of the
Hastings Direct Employee Benefit Trust). As of the date of this document, the fully diluted economic
value of the voting and non-voting shares in Holdco is attributable as follows:
Ted Limited(1) ..................................................................................................... 13.6%
Gary Hoffman .................................................................................................... 3.0%
Richard Hoskins................................................................................................. 0.6%
Note to B.6
(1) Ted Limited is a company incorporated and managed in Jersey, which is wholly owned by the New Largo Settlement,
a Jersey discretionary trust that was settled by Edward Fitzmaurice, a Director.
B.7 Historical financial information

On 17 April 2012, Hastings Insurance Group Limited (“HIG”) and its subsidiaries (the “HIG Group”)
was formed upon HIG’s acquisition of 100 per cent. of the share capital of Advantage Global
Holdings Limited (“AGH”) (the “Advantage Acquisition”), whose group principally comprises AICL,
Underwriting’s regulated trading entity.
On 8 January 2014, as part of a series of transactions (collectively, the “2014 Reorganisation”), a

wholly owned subsidiary of HIG(H) acquired 100 per cent. of the issued share capital of the HIG
Group, to form an enlarged group with HIG(H) as the new parent entity within the corporate structure
(the “HIG(H) Group”).
In accordance with IFRS, the financial performance of the HIG Group for the year ended
31 December 2012 and the HIG(H) Group for the year ended 31 December 2014 and for the
six months ended 30 June 2014 excludes pre-acquisition trading of the acquired businesses.
Furthermore, the financial performance and position of the HIG Group and the HIG(H) Group, both
in these periods and in subsequent periods, are impacted by acquisition accounting for the Advantage
Acquisition and the 2014 Reorganisation.
The selected financial information set out below has been extracted without material adjustment from
the historical financial information relating to the Group.
9
Consolidated statement of profit or loss
HIG(H)
Group HIG(H)
HIG HIG HIG(H) Six months Group
Group Group Group ended Six months
Year ended Year ended Year ended 30 June ended
31 December 31 December 31 December 2014 30 June
2012 2013 2014 (unaudited) 2015
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
Gross written premiums ........................... 263.5 407.2 475.4 219.3 282.7
Gross earned premiums ............................ 237.5 379.6 441.4 204.4 252.2
Earned premiums ceded to reinsurers ...... (128.5) (214.6) (242.3) (114.2) (134.2)
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Net earned premiums ............................. 109.0 165.0 199.1 90.2 118.0
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Other revenue ........................................... 121.3 173.2 180.2 82.6 101.6
Investment and interest income ................ 3.7 4.2 3.7 1.8 3.0
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Net revenue.............................................. 234.0 342.4 383.0 174.6 222.6
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Claims incurred ........................................ (179.4) (324.7) (354.9) (199.0) (204.8)
Reinsurers’ share of claims incurred........ 96.3 197.0 205.2 128.4 118.0
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Net insurance claims .............................. (83.1) (127.7) (149.7) (70.6) (86.8)
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Acquisition costs ...................................... (16.9) (31.3) (25.7) (8.4) (21.0)
Other operating expenses ......................... (70.7) (117.9) (140.4) (72.7) (69.3)
Finance costs ............................................ (7.4) (9.5) (68.6) (33.7) (36.2)
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Total expenses ......................................... (95.0) (158.7) (234.7) (114.8) (126.5)
Profit/(loss) before tax ............................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
55.9 56.0 (1.4) (10.8) 9.3
Taxation expense ......................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(16.4) (14.9) (7.0) (3.5) (4.5)
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Total profit/(loss) attributable to the
equity holders of the parent................... 39.5 41.1 (8.4) (14.3) 4.8
Reconciliation of Group total profit/

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(loss) to Group Operating Profit
Total profit/(loss)..................................... 39.5 41.1 (8.4) (14.3) 4.8
Taxation expense ......................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
16.4 14.9 7.0 3.5 4.5
Interest expense ........................................ 6.9 8.2 67.7 33.4 35.8
Non-trading costs(1) ................................... – 22.6 9.7 9.7 0.3
Removal of the impact of accounting
adjustments for business
combinations(2) .......................................... 5.1 – 25.9 15.8 11.4
Depreciation and amortisation(3) ............... 2.4 3.3 3.8 1.7 2.4
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Group Operating Profit(4)....................... 70.3 90.1 105.7 49.8 59.2
Reconciliation of Group total profit/

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(loss) to Group net income
Total profit/(loss)..................................... 39.5 41.1 (8.4) (14.3) 4.8
Finance costs on Senior Secured Notes

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
from memorandum period(5) ..................... – (6.5) – – –
Non-trading costs...................................... – 22.6 9.7 9.7 0.3
Preference shares dividends accrued(6) ..... – – 33.7 16.3 19.1
Shareholder loan and loan notes interest
accrued(7) ................................................... 5.4 7.4 – – –
Impact of accounting for business
combinations on finance costs(8) ............... 1.5 0.8 0.9 0.6 0.1
Non-operational amortisation(9) ................ – – 23.8 12.6 11.4
Other effects of accounting for business
combinations(10) ......................................... 5.1 – 2.1 3.2 –
Tax effect of the above ............................. 1.5 (0.6) (4.3) (1.9) (2.2)
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Group net income(11) ............................... 53.0 64.8 57.5 26.2 33.5
Notes:
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(1) Predominantly comprises costs incurred in relation to the 2014 Reorganisation.
(2) Comprises pre-acquisition trading and the other impacts of fair value acquisition accounting of the Advantage
Acquisition and 2014 Reorganisation, including from 2014, amortisation of acquired intangibles related to the 2014
Reorganisation.
10
(3) Comprises operational depreciation and amortisation only, excludes amortisation of acquired intangible assets arising on
business combinations.
(4) Operating profit is defined as profit before taxation expense, interest expense, amortisation and depreciation, revaluation
of property, certain non-trading costs and the effects of accounting for business combinations.
(5) Represents finance costs associated with the Group’s Senior Secured Notes incurred in the period ended 31 December
2013 by the HIG(H) Group, which are not recognised in profit after tax of the HIG Group for the year ended 31
December 2013 under IFRS.
(6) Represents the accumulated dividends and interest accrued on the Group’s preference shares.
(7) Represents accrued interest associated with the Group’s shareholder loan and loan notes which are not considered
operational debt of the Group. These shareholder loan and loan notes were repaid in full upon the 2014 Reorganisation.
(8) Represents the unwind of claims reserves and reinsurance assets which were fair valued to their net present value as part
of the accounting for the 2014 Reorganisation.
(9) Represents amortisation of acquired intangibles related to the 2014 Reorganisation.
(10) Comprises other pre-acquisition trading and other impacts of fair value acquisition accounting of the Advantage
Acquisition and 2014 Reorganisation including amortisation of acquired intangibles related to the 2014 Reorganisation.
(11) Group net income represents Group Operating Profit less operational depreciation and amortisation, finance costs
relating to the Senior Secured Notes and the associated taxation expense.
Consolidated balance sheet

HIG HIG HIG(H) HIG(H)
Group Group Group Group
31 December 31 December 31 December 30 June
2012 2013 2014 2015
–––––––––– –––––––––– –––––––––– ––––––––––
(£ millions)
ASSETS
Property and equipment ...................................................... 9.2 10.1 10.1 12.4
Intangible assets .................................................................. 14.4 19.4 120.0 121.0
Goodwill.............................................................................. 28.5 28.5 470.0 470.0
Investments in associates .................................................... 0.3 – – –
Deferred income tax asset ................................................... 2.5 2.2 5.6 2.9
Loans receivable.................................................................. 4.5 – – –
Reinsurance assets............................................................... 231.5 343.5 426.5 471.2
Prepayments ........................................................................ 0.9 1.0 1.2 5.4
Insurance and other receivables .......................................... 145.8 190.4 212.6 234.0
Financial assets.................................................................... 140.0 172.1 224.9 264.1
Cash and cash equivalents................................................... 102.8 110.8 123.4 125.2
–––––––––– –––––––––– –––––––––– ––––––––––
Total assets ......................................................................... 680.4 878.0 1,594.3 1,706.2
EQUITY
–––––––––– –––––––––– –––––––––– ––––––––––
Share capital ........................................................................ 1.1 1.1 1.0 1.0
Share premium account....................................................... 0.1 0.1 – –
Treasury shares.................................................................... (0.1) – – –
Merger reserve..................................................................... (1.0) (1.0) – –
Other reserves...................................................................... – – – (0.9)
Retained earnings(1) ............................................................. 25.7 54.8 (14.9) (10.1)
–––––––––– –––––––––– –––––––––– ––––––––––
Total equity ........................................................................ 25.8 55.0 (13.9) (10.0)
LIABILITIES
–––––––––– –––––––––– –––––––––– ––––––––––
Preference shares................................................................. – – 319.3 338.4
Senior Secured Notes .......................................................... – – 403.6 404.6
Loans and borrowings ......................................................... 82.5 83.8 – –
Insurance contract liabilities ............................................... 462.3 590.9 704.7 785.7
Insurance and other payables .............................................. 94.9 137.1 146.9 160.3
Provisions ............................................................................ 1.5 0.9 0.3 –
Deferred income tax liability .............................................. 4.9 5.6 27.0 22.9
Current tax liabilities........................................................... 8.5 4.7 6.4 4.3
–––––––––– –––––––––– –––––––––– ––––––––––
Total liabilities ................................................................... 654.6 823.0 1,608.2 1,716.2
Total equity and liabilities ................................................
–––––––––– –––––––––– –––––––––– ––––––––––
680.4 878.0 1,594.3 1,706.2
(2)
Total equity at HIG/HIG(F) ..........................................
–––––––––– –––––––––– –––––––––– ––––––––––
25.8 55.0 305.4 328.5
Notes:
–––––––––– –––––––––– –––––––––– ––––––––––
(1) Under local laws and regulations, the Company and the holding companies of the Group have the capacity to distribute
any dividends they receive from the Group’s trading subsidiaries. There are expected to be significant distributable
reserves capacity following the capital reduction exercise to be performed by the Company.
11
(2) Total equity at HIG/HIG(F) presents equity in the Group’s audited consolidated balance sheet at the HIG level for
31 December 2012 and 31 December 2013, and at the HIG(F) level for 31 December 2014 and 30 June 2015, prepared
in accordance with IFRS. These represent the lowest levels in the corporate structure which includes all operational debt.
As at 31 December 2014 and 30 June 2015, the total equity of the Group was negative. At each of
these reporting dates, the Group recorded preference share liabilities and the accumulated dividends
and interest accrued thereon. As these liabilities formed part of the long term investment in the Group
by its shareholders, there was no obligation to service these liabilities in the immediate future and it
was always the Group’s intention to settle or convert these liabilities following a public offering.
These liabilities were not considered a part of the operational liabilities of the Group.
Following the reorganisation of the Group on 12 August 2015 (the “Reorganisation”), all preference
shares and the accumulated dividends and interest accrued thereon were converted to ordinary share
capital of the Company. On this date, the Group’s total equity increased significantly and the Group’s
total equity was positive.
Consolidated statement of cash flows

HIG(H)
HIG HIG HIG(H) Group HIG(H)
Group Group Group Six Group
Year Year Year months Six
ended ended ended ended months
31 31 31 30 June ended
December December December 2014 30 June
2012 2013 2014 (unaudited) 2015
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
Net cash flows from operating
activities.................................................... 82.8 65.2 82.2 24.0 72.0
Net cash flows from investing activities .. (6.6) (37.0) 14.1 72.3 (54.4)
Net cash flows from financing
activities.................................................... (7.4) (20.2) 27.1 45.2 (15.8)
Net increase/(decrease) in cash and cash
equivalents ................................................ 68.8 8.0 123.4 141.5 1.8
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Cash and cash equivalents at beginning
of year/period............................................ 34.0 102.8 – – 123.4
Cash and cash equivalents at end of
year/period .............................................. 102.8 110.8 123.4 141.5 125.2
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Certain significant changes to the Group’s financial condition and results of operations occurred
during years ended 31 December 2012, 2013 and 2014 and the six months ended 30 June 2014 and
2015. These changes are set out below.
Net revenue increased by £48.0 million, or 27.5 per cent., from £174.6 million in the six months ended
30 June 2014 to £222.6 million in the six months ended 30 June 2015, and increased from £234.0
million in the year ended 31 December 2012 to £342.4 million in the year ended 31 December 2013
to £383.0 million in the year ended 31 December 2014.
Profit/(loss) before tax increased by £20.1 million from a loss of £10.8 million in the six months ended
30 June 2014 to a profit of £9.3 million in the six months ended 30 June 2015, and increased from a
profit of £55.9 million in the year ended 31 December 2012 to £56.0 million for the year ended 31
December 2013 and decreased to a loss of £1.4 million in the year ended 31 December 2014.
Total profit/(loss) attributable to the equity holders of the parent increased by £19.1 million from a
loss of £14.3 million in the six months ended 30 June 2014 to a profit of £4.8 million in the six months
ended 30 June 2015, and increased from a profit of £39.5 million in the year ended 31 December 2012
to £41.1 million for the year ended 31 December 2013 and decreased to a loss of £8.4 million in the
year ended 31 December 2014.
There has been no significant change in the financial position or results of operations of the Group
since 30 June 2015, the date to which the last audited consolidated financial information of Hastings
Insurance Group (Holdings) plc was prepared.
12
B.8 Pro forma financial information
The unaudited pro forma statement of net assets set out below has been prepared to illustrate the
effects of the Offer, the Reorganisation, the intended refinancing of the existing Senior Secured Notes
and the combination of the HIG(H) Group and the Company on the net assets of the Company, as if
those transactions had taken place and been settled on 30 June 2015. The pro forma statement of net
assets is based on the audited historical financial information of the HIG(H) Group and has been
prepared in a manner consistent with the accounting policies adopted in the preparation of this
historical financial information and to be adopted by the Company for the period ended 31 December
2015.
The unaudited pro forma statement of net assets has been prepared for illustrative purposes only, and
by its nature addresses a hypothetical situation and, therefore, does not reflect the Group’s actual
financial position or results. The unaudited pro forma statement of net assets is compiled on the basis
set out in the notes below and in accordance with the requirements of items 1 to 6 of Annex II to the
Prospectus Rules. This pro forma statement of net assets does not constitute financial statements
within the meaning of section 434 of the Companies Act 2006. No account has been taken of any
results or other activity since 30 June 2015.
Adjustments (unaudited)
–––––––––––––––––––––––––––––––––––––––––––––
HGH plc
HIG(H) Re- consolidated
Group as Conversion financing Admission, pro forma
reported of Proceeds of Senior Offer and 30 June
30 June preference of the Secured refinancing 2015(6)
2015(1) shares(2) Offer(3) Notes(4) costs(5) (unaudited)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(£ millions)
ASSETS
Intangible assets..................................................... 121.0 – – – – 121.0
Goodwill ................................................................ 470.0 – – – – 470.0
Reinsurance assets ................................................. 471.2 – – – – 471.2
Financial assets ...................................................... 264.1 – – – – 264.1
Cash and cash equivalents ..................................... 125.2 – 182.0 (116.5) (51.3) 139.4
Other assets ............................................................ 254.7 – – – – 254.7
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total assets ............................................................ 1,706.2 – 182.0 (116.5) (51.3) 1,720.4
LIABILITIES
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Preference shares ................................................... 338.4 (338.4) – – – –
Senior Secured Notes............................................. 404.6 – – (416.5) 11.9 –
Loans and borrowings............................................ – – – 300.0 (4.5) 295.5
Insurance contract liabilities .................................. 785.7 – – – – 785.7
Other liabilities ...................................................... 187.5 – – – – 187.5
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total liabilities ...................................................... 1,716.2 (338.4) – (116.5) 7.4 1,268.7
Net assets...............................................................
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(10.0) 338.4 182.0 – (58.7) 451.7
Notes:
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(1) The financial information as at 30 June 2015 has been extracted without adjustment from the Group’s historical financial
information.
(2) As part of the Reorganisation, preference shares and accumulated dividends and interest accrued thereon in the HIG(H)
Group were converted to ordinary share capital of the Company.
(3) The proceeds of the Offer receivable by the Company are calculated on the basis that the Company issues 107,058,823
New Shares at the Offer Price of 170 pence to raise £182.0 million, gross of the expenses of the Offer.
(4) The refinancing of the Senior Secured Notes is based on the use of £116.5 million of the proceeds of the Offer and on
drawing down £300.0 million of the new term loan facility.
(5) The aggregate expenses of, or incidental to, Admission, the Offer and refinancing (including costs incidental to the early
repayment of the Senior Secured Notes) which are to be borne by the Company are approximately £51.3 million
(inclusive of amounts in respect of VAT), which the Company intends to pay out of cash resources, including, in part,
proceeds of the Offer.
(6) This pro forma financial information does not constitute financial statements within the meaning of section 434 of the
Companies Act 2006. The combination of the HIG(H) Group and the Company has been accounted for as a common
control transaction.
13
B.9 Profit forecast
Not applicable. There is no profit forecast or estimate included in this Prospectus.
B.10 Qualifications in the audit report on the historical financial information

Not applicable. There are no qualifications to the accountant’s report on the historical financial
information.
B.11 Insufficient working capital

Not applicable. In the opinion of the Company, taking into account the net proceeds receivable by the
Company from the subscription for New Shares in the Offer, the Group has sufficient working capital
for its present requirements, that is for at least the next 12 months following the date of this
Prospectus.
Section C—Securities
C.1 Type and class of securities

Pursuant to the Offer, the Company intends to issue 107,058,823 new ordinary shares (the “New
Shares”), raising proceeds of approximately £166.5 million, net of underwriting commissions and
other estimated fees and expenses of approximately £15.5 million. The New Shares will represent
approximately 16.3 per cent. of the expected issued ordinary share capital of the Company
immediately following Admission.
Each of the Selling Shareholders will sell ordinary shares (the “Existing Shares”) in the Offer,
representing up to 16,470,589 Existing Shares in aggregate. In addition, up to a further 12,352,941
Existing Shares are being made available by the Over-allotment Shareholders (the “Over-allotment
Shares”) pursuant to the Over-allotment Option.
When admitted to trading, the ordinary shares of the Company (the “Shares”) will be registered with
ISIN number GB00BYRJH519 and SEDOL number BYRJH51.
C.2 Currency
The Company reports revenue in British pounds sterling.
C.3 Issued Share Capital

As at the date of this Prospectus, the issued share capital of the Company is £10,999,999.92,
comprising 549,999,996 Shares of two pence each (all of which were fully paid or credited as fully
paid). Immediately following completion of the Offer, the issued share capital of the Company is
expected to be £13,144,353 comprising 657,217,641 Shares of two pence each (all of which will be
fully paid or credited as fully paid).
C.4 Rights attaching to the Shares

The rights attaching to the Shares will be uniform in all respects and they will form a single class for
all purposes, including with respect to voting and for all dividends and other distributions thereafter
declared, made or paid on the ordinary share capital of the Company.
On a show of hands every Shareholder who is present in person shall have one vote and on a poll every
Shareholder present in person or by proxy shall have one vote per Share.
Except as provided by the rights and restrictions attached to any class of shares, Shareholders will
under general law be entitled to participate in any surplus assets in a winding up in proportion to their
shareholdings.
C.5 Restrictions on transfer

There are no restrictions on the free transferability of the Shares.
14
C.6 Admission
Application will be made to the FCA for all of the Shares, issued and to be issued, to be admitted to
the premium listing segment of the Official List of the FCA and to the London Stock Exchange for
such Shares to be admitted to trading on the London Stock Exchange’s main market for listed
securities.
C.7 Dividend policy

The Company’s aim is to generate long term value for its stakeholders, with its shareholder
distribution policy reflecting the growth prospects, capital efficiency and profitability of the Company,
whilst also maintaining appropriate levels of dividend cover, regulatory capital coverage and
operational liquidity. Subject to, inter alia, regulatory capital requirements and sufficient liquidity to
meet forecast working capital requirements, the Board intends to target an annual total dividend of
between 50 per cent. and 60 per cent. of Group profits after tax, adjusted to exclude the impact of non-
operational amortisation, share scheme costs and other non-recurring items. It is envisaged that
interim dividends will be paid in November of each financial year, and that final dividends will be
paid in May of the next financial year. It is intended that the interim and final payments will represent
approximately one third and two thirds of the total annual dividend respectively. Subject to cash not
being used for growth or the Group’s capital management requirements, the Directors may also seek
to redistribute surplus capital to shareholders.
It is expected that the first dividend to be declared by the Company following Admission will be half
of the usual final dividend, to reflect approximately the period between Admission and the Company’s
financial year end.
The Board may periodically reassess the Company’s dividend policy. The ability of the Company to
pay dividends is dependent on various factors, including those outside of the direct control of the
Group. There can be no assurance that the Company will pay a dividend or, if one is paid, that it will
be of the quantum outlined above.
The Company has not traded since incorporation and lacks distributable reserves. This could restrict
the Company’s ability to pay future dividends. Therefore, the Company proposes to undertake a court-
approved capital reduction in accordance with the Act and the Company (Reduction of Share Capital)
Order 2008 following Admission in order to provide it with the distributable reserves required to
support the dividend policy described above. The proposed capital reduction will reduce the
Company’s share premium account by £1,089,000,000. The capital reduction has been approved
(conditional on Admission) by a special resolution of the current shareholders of the Company and
will require the approval of the Companies Court.
Section D—Risks
D.1 Key information on the key risks specific to the Group and its industry
The Group faces significant competition from other insurers and insurance brokers in the insurance
markets in which it operates (from established insurers and brokers as well as new entrants to the
market or as a result of technological progress, such as driverless cars). If the Group is unable or is
perceived to be unable to compete effectively in its core insurance markets or products, its competitive
position may be adversely affected, which could have a material adverse effect on Group’s business,
financial condition and results of operations.
The underwriting and management of insurance risks is subject to a number of uncertainties and
variable factors, and the Group’s technical claims reserves may not adequately cover actual claims
including settlement of periodical payment orders. To the extent that the Group’s technical claims
reserves are inadequate, the Group will have to increase its claims reserves and incur a corresponding
reduction in its net income in the period in which the deficiency is identified, and if, in the longer
term, the shortfall becomes large enough and trading conditions are unfavourable, the Group may be
unable to write new business successfully and/or establish premium rates and reserves at levels
sufficient to cover losses.
15
The pricing of motor and home insurance is subject to a number of specific uncertainties. If the Group
fails to appropriately assess the risks that it assumes, it may fail to establish adequate premium rates,
which could result in the Group experiencing losses from its underwriting activities. Such losses could
have a material adverse effect on the Group’s business, financial condition and results of operations.
If the Group fails to comply with regulatory requirements, it may be subject to substantial fines or
other sanctions that may have a material adverse effect on the Group’s business or financial condition.
Additionally, certain minimum regulatory capital requirements apply to both Retail and Underwriting,
and if the Group is unable to meet the applicable regulatory capital requirements in any of its
regulated subsidiaries, the Group would have to take measures to protect and, where necessary,
reinstate its required capital and solvency position, which could have a material adverse effect on the
Group’s financial condition.
The majority of the Group’s new business is generated through PCWs. If the Group is unable to
maintain terms with PCWs, and to attract visitors and convert them into customers in a cost-effective
manner, its business, financial condition and results of operations may be adversely affected.
D.3 Key information on the key risks specific to the Shares

There is no existing market for the Shares and an active trading market for the Shares may not develop
or be sustained which may adversely affect the liquidity or trading price of the Shares.
If a market for the Shares develops, the Shares could be subject to market price volatility and the
market price of the Shares may decline in response to developments that are unrelated to the
Company’s operating performance, or as a result of sales of substantial amounts of Shares, for
example, following expiry of the lock-up period, or the issuance of additional Shares in the future, and
Shareholders could earn a negative or no return on their investment in the Company.
Finally, Shareholders in the United States or other jurisdictions may not be able to participate in future
equity offerings which could result in dilution of such Shareholders’ interests in the Company.
Section E—Offer
E.1 Net proceeds and costs of the Offer

Pursuant to the Offer, the Company intends to issue 107,058,823 New Shares, raising net proceeds of
approximately £166.5 million, net of underwriting commissions and other estimated fees and
expenses of approximately £15.5 million, which the Company intends to pay out of the proceeds of
the Offer.
Through the sale of Existing Shares pursuant to the Offer, the Company expects the Selling
Shareholders to raise up to approximately £27.0 million, net of underwriting commissions and
amounts in respect of stamp duty or SDRT payable by the Selling Shareholders in connection with
the Offer of approximately £1.0 million.
E.2a Reasons for the Offer and use of proceeds

The Directors believe that the Offer will:
• enable the Group to reduce its current leverage;

• provide a partial realisation of the investment in the Group by certain of the existing
Shareholders;
• further increase the Group’s profile, brand recognition and credibility with its customers,
suppliers and employees;
• assist in recruiting, retaining and incentivising key management and employees;
• further strengthen Underwriting’s Solvency II capital adequacy position; and
• assist the Group with paying the early redemption charge incurred in connection with the
refinancing of the Group’s outstanding Senior Secured Notes.
The net proceeds from the issue of New Shares in the Offer will enable the Group to redeem
approximately £106.6 million of its outstanding debt in the form of its Senior Secured Notes, with the
16
balance of the Senior Secured Notes being redeemed within three months of the date of Admission
using existing cash resources and the new bank facilities (the “New Facilities”), which is expected to
give the Group greater financial flexibility to drive the future growth of the business. The Company
also intends to apply approximately £50 million of the net proceeds from the Offer towards
Underwriting’s Solvency II capital adequacy requirements to further strengthen Underwriting’s
capital base in advance of the new Solvency II capital requirements.
E.3 Terms and conditions of the Offer

The Offer consists of an institutional offer only. In the Offer, Shares will be offered (i) to certain
institutional investors in the United Kingdom and elsewhere outside the United States and (ii) in the
United States only to QIBs in reliance on an exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act.
The Shares allocated under the Offer have been underwritten, subject to certain conditions, by the
Banks. Allocations under the Offer will be determined jointly by the Company, the Principal
Shareholder and Neil Utley as representative of the Founder Shareholders (the “Founder
Representative”) following consultation with the Joint Global Co-ordinators. All Shares issued or sold
pursuant to the Offer will be issued or sold, payable in full, at the Offer Price.
It is expected that Admission will become effective, and that unconditional dealings in the Shares will
commence on the London Stock Exchange, at 8.00 a.m. (London time) on 15 October 2015.
Settlement of dealings from that date will be on a two-day rolling basis. Prior to Admission,
conditional dealings in the Shares are expected to commence on the London Stock Exchange at
8.00 a.m. on 12 October 2015. The earliest date for such settlement of such dealings will be
15 October 2015.
From Admission, the Offer will be fully underwritten by the Banks in accordance with the terms of
the Underwriting Agreement.
E.4 Material interests

There are no interests, including conflicting interests, that are material to the Offer, other than those
disclosed in B.6.
E.5 Selling Shareholders and lock-up

The expected interests in Shares of the Selling Shareholders immediately prior to Admission, together
with a corresponding estimate of their interests in Shares immediately following Admission, are set
out in the table below.
Existing Shares to be Interests
Interest immediately prior sold pursuant to the immediately
to Admission Offer following Admission(1)
––––––––––––––––––––––– ––––––––––––––––––––– –––––––––––––––––––––
% of % of
total % of total
Shareholder No. issued No. holding No. issued
––––––––––––––––––––––––––––––––––––––––––––– ––––––––––– –––––– ––––––––––– ––––––– ––––––––––– ––––––
Principal Shareholder ...................................................... 393,759,451 71.6% 12,622,812 3.2% 381,136,639 58.0%
Hastings Nominees F Limited(2) ...................................... 137,707,289 25.0% 2,994,088 2.2% 146,477,905 (5)
22.3%
Hastings Nominees G Limited(3) ..................................... 18,226,606 3.3% 547,039 3.0% 17,679,567 2.7%
Elian Employee Benefit Trustee Limited(4) ..................... 306,650 0.1% 306,650 100.0% – –
––––––––––– –––––– ––––––––––– ––––––– ––––––––––– ––––––
Total ................................................................................ 549,999,996 100.0% 16,470,589 3.0% 545,294,111 83.0%
––––––––––– –––––– ––––––––––– ––––––– ––––––––––– ––––––
Notes:
(1) Assuming no exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the Over-allotment
Shareholders will sell a further 12,352,941 Shares, representing 10 per cent. of the total number of Shares comprised in
the Offer.
(2) Hastings Nominees F Limited holds Shares on behalf of certain of the Founder Shareholders (Neil Utley (and certain
members of his immediate family) and Richard Brewster), Thomas Duggan (and certain members of his family), Ian
Donald (and certain members of his immediate family) and David Saville (together, the “Nominees F Shareholders”).
(3) Hastings Nominees G Limited holds Shares on behalf of certain of the Executive Directors, Senior Managers, other
employees and former employees of the Group and other investors.
(4) Elian Employee Benefit Trustee Limited acts as trustee for the Hastings Direct Employee Benefit Trust.
(5) Including 11,764,704 Shares in aggregate acquired by Thomas Duggan and David Saville in the Offer.
17
10,559,313 of the Shares (held through Hastings Nominees G Limited) are held by Gary Hoffman,
Pierre Lefèvre, certain of the Senior Managers and certain other managers of the Group who received
proceeds from the sale of instruments they held prior to the 2014 Reorganisation (such certain other
managers being referred to as the “Lock-up Shareholders”).
Pursuant to the Underwriting Agreement, the Company has agreed that, subject to certain exceptions,
during the period of 180 days from the date of Admission, it will not, without the prior written consent
of the Joint Global Co-ordinators (such consent not to be unreasonably withheld or delayed), issue,
offer, lend, sell or contract to sell, grant any option, right or warrant to subscribe or purchase or allow
any encumbrance to be created over or otherwise dispose of, directly or indirectly, any Shares (or any
interest therein or in respect thereof) or enter into any transaction with the same economic effect as
any of the foregoing, or announce any offer of Shares or other intention to do the foregoing.
Pursuant to the Underwriting Agreement and related agreements, 526,085,523 of the Shares (or
513,732,582 Shares if the Over-allotment Option is exercised in full) (excluding those Shares
acquired in the Offer by Thomas Duggan and David Saville) are subject to lock-up arrangements.
Pursuant to these arrangements, Directors, Senior Managers, the Principal Shareholder, those Founder
Shareholders who are beneficial owners of Shares, the other Nominees F Shareholders and the Lock-
up Shareholders have agreed that, subject to certain exceptions, during the periods stated below they
will not, without the prior written consent of the Joint Global Co-ordinators (such consent not to be
unreasonably withheld or delayed), offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, any Shares (or any interest therein in respect thereof) or enter into any transaction with the
same economic effect as any of the foregoing or announce any intention to do the foregoing. The
Directors (other than Richard Brewster and Edward Fitzmaurice) and Senior Managers have agreed
to a lock-up period of 365 days from the date of Admission and the Principal Shareholder, the relevant
Founder Shareholders, the other Nominees F Shareholders, Richard Brewster, Edward Fitzmaurice
and the Lock-up Shareholders have agreed to a lock-up period of 180 days from the date of
Admission. The Joint Global Co-ordinators have agreed to exclude the 11,764,704 Shares, in
aggregate, acquired by Thomas Duggan and David Saville in the Offer from the lock-up
arrangements.
The net proceeds of any sale of Shares by the Principal Shareholder will benefit holders of the
Preference Shares. The Principal Shareholder and Holdco will distribute the net proceeds received by
the Principal Shareholder from its sale of Shares in the Offer by way of the redemption of Preference
Shares. The total amount of the Preference Shares to be redeemed, and the proportions in which the
Preference Shares shall be redeemed, will be determined at the discretion of the board of directors of
the Principal Shareholder and (as the case may be) Holdco. The redemption of Preference Shares will
not be subject to the lock-up provisions described above.
E.6 Dilution
Pursuant to the Offer, existing Shareholders will experience a 16.3 per cent. dilution from the issue of
107,058,823 New Shares (that is, its, his or her proportionate interest in the Company will drop by
16.3 per cent.), excluding any increase in his or her proportionate interest as a result of acquiring New
Shares in the Offer.
E.7 Expenses charged to the investor

Not applicable. No expenses will be charged by the Company or the Selling Shareholders to any
investor who subscribes for or purchases Shares pursuant to the Offer.
18
PART 1
RISK FACTORS
Any investment in the Shares is subject to a number of risks. Prior to investing in the Shares, prospective
investors should carefully consider the risk factors associated with any investment in the Shares, the Group’s
business and the industry in which it operates, together with all other information contained in this
Prospectus including, in particular, the risk factors described below.
Prospective investors should note that the risks relating to the Group, its industry and the Shares summarised
in the section of this Prospectus headed “Summary” are the risks that the Directors and the Company believe
to be the most essential to an assessment by a prospective investor of whether to consider an investment in
the Shares. However, as the risks which the Group faces relate to events and depend on circumstances that
may or may not occur in the future, prospective investors should consider not only the information on the
key risks summarised in the section of this Prospectus headed “Summary” but also, among other things, the
risks and uncertainties described below.
The risk factors described below are not an exhaustive list or explanation of all risks which investors may
face when making an investment in the Shares and should be used as guidance only. Additional risks and
uncertainties relating to the Group that are not currently known to the Group, or that the Group currently
deems immaterial, may individually or cumulatively also have a material adverse effect on the Group’s
business, results of operations and/or financial condition and, if any such risk should occur, the price of the
Shares may decline and investors could lose all or part of their investment. An investment in the Shares
involves complex financial risks and is suitable only for investors who (either alone or in conjunction with
an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any losses that may result therefrom.
Investors should consider carefully whether an investment in the Shares is suitable for them in the light of
the information in this Prospectus and their personal circumstances.
Risks relating to the Group’s business and industry (i) 4
Competition in the Group’s industry is intense and, if the Group is unable to compete effectively, its
business may be materially adversely affected.
The Group faces significant competition from other insurers and insurance brokers in the insurance markets
in which it operates (from established insurers and brokers as well as new entrants to the market). Such
competitors currently offer or may in the future offer the same or similar products and services as the Group.
The entry into, or the targeting of, the markets in which the Group operates, particularly the private car
insurance market, by insurers with greater financial resources, better brand recognition, greater pricing
flexibility or risk tolerance than the Group could adversely affect its ability to obtain new, or retain existing,
customers, which could have a material adverse effect on the Group’s business, financial condition and
results of operations.
If the Group is unable or is perceived to be unable to compete effectively in its core insurance markets or
products, its competitive position may be adversely affected. In particular, competitive pressures may, among
other things, compel the Group to reduce prices, which may adversely affect its operating margins, results
of Retail and Underwriting, capital position and capital requirements, or reduce its market share, any of
which could have a material adverse effect on Group’s business, financial condition and results of operations.
Moreover, the Group’s future growth prospects depend and are predicated on winning market share from
larger and more-established competitors, many of which may have greater financial resources, longer track
record of profitability, more valuable relationships with affinity partners or greater access to resources than
the Group does.
Additionally, technological changes may present competitive risks. For example, innovations, such as
telematics and other usage-based methods of determining premiums, can impact product design and pricing
and may become an increasingly important competitive factor. Other potential technological changes, such
19
as driverless cars or technologies that facilitate ride or home sharing, could materially disrupt the demand
for the Group’s products from current customers or materially impact the frequency or severity of losses, and
the Group may not be able to respond effectively. In addition, the Group’s competitive position could be
impacted by its ability to deploy, in a cost effective manner, technology that collects and analyses a wide
variety of data points, as well as technology that enriches externally and internally sourced data, so as to
make underwriting, claims or other decisions, as well as from companies and competitors that have larger
databases or are better able to collect these data points. If the Group is unable to adapt to changes in
technology and the increased competitive risks they create, then it could have a material adverse effect on
Group’s business, financial condition and results of operations.
The underwriting and management of insurance risks is subject to a number of uncertainties and variable
factors, and the Group’s technical claims reserves may not adequately cover actual claims including
settlement of periodical payment orders.
Due to the uncertain nature and timing of the risks which the Group incurs in Underwriting, the Group
cannot precisely determine the amounts that it will ultimately pay to meet the liabilities covered by the
insurance policies it underwrites or the timing of payment and settlement of those liabilities. As such, the
Group’s technical claims reserves may prove to be inadequate to cover actual claims costs, particularly when
the settlement of liabilities or payments of claims may not occur until well into the future, in particular for
bodily injury claims. Among other issues, the uncertainties under insurance contracts include:
• uncertainty whether an event has occurred which would give rise to a customer suffering an insured
loss;
• uncertainty about the extent of policy coverage and limits applicable;
• uncertainty about the amount of insured loss suffered by a customer as a result of the event occurring;
• uncertainty over the timing of a settlement with a customer for a loss suffered; and
• uncertainty over the level of claims expenses to be incurred.
In addition to the inherent uncertainty of having to make provisions for unreported claims, there is also
uncertainty regarding the eventual outcome of the claims that have been reported as at the end of the
accounting period, but remain unsettled. This includes claims that may have occurred but have not yet been
reported to the Group (either in full or at all) and those that are not yet apparent to the customer (either in
full or at all). Claims provisions do not therefore represent an exact calculation of liability, but rather are
estimates of the expected cost of the ultimate settlement of claims. As a consequence of these uncertainties,
the eventual cost of settlement of outstanding claims and unexpired risks can vary substantially from initial
estimates.
As a consequence of the uncertainty inherent in estimating and providing for insurance contract liabilities,
sophisticated estimation techniques need to be applied in order to determine the appropriate provisions.
The estimation of insurance contract liabilities involves the use of judgements and assumptions that are
specific to the relevant insurance risks and the particular type of insurance risk covered. These estimates are
based on actuarial and statistical projections and assumptions, including the time required to learn of and
settle claims, of facts and circumstances known at a given time, as well as estimates of trends in claim
severity. The estimates are also based on other variable factors, including changes in the legal and regulatory
environment, results of litigation, changes in medical costs, the cost of repairs and replacement and general
economic conditions. The Group’s earnings depend significantly upon the extent to which the Group’s actual
claims experience is consistent with the projections and the assumptions it uses in setting claims reserves
and subsequent premium levels. Changes in the trends or other variable factors, such as inflation and interest
rates, used to produce these estimates could result in claims in excess of relevant claims provisions.
Consequently, actual claims and related expenses paid may differ from estimates reflected in the claims
provisions in the Group’s financial statements.
The Group maintains technical claims reserves to cover the estimated cost of future claims payments and
related administrative expenses with respect to losses or injuries which have been incurred but have not been
20
fully settled or which may occur in the future against insurance policies which have already been written.
These include losses or injuries that have been reported to the Group and those that have not yet been
reported. The technical claims reserves the Group maintains represent estimates of all expected future
payments, including related administrative expenses, to bring every claim (whether reported or not) which
has occurred to final settlement. The Group’s technical claims reserves represent the estimated ultimate cost
of its exposure to claims and expenses against business which was previously underwritten.
The Group’s technical claims reserves also cover the estimated cost of awards of PPOs, to settle bodily injury
claims, of which there has been a significant increase in the UK insurance industry. In a PPO, annually
indexed payments are made periodically over several years or even the lifetime of the injured party, giving
rise to longer-tailed liabilities compared to traditional settlements. The increase in the award of PPOs has
made the estimation of technical claims reserves increasingly complex and uncertain due to the increased
range of assumptions required, such as the future propensity of such settlement methods, estimated rates of
inflation, estimated mortality trends for impaired lives, payment patterns, investment income and the impact
of reinsurance recoveries which will occur many years into the future with a resultant increase in the
associated credit or other non-payment risk. PPO awards result in only a portion of the cash value of the
claim being paid at settlement, with the remainder being paid over several years or the lifetime of the injured
party. However, the expense associated with PPO awards is recognised based on the terms of the settlement,
PPO payments rising at 2.5 per cent. per annum and an assumed discount rate of 1.5 per cent. The Group’s
non-proportional excess of loss reinsurance, which comprises a panel of reinsurers who reinsure all risk of
loss on a single claim exceeding an inflation-adjusted £1.0 million (£0.5 million pre-2014 underwriting
year), with 50 per cent. of such amount met by quota share reinsurance, effectively protects against any
PPO awards. As at 30 June 2015, the Group has experienced two PPO awards and has reserved for ten other
claims with over £1.0 million outstanding which have a high risk of being settled as a PPO. The risk of a
claim becoming a PPO is dependent on the specific circumstances of the claim.
To the extent that the Group’s technical claims reserves are subsequently estimated to be insufficient to cover
the future cost of claims or administrative expenses, the Group will have to increase its claims reserves and
incur a corresponding reduction in its net income in the period in which the deficiency is identified, and if,
in the longer term, the shortfall becomes large enough and trading conditions are unfavourable, the Group
may be unable to write new business successfully and/or establish premium rates and reserves at levels
sufficient to cover losses. In addition, if the Group’s technical claims reserves are excessive as a result of an
over-estimation of risk, it may set premiums at levels which are too high and potentially may not be able to
compete effectively, which may result in a loss of customers and premium income. If the Group charges
premiums that are insufficient for the cover provided, it may suffer underwriting losses, leading to a
reduction in earnings. Any increase in the technical claims reserves held or estimates or expectations of the
uncertainty around those technical claims reserves could also lead to increased capital being required and
increased uncertainty around the Group’s current and future profitability. Any of these could have a material
adverse effect on the Group’s business, financial condition and results of operations.
The Group’s underwriting performance may be affected if it fails to make an accurate assessment of the
risks it assumes, including any failure to collect and analyse data, to develop, test and apply appropriate
rating formulas, to promptly recognise and monitor claim trends, to identify and prevent fraud and/or to
project severity and frequency of claims with accuracy.
The Group’s results of operations and financial condition depend on its ability to underwrite and set rates
and prices accurately. Rate adequacy is necessary to generate sufficient premiums to cover losses and
underwriting expenses and to earn a profit on its own underwriting. If the Group fails to appropriately assess
the risks that it assumes, it may fail to establish adequate premium rates, which could result in the Group
experiencing losses from its underwriting activities. Such losses could have a material adverse effect on the
In order to price its products accurately, the Group must collect and properly analyse a substantial volume
of data; develop, test and apply appropriate rating formulas; promptly recognise and closely monitor trends;
identify and prevent fraud; and project both severity and frequency of losses with reasonable accuracy.
21
The Group’s ability to do these successfully and, as a result, price its products adequately, is subject to a
number of risks and uncertainties, including:
• the availability of and ability to use sufficiently reliable data;
• correct analysis of available data;
• uncertainties inherent in estimates and assumptions generally;
• the selection and application of appropriate rating formulas or other pricing methodologies;
• unanticipated or inconsistent court decisions, legislation or regulatory action;
• changes in the Group’s claims settlement practices, which can influence the amount paid on claims;
• changes in frequency or severity of claims; and
• changes over time in consumer behaviour and habits.
Pricing of motor insurance is subject to a number of specific uncertainties, including:
• changing driving and other consumer patterns, which could adversely affect both frequency and
severity of claims;
• unanticipated increases in the number and severity of bodily injury claims;
• changes in vehicle technology, such as driverless cars, the impact of which may be difficult to
anticipate, especially when first introduced;
• increases in cost of provision of replacement cars due to use of credit hire arrangements; and
• unanticipated inflation in motor repair costs, motor parts prices and used motor prices, adversely
affecting motor physical damage claim severity.
Pricing of home insurance is subject to a number of specific uncertainties, including:
• increases in the costs of repairs and building work;
• inflation in the value of home contents and goods; and
• unanticipated weather patterns and climatic conditions, as well as catastrophes.
Such risks may result in the Group’s pricing being based on inadequate or inaccurate data or inappropriate
analyses, assumptions or methodologies, and may cause the Group to incorrectly estimate future increases
in the frequency and severity of claims. As a result, the Group could underprice risks, which could negatively
affect its loss ratio, or the Group could overprice risks, which could reduce its business volume and
competitiveness.
The underwriting process is a matter of judgement involving important assumptions about matters that are
inherently unpredictable and beyond the Group’s control and for which historical experience and probability
analysis may not provide sufficient guidance. Notwithstanding the risk mitigation and underwriting controls
employed, one or more catastrophic or other loss events could result in claims that substantially exceed the
Group’s expectations, which may have a material adverse effect on the Group’s business, financial condition
and results of operations.
The Group is required to meet certain minimum capital and solvency requirements and to comply with a
number of regulatory requirements relating to its operations.
Certain minimum regulatory capital requirements apply to both Retail and Underwriting, and Underwriting
is required to report annually on its solvency levels at the appropriate Group level. Underwriting is subject
to capital requirements imposed by the Gibraltar regulator, the Financial Services Commission (the “FSC”)
and Retail is subject to capital requirements imposed by the FCA. Specifically, Underwriting must, pursuant
22
to the FSC’s current regulatory regime, ensure that, at a minimum, it maintains available assets (i.e., net
admissible assets) in excess of the minimum margin specified under EU directives. Retail must have capital
resources at least equal to the higher of £5,000 or 2.5 per cent. of HISL’s regulated annual income from its
insurance mediation activity. Furthermore, the predecessor to the FCA, the Financial Services Authority
(“FSA”), issued additional capital requirements under Threshold Condition 2.4 (“TC2.4”), which requires a
periodic assessment to ensure that a broker has sufficient capital resources based on its business plan
requirements, considering both the adequacy of financial and non-financial resources. Additionally,
regulatory capital requirements are subject to change, and such changes may have a significant impact on the
Group’s business, financial condition and results of operations. The Group may also be subject to changes
in its regulatory environment in future, including in respect of its supervisory entities and their interpretation
of the Group’s structure, which may change the level of capital the Group is required to hold. If the Group
is unable to meet required minimum capital requirements, the Group’s regulators may withdraw permission
for it to continue operating its business.
The Group’s capital position and its ability to meet the minimum capital requirements applicable to each of
its regulated businesses can be adversely impacted by a number of factors, in particular, factors that erode
the Group’s capital resources and which could impact the quantum of risk to which it is exposed. In addition,
any event which erodes current profitability and is expected to reduce future profitability or make the
Group’s profitability more volatile could impact its capital position, which in turn could have a material
adverse effect on the Group’s business, financial condition and results of operations.
The respective board of directors of HISL and AICL are ultimately responsible for managing their capital
positions, including the responsibility of undertaking periodic reviews of their respective capital resources.
As such, the boards of directors of HISL or AICL may decide to (and currently do) hold higher surplus above
regulatory capital requirements. Additionally, the regulators could decide to increase the regulatory capital
requirements of any of its regulated subsidiaries or impose additional requirements at the Group level.
If the Group is unable to meet the applicable regulatory capital requirements in any of its regulated
subsidiaries, the Group would have to take measures to protect and, where necessary, reinstate its required
capital and solvency position, which might include redeploying existing capital from elsewhere in the Group,
increasing prices, reducing the volume of, or types of business underwritten, increasing reinsurance
coverage, divesting parts of its business, or other external capital market activities, any of which may be
difficult or costly or result in a significant loss, particularly in cases where such measures are required to be
undertaken quickly.
Furthermore, the Group’s ability to receive dividends from its regulated subsidiaries is dependent on their
compliance with regulatory capital requirements. For instance, per an agreement with the FSC, AICL may
only distribute dividends if at all times AICL’s Solvency I coverage ratio is above a minimum threshold on
both a retrospective and prospective bases. AICL is also required to maintain claims reserves that are
validated by independent third-party actuarial reviews. This basis was agreed with the FSC as a transitional
proxy for solvency requirements after the implementation of Solvency II. If the Group is unable to receive
dividends from its regulated subsidiaries then it may be unable to maintain its capital position, which could
have a material adverse effect on the Group’s business, financial condition or results of operations. The
impact of Solvency II on the Group’s ability to receive dividends in the future is currently unknown and
regulatory requirements may change in the future, but based on discussions with the FSC, the Company does
not expect dividend restrictions following the time at which AICL has a Solvency II surplus and can
demonstrate future coverage and provided that AICL ensures continued compliance with the Solvency II
regime.
23
The EU is currently in the process of introducing a new regime governing solvency requirements,
technical claims reserves and other requirements for insurance companies, the effect of which is
uncertain.
The EU is in the process of developing and implementing Solvency II within each Member State, including
Gibraltar(1). The regime will be binding on insurers and reinsurers within each Member State from 1 January
2016. It is intended that the new regime for insurers and reinsurers domiciled in the EU will apply more risk-
sensitive standards to capital requirements, bringing European insurance regulation more closely in line with
banking and securities regulation with a view to avoiding regulatory arbitrage, aligning regulatory capital
with economic capital and enhancing public disclosure and transparency. As a result, both the composition
and the quantum of Underwriting’s capital requirements are likely to change, and there is a risk that such
capital requirements may be higher under the new directive as compared to Underwriting’s existing capital
requirements.
The Group has established a Solvency II programme to implement the necessary enhancements to meet the
prescribed standards outlined in the new legislation. The FSC has published a number of dates for firms to
supply evidence of progress towards compliance with Solvency II, all of which AICL has met. There will be
continued development and implementation of various aspects of the Solvency II regime throughout 2015,
with AICL continuing to work closely with the FSC. AICL has invested in new software systems to support
capital calculations and produce regulatory reporting in-line with the Solvency II Directive. AICL has
notified the FSC that it intends to initially apply to use the standard formula supported by undertaking
specific parameters based on actual AICL historical data to calculate its capital requirement. Over time,
AICL aims to develop and report under a partial internal model approach. Though AICL will use the
standard formula if it does not get FSC approval for its approach for calculating its capital requirement under
Solvency II, failure to achieve FSC approval for its approach or in respect of certain of the components of
the calculation of its capital requirements may result in an increase in the amount of capital resources that it
would be required to maintain under Solvency II or in other restrictions being placed upon the manner in
which AICL is able to operate its business.
If the Group fails to comply with regulatory requirements, it may be subject to substantial fines or other
sanctions that may have a material adverse effect on the Group’s business, financial condition and results
of operations or ultimately the Group may not be able to conduct its business.
Retail and Underwriting are subject to detailed and comprehensive government regulations and legislation
in the United Kingdom and Gibraltar, respectively, and the Group’s business is dependent upon compliance
with those regulations as well as maintaining its ongoing relationship with the regulatory agencies.
Historically, the Group has complied with the applicable regulations and legislation and maintained good
relationships with its regulators; however the Group cannot guarantee that its subsidiaries will be able to
comply with all aspects of the detailed and comprehensive regulations and legislation to which they are
subject and/or continue to have productive relationships with these bodies in the future. The Group must
comply with regulatory requirements to maintain its positive relationships with the regulatory agencies and
to avoid regulatory action which may deteriorate those relationships and may have a material adverse impact
on the Group’s business, financial condition or results of operations. The Group’s operations in Gibraltar
may also expose it to local regulatory, legal, political or economic changes which could impact the results
of operations or financial condition, and which other peers exclusively based in the United Kingdom may
not be impacted by.
In addition, in order to conduct business in the jurisdictions in which it currently operates, the Group must
obtain and maintain certain licences, permissions and authorisations (such as permission from the FSC in the
case of Underwriting, or the FCA, in the case of Retail, to conduct insurance activities in Gibraltar and the
United Kingdom, respectively) and must comply with rules and regulations as determined by these
jurisdictions. Failure to comply with the regulations, applicable insurance laws and public approvals and
policies may lead to legal or regulatory disciplinary action, the imposition of fines (including retrospective
(1) Gibraltar has a special relationship with the European Community, whereby, through its classification as a dependent territory of
the UK, which manages Gibraltar’s foreign affairs, Gibraltar has become a member of the EU. Though Gibraltar is exempt from
and sits outside of certain EU laws, it is still subject to the EU’s financial regulation requirements, including Solvency II and
other capital requirements.
24
fines) or the revocation of licences, permissions or authorisations. Any failure could have a material adverse
impact on the Group’s continued conduct of business in that jurisdiction.
The Group maintains a forward looking watching brief on current and forthcoming insurance and
non-insurance legislation, regulations and policies, and the approach and attitude of insurance regulators to
those laws and regulations that the Group recognises may change at any time in ways which could have a
material adverse effect on the Group’s business, financial condition or results of operations.
Regulatory and supervisory authorities are concerned primarily with financial stability and the protection of
policyholders and certain other third-party claimants. The Group continues to observe the increasing
regulatory attention to income generation, consumer issues and the overall fairness of insurance products.
For example, in May 2015, the FCA announced that it had found that insurers and insurance intermediaries
did not always provide customers with clear information about the different payment options available when
buying general insurance products, and that consumers were therefore unaware of fees and interest incurred
paying through monthly instalments rather than through an up-front payment. If the FCA or other regulators
were to impose further regulations limiting customer instalment payments, the payment of premiums more
generally or restricting other sources of insurance income, this could have a material adverse effect on the
Group’s business, financial condition or results of operations.
In March 2015, the Competition and Markets Authority (“CMA”) published a final order setting out changes
resulting from its investigation into private motor insurance (“PMI”). From 1 August 2016, PMI providers
will be required to provide specified information about no-claims bonus protection to consumers when
offering no-claims bonus protection as an add-on to PMI products. From 1 September 2015, insurers can no
longer include broad most-favoured nation clauses (which guaranteed that no other distributor would receive
a better deal) in contracts. If the CMA were to impose further regulations on PMI providers, this could have
an adverse effect on the Group’s business, financial conditions or results of operations. In March 2015, the
FCA proposed a number of changes in respect of the provision of general insurance add-ons. The FCA has
recently consulted on banning “opt-out” selling for all add-ons and improving product information
provisions in relation to general insurance add-ons. A reduction in the uptake of add-on products may reduce
future profitability. This in turn may have an adverse impact on the Group’s business, financial condition and
results of its operations. Additionally, in April 2015, HM Treasury announced its intention, via the 2015
Summer Finance Bill, to increase the rate of Insurance Premium Tax by 3.5 per cent., with the new standard
rate expected to be due on premiums treated by the legislation as received on or after 1 November 2015.
Depending on how competition is impacted by this implementation, there is the potential for the Group’s
financial performance to be negatively impacted by the change in this legislation.
In addition, insurance regulation in the UK and Gibraltar is largely based on the requirements of
EU directives. Inconsistent application of directives by regulators in different Member States may place the
Group’s business at a competitive disadvantage to other European financial services groups. In addition,
changes in the local regulatory regime in the UK and Gibraltar could affect the calculation of the Group’s
solvency position and other matters. There is a risk of differences in interpretation and a failure by financial
services regulators to align regulatory approaches across Europe may result in an unequal competitive
landscape, with potentially adverse effects on the Group’s business, financial condition and results of
operations.
Regulatory actions and developments will continually require the Group to assess its compliance measures
and evaluate their impact on the Group’s revenue and profitability, including in relation to new markets and
new products the Group may offer in the future. Failure to adequately address these and future unforeseen
changes in the legal and regulatory framework in which the Group operates may have a materially adverse
impact on the Group’s business, financial condition or results of operations. For example, the Group
generates income through fees from consumers and distribution fees for products sold from its motor legal
expense cover product. Motor legal expense cover products were the subject of a previous thematic review
by the Financial Conduct Authority which concluded in June 2013 and could in the future be the subject of
further regulatory focus. Should regulatory limitations on motor legal expense cover be put in place, this
could have an adverse effect on the Group’s business, financial condition or results of operations. Moreover,
both Retail and Underwriting are highly sensitive to each other from a regulatory and operational
25
concentration perspective and a disruption in one entity, due to changes in applicable laws or regulatory or
other sanctions, would possibly disrupt the operation of the Group as a whole. If Underwriting was no longer
able to provide services to Retail, for regulatory prohibition or other reasons, this would result in an adverse
impact on the Group’s business, financial condition or results of operations.
Reinsurance may not be available, affordable or adequate to protect the Group against losses, and
reinsurers may dispute or default on their reinsurance obligations.
As part of the Group’s overall risk mitigation and capital management strategy, the Group purchases quota
share and non-proportional excess of loss reinsurance, to cover certain risks to which it is exposed.
The Group’s purchase of reinsurance reflects the insurance industry practice of reinsuring a portion of the
risks the Group underwrites, in the case of its quota share reinsurance, and limiting its losses for certain
significant loss incidents, in the case of its non-proportional excess of loss reinsurance. Market conditions
beyond the Group’s control determine the availability and cost of appropriate reinsurance and the receipt of
future reinsurance recoveries as well as the financial strength of reinsurers. Like the insurance industry, the
reinsurance industry has been and may continue to be cyclical and exposed to substantial market losses,
which may adversely affect reinsurance pricing and availability, or its terms and conditions, or the ability of
a reinsurer to fulfil its obligations towards the Group. Similarly, risk appetite among reinsurers may change,
resulting in changes in price or willingness to reinsure certain risks in the future. Changes to reinsurance such
as the removal of unlimited bodily injury cover also may result in a mismatch between the insurer’s legal
requirements under the 1988 Road Traffic Act (“Road Traffic Act”) and reinsurance cover available. Any of
these occurrences and/or significant changes in reinsurance pricing may result in the Group being forced to
incur additional expenses for reinsurance, underwriting less business, having to obtain sufficient reinsurance
on less favourable terms or not being able to or choosing not to obtain reinsurance, thereby exposing the
Group to increased retained risk and potentially an increase in loss ratio.
The Group purchases reinsurance under various third-party agreements generally on a yearly renewable
basis. These reinsurance agreements are designed to transfer risk, support underwriting volumes within the
Group’s “capital efficient” framework and moderate the effect of its losses. Under the terms of these
reinsurance agreements and in return for the premium paid, the reinsurer agrees to reimburse the Group for
a portion of the claim paid to a policyholder or third-party claimant, in the case of quota share reinsurance,
or a portion of a claim in excess of a certain amount, in the case of non-proportional excess of loss
reinsurance.
The Group’s largest reinsurance providers as at 30 June 2015 were SCOR UK (19 per cent.), an AA-rated
reinsurer (16 per cent.), R&V Versicherung AG (15 per cent.) for the Group’s quota share reinsurance panel,
and R&V Versicherung AG (20 per cent.), Q Re LLC (15 per cent.) and an AA-rated reinsurer (13 per cent.)
for the Group’s non-proportional excess of loss reinsurance panel, which together underwrote a substantial
portion of the Group’s overall reinsurance programmes. If the Group’s reinsurance providers do not offer to
renew their products and services, in whole or in part, for any reason, there is a risk that the Group may be
unable to procure replacement cover for any reinsurance agreements at rates equivalent to those of the
terminated cover and that the Group may be exposed to un-reinsured losses during any interim period
between termination of the existing agreements and the start of any replacement cover. A default by a
reinsurer to which the Group has material exposure could also expose the Group to significant losses and
therefore have a material adverse effect on its business financial condition and results of operations.
Additionally, though the Group seeks to employ a conservative reinsurance strategy that diversifies its
exposure to reinsurers and its mix of quota share and non-proportional excess of loss reinsurance coverage,
the Group bears credit risk with respect to its reinsurers, and if any reinsurer fails to pay the Group, or fails
to pay it on a timely basis, the Group could experience significant losses. Although reinsurance makes the
reinsurer liable to the Group to the extent of the risk assumed by (that is, ceded to) the reinsurer, the Group
is not relieved of its primary liability to its customers and policyholders. As a result, the Group bears risk
with respect to its reinsurers. The Group cannot ensure that its reinsurers will pay reinsurance claims on a
timely basis or at all. If reinsurers are unwilling or unable to pay the amounts due under reinsurance
contracts, whether due to the reinsurer experiencing financial difficulties, a dispute over policy coverage
between the Group and the reinsurer, or otherwise, the Group will incur unexpected losses and its cash flow
26
will be adversely affected, which could have a material adverse effect on the Group’s business, financial
condition and results of operations.
The Group’s ability to price risk effectively and accurately may be affected as a result of legal
developments in the UK and EU.
Changes in government policy or legislation, or the regulatory interpretation or enforcement thereof (at a UK
or EU level), in the insurance markets in which the Group operates may occur in the future or be applied
retrospectively, and may adversely affect the Group’s underlying profitability, product range, distribution
channels and capital requirements. For example, in December 2013, the UK Competition Commission
released a provisional findings report on the private motor insurance market, which found unnecessarily high
insurance premiums, price-parity contracts between PCWs and insurers and sub-standard post-accident
repairs, and as a result proposed a number of possible remedies, including audits of repairs and more clear
information on PCWs. The FCA’s thematic review of the role of PCWs in the general insurance sector,
concluded in August 2014, and the ultimate outcome of the UK Competition Commission’s investigation
have yet to be seen, but these may result in adverse outcomes, including negatively impacting the
profitability of the Group’s credit hire schemes through the introduction of caps on the costs of hire vehicles.
As another example, a ban on legal referral fees and other reforms to civil litigation recommended as part of
the Jackson Review and substantially implemented in April 2013, including through the LASPO Act, has
impacted both pricing and claims experience in motor insurance. Other examples of recent or future
legislation or regulation which may have or has had an adverse effect on the Group include the
implementation of the Insurance Mediation Directive II (“IMD II”) in 2015, gender neutral pricing at the end
of 2012, the Retail Distribution Review (the “RDR”) at the start of 2013, the impact of historical and future
changes in the Financial Services Compensation Scheme, including the risk of failure in other financial
services sectors impacting the level of levies on insurers, amendments to UK insurance contract law,
government initiatives to improve transparency and customer confidence in insurance pricing and new EU
solvency requirements. The Group may also face increased compliance or compensation costs due to such
changes to financial services legislation or regulation, or due to the need to set up additional compliance
controls.
The Group’s technical claims reserves are susceptible to potential retrospective changes in legislation and
new court decisions. For example, a change in the “Ogden discount rate,” which is the discount rate set by
the Lord Chancellor and used by courts to calculate lump sum awards in personal injury cases, would impact
all relevant claims settled after that date, regardless of whether the insurance to which the claim relates was
priced on that basis or not. Changes to the Ogden discount rate can result from changes in or volatility of
interest rates or changes in the cost of care and other medical cost inflation, and there is a particular risk that
sustained low interest rates may lead to increased pressure on the UK government to reduce the Ogden
discount rate. A reduction in the Ogden discount rate would have the effect of increasing the present value
of lump sum awards, thereby increasing the amount the Group would need to pay to settle certain claims.
Additionally, changes to the Ogden discount rate, as well as changes in legislation and new court decisions,
may increase the award of PPOs, which could increase the complexity and uncertainty of estimating
technical claims reserves. Any such changes could have an adverse effect on the Group’s business, financial
The Group largely depends on PCWs to generate the majority of new business. If the Group is unable to
maintain terms with PCWs and to attract these visitors and convert them into customers in a cost-effective
manner, its business, financial condition and results of operations may be adversely affected.
The Group’s success depends on its ability to attract online consumers to solicit a quote from the Group and
purchase its insurance products. The Group depends, in large part, on PCWs, search engines and other online
sources as the distribution channels for its products. Of the Group’s new policies sold in the six months ended
30 June 2015, 88 per cent. were sold through various PCWs (excluding telematics). While the Group has
invested in its direct distribution capabilities to create a complementary channel to PCW distribution, it relies
principally on PCWs as its primary distribution channel.
The Group is independent from each of the PCWs which it utilises, though some of these PCWs are owned
by the Group’s competitors, and PCWs control which insurance companies may quote prices on their sites.
27
If one or more of the PCWs in which the Group participates prohibits the Group from quoting the Group’s
policies on its site, or enter the insurance broking market and start competing with the Group directly, the
Group would lose an important channel for distributing its insurance products and attracting new customers,
and its business, financial condition and results of operations could suffer. Additionally, more traditional
insurers in the UK private motor market may make more substantive use of, or may compete more effectively
on, PCWs, which could negatively impact the Group’s ability to effectively utilise PCWs as a distribution
channel. Moreover, to the extent the Group is unable to effectively place its quotes on PCWs, or to attract
requests for quotes or convert such requests into new business, it could have a material adverse effect the
The Group is also dependent on consumers continuing to use PCWs. Recently PCWs have been the focus of
potentially adverse regulatory scrutiny (including, for example, in switching services). The Group is now
subject to additional FCA requirements relating to the information it provides to customers, the way in which
its services are described and any potential conflicts of interest where the price comparison is part of a wider
group. To the extent consumers reduce their use of PCWs, as a result of this regulatory scrutiny or otherwise,
any overall decrease in traffic to PCWs could also adversely impact the Group’s results of operations.
Increases in or changes to fees for PCWs may adversely affect the Group’s results of operations.
The PCWs which the Group utilises are independent from the Group, and as a result they are able to and do
from time to time change the fees they charge the Group to quote and sell the Group’s insurance products
on their website. Additionally, the Group does not have exclusivity agreements in place with these PCWs,
and as a result they quote policies and offer products of other insurance companies as well, with no
obligation to give priority to the Group’s products and services. The successful distribution of the Group’s
insurance products therefore depends on their placement on PCWs, and the Group competes with other
insurers and financial institutions to attract new business on these websites by improving the placement and
presentation of the Group’s offering on such websites. Failure to maintain relationships with PCWs, or an
inability to respond to increases in the fees they charge the Group or changes to the fee structure the Group
has could result in a loss of market share for the Group’s policies or a reduction in the sale or profitability
of its products, which could, in turn, have a material adverse effect on the Group’s business, financial
The Group’s contractual arrangements with PCW providers can be terminated upon one to three months’
notice and prices are typically renegotiated on an annual basis. Any change in the Group’s arrangements with
its PCW providers or a termination of such contracts by the PCW providers, with or without fault on the
Group’s part, would increase the acquisition costs for new and/or renewal business, which could have a
material adverse effect on the Group’s business, financial condition and results of operations.
Failure of the Group to successfully implement Guidewire may adversely affect the Group’s business,
The Group’s businesses are replacing the IT systems that support Retail and Underwriting operations and
developing and implementing Guidewire, a leading insurance software platform, as the Group’s claims and
broker platform. The implementation of Guidewire represents significant change that needs to be introduced
with the Group’s Retail and Underwriting capability being migrated to a new platform. The magnitude and
complexity of change that will impact the Group’s strategic platforms will increase the probability of an IT
service disruption.
The possibility of IT service disruptions as the result of implementing Guidewire may result in the Group’s
operations and processes and/or outcomes of such operations and processes being inefficient, ineffective
and/or inaccurate and adversely affect the overall operational or financial performance of the business and
result in increased capital expenditures. There is also a risk that the benefits that are anticipated, as a result
of the investment in Guidewire, may not be realised to the extent envisaged.
28
The Group relies on the proper functioning, implementation and upgrading of its information technology
and communication systems, as well as its relationships with existing suppliers of these products.
The Group’s business depends on the ability of its employees to process transactions and analyse data using
secure information systems. The Group relies heavily on its operational processes and information
technology and communication systems. The Group’s capacity to generate business, effectively manage its
risk profile and service its customers depends on storing, retrieving, processing, presenting and managing
information. Retail and Underwriting use sophisticated underwriting software systems to help them assess
risk, manage claims and support new and existing customers, whilst the Group’s website represents a key
customer interaction portal. If the Group does not make the correct technology choices or investments,
including with respect to pricing and distribution channels, or if the Group’s choices or investments are
insufficiently prompt or cost-effective, it could adversely affect the Group’s business, financial condition and
results of operations. In addition, interruption or loss of the Group’s computer and data processing
capabilities, the failure of computer equipment or software systems, failure of the Group’s website,
telecommunications failure or other disruption, whether due to system failures, computer viruses, software
errors, cyber-attacks, theft of or physical damage to IT hardware or otherwise, could have a material adverse
effect on the Group’s business, financial condition and results of operations.
The successful implementation of the Group’s business strategy depends, in part, on its success at renewing
or entering into new contracts with suppliers of products and services on favourable terms, such as contracts
with its key IT suppliers. The Group’s ability to renew its existing contracts with suppliers of insurance
products and services, or enter into new contractual relationships, either on commercially attractive terms,
or at all, depends on a range of commercial and operational factors and events which may be beyond the
Group’s control. The Group’s inability to maintain its existing contracts and agreements with its suppliers of
the various products and services which the Group relies upon or enter into new contracts on commercially
favourable terms could lead to business interruption, reduced sales, lower margins or a loss of existing Retail
customers and difficulties in attracting customers, which could have a material adverse effect on the Group
business, financial condition and results of operations.
The Group is exposed to particular risks specific to motor insurance.

Motor insurance is the Group’s largest product line by volume of live customer policies and GWP, and
represents a core component of the Group’s overall business going forward. While many of the risks inherent
to the sale and administration of motor insurance are similar to all general insurance business lines, there
remain several risks that are more relevant or even specific to this product. Those risks include, but are not
limited to:
• the propensity of severe bodily injury claims to settle using PPOs;
• significant competition among motor insurers, principally on the basis of price;
• lower barriers to entry and flexible movement of capital into and out from the industry, with new
entrants to the market having, in certain instances, implemented aggressive pricing policies;
• increased bodily injury or third-party property damage claims, which could be caused by, among
others, an increased propensity of third-parties to claim, increased size or severity of claims, and
increased fraud associated with staged accidents, falsified claims or other fraudulent reporting;
• enhancements in medical knowledge and techniques as well as the increasing use of rehabilitation,
resulting in increased life expectancy for (severely) injured claimants, with expensive medical and
rehabilitation regimes required for longer periods;
• uncertainty of the outcome or impact of potential regulatory or legislative changes as a result of either
current investigations and initiatives or potential future initiatives, including, for example, any
changes to regulatory restrictions relating to automatic renewal of insurance contracts;
• changes to distribution landscapes, as evidenced by the growth in penetration of PCWs;
29
• cyclical market patterns, including in relation to the economy, weather, competition and underwriting
capacity in the insurance and reinsurance industries, some of which are unpredictable and are
characterised by periods of significant competition in pricing and underwriting terms and conditions,
followed by periods of lessened competition and increasing premium rates; and
• changes to vehicle technology (such as driverless cars, electric cars and key cloning), the proportion
of used cars on the road, road building and road safety initiatives, road traffic offence enforcement or
speed limits can have a positive or negative impact on the likelihood of accidents and the Group’s
ability to accurately determine the impact of any change.
The occurrence or persistence of any of these factors could have a material adverse effect on the Group’s
business, results of operations and financial position.
Like any other company in the insurance industry, there is a risk that the Group might not adapt (or respond
in a timely manner) to new or emerging risks, which might severely impact the Group’s business in the
future. New or emerging risks are those risks that are not foreseen or are unknown or where the industry
lacks experience in such risks. Any inability on behalf of the Group’s management to identify and react to
any existing or emerging trends may negatively impact the Group’s financial condition and results of
operations.
The Group may be subject to fraudulent insurance applications and claims, and other fraudulent
activities.
The Group is vulnerable to internal and external fraud from a variety of sources such as employees,
suppliers, intermediaries, customers and other third parties. This includes both policy (i.e. application-
related) fraud and claims fraud. Although the Group employs fraud detection processes to help monitor and
combat fraud, including Insight, the Group’s counter-fraud team, the Group is still at risk from customers
who misrepresent or fail to provide full disclosure of the risks covered before such cover is purchased, from
policyholders who file fraudulent or exaggerated claims and from a range of other fraud related exposures,
such as the fraudulent use of Group-related confidential information. These risk include payment security
risks.
Additionally, the Group is subject to risk from employees and staff members committing fraud in cases in
which procedures designed to prevent fraudulent activities are not followed or are circumvented.
Furthermore, the techniques used to perpetuate fraud are constantly evolving which may make instances of
fraud more difficult to detect. The occurrence or persistence of fraud in any aspect of the Group’s business
could damage the Group’s reputation and brands, and could have a material adverse effect on the Group’s
The Group collects and utilises third-party and/or non-public data from quote-seeking consumers,
policyholders, claimants, business contacts, employees and other third parties, and the failure to
adequately maintain and protect such information, or failure to comply with applicable data protection
laws, could have a material adverse effect on the Group’s business, financial condition and results of
operations.
The Group collects and processes personal data (including name, address, age, bank, credit score and
payment details and other personal data) from quote-seeking consumers, policyholders, third-party
claimants, business contacts and employees as part of the operation of the Group’s business, and therefore
the Group must comply with data protection and privacy laws and industry standards in the UK and Gibraltar
in respect of the handling and storage of such data. Those laws and standards impose certain requirements
on the Group in respect of the collection, use, processing and storage of such personal information.
For example, under UK and EU data protection laws and regulations, when collecting personal data, certain
information must be provided to the individual whose data is being collected. This information includes the
identity of the data controller, the purpose for which the data is being collected and any other relevant
information relating to the processing. There is a risk that data the Group collects is not processed in
accordance with notifications made to, or obligations imposed by, data subjects, regulators, or other
counterparties or applicable law. Failure to operate effective data collection, handling and storage controls
30
could potentially lead to regulatory censure, fines, reputational and financial costs as well as result in
potential inaccurate rating of risks or overpayment of claims.
The Group also receives external, third-party data from PCWs, credit agencies and other third-party data
providers, which it relies on for certain of its business activities including its counter-fraud and pricing
capabilities. Any changes to the availability, storage and use of such data, including any increase in price and
regulatory constraints on the gathering or use of such data could affect the Group’s business, including its
counter-fraud capabilities and price policies, as well as have a material adverse effect on the Group’s
In addition, the Group is exposed to the risk that the personal data it controls could be wrongfully accessed,
distributed or used, whether by employees or other third-parties, or otherwise lost or disclosed or processed
in breach of data protection regulations. If the Group or any of the third-party service providers on which it
relies fail to process, store or protect such personal data in a secure manner or if any such theft or loss of
personal data were otherwise to occur, the Group could face liability under data protection laws. This could
also result in damage to its brands and reputation as well as the loss of new or renewal business, any of which
could have a material adverse effect on the Group’s business, financial condition and results of operations.
In its 2015/2016 Business Plan, the FCA announced its intention to launch a market study on the use of Big
Data in the insurance market. This will aim to identify potential risks and benefits for consumers, including
whether the use of Big Data creates barriers to accessing products or services. The results of this review,
including any policy or regulatory changes, as well as complying with any requests that the FCA may have
for the Group when undertaking this review may have an adverse impact the Group’s business, financial
Changes to the Group’s customers’ behaviour could reduce demand for its products.
The Group is exposed to changes in the behaviour of its customers and the markets in which it sells its
insurance products. For example, changes in lifestyle, technology, regulation, or taxation could significantly
alter customers’ actual or perceived need for insurance and the types of insurance sought. Changes in
technology could also give rise to new types of entrants into the insurance and/or insurance sales markets,
for example, pay-as-you-go motor insurance, or the development of new distribution channels requiring
further adaptation of the Group’s business and operations. Such changes could result in reduced demand for
the Group’s products and require the Group to expend significant energy, resources and expenditure to
change its product offering, build new risk and pricing models, modify and/or renew its operating and IT
systems and/or retrain or hire new people. Changes to customer behaviour could also result in higher
customer turnover leading to higher overall costs and/or lower or eliminated profit margins due to increased
pricing pressure. Such changes could have a material adverse effect on the Group’s business, financial
The Group is also exposed to changes in the behaviour of customers in relation to the way that they purchase
insurance. To the extent consumers reduce their use of PCWs in favour of direct sales of traditional brokers
and the Group is unable to adapt to such a change, this could also adversely impact the Group’s business,
The Group’s claims management processes may be inefficient, leading to additional claims-related
expenses and possibly adverse inflation effects upon claims.
A key assumption used in the pricing of the Group’s insurance products as well as the provisions for claims
is the relative time and efficiency with which claims will be notified, processed and paid. Efficient and
effective claims management depends, among other things, on well-trained personnel making accurate and
timely decisions with respect to claims handling. Inefficiencies in managing and paying claims can lead to
issues such as inappropriate indemnity decisions, inappropriate claims reserving and/or payment decisions,
increased fraud and distorted management information for reserving and pricing, resulting in additional
claims costs and claims handling-related expenses as well as increased risk that technical claims reserves
and/or pricing models will be inappropriate. This risk increases as the time lag between claim and payment
becomes longer. If the Group’s claims management processes prove to be inefficient or ineffective or it
31
otherwise suffers from costs or expenses above expected levels, the Group could be forced to refine its
pricing models and/or increase prices, potentially resulting in a loss of business, and increase its technical
claims reserves. Such additional costs or inflation effects could harm the Group’s profitability, which could
have an overall adverse effect on the Group’s business, financial position and results of operations.
Results in the personal lines insurance industry are subject to volatility and uncertainty which may
adversely affect the Group’s ability to offer insurance broking and underwriting services.
In addition to considerations specific to motor insurance as discussed above, personal lines insurers more
generally have historically experienced significant fluctuations in operating results due to competition, the
frequency or severity of catastrophic events, levels of underwriting capacity, general social, legal or
economic conditions and other factors. The supply of insurance capacity is related to prevailing prices, the
level of insured losses and the level of industry profitability and capital surplus which, in turn, may fluctuate
in response to changes in inflation rates, number of claims, the rates of return on investments being earned
by the insurance industry, as well as other social, economic, legal and political changes. As a result, the
insurance business has historically been cyclical, characterised by periods of intense competition in relation
to price often due to excessive underwriting capacity, as well as periods when shortages of capacity have
seen increased premium rates that are more advantageous to underwriters. Increases in the supply of
insurance (whether through an increase in the number of competitors, an increase in the capital available to
insurers, or otherwise) could have adverse consequences for the Group, including fewer contracts
underwritten, lower premium rates, increased expenses for customer acquisition and retention, and less
favourable policy terms and conditions for the Group, any of which could adversely affect the Group’s
The Group bears credit risk with respect to customers pursuant to its premium financing products and
counterparty risk with respect to various third parties, including its reinsurance partners and other
financial institutions.
The Group offers a premium financing service to its customers whereby the Group finances a participating
customer such that the customer pays for their insurance products in instalments over the policy period,
instead of upfront, in exchange for the customer paying interest on such financing. If a customer does not
make instalment payments, the Group may be exposed to operating costs and reinsurance costs in respect of
such policy until it is able to cancel that policy. As the Group does not use a third-party to finance such
premiums, it bears all the credit risk of customers participating in its premium financing programme. Credit
risk issues may have an adverse effect on the Group’s business, financial condition and results of operations.
Any policy or regulatory changes, as well as complying with any requests that the FCA may have for the
Group, may have an adverse impact the Group’s business, financial condition and results of operations.
The Group faces exposure to various different counterparties, including in relation to amounts receivable
from reinsurance partners, holdings of fixed income instruments and other assets within its investment
portfolio, amounts held as cash, and amounts due from suppliers, distribution partners, PCWs, policyholders
and from other relationships. Changes in the financial position of any of these counterparties could
negatively impact the Group’s financial condition, in particular where such payables are unsecured or where
amounts recoverable under the terms of such relationships exceeds the quantum of any provisions the Group
may hold against them. More generally, inter-dependency within financial institutions may mean that
counterparty defaults may occur in rapid succession or in a related fashion. Any of these events, individually
or collectively, could have an adverse effect on the Group’s business, financial position and results of
operations.
The failure of any of the loss limitations or exclusions the Group employs or changes in other claim and
coverage issues could have a material adverse effect on the Group’s financial condition or results of
operations.
Various provisions of the Group’s policies, such as loss limitations, exclusions from coverage or choice of
jurisdiction, which have been negotiated to limit its risks, may not be enforceable in the manner the Group
intends. The Group employs a variety of endorsements to its policies in an attempt to limit exposure to
32
known risks. As industry practices and legal, social and other conditions change, unexpected and unintended
issues related to claims and coverage may emerge. These issues may adversely affect the Group’s business
by either extending coverage beyond its underwriting intent or by increasing the size or number of claims.
The effects of emerging claim and coverage issues can be extremely hard to predict and could harm the
Group’s business.
In addition, the Group designs its Underwriting insurance policy language to manage its exposure to
expanding theories of legal liability. Many of the policies the Group issues also include conditions requiring
the prompt reporting of claims to the Group and its right to decline coverage in the event of a violation of
that condition, as well as limitations restricting the period during which a policyholder may bring a breach
of contract or other claim against it, which in many cases is shorter than the statutory limitation for such
claims. While these exclusions and limitations reduce the loss exposure to the Group and help eliminate
known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an
exclusion or that legislation could be enacted which modifies or bars the use of such endorsements and
limitations in a way that would adversely affect the Group’s loss experience, which could have a material
adverse effect on the Group’s business, financial condition or results of operations. In some instances, these
changes may not become apparent until sometime after the Group has issued insurance policies that are
affected by the changes. As a result, the full extent of liability under the Group’s insurance contracts may not
be known for many years after a contract is issued.
The loss of the Group’s senior management or a significant number of its sales personnel or other
consumer-facing employees, or the inability to attract and retain qualified personnel could have a
material adverse effect on the Group’s business.
The success of the Group’s business depends, to a substantial extent, on the ability and experiences of
members of its senior management and on the individual underwriters and sales personnel and teams that
service the Group’s customers, manage underwriting and claims processes, and maintain its customer
relationships. The loss of, or a delay in replacing, a number of the Group’s senior management, qualified
personnel or other client-facing employees could have a material adverse effect on the Group’s business,
Additionally, the Group relies on the continued attraction of senior management and other qualified
personnel to its business, the headquarters of which are located in Bexhill. Failure to attract and retain highly
skilled and qualified personnel across all levels of the organisation or to continue to successfully expand,
train, manage and motivate the Group’s employee base, could also have a material adverse effect on the
The Group offers different prices to different types of customers, and the lack of price harmonisation
across its various customer bases could result in adverse regulatory action or liability.
As part of its efforts to achieve a high degree of cross-penetration between its business segments, the Group
may offer discounts to certain customers in respect of its various insurance products. The Group also offers
some of its products and services at varying rates based upon different factors that the Group uses to
calculate its insurance premiums, such as a customer’s residential post code or driving history. In recent
years, the UK insurance industry has experienced regulatory changes, including the gender neutral pricing
directive introduced by the European Commission in December 2012. Similar regulatory developments may
make it more difficult or may prohibit varying rates between different customer groups.
While the Group is generally able to charge different premiums for different groups of customers, there is a
risk that regulators could prohibit some or all of the bases upon which the Group sets certain insurance
premiums which could result in a shift in the Group’s charging structure. The Group cannot guarantee that
similar regulatory changes will not be promulgated in the future targeting other of its premium calculation
processes, which could result in volatile prices as the Group adjusts its risk rating and pricing models.
A significant change to the factors the Group uses to measure risk and calculate premiums could have a
33
Maintaining favourable brand recognition and a strong reputation is essential to the Group’s success, and
failure to do so could materially and adversely affect the Group’s business, financial condition and results
of operations.
While the Group’s “Hastings Direct” brand name and reputation enjoy a certain degree of familiarity and
awareness in the UK, the Group depends next on the integrity of its brand and its reputation for quality of
service for its business, and the Group believes favourable recognition of its brand is important to
maintaining a key position in an industry where trust and confidence with customers are paramount.
Nevertheless, factors affecting brand recognition and its reputation are often outside the Group’s control, and
its efforts to enhance its favourable brand recognition and reputation, such as making significant investments
in cross channel marketing including a television campaign, may not have their desired effects. The Group
is also exposed to possible brand and reputational damage from poor performance in terms of customer
service or product dissatisfaction. The Group is exposed to the risk that litigation, employee misconduct,
operational failures, the outcome of regulatory or other investigations or actions, the reputations and actions
of the Group’s business partners or one or more of its competitors, press speculation and negative publicity,
among others, whether or not founded, could damage the Group’s brand and reputation. In particular, the
Group’s reputation and brand could be adversely affected if any of the PCWs that the Group utilises fails to
perform as expected or adversely changes their relationship with the Group. By virtue of the fact that the
Group has a visible and recognised brand, it is particularly exposed to mistakes or misconduct, or allegations
thereof, by its claims handlers and other employees, underwriters, contractors or agents. A decline in
favourable recognition of the Group’s brand or its reputation could also impact its ability to attract or retain
new customers, which may have a material adverse effect on the Group’s business, financial condition and
The Group may be exposed to fines, penalties, reputational damage and the potential loss or revocation
of permissions or authorisations if it fails to address customer complaints or to identify and eliminate
potential mis-selling practices.
The FCA has authority to investigate the companies it regulates with respect to complaints from individuals
or institutions and to take disciplinary action to prevent unlicensed activity or fraud. The Group has
implemented procedures in response to the FCA’s assessment of the Group’s response to customer
complaints, specifically around structuring and fee transparency in utilising PCWs. If in future assessments
the FCA were to find that the Group has not responded appropriately to customer complaints, was receiving
an unusually high volume of customer complaints or has failed to put in place appropriate procedures to
address customer complaints or the underlying causes of customer complaints, it may take action against the
Group, including withdrawal of approved status, granting a prohibition order, disciplinary action and/or
fines. In addition, the FCA released a policy statement in July 2015 which provides rules on how regulated
firms are to approach complaints handling and limiting the telephone call charges that can be made to
customers. In the event that the Group does not make these changes effectively or the changes are not
delivered in time, there could be a material impact to the Group’s reputation, financial condition and results
of operations.
If the Group fails to identify and eliminate potential mis-selling practices, or to effectively manage and
reduce the risk of mis-selling, the Group may be exposed to financial and reputational risk. If disputes arise
in relation to the way in which an insurance policy or product was sold or administered by the Group or in
relation to the fair treatment of customers by the Group, they may, if not successfully resolved, be dealt with
by the FOS or the Group’s regulators. Prior to 2008, the Group was the subject to such inquiries and fines,
and future investigations could result in regulatory fines or penalties, and the Group may be required to
improve its systems and controls or its business policies and practices, which could include making changes
to sales processes, withdrawing products, or providing restitution to affected customers. Any of these events
could have a material adverse effect on the Group’s business, financial position and results of operations.
34
The Group may become subject to inquiries and challenges of its tax position by the tax authorities in the
jurisdictions in which it operates, and the Group’s business, results of operations and financial condition
may be adversely affected by legislative changes or changes in taxation.
The Group’s operations in the UK are subject to the laws of England and Wales and the taxation rules and
decisions administered by HM Revenue & Customs (the “HMRC”). In addition, AICL, as a Gibraltar
registered business, is subject to the laws of Gibraltar in respect of its insurance business and taxation rules
and decisions administered by the Commissioner of Income Tax in Gibraltar under the Gibraltar Income Tax
Act, and HIG(H) is resident in Jersey for tax purposes and is therefore subject to the tax laws applying in
Jersey. Changes in legislation or regulations and actions by regulators, including changes in administration
and enforcement policies, could from time to time require operational improvements or modifications, the
conduct of reviews and audits or the cessation of certain business practices, product lines or income stream
that could result in higher costs or restrict the Group’s ability to operate its business and, as a result, have a
material adverse effect on the Group’s business, financial condition and results of operations. A change in
taxation rules, or a successful challenge by a tax authority of the Group’s application of those rules could
also have a material adverse effect on its business. In particular, a successful attempt by HMRC to bring
Underwriting’s profits “onshore” for UK tax purposes could have a material adverse effect on the Group’s
business, financial position and results of operations. While it is the Group’s policy that the pricing of the
provision of services between Retail and Underwriting are intended to be established on an arm’s length
basis, if HMRC in future does not regard these arrangements as being at arm’s length, the amount of tax
payable by the Group as a whole may increase. Insurance intermediary services are exempt from Value
Added Tax (“VAT”) under the EU and UK VAT exemption for insurance related services. There is no
guarantee that HMRC will not in the future reconsider their approach and policy to the scope of this VAT
exemption in the UK and what can properly be classified as exempt insurance intermediary services and
therefore determine that the Group underpays, or in the past has underpaid, VAT owed to HMRC and
subsequently reclaim such VAT amounts from the Group. Any such change to these taxation rules or the
taxation treatment of the Group’s other sources of income could have a material adverse effect on the
With effect from 1 April 2015 a new tax has been introduced in the UK called the “diverted profits tax”,
which is charged at a rate of 25.0 per cent. on any “taxable diverted profits”. The tax may apply in
circumstances including where arrangements are designed to ensure that a non-UK resident company does
not carry on a trade in the UK for corporation tax purposes through a permanent establishment or where
arrangements involve entities or transactions lacking economic substance. The Group intends to conduct its
operations so that diverted profits tax should not apply to it, in particular by ensuring that the “independent
broker exemption” applies to activities performed by Retail on behalf of Underwriting, and that services
between Retail and Underwriting are provided on arm’s length terms. While it is not expected that the
diverted profits tax would apply to the Group, this is a new tax and its scope and the basis upon which it will
be applied by HMRC remains uncertain.
The Group’s ability to attract and retain participation in its third-party insurance panel may adversely
affect its results of operation.
The Group’s success depends, in part, on the quality of services provided by, and its relationships with,
third-party insurers who sit on its external insurer panel and underwrite certain of the Group’s insurance
policies. Additionally, certain of the Group’s products, in particular its home insurance products, are
predominately underwritten by its panel of insurers, and not by AICL. The Group’s insurer panel, which
includes, for example, Aviva, AXA, Covéa, SABRE and Sterling, allows Retail to sell a wider range of the
Group’s products to a broader range of customers. The loss of any of the key insurers who sit on the Group’s
panel could have an adverse effect on its business. The Group relies on its ability to attract and retain
third-party insurers for the Group’s insurer panel, and the failure to do which could have an adverse effect
on the Group’s business, financial condition and results of operations.
35
Changes to IFRS treatment of insurance companies, or more generally, may adversely affect the Group’s
financial results.
Changes to IFRS treatment of insurance companies have been proposed in recent years, and further changes
may be proposed in the future. The International Accounting Standards Board has published proposals in its
IFRS 4 Insurance Contracts Phase II for Insurers Exposure Draft (“Phase II”) that would introduce
significant changes to the statutory reporting of insurance entities that prepare financial statements according
to IFRS. The accounting proposals, which are not expected to become effective before 2018, will change the
presentation and measurement of insurance contracts, including the effect of technical claims reserves and
reinsurance on the value of insurance contracts. It is uncertain whether and how the proposals in the draft
will affect the Group should they become definitive. Following recommendation of current proposals under
Phase II, these may have an adverse effect on the manner in which the Group reports provisions and therefore
identify and report revenue and costs. These and any other changes to IFRS that may be proposed in the
future, whether or not specifically targeted at insurance companies, could adversely affect the Group’s results
of operations.
The Group has market risk due to its investments in its portfolio, including the risk of default of
counterparties of corporate bonds.
The Group’s investment portfolio is primarily made up of cash, corporate bonds, fixed deposits, liquid
absolute return funds, money market funds and other investment funds, including hedge funds. The Group’s
investment returns are highly susceptible to changes in interest rates and credit spreads and are subject to a
variety of risks, including risks related to general global economic conditions (including those in the
eurozone), market volatility and interest rate fluctuations, liquidity risk, and credit risk. Changes in these
factors can be very difficult to predict, and certain of the funds in which the Group has invested have recently
experienced a high degree of volatility.
The value of the Group’s investment portfolio will be affected by changes in interest rates, changes in the
credit ratings of the issuers of the securities, and liquidity generally in the bond markets, which may affect
returns on, and the market values of, UK and international fixed-income investments in the Group’s
investment portfolios. Generally, investment income may be reduced during sustained periods of lower
interest rates as higher-yielding fixed-income securities are called, mature or are sold and the proceeds are
reinvested at lower rates, even though prices of fixed-income securities tend to be higher and gains realised
upon their sale tend to increase under such circumstances. During periods of rising interest rates, prices of
fixed income securities tend to fall, and realised gains upon their sale are reduced or realised losses are
increased, but reinvestments take place at a higher yield. When the credit rating of the issuer of the debt
securities falls, or the credit spread with respect to the issuer increases, the value of the fixed income
securities may also decline. This, or any of the other factors described above could have a material adverse
effect on the performance of the Group’s investment portfolio and therefore a material adverse effect on the
Group’s business, financial condition and results of operations, including its level of solvency capital.
The geographic concentration of the Group’s business in the United Kingdom could leave it vulnerable
to an economic downturn, or regulatory or political changes in the United Kingdom, Europe, or a
downturn in the financial markets globally may result in a decrease in the Group’s revenue.
The Group derives all of its income from consumers in the UK. As the Group markets and delivers its
products exclusively to customers in the UK, its success is closely tied to general economic developments in
the UK and cannot be offset by developments in other markets. Negative developments in, or the general
weakness of, the UK economy and, in particular, higher unemployment, lower household income and lower
consumer spending may have a direct negative impact on the spending patterns of the Group’s customers,
both in terms of the services they subscribe for and the amount of insurance and other products they
purchase. However, this or any other negative economic developments in the UK could reduce consumer
confidence, limit the demand for private car insurance or other of the Group’s insurance products and make
its customers less likely to purchase ancillary products, and thereby could negatively affect earnings and have
a material adverse effect on the Group’s results.
36
In addition, any deterioration in the UK economic and financial market conditions may:
• cause financial difficulties for the Group’s suppliers and reinsurers, which may result in their failure
to perform as planned;
• result in inefficiencies due to the Group’s deteriorated ability to forecast developments in the markets
in which it operates and failure to adjust its costs appropriately;
• cause reductions in the future valuations of the Group’s investments and assets and result in
impairment charges related to goodwill or other assets due to any significant underperformance
relative to its historical or projected future results or any significant changes in its use of assets or its
business strategy;
• result in increased or more volatile taxes, which could negatively impact the Group’s effective tax rate,
including the possibility of new tax regulations, interpretations of regulations that are stricter or
increased effort by governmental bodies seeking to collect taxes more aggressively;
• result in increased customer requests for reduced pricing and reduced renewal rates;
• result in increased incidences of fraud among both consumers and the Group’s employees; and
• result in increased consumer indebtedness that results in policyholders not being able to fund
insurance products purchased from the Group.
In addition, both global and European capital markets have experienced volatility and disruption for
extended periods in recent years. This volatility and disruption has had a number of effects, including a lack
of liquidity in the equity and debt capital markets, significant write-offs in the financial services sector, the
re-pricing of credit risk in the credit market, failure of major financial institutions, downgrades to sovereign
credit ratings and an increase in debt defaults with volatility and disruption further fuelled by the escalation
of the eurozone crises and speculation that some Member States would exit the euro.
Specifically, the Group faces potential risks associated with the planned referendum on UK membership in
the EU. The possible UK exit from the EU could have an adverse impact on the regulatory, currency,
insurance and tax regime to which the Group’s operations are currently subject. In addition, the referendum
as well as its result could contribute to prolonged uncertainty around certain aspects of the UK economy
including consumers’ and investors’ confidence. Due to Gibraltar’s classification as a dependent territory of
the UK under the Treaty of Rome 1973 and UK Act of Accession, the UK Government is responsible for
Gibraltar’s foreign affairs, including Gibraltar’s relationships with the EU. If the UK exits from the EU, then
Gibraltar may also be required to exit the EU, which could disrupt the Group’s underwriting business
including AICL’s activities. AICL would also likely be required to obtain UK regulatory permissions, as it
would no longer be able to operate through the UK passporting arrangements now in place. Any combination
of these factors could increase the Group’s operating costs or place additional regulatory burdens on the
Group that could otherwise have a material adverse effect on the Group’s business, financial condition and
The occurrence of international conflicts which have an adverse effect on economic conditions or disrupt the
Group’s operations, the lack of improvement in the current economic environment and varying improvement
rates in the Group’s source markets or improvements only over an extended period of time, could have a
The determination of the amount of allowances and impairments taken is subjective. If the Group’s
business does not perform well, it may be required to recognise an impairment of its goodwill or
intangibles with indefinite and finite useful lives, which could adversely affect the Group’s results of
operations or financial condition.
If the Group concludes that a future write-down of its goodwill is necessary, including a determination that
it is required to adjust the amount of allowances and impairments the Group takes, the Group would have to
record the appropriate charge, which could result in a material adverse effect on results of operations and
financial condition. Following a series of restructuring transactions in 2014 (the “2014 Reorganisation”), the
37
Group has recognised a significant balance of both intangible assets and goodwill in the consolidated balance
sheet. This balance will be subject to at least annual impairment reviews since a significant decline in the
Group’s expected future cash flows or a general decline in results could require a future write-down and
impairment of the value of that goodwill. Any such requirement to recognise an impairment of the Group’s
goodwill could have a material adverse effect on the Group’s business, financial condition and results of
operations.
The Group’s inability to successfully recover should it experience a disaster or other business continuity
problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm
or legal liability.
The Group is predominantly a private car insurer, and like all insurance companies, the Group is subject to
losses from unpredictable events that may affect multiple covered risks, particularly widespread weather
events in respect of its private car insurance. In the UK, such events include both natural and man-made
events, such as, but not limited to, windstorms, coastal inundation, floods, severe hail, severe winter weather,
other weather-related events, earthquakes and other man-made disasters such as civil unrest and terrorism.
The extent of the Group’s losses from such catastrophic events is a function of their frequency, the severity
of each individual event and the reinsurance arrangements the Group has in place. The Group generally seeks
to reduce its exposure to such events by utilising selective underwriting and pricing practices, purchasing
appropriate non-proportional excess of loss reinsurance, managing reinsurer concentration risk and
excluding certain events under policy terms and conditions. However, the Group’s efforts to reduce its
exposure, or appropriately price, or set appropriate underwriting terms for, its exposure may not be
successful. In addition, government or industry schemes, such as those relating to flood control (including,
for example, the “Statement of Principles” agreement between the UK Government and the insurance
industry), are subject to change which could result in pricing risk if the Group is unable to price its products
appropriately or result in reputational risk if the Group is suddenly forced to change pricing or policy
coverage.
In addition, any catastrophe that impacted the Group’s offices in Bexhill or at the Group’s other sites could
adversely affect the Group’s business, financial condition and results of operations, and any disaster recovery
or contingency plans the Group may have may not be sufficient to recover or continue the Group’s operations
following such an event or events.
The Group is subject to risks relating to its debt service obligations.

The Group has a significant amount of outstanding indebtedness with substantial debt service obligations.
As at 30 June 2015, the Group had total third-party net debt of £364.6 million. Under the Senior Secured
Notes, the Group is subject to restrictive debt covenants (limiting, or imposing thresholds on, inter alia its
use of cash from operations) that may limit its ability to finance its future operations and capital needs and
to pursue business opportunities and activities by, for example, prioritising debt repayment to new
investment (including capital expenditure).
The Company intends to use the £166.5 million net proceeds from the issue of New Shares in the Offer to
redeem £106.6 million of its outstanding debt associated with the 2020 Notes. Within three months of the
date of Admission, the Company expects to use the entirety of the New Facilities (as defined below)
(£300.0 million) towards repayment of the remainder of the 2020 Notes (£159.9 million) and the entirety of
the 2019 Notes (£150.0 million). The Company expects the Group to pay an early redemption charge of
approximately £25.0 million related to the 2020 Notes, £8.5 million of which will be paid immediately and
approximately £16.5 million upon redemption of the remaining 2020 Notes. These amounts have been taken
into account for the purposes of the working capital statement included in this Prospectus.
The Group’s leverage and debt service obligations could have important negative consequences for its
business and operations, including:
• making it difficult for the Group to satisfy its obligations in respect of its other indebtedness and the
Senior Secured Notes;
38
• requiring the Group to dedicate a portion of its cash flows from operations to making payments on its
indebtedness, thereby limiting the availability of funds for dividend payments, capital expenditures,
acquisitions, business opportunities and other general corporate purposes;
• increasing the Group’s vulnerability to adverse general economic or industry conditions;
• limiting the Group’s flexibility in reacting to changes in its business or industry;
• placing the Group at a competitive disadvantage compared to those of its competitors that have less
debt; and
• limiting its ability to borrow additional funds and increasing the costs of any such additional
borrowings.
The Group’s ability to make scheduled payments on its indebtedness, comply with applicable financial
covenants or to refinance its obligations over the longer term, that is, in the period beyond the date that is
12 months from the date of this Prospectus, will depend on the Group’s financial and operating performance,
which in turn will be subject to prevailing economic and competitive conditions and to financial and business
risks many of which may be beyond the Group’s control. If the Group is unable to maintain sufficient cash
generation from operations to service its debt obligations, comply with financial covenants or avoid default
under the terms of the Senior Secured Notes in the longer term, the Group may face increased financing
charges, an acceleration of its repayment obligations or an inability to secure new financing on acceptable
terms or at all, any of which could have a material adverse effect on the Group’s business, financial condition
results of operations and prospects.
Risks relating to the Offer and the Shares

Certain Shareholders will retain a significant interest in and will continue to exert substantial influence (iii) 2
over the Group following the Offer and their interests may differ from or conflict with those of other
Shareholders.
Immediately following Admission, the Principal Shareholder will continue to beneficially own
approximately 58.0 per cent. of the issued ordinary share capital of the Company (assuming no exercise of
the Over-allotment Option) and 56.4 per cent. if the Over-allotment Option is exercised in full. As a result,
the Principal Shareholder will possess sufficient voting power to have a significant influence over all matters
requiring shareholder approval, including the election of directors and approval of significant corporate
transactions. The interests of the Principal Shareholder may not always be aligned with those of other holders
of Shares.
The Principal Shareholder, Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co. and the Founder
Shareholders (the “Concert Party”) are currently regarded by The Panel on Takeovers and Mergers (the
“Panel”) as acting in concert with each other in relation to the Company. Immediately prior to Admission,
the Concert Party will be interested (directly or indirectly) in 84.6 per cent. of the voting rights of the
Company and will therefore be able to increase their interest in Shares without being required to make a
general offer to all Shareholders to acquire their Shares.
There is no existing market for the Shares and an active trading market for the Shares may not develop
or be sustained.
Prior to Admission, there has been no public trading market for the Shares. Although the Company has
applied to the UK Listing Authority for admission to the premium listing segment of the Official List and
has applied to the London Stock Exchange for admission to trading on its main market for listed securities,
the Company can give no assurance that an active trading market for the Shares will develop or, if developed,
could be sustained following the closing of the Offer. If an active trading market is not developed or
maintained, the liquidity and trading price of the Shares could be adversely affected.
39
Shares in the Company may be subject to market price volatility and the market price of the Shares in the
Company may decline disproportionately in response to developments that are unrelated to the Company’s
operating performance.
The Offer Price is not indicative of the market price of the Shares following Admission. The market price of
the Shares may be volatile and subject to wide fluctuations. The market price of the Shares may fluctuate as
a result of a variety of factors, including, but not limited to, those referred to in these Risk Factors, as well
as period to period variations in operating results or changes in revenue or profit estimates by the Group,
industry participants or financial analysts. The market price could also be adversely affected by
developments unrelated to the Group’s operating performance, such as the operating and share price
performance of other companies that investors may consider comparable to the Group, speculation about the
Group in the press or the investment community, unfavourable press, strategic actions by competitors
(including acquisitions and restructurings), changes in market conditions and regulatory changes. Any or all
of these factors could result in material fluctuations in the price of Shares, which could lead to investors
getting back less than they invested or a total loss of their investment.
Shareholders in the United States and other jurisdictions may not be able to participate in future equity
offerings.
The Articles provide for pre-emption rights to be granted to shareholders in the Company, unless such rights
are disapplied by a shareholder resolution. However, securities laws of certain jurisdictions may restrict the
Group’s ability to allow participation by shareholders in future offerings. In particular, shareholders in the
United States may not be entitled to exercise these rights, unless either the Shares and any other securities
that are offered and sold are registered under the Securities Act, or the Shares and such other securities are
offered pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act. The Company cannot assure prospective investors that any exemption from such overseas
securities law requirements would be available to enable US or other shareholders to exercise their
pre-emption rights or, if available, that the Company will utilise any such exemption.
Not all rights available to shareholders under US law will be available to holders of the Shares.
Rights afforded to shareholders under English law differ in certain respects from the rights of shareholders
in typical US companies. The rights of holders of the Shares are governed by English law and the Articles.
In particular, English law currently limits significantly the circumstances under which the shareholders of
English companies may bring derivative actions. Under English law, in most cases, only the Company may
be the proper plaintiff for the purposes of maintaining proceedings in respect of wrongful acts committed
against it and, generally, neither an individual shareholder, nor any group of shareholders, has any right of
action in such circumstances. In addition, English law does not afford appraisal rights to dissenting
shareholders in the form typically available to shareholders in a US company.
The market price of the Shares could be negatively affected by sales of substantial amounts of such shares
in the public markets, including following the expiry of the lock-up period, or the perception that these
sales could occur.
Immediately following Admission, the Principal Shareholder will continue to beneficially own
approximately 58.0 per cent. of the issued ordinary share capital of the Company (assuming no exercise of
the Over-allotment Option) and 56.4 per cent. if the Over-allotment Option is exercised in full. The
Company, the Principal Shareholder, the Directors and the Senior Managers are subject to restrictions on the
issue, sale and/or transfer, as applicable, of their respective holdings in the Company’s issued share capital.
The issue or sale of a substantial number of Shares by the Company, the Principal Shareholder, Directors or
Senior Managers in the public market after the lock-up restrictions in the Underwriting Agreement expire (or
are waived by the Global Co-ordinators), or the perception that these sales may occur, may depress the
market price of the Shares and could impair the Company’s ability to raise capital through the sale of
additional equity securities.
40
The issuance of additional Shares in the Company in connection with future acquisitions, any share
incentive or share option plan or otherwise may dilute all other shareholdings.
The Group may seek to raise financing to fund future acquisitions and other growth opportunities.
The Company may, for these and other purposes, issue additional equity or convertible equity securities. As a
result, existing holders of Shares may suffer dilution in their percentage ownership or the market price of the
Shares may be adversely affected.
Overseas shareholders may be subject to exchange rate risk.

The Shares are, and any dividends to be paid in respect of them will be, denominated in pounds sterling.
An investment in Shares by an investor whose principal currency is not pounds sterling exposes the investor
to foreign currency exchange rate risk. Any depreciation of pounds sterling in relation to such foreign
currency will reduce the value of the investment in the Shares or any dividends in foreign currency terms.
41
PART 2
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
General (iii) 5.1.7
Investors should only rely on the information in this Prospectus. No person has been authorised to give any
information or to make any representations in connection with the Offer, other than those contained in this
Prospectus and, if given or made, such information or representations must not be relied upon as having been
authorised by or on behalf of the Company, the Directors, the Selling Shareholders or any of the Banks.
No representation or warranty, express or implied, is made by any of the Banks, any of their respective
affiliates or any selling agent as to the accuracy or completeness of such information, and nothing contained
in this Prospectus is, or shall be relied upon as, a promise or representation by any of the Banks, any of their
respective affiliates or any selling agent as to the past, present or future. Without prejudice to any obligation
of the Company to publish a supplementary prospectus pursuant to FSMA, neither the delivery of this
Prospectus nor any subscription or sale of Shares pursuant to the Offer shall, under any circumstances, create
any implication that there has been no change in the business or affairs of the Group since the date of this
Prospectus or that the information contained herein is correct as of any time subsequent to its date.
The Company will update the information provided in this Prospectus by means of a supplement hereto if a
significant new factor that may affect the evaluation by prospective investors of the Offer occurs after the
publication of the Prospectus or if this Prospectus contains any mistake or substantial inaccuracy. The
Prospectus and any supplement thereto will be subject to approval by the FCA and will be made public in
accordance with the Prospectus Rules. If a supplement to the Prospectus is published prior to Admission,
investors shall have the right to withdraw their applications for Shares made prior to the publication of the
supplement. Such withdrawal must be made within the time limits and in the manner set out in any such
supplement (which shall not be shorter than two clear business days after publication of the supplement).
The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective
investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax
advice. In making an investment decision, each investor must rely on their own examination, analysis and
enquiry of the Company and the terms of the Offer, including the merits and risks involved.
This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be
considered as a recommendation by any of the Company, the Directors, the Selling Shareholders, or any of
the Banks or any of their affiliates or representatives that any recipient of this Prospectus should subscribe
for or purchase the Shares. Prior to making any decision as to whether to subscribe for or purchase the
Shares, prospective investors should read this Prospectus. Investors should ensure that they read the whole
of this Prospectus carefully and not just rely on key information or information summarised within it.
In making an investment decision, prospective investors must rely upon their own examination of the
Company and the terms of this Prospectus, including the risks involved.
Investors who subscribe for or purchase Shares in the Offer will be deemed to have acknowledged that:
(i) they have not relied on any of the Banks or any person affiliated with any of them in connection with any
investigation of the accuracy of any information contained in this Prospectus or their investment decision;
and (ii) they have relied on the information contained in this Prospectus, and no person has been authorised
to give any information or to make any representation concerning the Group or the Shares (other than as
contained in this Prospectus) and, if given or made, any such other information or representation should not
be relied upon as having been authorised by the Company, the Directors, the Selling Shareholders or any of
the Banks.
None of the Company, the Directors, the Selling Shareholders or any of the Banks or any of their affiliates
or representatives is making any representation to any offeree or purchaser of the Shares regarding the
legality of an investment by such offeree or purchaser.
42
In connection with the Offer, the Banks and any of their respective affiliates, acting as investors for their own
accounts, may subscribe for Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise
deal for their own accounts in such Shares and other securities of the Company or related investments in
connection with the Offer or otherwise. Accordingly, references in this Prospectus to the Shares being issued,
offered, subscribed, acquired, placed or otherwise dealt in should be read as including any or issue, offer,
subscription, acquisition, dealing or placing by, the Banks and any of their affiliates acting as investors for
their own accounts. None of the Banks intends to disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory obligations to do so.
Over-allotment and stabilisation

In connection with the Offer, Credit Suisse, as Stabilising Manager, or any of its agents, may (but will be
under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other
stabilisation transactions with a view to supporting the market price of the Shares at a higher level than that
which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such
transactions and such transactions may be effected on any securities market, over-the-counter market, stock
exchange or otherwise and may be undertaken at any time during the period commencing on the date of the
commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later
than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of
its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be
undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. Except
as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the
extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.
In connection with the Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up (iii) 5.2.5(a)
to a maximum of 10 per cent. of the total number of Shares comprised in the Offer. For the purposes of (iii) 5.2.5(b)
allowing the Stabilising Manager to cover short positions resulting from any such overallotments and/or (iii) 5.2.5(c)
from sales of Shares effected by it during the stabilising period, it is expected that the Over-allotment
Shareholders will grant the Stabilising Manager the Over-allotment Option, pursuant to which the Stabilising
Manager may purchase or procure purchasers for additional Shares at the Offer Price, which represents up
to an additional 10 per cent. of the Offer Size (the “Over-allotment Shares”). The Over-allotment Option will
be exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the
30th calendar day after the commencement of conditional dealings of the Shares on the London Stock
Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari
passu in all respects with the Shares, including for all dividends and other distributions declared, made or
paid on the Shares, will be purchased on the same terms and conditions as the Shares being issued or sold
in the Offer and will form a single class for all purposes with the other Shares.
Presentation of financial information

The Company’s financial year runs from 1 January to 31 December. The financial information in this (i) 20.4.1
Prospectus has been prepared in accordance with International Financial Reporting Standards as adopted by (i) 20.4.2
the European Union (“EU”) (“IFRS”), unless otherwise stated. The significant IFRS accounting policies
applied in the financial information of the Company are applied consistently in the financial information in
this Prospectus.
On 17 April 2012, the HIG Group was formed upon HIG’s acquisition of 100 per cent. of the share capital
of Advantage Global Holdings Limited (“AGH”) (the “Advantage Acquisition”), whose group principally
comprises AICL, Underwriting’s regulated trading entity.
On 8 January 2014 as part of a series of transactions (collectively, the “2014 Reorganisation”), a wholly
owned subsidiary of HIG(H) acquired 100 per cent. of the issued share capital of HIG and its subsidiaries
(the “HIG Group”), to form an enlarged group with HIG(H) as the new parent entity within the corporate
structure (the “HIG(H) Group”). The Advantage Acquisition and the 2014 Reorganisation are described
further in Note 34 of Part 12 (Historical Financial Information).
43
In accordance with IFRS, the financial performance of the HIG Group for the year ended 31 December 2012
and the HIG(H) Group for the year ended 31 December 2014 and for the six months ended 30 June 2014
excludes pre-acquisition trading of the acquired businesses. Furthermore, the financial performance and
position of the HIG Group and the HIG(H) Group, both in these periods and in subsequent periods, are
impacted by acquisition accounting for the Advantage Acquisition and the 2014 Reorganisation.
For purposes of the Prospectus, the term “Group” means the Company and its consolidated subsidiaries and
subsidiary undertakings.
None of the financial information used in this Prospectus has been audited in accordance with auditing
standards generally accepted in the United States of America (“US GAAS”) or auditing standards of the
Public Company Accounting Oversight Board (United States) (“PCAOB”). US GAAS and the auditing
standards of the PCAOB do not provide for the expression of an opinion on accounting standards which have
not been finalised and are still subject to modification, as is the case with accounting standards as adopted
for use in the EU and included in Part 12 (Historical Financial Information). Accordingly, it would not be
possible to express any opinion on the “Financial Information” in Part 12 (Historical Financial Information)
under US GAAS or the auditing standards of the PCAOB. In addition, there could be other differences
between the auditing standards issued by the Auditing Practices Board in the United Kingdom and those
required by US GAAS or the auditing standards of the PCAOB. Potential investors should consult their own
professional advisers to gain an understanding of the “Financial Information” in Part 12 (Historical Financial
Information) and the implications of differences between the auditing standards noted herein.
Pro forma financial information

In this Prospectus, any reference to “pro forma” financial information is to information which has been
extracted without material adjustment from the unaudited pro forma financial information contained in
Part 13 (Unaudited Pro Forma Financial Information). The unaudited pro forma financial information has
been prepared to illustrate the effect of the Offer as if it had taken place on 30 June 2015.
Due to its nature, the unaudited pro forma financial information addresses a hypothetical situation and,
therefore, does not represent the Group’s actual financial position or results. It may not, therefore, give a true
picture of the Group’s financial position or results nor is it indicative of the results that may, or may not, be
expected to be achieved in the future. The pro forma financial information has been prepared for illustrative
purposes only in accordance with Annex II of the Prospectus Directive.
Supplementary and non-IFRS financial information

Adjusted financial metrics
Certain financial information included in this document has been adjusted where appropriate to give a more
accurate representation of underlying profitability for the business. Except for the items that have been
extracted from Part 12 (Historical Financial Information), the financial information in the section below is
unaudited. Unless otherwise stated the financial information below is presented in accordance with IFRS.
and the HIG(H) Group for the year ended 31 December 2014 and for the six months ended 30 June
2014 excludes pre-acquisition trading of the businesses acquired during the Advantage Acquisition and the
2014 Reorganisation. Furthermore, the financial performance and position of the HIG Group and the HIG(H)
Group, both in these periods and in subsequent periods, are impacted by acquisition accounting for the
Advantage Acquisition and the 2014 Reorganisation. This combined impact on financial performance and
position of pre-acquisition trading and fair value acquisition accounting is referred to as “acquisition
accounting” throughout this Prospectus.
In the tables presented below for the years ended 31 December 2012, 2013 and 2014 and the six months
ended 30 June 2014 and 2015, the adjusted figures reflect the underlying performance of the business,
excluding the combined impact of acquisition accounting, certain non-trading costs, certain finance costs and
property revaluations, as well as adding in certain finance costs not recognised in the results under IFRS and
the tax effect of each of these items.
44
The table below summarises the Group’s adjusted financial performance as outlined above.
HIG(H) HIG(H)
HIG(H) Group Group
HIG Group HIG Group Group Six months Six months
Year ended Year ended Year ended ended ended
31 December 31 December 31 December 30 June 30 June
2012 2013 2014 2014 2015
—————— —————— —————— —————— ——————
(unaudited/non-IFRS)
(£ millions)
Gross written premiums.............. 350.2 407.2 483.4 227.2 282.7
—————— —————— —————— —————— ——————
Net Earned Premiums .............. 149.9 164.9 202.5 93.6 118.0
—————— —————— —————— —————— ——————
Other revenue.............................. 136.0 174.2 194.6 95.9 101.6
Investment and interest
income......................................... 4.8 4.2 3.8 1.8 3.0
—————— —————— —————— —————— ——————
Group net revenue .................... 290.7 343.3 400.9 191.3 222.6
—————— —————— —————— —————— ——————
Net insurance claims................... (117.5) (127.7) (152.4) (73.4) (86.8)
Acquisition costs......................... (26.0) (32.2) (37.9) (18.2) (21.0)
Other operating expenses
(excluding depreciation
and amortisation) ........................ (76.2) (92.0) (104.0) (49.4) (55.2)
Finance costs............................... (0.7) (1.3) (0.9) (0.5) (0.4)
—————— —————— —————— —————— ——————
Group Operating Profit(1) ......... 70.3 90.1 105.7 49.8 59.2
—————— —————— —————— —————— ——————
Operational depreciation
and amortisation(2) ....................... (2.4) (3.3) (3.8) (1.7) (2.4)
Adjusted interest expense ........... – (6.5) (33.0) (16.5) (16.6)
Adjusted taxation expense .......... (14.9) (15.5) (11.4) (5.4) (6.7)
—————— —————— —————— —————— ——————
Group net income(3)................... 53.0 64.8 57.5 26.2 33.5
—————— —————— —————— —————— ——————
Notes:
(1) Group Operating Profit is defined as profit before taxation expense, interest expense, amortisation and depreciation, revaluation
of property, certain non-trading costs and the effects of accounting for business combinations. Audited for the years ended
31 December 2012, 2013 and 2014 and the six months ended 30 June 2015.
(2) Comprises operational depreciation and amortisation only, excludes amortisation of acquired intangible assets arising on business
combinations.
(3) Group net income represents Group Operating Profit less operational depreciation and amortisation, finance costs relating to the
Senior Secured Notes and the associated taxation expense.
45
Reconciliation of adjusted financial performance
The table below shows reconciliations to the Group’s adjusted results for the years ended 31 December 2012, 2013 and 2014 and to the Group’s adjusted results for the
six months ended 30 June 2014 and 2015. The adjusted figures reflect the underlying performance of the business, excluding the combined impact of acquisition
accounting, certain non-trading costs, certain finance costs and property revaluations, as well as adding in certain finance costs not recognised in the results under IFRS
and the tax effect of each of these items. The bridge figures reflect the adjustments between results under IFRS and adjusted figures.
HIG Group HIG Group HIG(H) Group HIG(H) Group HIG(H) Group
Year ended Year ended Year ended Six months Six months
31 December 31 December 31 December ended ended
2012 2013 2014 30 June 2014 30 June 2015
–––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––
Audited Bridge(1) Adjusted(1) Audited Bridge(1) Adjusted(1) Audited Bridge(1) Adjusted(1) Unaudited Bridge(1) Adjusted(1) Audited Bridge(1) Adjusted(1)
(£ millions)
Gross written premiums.......................... 263.5 86.7 350.2 407.2 – 407.2 475.4 8.0 483.4 219.3 7.9 227.2 282.7 – 282.7
Gross earned premiums ............................ 237.5 89.6 327.1 379.6 (0.1) 379.5 441.4 7.9 449.3 204.4 7.9 212.3 252.2 – 252.2
Earned premiums ceded to reinsurers........ (128.5) (48.7) (177.2) (214.6) – (214.6) (242.3) (4.5) (246.8) (114.2) (4.5) (118.7) (134.2) – (134.2)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net earned premiums .............................. 109.0 40.9 149.9 165.0 (0.1) 164.9 199.1 3.4 202.5 90.2 3.4 93.6 118.0 – 118.0
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Other revenue ............................................ 121.3 14.7 136.0 173.2 1.0 174.2 180.2 14.4 194.6 82.6 13.3 95.9 101.6 – 101.6
Investment and interest income ................ 3.7 1.1 4.8 4.2 – 4.2 3.7 0.1 3.8 1.8 – 1.8 3.0 – 3.0
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net revenue .............................................. 234.0 56.7 290.7 342.4 0.9 343.3 383.0 17.9 400.9 174.6 16.7 191.3 222.6 – 222.6
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Claims incurred.......................................... (179.4) (75.9) (255.3) (324.7) – (324.7) (354.9) (6.0) (360.9) (199.0) (6.1) (205.1) (204.8) – (204.8)
Reinsurers’ share of claims incurred ........ 96.3 41.5 137.8 197.0 – 197.0 205.2 3.3 208.5 128.4 3.3 131.7 118.0 – 118.0
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net insurance claims................................ (83.1) (34.4) (117.5) (127.7) – (127.7) (149.7) (2.7) (152.4) (70.6) (2.8) (73.4) (86.8) – (86.8)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
46
Acquisition costs........................................ (16.9) (9.1) (26.0) (31.3) (0.9) (32.2) (25.7) (12.2) (37.9) (8.4) (9.8) (18.2) (21.0) – (21.0)
Other operating expenses .......................... (70.7) (7.9) (78.6) (117.9) 22.6 (95.3) (140.4) 32.6 (107.8) (72.7) 21.6 (51.1) (69.3) 11.7 (57.6)
Finance costs.............................................. (7.4) 6.7 (0.7) (9.5) 1.7 (7.8) (68.6) 34.7 (33.9) (33.7) 16.7 (17.0) (36.2) 19.2 (17.0)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total expenses .......................................... (95.0) (10.3) (105.3) (158.7) 23.4 (135.3) (234.7) 55.1 (179.6) (114.8) 28.5 (86.3) (126.5) 30.9 (95.6)
Profit/(loss) before tax ............................

–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
55.9 12.0 67.9 56.0 24.3 80.3 (1.4) 70.3 68.9 (10.8) 42.4 31.6 9.3 30.9 40.2
Taxation expense........................................
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(16.4) 1.5 (14.9) (14.9) (0.6) (15.5) (7.0) (4.4) (11.4) (3.5) (1.9) (5.4) (4.5) (2.2) (6.7)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
equity holders of the parent.................... 39.5 13.5 53.0 41.1 23.7 64.8 (8.4) 65.9 57.5 (14.3) 40.5 26.2 4.8 28.7 33.5
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Note:
(1) Unaudited/non-IFRS.
Reconciliation of Group Operating Profit and Group net income
Group Operating Profit represents profit before taxation expense, interest expense, depreciation and
amortisation, revaluation of property, certain non-trading costs and the effects of accounting for business
combinations.
Group net income represents Group Operating Profit less operational depreciation and amortisation, finance
costs relating to the Senior Secured Notes and the associated taxation expense.
The tables below show the reconciliations from Group total profit/(loss) to Group Operating Profit and
Group net income and are non-IFRS unless otherwise stated.
HIG(H) HIG(H)
HIG(H) Group Group
2012 2013 2014 2014 2015
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(audited) (audited) (audited) (unaudited) (audited)
(£ millions)
Reconciliation of Group total profit/(loss) to
Group Operating Profit
———————————————————
Total profit/(loss) (IFRS) ................................. 39.5 41.1 (8.4) (14.3) 4.8
Taxation expense (IFRS) ...................................

––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
16.4 14.9 7.0 3.5 4.5
Interest expense ................................................. 6.9 8.2 67.7 33.4 35.8
Non-trading costs(1) ........................................... – 22.6 9.7 9.7 0.3
Removal of the impact of accounting
adjustments for business combinations(2) .......... 5.1 – 25.9 15.8 11.4
Depreciation and amortisation(3) ....................... 2.4 3.3 3.8 1.7 2.4
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Group Operating Profit(4) ............................... 70.3 90.1 105.7 49.8 59.2
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
47
HIG(H) HIG(H)
HIG(H) Group Group
2012 2013 2014 2014 2015
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(audited) (audited) (audited) (unaudited) (audited)
(£ millions)
Reconciliation of Group total profit/(loss) to
Group net income
———————————————————
Total profit/(loss) (IFRS) ................................. 39.5 41.1 (8.4) (14.3) 4.8
Finance costs on Senior Secured Notes from

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
memorandum period(5) ....................................... – (6.5) – – –
Non-trading costs(1) ........................................... – 22.6 9.7 9.7 0.3
Preference shares dividends accrued(6) ............. – – 33.7 16.3 19.1
Shareholder loan and loan notes interest
accrued(7) ........................................................... 5.4 7.4 – – –
Impact of accounting for business combinations
on finance costs(8) .............................................. 1.5 0.8 0.9 0.6 0.1
Non-operational amortisation(9) ........................ – – 23.8 12.6 11.4
Other effects of accounting for business
combinations(10).................................................. 5.1 – 2.1 3.2 –
Tax effect of the above ....................................... 1.5 (0.6) (4.3) (1.9) (2.2)
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Group net income(11) ........................................ 53.0 64.8 57.5 26.2 33.5
Notes:
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(1) Predominantly comprises costs incurred in relation to the 2014 Reorganisation.
(2) Comprises pre-acquisition trading and the other impacts of acquisition accounting of the Advantage Acquisition and 2014
Reorganisation including from 2014, amortisation of acquired intangibles related to the 2014 Reorganisation.
(3) Comprises operational depreciation and amortisation only, excludes amortisation of acquired intangible assets arising on business
combinations.
(4) Group Operating Profit is defined as profit before taxation expense, interest expense, amortisation and depreciation, revaluation
of property, certain non-trading costs and the effects of accounting for business combinations.
(5) Represents finance costs associated with the Group’s Senior Secured Notes incurred in the period ended 31 December 2013 by
the HIG(H) Group, which are not recognised in profit after tax of the HIG Group for the year ended 31 December 2013 under
IFRS.
(6) Represents the accumulated dividends and interest accrued on the Group’s preference shares.
(7) Represents accrued interest associated with the Group’s shareholder loan and loan notes which are not considered operational
debt of the Group. These shareholder loan and loan notes were repaid in full upon the 2014 Reorganisation.
(8) Represents the non-cash amortisation of adjustments recognised to discount claims reserves and reinsurance assets to their net
present value as part of the accounting for the 2014 Reorganisation.
(9) Represents amortisation of acquired intangibles related to the 2014 Reorganisation.
(10) Comprises other pre-acquisition trading, and the impacts of acquisition accounting of the Advantage Acquisition and 2014
Reorganisation.
(11) Group net income represents Group Operating Profit less operational depreciation and amortisation, finance costs relating to the
Senior Secured Notes and the associated taxation expense.
48
Reconciliation of Retail revenue to adjusted Group other revenue
The table below summarises the reconciling items from Retail revenue to adjusted Group other revenue.
Negative AICL Adjusted
commission Intercompany reinsurance Group
Retail and commission commission other
revenue discounts(1) income(2) income(3) Other(4) revenue
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(unaudited)
(£ millions)
(non-IFRS) (non-IFRS) (non-IFRS) (non-IFRS) (non-IFRS)
HIG Group Year ended
31 December 2012
Fees and commission.................... 61.2 4.1 (41.2) – (0.7) 23.4
Ancillaries..................................... 29.7 – – – (0.2) 29.5
Premium finance interest .............. 35.3 – – – – 35.3
Reinsurance commissions............. – – – 30.9 – 30.9
Investment and interest income .... 0.4 – – – (0.4) –
Other income ................................ 17.4 – – – (0.5) 16.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total revenue ............................... 144.0(5) 4.1 (41.2) 30.9 (1.8) 136.0
HIG Group Year ended

––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––
31 December 2013
Ancillaries..................................... 33.8 – – – (0.1) 33.7
Other income ................................ 11.4 – – – (0.8) 10.6
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total revenue ............................... 173.9(5) 8.7 (45.1) 38.3 (1.6) 174.2
HIG(H) Group Year ended

––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––
31 December 2014
Ancillaries..................................... 38.1 – – – – 38.1
Other income ................................ 10.0 – – – – 10.0
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total revenue ............................... 205.5(5) 12.9 (57.8) 34.5 (0.5) 194.6
HIG(H) Group six months

––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––
ended 30 June 2014
Ancillaries..................................... 18.1 – – – – 18.1
Reinsurance commissions............. – – – 18.2 0.1 18.3
Other income ................................ 4.9 – – – – 4.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total revenue ............................... 102.0 5.0 (29.1) 18.2 (0.2) 95.9
HIG(H) Group six months

––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––
ended 30 June 2015
Fees and commission.................... 60.3 10.1 (36.2) – 0.7 34.9
Ancillaries..................................... 21.7 – – – (0.1) 21.6
Other income ............................... 4.8 – – – (0.1) 4.7
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total revenue ............................... 115.0(5) 10.1 (36.2) 12.3 0.4 101.6
––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––
49
Notes:
(1) Reflects the adjustment to deduct negative commissions and discounts, incurred by the Retail business during the period, from
GWP in the consolidated Group accounts, where they are earned alongside the premiums to which they relate.
(2) Eliminates the intercompany broker and performance commission charged by the Retail business to AICL during the period.
(3) Reflects the reinsurance commission income earned by AICL during the period, which is recognised within other revenue in the
consolidated Group accounts.
(4) Reflects other minor adjustments required to consolidate Retail revenue in the consolidated Group accounts.
(5) Audited.
Presentation of return on capital employed

Although the Group generates high returns on deployed capital given its strong capital efficiency, earnings
generation is not primarily balance sheet driven in the way that it is for traditional insurers. Consequently,
management believe return on equity or comparative metrics have limited relevance for the overall analysis
of the Group. In particular, equity held in HIG as at 31 December 2013 and in HIG(H) as at 31 December
2014, 30 June 2014 and 30 June 2015 does not drive earnings in the way that traditional net asset balances
do for the Group’s peers. A more accurate measure, in the opinion of the Group’s management, is an analysis
of return on deployed capital, which measures Group net income, which as previously described is after the
application of the Group’s finance costs associated with the Senior Secured Notes, divided by the average
capital employed in each of the Group’s business units in the corresponding period. For interim periods this
is shown on an annualised basis.
Six months Six months
Year ended Year ended ended ended
31 December 31 December 30 June 30 June
2013 2014 2014 2015
–––––––– –––––––– –––––––– ––––––––
(£ millions)
AICL deployed capital(1) ............................................................. 104.2 107.9 98.6 122.6
HISL deployed capital(2) ............................................................. 32.1 31.3 31.5 21.5
Corporate free cash balances(3) ................................................... 0.2 20.6 – 23.3
–––––––– –––––––– –––––––– ––––––––
Group deployed capital ............................................................ 136.5 159.8 130.1 167.4
Group net income .....................................................................

–––––––– –––––––– –––––––– ––––––––
64.8 57.5 26.2 33.5
Group ROCE ............................................................................

–––––––– –––––––– –––––––– ––––––––
55.0% 38.8% 39.3%(4) 41.0%(4)
Notes:
–––––––– –––––––– –––––––– ––––––––
(1) Represents AICL’s net admissible assets as stated in FSC returns as at the end of each period.
(2) Represents HISL’s total capital resources as per FCA regulations as at the end of each period.
(3) Includes cash held as at the end of each period in the Group’s unregulated corporate entities HIG and HIG(F) only and excludes
cash held by HIG(I) and HIG(H).
(4) Group ROCE for these periods has been multiplied by two in order to present Group ROCE on an annualised basis.
Key performance indicators (“KPIs”)

The Group reviews several KPIs to track the financial and operating performance of its business. These
measures are derived from the Group’s internal operating and financial systems. Because these measures are
not determined in accordance with generally accepted accounting principles, including IFRS, and are thus
susceptible to varying calculations, they may not be comparable with other similarly titled measures of
performance of other companies. The method of calculating the KPIs is described below.
50
Group Operating Profit margin
Group Operating Profit margin represents Group Operating Profit divided by adjusted Group net revenue.
Group accident year and calendar year loss ratio

On an accident year basis, Group loss ratio is defined as claims incurred in the period net of quota share and
non-proportional excess of loss reinsurance, net of certain salvage and repairer income included within
claims files and net of movements in margin over management’s best estimate of reserves, divided by
adjusted Group net earned premiums. On a calendar year basis, Group loss ratio also includes prior year
development of claims and PPO reserves. For certain of the historic periods the Group has also presented
adjustments relating to changes in quota share contract terms.
Group expense ratio

Group expense ratio is a measure of incurred operational and acquisition expenses. It includes amortised
acquisition costs; quota share provisional commission earned, being a contribution towards underwriting
expenses; marketing costs; underwriting charges including MIB levies; underwriting administration
expenses; certain depreciation and amortisation costs; insurer services and underwriting department costs
(including staff costs, outsourcing, IT systems costs and claims handling provisions) and data enrichment
costs. The ratio is expressed relative to adjusted Group net earned premiums. For certain of the historic
periods, the Group has also presented adjustments relating to changes in quota share contract terms.
Group combined operating ratio

Group combined operating ratio is the sum of the Group calendar year loss ratio and the Group expense ratio,
as defined above.
Share of total stock (private car)

Share of total stock (private car) represents private car live customer policies as at the end of the period as a
percentage of UK and Northern Ireland private registered cars as at the end of the period.
Solvency I coverage ratio

As stipulated by the FSC, Solvency I coverage ratio represents AICL’s net admissible assets divided by the
required minimum margin (“RMM”), both as at the end of the period.
Net leverage multiple

Net leverage multiple refers to net debt expressed relative to Group Operating Profit. The net debt used
represents gross debt less Retail free cash, Underwriting dividend capacity and corporate free cash. The
Group’s net leverage multiple represents the Group’s net debt divided by last twelve month (“LTM”)
operating profit at each period end.
Currency presentation
Unless otherwise indicated, all references in this Prospectus to “sterling”, “pounds sterling”, “GBP”, “£”, or
“pence” are to the lawful currency of the United Kingdom. The Company prepares its financial statements
in pounds sterling. All references to the “euro” or “€” are to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the Treaty establishing the European
Community, as amended. All references to “US dollars” or “US$” are to the lawful currency of the United
States.
The average exchange rates of the Group’s main trading currencies, other than pounds sterling, are shown
relative to pounds sterling below. The rates below may differ from the actual rates used in the preparation of
the financial statements and other financial information that appears elsewhere in this Prospectus.
The inclusion of these exchange rates is for illustrative purposes only and does not mean that the sterling
amounts actually represent such US dollar or euro amounts or that such sterling amounts could have been
converted into US dollars or euro at any particular rate, if at all.
51
The Group has operations in Gibraltar and certain Group subsidiaries are incorporated in Jersey, which use
the Gibraltar pound and the Jersey pound, respectively. The currency of Gibraltar is pegged to and
exchangeable with the British pound sterling at par value. Jersey is in a currency union with the United
Kingdom, and the Jersey pound is not a separate currency.
Average rate against pounds sterling

US dollar
Year Period End Average High Low
––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––––––––
2010 ........................................................ 1.5591 1.5457 1.6377 1.4324
2011 ........................................................ 1.5509 1.6037 1.6694 1.5390
2012 ........................................................ 1.6242 1.5850 1.6276 1.5295
2013 ........................................................ 1.6566 1.5648 1.6566 1.4858
2014 ........................................................ 1.5581 1.6474 1.7165 1.5515
2015 (through 9 October 2015) .............. 1.5310 1.5320 1.5872 1.4654
Euro
Year Period End Average High Low
––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––––––––
2010 ........................................................ 1.1665 1.1663 1.2358 1.0961
2011 ........................................................ 1.1967 1.1526 1.2042 1.1071
2012 ........................................................ 1.2307 1.2331 1.2863 1.1789
2013 ........................................................ 1.2014 1.1779 1.2328 1.1431
2014 ........................................................ 1.2874 1.2409 1.2874 1.1912
2015 (through 9 October 2015) .............. 1.3468 1.3742 1.4399 1.2726
Source: Bloomberg
Rounding
Certain data in this Prospectus, including financial, statistical, and operating information has been rounded.
As a result of the rounding, the totals of data presented in this Prospectus may vary slightly from the actual
arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to
100 per cent.
Market, economic and industry data

Unless the source is otherwise stated, the market, economic and industry data in this Prospectus constitute (i) 6.5
the Directors’ estimates, using underlying data from independent third parties. The Company obtained (i) 23.2
market data and certain industry forecasts used in this Prospectus from internal surveys, reports and studies,
where appropriate, as well as market research, publicly available information and industry publications,
including publications and data compiled by the AA British Insurance Premium Index, the Association of
British Insurers (“ABI”), Claims Portal, Datamonitor, the Department for Transport, eBenchmarkers and HM
Government of Gibraltar.
Whilst the Directors believe the third-party information included herein to be reliable, the Company has not (iii) 10.4
independently verified such third-party information, and neither the Company nor the Banks make any
representation or warranty as to the accuracy or completeness of such information as set forth in this
Prospectus. The Company confirms that all third-party data contained in this Prospectus has been accurately
reproduced and, so far as the Company is aware and able to ascertain from information published by that
third-party, no facts have been omitted that would render the reproduced information inaccurate or
misleading.
Where third-party information has been used in this Prospectus, the source of such information has been
identified.
52
Service of process and enforcement of civil liabilities
The Company has been incorporated under English law. Service of process upon Directors and officers of (i) 5.1.4
the Company, most of whom reside outside the United States, may be difficult to obtain within the United
States. Furthermore, since most directly owned assets of the Company are outside the United States, any
judgment obtained in the United States against it may not be collectible within the United States. There is
doubt as to the enforceability of certain civil liabilities under US federal securities laws in original actions
in English courts, and, subject to certain exceptions and time limitations, English courts will treat a final and
conclusive judgment of a US court for a liquidated amount as a debt enforceable by fresh proceedings in the
English courts.
No incorporation of website information

The contents of the Company’s websites do not form part of this Prospectus.
Definitions and glossary

Certain terms used in this Prospectus, including all capitalised terms and certain technical and other items,
are defined and explained in Part 17 (Definitions) and Part 18 (Glossary).
Information not contained in this Prospectus

No person has been authorised to give any information or make any representation other than those contained
in this Prospectus and, if given or made, such information or representation must not be relied upon as having
been so authorised. Neither the delivery of this Prospectus nor any subscription or sale made hereunder shall,
under any circumstances, create any implication that there has been no change in the affairs of the Company
since the date of this Prospectus or that the information in this Prospectus is correct as of any time subsequent
to the date hereof.
Information regarding forward-looking statements

Some of the statements under the headings Summary, Part 1 (Risk Factors), Part 5 (Industry Overview),
Part 6 (Business Description) and Part 10 (Operating and Financial Review) and elsewhere in this document
include forward-looking statements that reflect the Company’s or, as appropriate, the Directors’ or third
parties’ current views with respect to, among other things, the intentions, beliefs and current expectations of
the Company or the Directors or such third parties concerning, amongst other things, the results of
operations, the financial condition, prospects, growth, strategies and dividend policy of the Company and the
industry in which it operates. These forward-looking statements involve known and unknown risks and
uncertainties, many of which are beyond the Group’s control and all of which are based on the Directors’
current beliefs and expectations about future events. Forward-looking statements are sometimes identified
by the use of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”,
“shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or
“anticipates” or the negative thereof, other variations thereon or comparable terminology. These forward-
looking statements include all matters that are not historical facts. They appear in a number of places
throughout this Prospectus and include statements regarding the intentions, beliefs or current expectations of
the Directors or the Group concerning, among other things, the results of operations, financial condition,
prospects, growth, strategies, and dividend policy of the Group and the industry in which it operates.
In particular, the statements under the headings “Summary”, “Risk Factors”, “Business Description” and
“Operating and Financial Review” regarding the Company’s strategy and other future events or prospects are
forward-looking statements.
These forward-looking statements and other statements contained in this Prospectus regarding matters that
are not historical facts involve risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Undue reliance should not be placed on such forward
looking statements because they involve known and unknown risks, uncertainties and other factors that are
in many cases beyond the Group’s control. No assurance can be given that such future results will be
achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group.
Such risks and uncertainties could cause actual results to vary materially from the future results indicated,
53
expressed, or implied in such forward-looking statements. Forward-looking statements contained in this
Prospectus speak only as of the date of this Prospectus. The Company, the Directors, the Selling
Shareholders and the Banks expressly disclaim any obligation or undertaking to update these forward-
looking statements contained in the document to reflect any change in their expectations or any change in
events, conditions, or circumstances on which such statements are based unless required to do so by
applicable law, the Prospectus Rules, the Listing Rules, or the Disclosure and Transparency Rules of the
FCA.
54
PART 3
DIRECTORS, SECRETARY, REGISTERED AND

HEAD OFFICE AND ADVISERS
Directors Michael Fairey, Chairman (i) 14.1
Gary Hoffman, Chief Executive Officer (i) 1.1
Richard Hoskins, Chief Financial Officer (iii) 1.1
Richard Brewster, Non-executive Director

Thomas Colraine, Senior Independent Director
Ian Cormack, Independent Non-executive Director
Edward Fitzmaurice, Non-executive Director
Pierre Lefèvre, Independent Non-executive Director
Malcolm Le May, Independent Non-executive Director
Sumit Rajpal, Non-executive Director
Michele Titi-Cappelli, Non-executive Director
Company Secretary Anthony Leppard
Registered and head office of the Conquest House (i) 5.1.4
Company Collington Avenue

Bexhill-on-sea
East Sussex TN39 3LW
Sponsor Credit Suisse International

One Cabot Square
London E14 4QT
Joint Global Co-ordinator and Credit Suisse Securities (Europe) Limited (iii) 5.4.1
Joint Bookrunner One Cabot Square (iii) 5.4.3
London E14 4QJ (iii) 10.1
Joint Global Co-ordinator and Goldman Sachs International (iii) 5.4.1
Joint Bookrunner Peterborough Court (iii) 5.4.3
133 Fleet Street (iii) 10.1
London EC4A 2BB
Joint Bookrunner Barclays Bank PLC (iii) 5.4.1
5 The North Colonnade (iii) 5.4.3
Canary Wharf (iii) 10.1
London E14 4BB
Joint Bookrunner HSBC Bank plc (iii) 5.4.1
8 Canada Square (iii) 5.4.3
London E14 5HQ (iii) 10.1
Senior Lead Manager Stifel Nicolaus Europe Limited (iii) 5.4.1
(trading as Keefe, Bruyette & Woods) (iii) 5.4.3
7th Floor (iii) 10.1
One Broadgate
London EC2M 2QS
Lead Manager Peel Hunt LLP (iii) 5.4.1
Moor House (iii) 5.4.3
120 London Wall (iii) 10.1
London EC2Y 5ET
55
English and US legal advisers to Freshfields Bruckhaus Deringer LLP (iii) 10.1
the Company 65 Fleet Street

London EC4Y 1HS
English and US legal advisers to Allen & Overy LLP (iii) 10.1
the Sponsor and Banks One Bishops Square

London E1 6AD
Auditors and Reporting KPMG LLP (i) 2.1
Accountants 15 Canada Square (i) 23.1
Canary Wharf (iii) 10.1
London E14 5GL (iii) 10.3
Independent External Actuaries Towers Watson Limited

Watson House
London Road
Reigate
Surrey RH2 9PQ
Registrars Capita Asset Services, a trading name of Capita (iii) 5.4.2
Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
56
PART 4
EXPECTED TIMETABLE OF PRINCIPAL

EVENTS AND OFFER STATISTICS
Expected timetable of principal events

Event Time and Date
Announcement of Offer Price and allocation 9 October 2015 (iii) 5.1.1
Commencement of conditional dealings on the London Stock Exchange 8.00 a.m. on 12 October 2015
Admission and commencement of unconditional dealings in the Shares

on the London Stock Exchange 8.00 a.m. on 15 October 2015
Crediting of Shares to CREST accounts 15 October 2015
Despatch of definitive share certificates (where applicable) From 15 October 2015
It should be noted that, if Admission does not occur, all conditional dealings will be of no effect and
any such dealings will be at the sole risk of the parties concerned.
All times are London times. Each of the times and dates in the above timetable is subject to change without
further notice.
Offer statistics
Offer Price (per Share) 170 pence (iii) 5.3.1
Number of Shares in the Offer(1) 123,529,412 (iii) 5.1.2
– New Shares 107,058,823
– Existing Shares 16,470,589
Percentage of the enlarged issued Share capital being offered in the Offer(1) 18.8 per cent.
Number of Existing Shares subject to the Over-allotment Option 12,352,941
Number of Shares in issue following the Offer 657,217,641 LR 2.2.7(1)
Market capitalisation of the Company at the Offer Price £1,117 million (iii) 8.1
Estimated net proceeds of the Offer receivable by the Company(2) £166.5 million
Estimated net proceeds of the Offer receivable by the Selling Shareholders(3) £27.0 million
Notes:
(1) Does not include any Over-allotment Shares that may be sold by the Over-allotment Shareholders pursuant to the Over-allotment
Option.
(2) Including the 158,822 Shares to be issued to the Non-executive Directors on Admission.
(3) The estimated net proceeds receivable by the Company is stated after deduction of the estimated underwriting commissions and
other fees and expenses of the Offer (including VAT) payable by the Company, which are currently expected to be approximately
£15.5 million. The Company will not receive any of the net proceeds from the sale of the Existing Shares in the Offer by the
Selling Shareholders or the sale of Shares pursuant to the Over-allotment Option.
(4) The estimated net proceeds receivable by the Selling Shareholders is stated after deduction of the estimated underwriting
commissions and other fees and expenses of the Offer (including VAT) payable by the Selling Shareholders, which are currently
expected to be approximately £1.0 million.
57
PART 5
INDUSTRY OVERVIEW
(i) 6.5
UK private motor insurance

Market overview
The UK insurance market is the largest in Europe and the third largest in the world (Source: ABI). With
approximately 29 million cars registered as at 31 December 2014 (Source: Department for Transport),
private motor insurance is the largest insurance market in the United Kingdom in terms of NWP (Source:
ABI). Under the Road Traffic Act, the purchase of motor insurance is compulsory for those wishing to drive
in the United Kingdom. The Road Traffic Act requires that, at a minimum, a driver be insured against liability
for injury to other persons and damage to their property in the event of an accident. The relatively limited
scope of legally-required coverage means that most individuals typically purchase more complete levels of
cover in order to achieve protection for themselves and their vehicle. The most commonly-purchased form
of motor insurance in the United Kingdom is “comprehensive cover”, which, in addition to coverage for
third-party damage and liability, also typically includes cover against accidental damage to the
policyholder’s car, to certain personal effects and to their person; and “third-party fire and theft” (“TPFT”)
which, in addition to the legal minimum cover, provides protection to the policyholder under circumstances
where their own vehicle is damaged by fire or stolen. Comprehensive cover is the most commonly purchased
form of insurance in the UK private motor insurance market, accounting for 93 per cent. of all private motor
GWP in 2013 (Source: ABI), and is overwhelmingly the most common form of insurance the Group sells,
representing 99 per cent. of the Underwriting’s written policies distributed in the six months ended 30 June
2015.
The relatively standardised nature of core policy coverage means that many insurance providers, through
their retail or broking business, have sought to provide consumers with the option of purchasing ancillary
insurance products alongside the core policy. Such products allow the customer to increase the flexibility of
their policy based on their own personal preferences by choosing additional levels of insurance cover related
to an array of risks outside the core vehicular protection offering, including windscreen cover, breakdown
cover, mis-fuelling cover, lost key cover, no-claims discount protection, courtesy rental car provision, motor
legal expense cover, personal accident cover and medical assistance cover, amongst others. The provision of
such products has grown in recent years and now represents a significant revenue stream for a number of
private motor insurers. Insurers may also generate income through the provision of premium financing on
the main policy, where customers choose to pay for their policies in monthly instalments instead of in one
single, upfront payment, for an additional credit charge.
In 2014, the UK private motor insurance market was estimated to be worth £9.6 billion based on GWP
(Source: ABI). The UK private motor insurance market is highly competitive, with a number of sophisticated
players maintaining or building market positions, and with the five largest insurers in the market accounting
for 57.2 per cent. of total GWP in 2013 (Source: ABI). In recent years certain established market participants
have lost market share to competitors such as the Company, who have achieved significant growth through,
inter alia, effective utilisation of distribution channels, sophisticated underwriting and pricing practices, and
efficient claims handling and counter-fraud processes. Changes in the competitive landscape have also, in
part, been influenced by wider market trends related to pricing, claims experience and policy distribution. In
particular, distribution within the motor insurance value chain has been substantially transformed by the rise
of the internet as a forum for comparing and purchasing products. This has resulted in changes in emphasis
for direct distributors and the increasing prominence of PCWs within intermediated distribution. The
associated increase in price transparency, and as a result price competition, has driven certain of these
changes in competitive positioning for both incumbents and disruptors. It has also introduced the potential
for more fraud into the system as customers have become responsible for providing their own data to support
a quote rather than buying through a traditional broker.
Despite the competitive and price led characteristics of the industry, several disruptive and agile participants
have demonstrated an ability to take market shares and exhibit relatively lower combined ratios.
58
In recent years, the UK insurance industry broadly, and the UK motor insurance industry specifically, have
experienced a number of regulatory changes and have been subject to substantial investigation and review
by various regulatory bodies. Such reforms and investigations include:
• the gender neutral pricing directive introduced by the European Commission in December 2012;
• a ban on legal referral fees and other reforms to civil litigation recommended as part of the Jackson
Review and substantially implemented in April 2013, including through the LASPO Act;
• the Financial Conduct Authority’s thematic review of motor legal expense products, concluded in June
2013; the Competition and Markets Authority’s investigation into the costs of post-accident car repair,
the provision of credit hire services, disclosure associated with first notification of loss and no-claims
bonus protection, informational asymmetries associated with the sale of add-on products, and price
parity agreements between insurers and PCWs known as “most favoured nation” clauses, concluded
during 2014;
• the Financial Conduct Authority’s market study into general insurance add-on products, concluded in
March 2014;
• the Financial Conduct Authority’s thematic review of the role of PCWs in the general insurance
sector, concluded in August 2014;
• the Ministry of Justice’s ongoing consultation on the implementation of the Government’s whiplash
reform programme, designed to address fraudulent soft tissue injury claims, with phase one
implementation including the Pre-Action Protocol for Low Value Personal Injury Claims in Road
Traffic Accidents, substantially implemented in April 2015;
• the Financial Conduct Authority’s thematic review of the provision of premium finance to retail
general insurance customers, concluded in May 2015;
• the Ministry of Justice’s ongoing consultation relating to potential changes to the recommended
discount rate used to discount long-term personal injury liabilities; and
• changes to solvency capital requirements and insurance risk management legislation for insurers
known as Solvency II, which will enter into force in January 2016.
Market structure and participants

Market structure
The structure of the insurance value chain in the UK reflects the relatively complex nature of competition
within the market, with various customer access strategies employed. Participants include PCWs, brokers,
insurers/underwriters and reinsurers, with various stages of intermediation deployed according to the
insurer’s underlying business model. Additionally, various participants in the value chain enter the market in
the event of a claim, including breakdown assistance companies, claims management companies, credit hire
and credit repair companies, personal and bodily injury solicitors and uninsured loss recovery agents.
Most insurers operate along a spectrum between a fully direct insurance proposition and a fully
intermediated one (Source: Datamonitor: UK Insurance Aggregators). Direct-focused distribution strategies
emphasise brand strength in addition to price competitiveness, and market directly to consumers through the
insurer’s website, call centres and other channels. Intermediated strategies see the insurer market to the
consumer either through PCWs or through a broker. Such strategies leverage the PCWs’ or the broker’s
brand strength and brand values to assist in customer capture, whilst also emphasising price competitiveness.
The majority of the Group’s close competitors utilise both direct and intermediated distribution routes to
varying degrees. The Group itself deploys a multi-channel internet oriented distribution strategy, optimised
for the PCWs, but with an important and growing direct offering.
Many insurers also utilise an array of different brands in order to target specific customer segments, or may
leverage other strong consumer brands in order to provide insurance through what are known as affinity
partnerships (Source: Datamonitor: UK Insurance Aggregators). Certain insurers are also vertically
59
integrated within the value chain, either through ownership of a PCW, such as Admiral’s ownership of
Confused.com or esure’s ownership of Gocompare.com, or through an integrated broker model, such as
Ageas UK’s ownership of Ageas Retail.
Business model differentiation also occurs in the way certain insurers use reinsurance. Since the purchase of
reinsurance allows the insurer to cede certain of the liabilities attaching to premiums, reinsurance can be used
both as a risk management and a capital management tool.
Market participants
Price comparison websites
PCWs, which are also referred to as aggregators, are web portals that enable customers to simultaneously
obtain and compare quotes directly from an array of insurance companies and brokers based on a single
search query which is tailored to their specific circumstances and characteristics. In addition to motor
insurance, most PCWs also offer comparison services for home, pet, travel, health and other forms of
insurance. Increasingly, PCWs also offer other forms of comparison services, for example across bank
deposits, credit cards, mortgages, gas, electricity and broadband products.
The increasing importance of the internet as a sales medium has seen PCWs progressively become the
dominant distribution channel in the UK motor market. For the six months ended 31 October 2014, it was
estimated that 66 per cent. of all new business private motor insurance sales originated through PCWs,
compared with 64 per cent. for the equivalent period in 2013 and 59 per cent. in 2012 (Source:
eBenchmarkers). The growth of PCW usage has increased price competition amongst market participants
and underscored the need for sophisticated price optimisation, risk selection, risk retention and brand
stratification strategies in order for insurers to compete effectively on these platforms.
PCWs’ primary sources of revenue are fees which are paid by the insurer or intermediary after a customer
selects and purchases a product that has been returned in their search query. The largest PCWs in the UK by
new motor insurance business volumes are Comparethemarket.com (owned by BGL Group),
Gocompare.com (owned by esure), Moneysupermarket.com (a publicly-listed company) and Confused.com
(owned by Admiral Group) (Source: eBenchmarkers). The Group sources the majority of its policies sold to
new customers through these four PCWs.
Brokers
Insurance brokers act as intermediaries between their customers and insurance companies by negotiating
competitive policy terms on behalf of customers and placing them with appropriate insurers. Historically,
brokers have served as an important distribution channel for private motor insurance products, and in
response to the growth of PCWs, many have adopted similar strategies to those adopted by insurers,
including partnering with PCWs and emphasising added value generated, particularly with respect to non-
standard risks (Source: Datamonitor: UK Insurance Aggregators). Brokers generate revenue by receiving
broking commissions, typically based on premium levels, fees for providing additional services such as risk
management or policy administration, and through ancillary and other products attached to the main policy
such as breakdown insurance and substitute vehicle coverage.
Insurance companies
Insurance companies provide policyholders with indemnification against the specific risks covered in
the insurance contract sold. They act as the risk carrier within the value chain, collecting (either directly or
indirectly) premiums from the consumer and holding claims reserves in order to meet anticipated claims
liabilities. Insurers generate income principally through the underlying price of the cover sold, but also
through investment income received on invested assets and other income which may be generated. Although
the overall profitability of an insurer may include contributions from items such as investment income, the
technical profitability of an insurer’s underwriting is measured by the net result of its earned premiums,
incurred claims and acquisition and operational expenditure, commonly expressed in terms of a combined
ratio. The largest insurance companies in the UK private motor insurance market in 2013, based on net
written premiums, were Ageas, Aviva, AXA, Chaucer, Covéa, Towergate, SABRE and Sterling (Source:
ABI).
60
Reinsurance companies
Reinsurance transfers the liability attaching to the risks ceded to the reinsurer (although not the ultimate
obligation to the customer on behalf of the primary insurer in the event of reinsurer default). Primary insurers
may purchase reinsurance for a number of different reasons, including capital relief, reduction of earnings
volatility through the avoidance of peak losses, balancing portfolio risk clusters, and leveraging reinsurers’
underwriting expertise in certain lines.
There are a number of providers of personal motor reinsurance for the UK private motor insurance market,
with distribution conducted through reinsurance brokers and directly between the insurance company and the
reinsurer. The two principal types of reinsurance cover provided are treaty reinsurance, which covers an
entire portfolio of risks in a business line, and facultative reinsurance, which covers a specific single risk or
event. There are also two principal types of coverage adopted to suit the reinsurance risks covered:
• Proportional reinsurance, whereby the primary insurer either cedes a fixed proportion of all risks in
the portfolio (quota share reinsurance) or cedes risks exceeding a specified retention limit (surplus
reinsurance) and receives cover against claims accruing to those risks; and
• Non-proportional reinsurance, whereby the primary insurer purchases reinsurance protection against
a specific event or retention level, and with the reinsurance protection only engaging when such a
trigger or event occurs. Non-proportional reinsurance commonly involves either excess of loss
reinsurance, whereby the primary insurer purchases cover against losses pertaining to a specific risk
exceeding a certain threshold; or stop loss reinsurance which provides protection against claims
exceeding a pre-defined level over an aggregated period.
Industry trends
Pricing
The requirement to purchase private motor insurance and the high penetration of car ownership in the United
Kingdom results in strong and stable demand for private car insurance. However, changes in the competitive
behaviour of incumbent insurers and new entrants to the market result in variations in insurance capacity
which, together with other social, economic and regulatory factors, drive price changes. The UK private
motor insurance industry has historically exhibited pricing cyclicality, with periods where increased
insurance capacity has resulted in intense competition in relation to price and legislative changes, as well as
periods where reductions in insurance capacity result in more favourable underwriting conditions.
Between 2009 and 2011, in response to increasing claim frequency and significant increases in bodily injury
claim severity, as well as certain insurers deselecting from certain parts of the market, average motor
premiums rose significantly. Average comprehensive premium prices peaked in late 2011, whereupon a
combination of the introduction of legislation recommended by the Jackson Review and a more general
increase in competitive intensity saw many insurers reducing their prices in late 2012 and into 2013 (Source:
AA British Insurance Premium Index). This trend continued during 2013 and into 2014, albeit with the pace
of price declines decelerating since the second quarter of 2014 and early signs of price increases and a turn
in cycle in the second quarter of 2015, as illustrated in the figure below.
61
Average Motor Comprehensive Cover and Third-party Cover Shoparound Premiums (£)
1,000
Average Shoparound Premium (£)

Comp
900
TPFT
800
700
600
500
400
300
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2010 2011 2012 2013 2014 2015
Source: AA British Insurance Premium Index – 2015 Quarter 2.

The AA British Insurance Premium Index measures the five cheapest quotes for each ‘customer’ to provide the Shoparound index, as
well as the market average premium (an average of all quotes on a UK-representative basket of ‘customers’). It is one of three main
indices that track premium price movements in the UK motor market, the other two being the Confused/Towers Watson Index and the
ABI insurance premium tracker. Over a broad time frame, all three indices produce substantially similar conclusions in regards of
pricing movements in the market, although there may be individual variations in any specific period which reflect the way that the
indices are constructed. In particular, the ABI index has a lower average premium that either new business pricing index given it
reflects both new business and renewal pricing for comprehensive motor cover across the ABI’s members.
There is some degree of seasonality in price movements in the market, reflecting greater competitive intensity
when new motor registrations are at their peak, more policies are sold than at other times (Source: AA British
Insurance Premium Index). Within the figure above, TPFT cover appears to have a higher premium than
comprehensive cover, which is the result of the basket of risks used in the pricing index, and which reflects the
typically younger age of drivers purchasing such cover (Source: AA British Insurance Premium Index). The
figure below shows the differences in premiums between different age and geographic groupings.
Average Motor Shoparound Premium by Age and Geographic Location (£, Second Quarter 2015)
1,200
1,000
800
600
400
200
0
2
Bo ia
Ce s
G al
Lo a
Sc on
nd
h
es
Yo est
ire
er
d
-2
-2
-3
-4
-5
-6
ut
70
al
na
ng
nd
la
W
nt
sh
rd
So
17
23
30
40
50
60
W
ot
ra
rk
A
Distribution
Aided by the relatively homogeneous nature of policy coverage and the increasing importance of price
within the consumer’s purchase decision, the internet has become the largest distribution channel for motor
policies with approximately 84 per cent. of private motor new business sales in the UK motor insurance
market originating online during 2014(2) (Source: eBenchmarkers). PCWs now act as a major purchase
(2) Average of six month rolling datasets to April and October 2014.
62
gateway in the distribution of policies representing 79 per cent. of the total online sales for the UK private
motor insurance market during 2014(2) (Source: eBenchmarkers). The majority of consumers compare price
quotes on these websites, with policies increasingly purchased either through the PCWs or directly through
insurers’ own websites. Telephone-based distribution, historically the most prevalent distribution channel,
remains important in offering consumers a personal contact point both at policy inception and in the event
of a claim. Insurance brokers, also another historically important distribution channel, have maintained
relevance through shifting their value propositions, with many brokers now offering both PCW and direct to
consumer-based distribution, and with the broker proposition generally becoming more targeted towards
older and more careful drivers and those with non-standard risks (such as high value cars). Going forward,
PCWs’ share of new business is expected to continue to remain strong, with all of the major PCWs
continuing to invest heavily in advertising spend and with PCW usage significantly higher for younger
drivers than those aged over 65 (Source: GfK). Additionally, PCW usage is likely to be influenced by wider
pricing trends in the market, with propensity to use PCWs increasing as average premiums rise. The figure
below shows the growth of new business sales being made through PCWs as a proportion of total new
business sales in the UK motor insurance market.
UK Motor Insurance New Business Sales Made Through PCWs (as percentage of total)
80%
64% 66%
59%
60% 56%
52%
45%
38%
40%
24%
20%
0%
2007 2008 2009 2010 2011 2012 2013 2014
Source: peer annual results presentations (2007–2010); eBenchmarkers (2011–2014, based on six months to October data in each year).
Claims experience
Since the early 2000s, the broad composition of claims expenses within the UK motor market has changed.
Historically, claims costs for private motor insurance companies have been driven by the costs involved in
repairing or replacing vehicles involved in accidents. The introduction of legislative changes related to the
personal injury claims process in 2003 and 2004, which included the introduction of a fixed cost system for
smaller claims and enabled referral fees to be paid across a broader number of cases, led to a significant rise
in third-party personal injury related claims expenses. Consequently, personal injury expenses overtook
vehicular repair costs as the most significant component of overall claims expenditure for insurers. In
combination with the increasing use of digital distribution within the market during this period, the
substantial appreciation in claims expenditure impacted different insurers in different ways, with certain of
the larger or more established players having to engage in significant reserve strengthening or suffering from
very poor underwriting performance.
Increases in claims costs, and the increases in motor premiums that preceded them, resulted in a number of
regulatory investigations into the cost of motor insurance. During 2012 and 2013, a number of different civil
justice reforms were introduced, including through the LASPO Act which came into force in April 2013. The
LASPO Act limited the use of conditional fee arrangements, removed defendant recoverability clauses from
after the event insurance contracts, and banned referral fees in personal injury cases. Separately, the Court
of Appeal also confirmed another recommendation of the Jackson Review, increasing the level of general
damages applied in civil claims, and the Ministry of Justice extended the upper limit on the value of
(2) Average of six month rolling datasets to April and October 2014.
63
insurance claims that could be introduced into the Ministry of Justice Claims Portal (the “Claims Portal”) to
£25,000, increasing the ability of insurers to settle these claims rapidly and with lower legal cost burdens.
The figure below shows the success of the reforms in reducing claims frequency, which can be viewed as the
result of the initial reduction of claims notifications within the Claims Portal. This trend has partially
reversed during 2014 and early 2015.
Number of Claim Notification Forms Created within the Road Traffic Accident Portal
(000s, absolute and rolling three month average)
100
80
60
40
20
0
Jan
Mar
Jan
Mar
Jan
Mar
Jan
Mar
Jan
Mar
May
Sept
Nov
May
Sept
Nov
May
Sept
Nov
May
Sept
Nov
May
Sept
Nov
May
Jul
Jul
Jul
Jul
Jul
Jul
2010 2011 2012 2013 2014 2015
CNFs created within RTA Portal Rolling 3M average
Source: Claims Portal – Executive Dashboard
Although the Group is not immune to the trends in claims experience discussed above, the Group believes
that the Group’s focused business model, bifurcation of policy distribution and underwriting provision,
sophisticated underwriting capabilities, underwriting footprint, strong counter-fraud operations and prudent
reinsurance programmes provide it with substantial resilience against these broader structural themes, as
demonstrated by the Group’s recent financial performance.
Underwriting profitability
Since the trough in 2010, the UK private motor industry has seen underwriting profitability improve driven
by industry wide price increases and targeted regulatory reforms, together with concerted strategic efforts
from a number of insurers in response to the increases in claims costs, including the creation of the Insurance
Fraud Enforcement Department (Source: ABI). According to ABI data, the UK motor industry reached a near
breakeven underwriting result in 2013 and 2014, as shown in the figure below.
UK Motor Market Pure Underwriting Result (calendar year basis, £ millions)

0
(200)
(400)
(600)
(800)
(1,000)
(1,200)
(1,400)
(1,600)
(1,800)
(2,000)
2007 2008 2009 2010 2011 2012 2013 2014
Source: ABI.
64
Since 2009, the changes in claims experience within the market along with substantial changes in
distribution trends have created substantial opportunities for the more agile players to profitably increase
their market share, without being impacted as much as the more traditional players by the increases in loss
frequency and severity discussed above. The Directors estimate that since 2010 these participants have
substantially increased their market share whilst significantly improving relative underwriting performance.
Furthermore, the traditional definitions of underwriting profitability, including those as discussed above, do
not necessarily account for the impact of ancillary and investment income, which has meant that profitability
for the industry overall was typically better than pure underwriting result analysis would indicate (Source:
management analysis of PRA returns).
Emerging trends
UK private motor insurance is showing early evidence of broader rate strengthening with average
comprehensive premium prices increasing by 5.2 per cent. in the second quarter of 2015 (Source: AA British
Insurance Premium Index – 2015 Quarter 2).
After a period of strong releases on historic accident year vintages increasingly being utilised across the
industry, the Group believes it is likely that the broader market has reached a point where price rises are
required to sustain overall profitability. The Group believes it is very well positioned to capitalise on the
opportunity that the current early evidence of price appreciation would sustain.
The Group also believes a number of other emerging trends will impact competitive behaviour in the private
motor insurance market over the medium term, including the continuation of the recent distribution trends,
greater customer adoption of multi-risk policies, such as “multi-car”, and the increasing prominence of
telematics within the market. Telematics policies involve the user installing a device (either physical or
digital) in their car which collects data on their driving behaviour and informs the insurers’ risk pricing
decisions. Although utilisation of the technology remains small, and is subject to customer inertia, telematics
technology gives higher risk drivers the opportunity to gain policy coverage on significantly improved terms,
subject to their driving behaviour. Although penetration of telematics remains small within the United
Kingdom, and elsewhere, the potential for growth in the market is significant.
UK home insurance market

The UK home insurance market is a key market within the UK general insurance sector and amongst the
largest in Europe. In the year ended 31 December 2014, UK home insurers underwrote 17.4 million contents
insurance policies, and 14.7 million buildings insurance policies (Source: ABI). In 2014, the UK property
insurance market was estimated to be worth £8.3 billion based on NWP (Source: ABI).
The distribution of home insurance policies has traditionally been principally through financial services
providers such as banks and building societies. Typical distribution strategies have involved low introductory
prices (for instance bundled as part of a mortgage package) and increases in prices on renewal, capitalising
on greater consumer inertia within this channel. However, PCWs have increasingly gained traction in home
insurance distribution and around 43 per cent. of new business was transacted through PCWs for the
six month period ended 31 October 2014 (Source: eBenchmarkers). The Group believes that PCW
penetration in the home market is following a structurally similar trend to the increases in PCW new business
penetration seen in the motor market over the previous several years. The figure below shows the growth of
new business sales being made through PCWs as a proportion of total new business sales in the UK home
insurance market.
65
UK Home Insurance New Business Sales Made Through PCWs (as percentage of total)
50%
40%
30%
20%
10%
0%
2009 2010 2011 2012 2013 2014
Source: peer annual results presentations (2009–2010); eBenchmarkers (2011–2014, based on six months to October data in each year).
Claims volatility within the home insurance market is driven in part by the incidence of weather-related
events. This has historically resulted in less cyclicality and greater profitability of underwriting than has been
experienced in motor insurance. Weather events, in particular related to floods, freezing conditions,
rainstorms, windstorms and subsidence, can cause significant volatility in claims experience between
underwriting years, as was experienced in 2007 following severe flooding in the United Kingdom, and in
2010 when severe cold weather experienced both in January and in November led to increases in water
related damage claims as pipes froze and burst. This experience led to strong pricing momentum in 2011
within the market. However, structural distribution changes including increased penetration of PCWs, a
continuation of relatively benign weather experience over recent years and increased competitive intensity
in the market, including on the part of certain new entrants, have increased price competition in recent years.
This has led to a sustained reduction in prices as shown in the figure below.
Average Home Buildings and Contents Shoparound Premiums (£)
150 80
140 75
130 70
120 65
110 60
100 55
Home Buildings (LHS)
90 50
Home Contents (RHS)
80 45
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2010 2011 2012 2013 2014 2015
The AA British Insurance Premium Index measures the five cheapest quotes for each ‘customer’ to provide the Shoparound index, as
well as the market average premium (an average of all quotes on a UK-representative basket of ‘customers’).
The Group’s existing presence in the UK home insurance market is explained in Part 6 (Business
Description). The Group believes that the home insurance market presents a number of attractive features
which it is well positioned to capitalise upon over the medium term.
66
The Gibraltar insurance industry
Over the last decade, Gibraltar’s insurance industry has expanded rapidly, with currently over 50 licensed
insurers writing insurance and related business, and passporting across all 31 EEA economies (Source: HM
Government of Gibraltar). The initial growth in the Gibraltar insurance industry came largely from the UK
broker community and, latterly, from primary and reinsurance companies. Because of this, non-life insurance
represents the largest sub-sector within the industry, and motor insurance the largest single class of business,
with the Gibraltar Finance Centre estimating that Gibraltar insurers wrote 10 per cent. of the UK motor
market in 2012, and with that figure likely to have grown since then (Source: HM Government of Gibraltar).
AICL was established in Gibraltar in 2002. In terms of market share, the Gibraltar private motor insurance
sector is dominated by the three largest Gibraltar motor insurers, AICL, Zenith and Admiral.
Regulatory reforms and developments

The UK private motor and home insurance markets and the Gibraltar insurance industry have been and
continue to be the subject of various regulatory reforms. For a summary of certain of these reforms, see Part 7
(Regulation).
67
PART 6
BUSINESS DESCRIPTION
Investors should read this Part 6 (Business Description) in conjunction with the more detailed information
contained in this Prospectus including the financial and other information appearing in Part 10 (Operating
and Financial Review). Where stated, financial information in this section has been extracted from Part 12
(Historical Financial Information).
Group overview
Hastings is a fast growing, agile, digital general insurance provider operating principally in the UK motor (i) 5.1.5
market. It provides private car and other forms of personal insurance cover in the UK. In recent years, the (i) 6.1.2
Group has achieved significant growth within its chosen markets through a combination of heightened (i) 6.2
strategic focus, optimised digital distribution, superior data generation and utilisation, sophisticated risk
selection and advanced fraud detection and claims management. As at 30 June 2015, the Group had a
5.5 per cent. share of the UK private car insurance market (Source: UK Department for Transport and
Company data) and 1.88 million live customer policies, having grown the number of live customer policies
at a CAGR of 22.5 per cent. across the last three financial years. The Group’s success in capturing market
share has been combined with consistently strong underwriting performance and growing retail profitability,
and as a result has translated into significant bottom line growth with the Group achieving a CAGR of
22.6 per cent. in operating profit between 2012 and 2014. Group Operating Profit for the six months ended
30 June 2015 was £59.2 million (for the year ended 31 December 2014: £105.7 million and for the year
ended 31 December 2012: £70.3 million).
Additionally, in the six months ended 30 June 2015, the Group generated £222.6 million of net revenue (in
the year ended 31 December 2014: £383.0 million and in the year ended 31 December 2012: £234.0 million).
The Group operates as an integrated, direct insurance provider with strategic coverage of the UK insurance
value chain through two principal segments. The Group’s retail business (“Retail”) is responsible for end
customer pricing, product design, distribution and the management of the underlying customer relationship.
The Group’s underwriting business (“Underwriting”) engages in risk selection, underlying technical pricing,
fraud management, reserving and claims handling. Retail is supported by, and benefits from, Underwriting’s
prudent approach to risk and reserving and a conservative and capital efficient reinsurance programme, as
detailed further below. The Retail business also benefits from the Group’s panel insurance partners who can
provide underwriting capacity where Underwriting declines to quote on a policy or is uncompetitive. The
Group’s integrated model deliberately separates underlying product manufacturing from its distribution.

insurance intermediaries. Retail operates across a number of products, the largest of which being private car
insurance, which are distributed through an extensive suite of brands, including Hastings Direct, Hastings
Essential, Hastings Direct SmartMiles and Hastings Premier. Retail has full flexibility and responsibility for
managing the relationships with the Group’s customers, including policy sales, customer service and
customer retention. Within Retail, the Group’s quote delivery systems are designed for PCWs and direct
distribution, with PCWs having in recent years become the most important distribution channel for
customers seeking to purchase a new private car insurance policy. Retail’s customer acquisition model is
optimised in particular for PCW distribution, with the Group having a significant share of new business
private motor insurance sales on PCWs (11.0 per cent. for the six months ended 30 June 2015 (Source:
eBenchmarkers)), strong and balanced distribution across all the major PCWs, and superior customer
retention rates. This is facilitated through Retail’s advanced pricing capabilities, agile and highly responsive
implementation, and data sophistication. The Group generates revenue in Retail primarily through fee and
commission income, the provision of ancillary products, including, for example, breakdown insurance and
substitute vehicle coverage, and the provision of premium financing, where customers choose to pay for their
policies in monthly instalments instead of in one single, upfront payment, for an additional credit charge. In
68
the six months ended 30 June 2015, Retail generated revenue of £115.0 million (in the year ended
31 December 2014: £205.5 million and in the year ended 31 December 2012: £144.0 million) and Retail
operating profit of £40.6 million (in the year ended 31 December 2014: £69.9 million and in the year ended
31 December 2012: £43.0 million).
sophisticated data-driven approach to risk selection and risk pricing, optimised for the PCW marketplace,
resulting in a high quality underwriting portfolio. Underwriting’s primary goal is the delivery of consistent
underwriting profitability. This is achieved through prudent, dynamic footprint selection (i.e., management
of the risks that Underwriting will accept) and where risks lie within the footprint, through a sophisticated
determination of the technical net rate (the premium passed through to Retail). This sophisticated data-driven
approach includes the consideration of both traditional underwriting data sources such as historic loss
probability, customer and vehicular characteristics, overlaid with significant data enrichment (the Group’s
proprietary method of supplementing traditional broking and underwriting analysis with both external data
sources and internally created data sets), and consideration of real-time behavioural data. Underwriting
further manages the risks underwritten through claims cost control as well as through use of the Group’s
proprietary counter-fraud analysis both by increasing premiums through identification of manipulation at
point of quote and sale as well as reducing claims costs through identification of fraud at point of claim.
cancelling policies as appropriate. Like Retail, these processes are optimised for PCW distribution, with
rapid execution capabilities and a culture of continuous improvement – Underwriting regularly monitors and
assesses pricing accuracy and refines risk selection and pricing modelling. The Group generates income and
profit in Underwriting principally through underwriting premiums and, to a lesser extent, through profit
commission from its reinsurance partners and income generated on invested assets. In the six months ended
30 June 2015, Underwriting generated GWP of £292.7 million (in the year ended 31 December 2014: £496.2
million and in the year ended 31 December 2012: £354.2 million) and Underwriting operating profit of £17.0
million (in the year ended 31 December 2014: £37.4 million and in the year ended 31 December 2012: £21.2
million).
The bifurcation of technical net rate pricing from ultimate PCW quote delivery has, together with various of
the Group’s other capabilities, facilitated the Group’s ability to grow significantly whilst maintaining strong
and consistent loss ratios on both an accident year and calendar year basis. For the six months ended 30 June
2015, the Group calendar year loss ratio was 73.6 per cent. and its combined ratio was 90.0 per cent., with
the Group also reporting calendar year loss ratios of 73.9, 71.5 and 72.4 per cent. for the years ended
31 December 2012, 2013 and 2014, respectively. The Group believes that Underwriting employs a prudent
claims reserving policy, as demonstrated by its reserves being consistently above both the internal actuarial
best estimate of its insurance contract liabilities and that of the half yearly claims reserves reviews performed
by an independent third-party actuary.
The Group’s underwriting performance benefits from the purchase of non-proportional reinsurance, whereby
all risk of loss on a single claim exceeding an inflation-adjusted £1.0 million (£0.5 million pre-2014
underwriting year) is ceded to a high quality panel of reinsurers, and from naturally lower large loss
frequency driven by the Group’s approach to risk selection, with the Group only having two claims currently
that have settled as PPOs. Underwriting’s capital efficiency is also enhanced by the Group’s proportional
reinsurance strategy, whereby the Group cedes 50 per cent. of underwritten premiums and attaching claims
to its reinsurance partners. The Group typically receives cost contributions and profit commission from its
reinsurance partners, resulting in strong returns on deployed capital (for the year ended 31 December 2014
the Group returned a return on capital employed of 38.8 per cent.). The Group’s cost of reinsurance has
declined materially since the inception of the programme, with the Group’s reinsurance partners having
access to, and validating, the Group’s underwriting.
With offices in Bexhill, Newmarket, Leicester and Gibraltar, the Group had approximately 1,800 full-time
employees on average during the six months ended 30 June 2015.
69
History (i) 5.1.5
(i) 11
In 1997, HISL began trading as an insurance broker providing UK private car insurance and related products
(i) 6.1.1
under the trade name Hastings Direct. The Group’s underwriting operating company, AICL, was founded in
(i) 6.1.2
2002 following Hastings’ acquisition of People’s Choice insurance from Brit Insurance the same year. In
September 2006, HISL and AICL were purchased by Insurance Australia Group. Led by the then-chief
executives of HISL and AICL, the two businesses were acquired by the Founder Shareholders through a
management buyout in February 2009 to continue to focus on the Group’s brands and build-up its UK private
car and home insurance businesses. In April 2012, HISL and AICL were combined under a common holding
company, HIG. HISL and AICL are authorised and regulated by the FCA and FSC, respectively.
On 8 January 2014 pursuant to the 2014 Reorganisation, a wholly owned subsidiary of HIG(H) acquired
100 per cent. of the issued share capital the HIG Group, to form the enlarged HIG(H) Group with HIG(H)
as the new parent entity within the corporate structure.
On 11 June 2015, the Company was incorporated as Hastings Group 123 Limited with its registered office
situated in England and Wales and renamed as Hastings Group Holdings Limited on 17 July 2015 and
re-registered as a public company limited by shares and renamed as Hastings Group Holdings plc on
23 September 2015. The Company operates under the Companies Act 2006. The Company has been the
holding company of the Group since 12 August 2015 following a series of transactions (collectively, the
“Reorganisation”).
Strengths
The Board of Directors believe the Group possesses a number of competitive strengths that together have
enabled, and can be expected to continue to enable, the successful implementation of its strategy within its
chosen markets. These strengths include:
• a differentiated, highly focused business model;
• a distribution model that is optimised for the way in which customers in the United Kingdom
increasingly purchase general insurance;
• an agile and data-driven retail distribution business;
• an Underwriting business built on a bedrock of sophisticated risk selection and fraud management,
with optimal use of capital;
• a track record of strong financial performance, consistent customer growth and superior underwriting
performance; and
• a high quality and knowledgeable management team with significant strength-in-depth and diverse
experience.
These strengths are detailed further below.
1. A differentiated, highly focused business

The Group’s business model has been designed to be successful in the high growth, dynamic digital
distribution segment of the UK motor insurance market. The Group operates across the insurance
value chain through a retail business (carried out in Retail’s operating entity, HISL) that optimises all
forms of brokerage value combined with an underwriting business (carried out in the underwriting
entity, AICL) that is primarily responsible for maintaining underwriting performance. The Group
maintains clear separation between these two businesses. The separation of distribution and
underwriting, which means that AICL always receives the technical net rate that it quotes, allows
Retail to maximise customer capture and, in so doing, maximise Retail income, without negatively
impacting underwriting profitability. The modern, lean and integrated nature of the Group’s model is
a significant competitive advantage. This can be evidenced through the speed with which the Group
is designing, building and implementing the Guidewire management system across both Retail and
Underwriting.
70
The Group has deliberately chosen to specialise and focus on:
• UK private car insurance (87 per cent. of the Group’s live customer policies as at 30 June
2015);
• distribution through PCWs and other digital channels (88 per cent. of the Group’s new business
policies (excluding telematics) were distributed on PCWs during the six months ended 30 June
2015); and
• business that is underwritten in-house (AICL underwrote approximately 89 per cent. of the
Group’s new business policies during the six months ended 30 June 2015 excluding
telematics).
The Directors believe the Group’s focus provides a significant competitive advantage. The Directors
believe that this strategic focus allows the Group to monitor and react to changes in its core market
quicker and more effectively than other participants, both through the rapid delivery of data, pricing
and technology initiatives and through the rapid optimisation of daily prices.
This strategic focus has allowed the Group to capture a disproportionately large share of new business
distribution through the PCW channel, without compromising risk identification or selection, as
detailed further below. The Group has introduced, and continually monitors, controls to manage the
concentration risk that the Group’s focus provides, including through strict criteria governing risk
selection, reserving, claims management, and counter-fraud.
The Group’s vision is to grow sustainably through offering “refreshingly straightforward” insurance
products. It works to create an environment where its colleagues can contribute and thrive. This is
based on the Directors’ belief that if the Group provides its colleagues with the right leadership,
resources and tools, they will be able to do more for the Group’s customers, enabling the Group to
grow profitably and sustainably, and resulting in the Group being able to invest responsibly in the
communities it serves.
The Group prioritises the customer outcome at each stage of customer interaction, from product
design, to product sale, to claims processing, to policy renewals. Products and sales practices are
continually reviewed to ensure charging structures are fair, that policy fees are communicated clearly
and accurately, and that products are designed to be simple, transparent and high quality. The Group
often leads the market in taking pre-emptive actions which improve the customer experience.
Examples of customer friendly changes include the Group’s decisions to: reduce mid-term adjustment
fees which are commonly charged in the market; remove incentivisation of call centre staff based on
the sale of product add-ons; and ban the use of “opt-out” techniques in policy sales. The Group
benefits from a high performing, engaged workforce who are bought in to its wider corporate
objectives. Employee motivation is achieved through a number of methods, including equity
incentivisation; a lean corporate structure with non-hierarchical decision making processes and a
focus on good human resources and management practices. Employee opinion survey results are
consistently in the top quartile for UK financial services companies. As a result, the Group’s culture
is therefore one where its employees will “go the extra mile” for its customers at each stage of the
customer journey and this is evidenced in the Group’s annual employee opinion surveys. The Group
has received a number of awards for various colleague focused initiatives and for its services and
products. This includes the Consumer Moneyfacts award for car insurance provider of the year for the
last three years running, and Hastings Direct and Hastings Premier products being “5-star” rated by
independent industry reviewer Defaqto for the last four years running.
The Group benefits from a “community feel” despite its size, and employees at all levels embrace the
Group’s data-centric approach to decision making, seeing change as an opportunity rather than a
hindrance for the business. Together, these attributes enable quicker and more effective decision
making, enhancing the Group’s operational agility and its ability to compete in its chosen market
segments. The Directors believe that the Group’s willingness to embrace, and foster, change acts as a
key competitive differentiator within the motor market.
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2. Hastings’ distribution model is optimised for the way in which customers in the UK increasingly
purchase general insurance products
The Group’s distribution model is optimised for the purchase of general insurance products through
PCWs and through direct channels, both online and on mobile. PCWs have become the dominant
feature of the private motor insurance distribution in the UK, accounting for a growing part of the
market at 66 per cent. of new business sales for the six months ended 31 October 2014 (Source:
eBenchmarkers). PCW distribution has a number of characteristics that the Group finds attractive:
• the ability to select the customers that meet the Group’s selection criteria and the right lifetime
value, and to only pay an acquisition cost for a sale made, with no further payments if the
customer renews with the Group;
• the ability to use the large amounts of dynamic data generated by these websites; and
• the ability to react to market conditions at short notice with no fixed marketing costs.
The Group maintains strong relationships with, and a balanced distribution across, all of the major
PCWs in the UK. The Group has built up specialist capabilities for the PCW channel over a number
of years across retail pricing, branding, underwriting and fraud management amongst others. The
Group’s share of new business private car insurance sales on PCWs has subsequently grown from
6.9 per cent. in the year ended 31 December 2011 to 11.0 per cent. in the six months ended 30 June
2015, and the Hastings Direct brand is now one of the largest brands on PCWs.
The Group is also well positioned for the ongoing adoption of mobile devices as a way of purchasing
the underlying insurance product, with 29.9 per cent. of new business sales in the year ended
31 December 2014 made from mobile devices.
This focus and specialist capability in turn has led, and in the Directors’ opinion can be expected to
continue to lead, to continued growth in live customer policies, with the Group’s live customer
policies having grown at a CAGR of 22.5 per cent. from 1.14 million live customer policies to 1.71
million live customer as at 31 December 2012 and 2014, respectively, and reaching 1.88 million as at
30 June 2015.
The Group’s market share on PCWs and UK car market PCW penetration is shown in the chart below.
12% 80%
10.3%
10% 9.7% 75%
9.1%
70%
8%
6.9%
65%
6%
60%
4% 55%
2% 50%
2011 2012 2013 2014
Hastings PCW car market share (LHS) UK car market PCW penetration (RHS)
Source: eBenchmarkers, Company data. Hastings PCW market share data on a full year basis; UK car market PCW
penetration based on six months to October data. Based on new business sales.
Although the distribution characteristics of the home insurance market in the UK are structurally
different to that of the motor market, it too is experiencing a shift in distribution towards PCWs in
much the same way as the private motor market did several years before it. Management believe the
Group’s ability to compete effectively on PCWs should allow it to capture profitable new business in
the home insurance market over time, in particular given the competitive position of many
incumbents.
The Group uses brand advertising and digital marketing to complement its price comparison
activities. The Group is active on paid and organic search, email marketing, affiliate marketing and
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online display advertising, generating new business sales through its websites and call centres, with
12 per cent. of the Group’s new business policies (excluding telematics) sold through these channels
in the six months ended 30 June 2015. The Group also conducts small amounts of TV advertising to
support brand awareness. The Group’s marketing strategy involves limited spend and adopts a
targeted, analytical approach across all platforms.
3. An agile, data-driven Retail business

Motor insurance in the UK distinguishes itself from other forms of insurance in terms of data
availability. The Group has embraced this, and in so doing, has evolved capabilities in data generation
and utilisation that, in the Directors’ opinion, are difficult to replicate.
The Group’s digital orientated distribution approach means that it generates a significant amount of
highly relevant data that it is able to use to refine and optimise its pricing strategies and decisions.
This data is enriched with significant amounts of both traditional and non-traditional external
customer data that the Group acquires from external data vendors, such as Equifax credit score data,
and with the Group’s own proprietary internally generated customer data, such as quotation frequency
and intensity indicators. The data that the Group generates is highly relevant to the distribution
channels in which it operates, and a more rapid “pace of change” which means that the very large data
sets of traditional insurers have more limited relevance in these channels.
The Group combines the significant amount of external and internal data that it generates with highly
specialised employees who are empowered to drive the Group’s sophisticated pricing capabilities. The
Group has a dedicated team of PhD qualified decision scientists that are focused on improving the
sophistication of the Group’s pricing and its ability to accurately assess overall customer lifetime
value. The team has a combination of both relevant industry experience and staff from other industries
that help challenge established practices and who deploy statistical techniques not constrained by
insurance tradition.
These capabilities and data inform the Group’s proprietary pricing models which are differentiated in
terms of their sophistication and their scale. The Group deploys individualised pricing models across
each element of the customer’s purchase decision, considering premium financing and ancillary
propensity, and retention likelihood, allowing Retail to optimise each element of the purchase decision
given the customer’s unique profile. These individual pricing models are then overlaid with
proprietary competitiveness models which track and predict pricing and competitiveness across a
range of different variables, including estimated price elasticity.
Collectively, the Group’s pricing models facilitate estimation of customer lifetime value, enabling it
to maximise value generation for a given customer profile within the risk appetite.
In addition to data availability, motor insurance in the United Kingdom distinguishes itself in terms
of price competition and a significant degree of price elasticity. Consequently, Retail has an approach
to pricing based on constant monitoring of price competition and maximisation of customer lifetime
value, and which works in a way that is complementary to its underlying risk pricing sophistication.
In contrast to many of the Group’s competitors where underwriting and pricing is an integrated
process and where price changes can take weeks to apply, the Group’s unique structure, where Retail
takes the technical net rate provided by the underwriter and seeks to optimise around this, means that
Retail can move from concept to application of a pricing change in under an hour. This capability is
delivered by a dedicated team who continually monitor and optimise the Group’s relative pricing and
positioning on PCWs, with intra-day sales management information data refreshed up to every 15
minutes and visible up to the Executive Committee level.
The Directors regard the Group’s underlying pricing agility to be a source of significant competitive
advantage.
The third element of the business’ agile, digital approach is the ability to deliver a range of different
products and brands to provide wider consumer choice. The Group provides quotes under a rich
proposition mix including the Hastings branded product range (Hastings Premier, Hastings Direct,
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Hastings Essential and Hastings Direct SmartMiles) and other brands (primarily Insure Pink and
People’s Choice). The Group believes this allows it to appeal to a wide range of potential customers
including, those that prefer lower cost cover as well as those that are prepared to pay for a higher level
of cover.
Retail’s cost effective distribution model, low marketing spend, flat organisational structure, approach
to employee remuneration, and basis of operations in Bexhill, Newmarket and Leicester, result in a
relatively low cost base. Additionally, as described further below, the Group’s digital architecture and
recent investment in Guidewire operating platforms is expected to increase the scalability of the cost
base and, once investment costs normalise, result in significant operational leverage over the medium
term. This has been visible historically in the upward trend in Group Operating Profit margin, which
has grown from 24.2 per cent. in the year ended 31 December 2012 to 26.4 per cent. in the year ended
31 December 2014. Live customer policies per full time equivalent (“FTE”) has also grown from
807.1 in the year ended 31 December 2012 to 942.7 in the year ended 31 December 2014.
4. An Underwriting business built on a bedrock of sophisticated risk selection and fraud management,
with optimal use of capital
The Group benefits from a highly sophisticated approach to risk selection and technical risk pricing.
The Group’s Underwriting business maintains a highly selective footprint which only returned quotes
on approximately 51 per cent. of requests received from PCWs in the six months ended 30 June 2015.
The selectivity of the Group’s underwriting footprint has been maintained despite the business’
significant growth through the sophisticated use of data and a focused approach to footprint
adjustments. The data intensive, analytically driven nature of the Group’s underwriting process
combined with its ability to rapidly identify and react to emerging trends has resulted in the Group’s
ability to grow while producing consistently strong underwriting performance. This approach includes
the implementation of new and better data sources, new analytic techniques and detailed adjacency
analysis (i.e. the examination of similar risk profiles) combined with a rapid test and learn process.
The Group’s selective approach to footprint expansion is supplemented by a prudent approach to the
establishment of the Group’s claims reserves. The Group’s strategy is to include a margin within its
booked claims reserves that provides a high degree of confidence that the booked claims reserves are
in excess of expected claims costs on the basis of the internal actuarial review.
The Group’s Underwriting business deploys a highly sophisticated, analytical approach to

determining net risk pricing. As with Retail, Underwriting makes use of significant amounts of
traditional PCW data and traditionally sourced external data such as credit bureau or vehicle
provenance data, and combines this with non-traditionally generated PCW data such as the Group’s
proprietary fraud index (which predicts the propensity for a customer to falsify data in their quote
application) and competitor data such as recent price movements or segmental price competitiveness
data. On average, the customer provides 38 pieces of data which the Group translates into more than
a hundred different rating variables. Combining traditional and non-traditional data in this way gives
it significantly greater predictive power which the Group can feed into its pricing models.
In addition to data enrichment, the Underwriting business combines best practice modelling
techniques with non-traditional model adjustment processes to deliver optimised net risk pricing. The
Underwriting pricing models include a number of different sub-models that address various aspects
of loss probability and individualised loss drivers (peril ratings), which are enhanced through the
Group’s ongoing approach to dynamic testing and learning and willingness to step outside of pure
statistical modelling. The Directors believe that the resulting technical pricing advancements have
created a competitive advantage in pricing which means that loss ratio performance displays limited
volatility across segments with price increases versus segments with price decreases.
Underwriting’s sophisticated approach to risk selection, risk pricing, and reserving, have together led
to significantly and consistently superior underwriting performance compared to market averages,
with Group calendar year loss ratios of 73.9 per cent., 71.5 per cent. and 72.4 per cent. for the years
ended 31 December 2012, 2013 and 2014, respectively.
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The Directors believe that effective prevention of fraud is a necessity for operating successfully in the
UK motor insurance market given the higher incidence of organised fraud than other general
insurance markets. The Group’s fraud detection programme, called Insight, is widely recognised as
market leading. Insight operates as a dedicated team across both Retail and Underwriting, designed
to combat fraud at point of quote, point of sale and point of claim, with over 100 employees dedicated
to combating all aspects of fraud. These activities support reduced claims costs, underpin the
conservative expansion of the underwriting footprint, increased premiums through ensuring that
correct premium is received for the correct risk, and boost demand from reinsurance partners and
panel insurance partners.
Key initiatives include ‘Fraud Score’, which predicts propensity to commit fraud at point of quote,
quote manipulation software, a list of known fraud risk consumers checked at point of sale and
analytics using financial data bases. Together, these activities support reduced claims costs, underpin
the conservative expansion of the underwriting footprint, increase premiums through ensuring the
correct premium is received for the correct risk, and boost demand from the Group’s reinsurance
partners and panel insurance partners.
The Directors believe the Group’s ability to detect fraudulent quotations and claims is crucial in order
to be successful within the UK motor market. They also believe that the Group’s counter-fraud
capabilities will act as a competitive advantage going forward, helping to maintain strong
underwriting performance and contributing to the Group’s ability to competitively purchase
reinsurance.
The Directors believe Underwriting employs a prudent non-proportional reinsurance strategy, which
is designed to ensure consistency of net loss ratio performance as well as significant balance sheet
protection. AICL purchases unlimited excess of loss cover above a conservative attachment point of
£1.0 million. This provides it with protection against emergent high value bodily injury claims and
PPOs which can represent an increasingly substantial proportion of an insurer’s overall incurred
claims. AICL’s underwriting is also supported through significant use of quota share insurance,
pursuant to which 50 per cent. of the Group’s in-house underwriting capacity is provided by a panel
of nine quota share partners. The strength and consistency of the AICL’s underwriting performance is
reflected in the nature of the its co-insurance agreements, with growing demand over time from
existing participants and with a number of new partnerships strategically developed to reduce
dependency on any single partner. Moreover, the structure of the Group’s arrangements and the
profitable nature of AICL’s underwriting mean that the Group receives significant cost contributions
and profit commission from its reinsurance partners on business ceded, effectively meaning it retains
the majority of the profitability on business ceded, resulting in high degrees of capital leverage and
very strong returns on capital.
When taken together, the Directors believe that the AICL’s proportional and non-proportional
reinsurance strategies have acted and can be expected to continue to act, to reduce the volatility of its
underwriting experience and reduce the capital intensity of the business that it selects, without a
corresponding reduction in profitability.
5. A track record of strong financial performance

Over the last few years, the aggregation of the Group’s competitive advantages as described above
have enabled the Group to grow both its top and bottom line significantly faster than competitors.
The business has grown the number of live customer policies at a CAGR of 22.5 per cent. across the
last three financial years, from 1.14 million as at 31 December 2012 to 1.71 million as at 31 December
2014 and 1.88 million as at 30 June 2015. The Group has grown its share of the UK private car
insurance market from 3.6 per cent. to 5.1 per cent. over this period, and had a market share of 11.0
per cent. of all new business private motor insurance sales distributed on PCWs in the six months
ended 30 June 2015, which has grown from a 6.9 per cent. share in the year ended 31 December 2011
(Source: eBenchmarkers).
This significant growth in market share and top line revenue has been accompanied by a 22.6 per cent.
compound growth in Group Operating Profit over the same period, reaching £105.7 million for the
75
year ended 31 December 2014. The faster relative growth of the Group’s bottom line is attributable to
the growing operational leverage within the business, as the business benefits from increasing scale
with expenses growing at a lower overall rate than revenue and with profitability also being driven by
the consistency of the AICL net loss ratio, which remains amongst the best in the market.
Despite the significant growth experienced in recent years, the Group is still of a size where it sees
opportunity for continued strong growth. Management expects that the competitive advantages as
described above, both individually and collectively, position the Group well to experience continued
profitable expansion over the medium term. This is detailed further in the “Strategy” section below.
The capital leverage obtained within Underwriting through the Group’s use of reinsurance together
with the cash generative nature of Retail collectively has enabled the Group to generate significant
amounts of free cash flow. The Directors believe that following Admission, the Group’s optimised
capital structure and lower debt burden should enhance the already significant amounts of free cash
that the Group generates.
6. A high quality and knowledgeable management team with significant strength-in-depth and diverse
experience
The Group benefits from a high calibre senior management team with significant and diverse
experience led by Gary Hoffman, the Group CEO. Together, the senior management team has
collectively 210 years of financial services experience, and has driven the transformation of the
business and the strong financial performance seen over the past several years. The Directors believe
the Group benefits from significant strength-in-depth in each of Retail and Underwriting, led by
Tobias van der Meer (Managing Director of HISL), Ed Biemer (Managing Director of Underwriting
Services) and Michael Lee (Managing Director of Insurer Services). The Group has also invested in
its senior management team in recent years to ensure it has the capability and experience required both
for its current as well as its expected medium term needs. This has included the hiring of Ed Biemer
as Managing Director of Underwriting Services, who was previously Senior VP responsible for Auto
at the US insurer Allstate, and Richard Hoskins as Group CFO, who was previously CFO of Global
Commercial Insurance at AIG. The strength and experience of the Group’s senior management team
is complemented by substantial industry experience throughout all levels of management, and by the
Group’s lean structure and lack of legacy infrastructure. This approach means executives are able to
implement decisions more rapidly and effectively than would otherwise be possible.
Further details of the senior management team and the Group’s Board of Directors are set out in Part 8
(Directors, Senior Managers and Corporate Governance).
Strategy
The Group’s strategy is focused on continued growth, increasing profitability and cash generation while
maintaining underwriting discipline based on the following six pillars.
1. Continued focus on profitable growth, targeting Group live customer policies in excess of
2.5 million by the end of 2017
The Group has a strong track record of profitable growth, having increased the live customer policies
by 3.9x from 0.48 million as at 31 December 2009 to 1.88 million as at 30 June 2015. The Group
intends to further expand its live customer policies driven by the following:
• Focused distribution model that is well positioned to benefit from increasing PCW
penetration: The Group’s business model is built for the internet age and is focused on PCW
distribution. It remains an ongoing source of strength in the market characterised by increasing
penetration of the PCW channel, which has risen from 24 per cent. of the UK car insurance
market in 2007 to 66 per cent. in 2014 (source: peer annual results presentations;
eBenchmarkers). The Group expects to capitalise on this natural momentum, helped by
advertising and spend and increasing digital adoption;
76
• Natural momentum and strong customer retention supporting overall growth: During the
six months ended 30 June 2015, the Group benefited from a superior customer retention rate
that exceeded both the PCW and the UK overall private car insurance market averages. The
Group is therefore expected to benefit from a naturally maturing portfolio as it develops long
standing relationships with its customers; and
• Focus on pricing sophistication to drive selective footprint expansion: The Group sees
value in its core market by expanding its internal footprint through further data enrichment
enabled pricing in both new business and renewals. In addition, the Group sees an opportunity
in expanding the panel-based footprint through working closely with its panel partners.
2. Continued focus on prudent underwriting, with a target Group current year net loss ratio of
between 75 per cent. and 79 per cent. through the cycle
The Group has demonstrated stringent focus on prudent underwriting while growing its live customer
policy portfolio. The Group continues to be highly selective in its underwriting footprint and targets
a Group current year net loss ratio of between 75 per cent. and 79 per cent. through the following:
• Dynamic footprint selection which identifies the segments that the Group can write
profitably;
• Extensive use of data enrichment by collecting and cleansing a broad range of data types, such
as traditional PCW data, quote manipulation, credit, vehicle provenance, loss costs and
competitor pricing;
• Advanced technical pricing processes which combines best practice modelling techniques
with non-traditional model adjustment processes, enhanced by continuous test and learn; and
• Rigorous fraud prevention with analysis of over 2.0 million quotes per month through the
Group’s proprietary quote manipulation detection system to ensure tangible and recurring
benefits.
3. Continued focus on cash generation and deleveraging, targeting a net debt to Group Operating
Profit ratio of around 1.5x by 2017
The Group employs a capital efficient business model that combines a highly cash generative Retail
business with strategic use of reinsurance in Underwriting. The combination of the highly cash
generative business and significant volume growth has led to a reduction of the Group’s net leverage
multiple from 4.6x as at 31 December 2013 to 3.2x as at 30 June 2015. At the time of Admission, the
Group intends to optimise its current capital structure by reducing its leverage to 2.5x and is targeting
a further decrease to around 1.5x by 2017.
4. Unlock profitability benefits from sophisticated claims handling and continued efficiency
improvement
The Group aims to achieve higher profitability by delivering a low cost operating model, increased
digitalisation and reduced indemnity spend. By continuing a targeted programme of incremental
infrastructure improvements, the Group looks for areas of additional cost savings, which will partially
be delivered through the implementation of Guidewire whereby, for example, ClaimCenter will be
configured to automate current administrative tasks and reduced claims spend through assisted
decision making and intelligent work-flow.
5. Invest in digital and mobile distribution channels

While the Group still sees PCWs as the main distribution channel for its products, it also intends to
further develop alternative channels to increase the volume of insurance policies sold and complement
the PCW offering. In light of this, the Group has already rolled out a mobile-optimised web journey
and, enabled by Guidewire, is developing mobile apps for both phone and tablet and enhancements to
the online portal for customer policy management including self-service functionality, for example
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including mid-term amendments and claims tracking. Together, these are expected to further increase
volumes alongside the PCW channel and improve the overall customer experience.
6. Expand the Group’s product offering and invest in its competitive proposition
As described above, the Group sees opportunities to increase volumes and profitability by gradually
increasing its footprint in its core private car market. In addition, the Group aims to diversify its
product portfolio by:
• Expanding in the home segment: The Group sees the home insurance market as an attractive
one, with consistent profitability, lower pricing cyclicality and higher retention rates than the
motor insurance market. PCW penetration has grown significantly, following a similar pattern
to the motor insurance market.
• Expanding further into the multi-car segment: With approximately 35.0 per cent. of
UK households owning more than one car, greater access to this market creates an opportunity
pool of approximately 9 million policies. The Group aims to capture a greater share of this
market through its investment in Guidewire and targeted marketing to its existing customer
base.
• Growing the telematics business: The UK telematics market has grown from approximately
12,000 policies at the end of 2009 to approximately 300,000 policies at the end of 2013
(Source: BIBA Research on Telematics Market). The Group has built a strong telematics
proposition with approximately 23,000 policies as at 30 June 2015. For these policies, the
technology cost per policy has decreased from approximately £230 in the second quarter of
2012 to approximately £90 in the second quarter of 2015.
Retail (i) 6.1.1

(i) 6.2
Overview
Operating through a number of brands and products, including Hastings Direct, Retail participates in the
UK private car insurance market. Within this market, the business has chosen to focus primarily on digital
distribution through PCWs and direct distribution through the Hastings Direct website. It supports PCW and
direct distribution through brand advertising, online and offline direct marketing and social media activity.
The Group’s focus on digital channels has allowed it to benefit from the ongoing growth in consumer
adoption of PCWs. Retail has built up a range of capabilities to support success on PCWs including
sophisticated market pricing capabilities, the ability to monitor results and implement price changes rapidly,
large scale data processing technology, a high quality product range with a number of 5-Star rated products
(based on independent rating firm Defaqto) and an experienced senior management team with dedicated
focus on this market. The business has grown its market share of PCWs consistently since 2010, with an
increasing number of consumers choosing to switch to Hastings’ brands.
Retail offers quotes from a number of insurance partners, flexing the final price presented to consumers by
adjusting its broking commission levels based on its analysis of customer lifetime value and market
dynamics. For private car insurance the vast majority of policies sold are placed with Underwriting. Home
insurance is a growing part of the Group and a product where Retail mainly uses external insurers, but retains
full customer ownership and broking income streams.
Retail manages customer relationships (sales, service and renewals) through its website and contact centres,
aiming to deliver straightforward service and good customer outcomes. The Group emphasises a
customer-centric culture and the Group’s staff are not incentivised on the basis of sales.
Retail benefits from diverse income streams including ancillary product revenues, premium finance, fees and
commissions and other income. For the six months ended 30 June 2015, Retail generated revenue of
£115.0 million, which comprised of £60.3 million from fees and commissions, £28.1 million from premium
finance income, £21.7 million from ancillary income, £4.8 million from other income and £0.1 million of
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investment and interest income. Retail generated operating profit of £40.6 million for the six months ended
30 June 2015.
Customers
The Group had 1.88 million live customer policies as at 30 June 2015 as compared to 1.14 million,
1.42 million and 1.71 million policies as at 31 December 2012, 2013 and 2014, respectively. The Group’s
continued growth in its number of live customer policies is a result of a number of factors, including the
Group’s ability to attract new customers through its PCW focused strategy complemented by the Group’s
competitive risk-based pricing, its ability to retain existing customers on renewal, and its ability to reduce
cancellation rates among the Group’s existing customers. All of these factors are assisted by the Group’s
investment in brand awareness which continued to perform strongly throughout the six months ended
30 June 2015.
Based on Underwriting’s written policies distributed during the six months ended 30 June 2015, 84 per cent.
of the Group’s policy holders were older than 25 years of age. The Group’s customers are spread throughout
all of the United Kingdom, with 16 per cent. of its customers living in the South East of England (excluding
London) based on Underwriting’s written policies distributed in the six months ended 30 June 2015.
Additionally, more than 10 per cent. lived in each of Yorkshire, the West Midlands and the North West of
England based on Underwriting’s written policies distributed in the six months ended 30 June 2015.
Approximately 74 per cent. of the policyholders for policies written by Underwriting in the six months ended
30 June 2015 have gone five or more years without making a claim. Through its data enrichment programme
the Group targets customers with higher credit scores who, in the Group’s experience, result in higher policy
retention rates, lower cancellation rates and overall lower loss ratios.
Brands and marketing (i) 6.1.2
The Group uses its digital and marketing function to attract new customers, to manage digital sales
conversion and to build its brand awareness. The primary channel through which the Group markets its
insurance products is the PCW channel, which is a low-cost channel for new customer acquisition and is the
channel of choice for the majority of UK insurance consumers (Source: eBenchmarkers). There are four
PCWs covering more than 90 per cent. of this market, and the Group has a dedicated team focused on
maintaining positive commercial relationships with these PCW providers, gaining early access to
opportunities such as data sharing and new propositions. As such, a significant component of the Group’s
new business acquisition strategy involves differentiating its offering through its data-driven results in the
quality and pricing of the insurance policies the Group delivers via PCWs. Retail also maintains a direct
distribution channel through the Hastings Direct website as a complementary channel for distribution. 88 per
cent. of the Group’s new business policies (excluding telematics) were distributed on PCWs during the six
months ended 30 June 2015.
Hastings Direct is the Group’s core brand, accounting for 93(3) per cent. of all new business sales for the six
months ended 30 June 2015. The Group markets its premium product offering, which includes a reduced
excess and additional coverage as standard (such as legal expense and breakdown coverage), as Hastings
Premier. Hastings Essential offers reduced levels of cover compared to the core Hastings Direct product,
providing flexibility for the Group’s customers trading the level of cover provided for price. In the six months
ended 30 June 2015, the Group’s telematics proposition offered under its Hastings Direct SmartMiles brand
has become more prominent and an important part of the Group’s business model, constituting 3 per cent. of
its new business sales in the six months ended 30 June 2015. The Group’s other brands, including Insure Pink
and People’s Choice, accounted for 4 per cent. of all new business sales in the six months ended 30 June 2015.
As at 30 June 2015, the Group’s private car, home and motorbike offerings under the Hastings Direct and
Hastings Premier brands were all rated 5-Star by Defaqto, an independent financial research company
specialising in the rating of financial products. All of the Group’s brands are present on the PCWs all offering
distinct customer propositions at different price points enabling the Group to display a number of prices to
customers requesting a quote.
(3) The “Hastings Direct” brand comprises Direct, Essentials and Premier.
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Hastings Direct is the Group’s core brand which benefits from the Group’s ongoing investment in
advertising, and accounted for approximately 93(3) per cent. of the Group’s new business sales in the six
months ended 30 June 2015. Having launched a national media campaign in 2013 designed to improve
awareness of the Hastings Direct brand, the Group has continued to build on this investment using a
controlled approach to TV advertising, measuring results closely and employing a test and learn
methodology to deliver maximum impact as efficiently as possible.
The continued investment in TV advertising also supports growth in non-PCW sales (direct sales) and
increases awareness of non-car products. Marketing spend is deployed across predominantly digital media
to efficiently harvest the sales driven by this increased awareness with a particular focus on organic and
paid-for search, affiliate marketing and email marketing. The Group uses a mix of internal data gathered
from current and previous quote requests, website analytics and externally purchased behavioural data to
effectively target prospects across the digital channels.
Products (i) 6.1.2
The Group’s core product offerings include private car insurance as well as motorbike, van and home
insurance in the UK. In 2014, the Group increased its strategic focus on home insurance in order to increase
the Group’s offerings to customers and expand its footprint.
Private car insurance

The Group’s core product offering is private car insurance, which constituted 87 per cent. of the Group’s live
customer policies as at 30 June 2015. The Group has grown its UK private car insurance market share
quickly in terms of the Group’s share of registered cars in the United Kingdom, from 4.3 per cent. as at
31 December 2013, to 5.1 per cent. as at 31 December 2014 and 5.5 per cent. as at 30 June 2015 (Source:
UK Department for Transport and Company data). The Group’s private car insurance is offered with a
number of different features, with (i) the Group’s standard policy offered, primarily, under its Hastings Direct
brand, (ii) the Group’s premium policy, which includes extra cover such as legal expense and breakdown
cover, offered via its Hastings Premier product and (iii) the Group’s simplified basic policy offered via its
Hastings Essential product. The Group also offers UK private car insurance telematics policies.
Home insurance
Home insurance policies made up 5 per cent. of the Group’s live customer policies as at 30 June 2015. The
Group also believes its home insurance offering is a key growth opportunity, particularly because the Group
is able to utilise its existing capabilities in place for sales of private car insurance through the PCW
distribution channel. As described in Part 5 (Industry Overview), consumers are increasingly purchasing
home insurance through PCWs, which enables the Group to capitalise on its successful, data-centric PCW-
based distribution model. The Group is also looking to explore offering home insurance to a greater
proportion of the Group’s existing 1.88 million live customer policies.
The number of the Group’s home insurance live customer policies increased by 69.6 per cent. to
approximately 95,000 as at 30 June 2015 from approximately 56,000 as at 30 June 2014.
Motorbike and van insurance

Motorbike insurance policies made up 5 per cent. of the Group’s live customer policies as at 30 June
2015.The Group’s offering in respect of motorbike insurance comprises Hastings Direct and Hastings
Premier products.
Van insurance policies made up 3 per cent. of the Group’s live customer policies as at 30 June 2015. The
Group’s product offering in respect of its van insurance is identical to that of its motorbike insurance
offering.
(3) The “Hastings Direct” brand comprises Direct, Essentials and Premier.
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Premium financing and ancillary products
The Group offers the option of premium finance to certain customers who choose to pay in monthly
instalments for their insurance products rather than in one annual upfront payment.
The Group also offers optional ancillary products to customers alongside its primary insurance products,
which are underwritten separately from the primary policy. Key ancillary products the Group offers with its
motor insurance products include legal expense, breakdown cover, substitute vehicle cover and personal
accident cover.
Key ancillary products the Group offers with its home insurance products include family legal insurance,
home emergency and replacement key coverage. All of the Group’s ancillary products are provided to
customers on an “opt in” basis, and the Group does not incentivise customer-facing staff on the basis of sales.
Pricing and analytics

Once a customer requests a quote, whether from a PCW or through a direct distribution channel, the
customer details are automatically forwarded to Underwriting and Retail’s panel of third-party insurers who
return the request with a technical net rate to Retail. Underwriting will enrich the request using external
credit ratings and other non-traditional pricing data and validate using the Group’s proprietary counter-fraud
analysis. Retail then applies an increase or discount within certain limits to the quotation using a range of
sophisticated pricing technologies and a data-driven assessment of customer value, price elasticity and other
factors to optimise income per policy, generating a quote for the customer. If the customer chooses to
purchase the insurance at the quoted price, Retail collects the full policy price from the customer and passes
the net premium (the technical net rate) on to the underwriter of the insurance. If the policy is underwritten
by Underwriting, the Group undertakes additional proprietary counter-fraud testing at the point of sale. The
quotation process described above is fully automated, and is generally completed in a few seconds.
The Group has a dedicated retail pricing team of 21 full-time employees supported by four developers. The
Group believes that a key to its success has been a data-driven approach to pricing. Each customer provides
38 pieces of information that the Group translates into more than a hundred different rating variables through
data enrichment. There are 36 models that support new car business life time value. These models use
customer information provided through the quote process and are enriched with external data, such as
behavioural patterns. Applying the Group’s proprietary database of customer and quote information and the
Group’s proprietary data enrichment technologies, the Group has been able to hone and constantly improve
its pricing methodologies. Additionally, the Group has daily price and competitiveness tracking across seven
segment categories and holistic daily market price tracking. The Group also has a minimum of two tests
active on car and home continuously and ongoing, real-time elasticity testing, the output of which is
incorporated into the price optimisation approach. Additionally, the Group has a range of statistical
predictive assessments in place, a defined timetable to refresh and rebuild models and embedded peer review
and a model review committee. The Group’s agile pricing capability allows it to make intra-day changes to
its methodologies, enabling the Group to quickly adapt in response to market changes, with adjustments
implemented in less than one hour if required. On average, the Group made 51 changes to its pricing
methodologies in each month in the six months ended 30 June 2015, and the Group is able to update intra-
day sales management information every 15 minutes.
Panel insurance
Retail places policies either with Underwriting or a select panel of leading third-party insurers, with
customers channelled to the lowest quote given.
In the six months ended 30 June 2015, due to Underwriting’s low cost model, coupled with its data-driven
risk selection and pricing technologies, 89 per cent. of the Group’s new business sales were placed with
Underwriting (excluding telematics). From the beginning of 2015, Underwriting also co-insures the home
insurance business with one of the insurers on Retail’s existing panel of third-party home insurers.
The remainder of the Group’s insurance policies are placed with an external insurer panel. The Group’s
third-party panel of insurers, which includes, for example, Ageas, Aviva, AXA, Chaucer, Covéa, Towergate,
SABRE and Sterling, allows Retail to sell a wider range of products to a broader range of customers.
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Customer retention
As it has grown, the Group has placed increasing emphasis on customer retention. This led to a strong
customer retention rate of 77.2 per cent. in the year ended 31 December 2014.
The Group supports customer retention through its overall customer service proposition and also through the
use of sophisticated pricing and communication strategies to ensure customers choose to stay with the
Group. The Group’s ability to retain its existing customers on renewal is influenced by the maturity of its
policy portfolio, its success in previous years in targeting new customers that are more likely to renew their
policies with the Group and its renewal pricing strategy. The Group continues to improve the sophistication
of its pricing on renewal, enhancing the data-centric approach and improving the infrastructure and systems.
These improvements to infrastructure and systems simplify the ability of Retail to modify the price paid by
the customer by adjusting its broking commission, either upward or downward, so that price competitiveness
is optimised.
Underwriting (i) 6.1.1

(i) 6.1.2
Overview
(i) 6.2
Underwriting utilises a data intensive process specifically designed to provide superior underwriting results
in the highly competitive PCW market. The underwriting process consists of the following key functions:
• Fraud detection: The Group believes that the most effective counter-fraud systems run throughout the
operation, from the point of quotation, to analysis of claims presented. Therefore the Group has
invested in proprietary systems to ensure the risks presented by customers are validated.
Even within an accurately priced, and cleansed portfolio, fraud will still be presented by
non-policyholders. The Group has therefore invested in teams who specialise in spotting staged or
exaggerated claims through the skilled application of relational database technology.
• Dynamic footprint selection: The Group utilises an analytic process to regularly adjust the market
segments where it writes business. The process includes conducting regular segment level
performance analysis, adding new data, introducing new analytic techniques and conducting rigorous
test and learn experiments. As a result of the process, the Group has made 10 adjustments to its
footprint in the six months ended 30 June 2015.
• Risk pricing: The Group uses state of the art tools to regularly review the adequacy of its price level
at both a book and segment level. These tools take into account the mix of business written, company
loss trends, market loss trends, company actions and market actions (regulatory, solicitor, etc.). The
Group has made 35 rate table changes in the six months ended 30 June 2015.
• Investment portfolio: Underwriting holds investments to realise return from its holdings, and the
Directors believe Underwriting holds a stable, low-risk portfolio of investments. The Group carefully
balances the risk return trade-off in the portfolio and adopts a cautious style to minimise risk charges,
maintain capital projection and ensure compliance with FSC guidelines, with a primary focus on
maintaining capital.
• Reinsurance: The Group employs both proportional (quota share) and non-proportional (excess of
loss) structures in order to maximise return on equity, provide balance sheet protection and minimise
volatility of profits.
• Claims handling: The department has two core objectives, (i) delivering straightforward quality
service to the Group’s customers in their time of need following an incident, and (ii) minimising
payments to third parties through efficient pro-active case management.
• Reserving: The Group conducts quarterly reserve reviews at a product and peril level. These reviews
are conducted utilising accepted actuarial procedures. In addition, the Group validates its claims
reserves through an independent third-party actuarial opinion every six months.
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Multiple standard actuarial methods are considered when selecting the internal actuarial best estimate
reserve, including Chain ladder, Bornhuetter-Ferguson and Average Cost per Claim methods, on paid
and incurred data. The last three to five years of history is used for development factor selection within
the Chain ladder method. Booked reserves are selected by management taking account of various
factors including targeting a risk margin in the booked reserves that is broadly consistent with a 75
per cent. confidence level on the basis of the internal actuarial analysis.
Underwriting exclusively underwrites policies sold through Retail (underwriting policies sold through third-
parties were discontinued in 2011). Under the broking relationship, Retail receives a broking commission on
each customer contract which is applied by Retail to the Underwriting net rate. Retail also receives a
performance commission pursuant to the performance of the value added services it provides to
Underwriting against certain key metrics. Underwriting contributed £292.7 million of GWP and
£17.0 million of operating profit in the six months ended 30 June 2015.
AICL is a Gibraltar-based insurer licensed by the Gibraltar regulator, the FSC, to underwrite motor, home,
legal expense and personal accident insurance and authorised to carry out business in the UK pursuant to
Gibraltar insurers’ passporting rights to do business in the UK. AICL currently underwrites most of Retail’s
private car, motorbike and van insurance policies. From the beginning of 2015, Underwriting also co-insures
the home insurance business with one of the insurers on Retail’s existing panel of third-party home insurers.
The Group generates underwriting revenue from (i) net earned premiums from insurance policies
underwritten by Underwriting, consisting of gross earned premiums received less reinsurance, (ii)
investment income, consisting of income and gains from the Group’s investment portfolio, and (iii) profit
commission, consisting of performance-based payments from reinsurers based on contractual performance
targets.
Underwriting is managed from Gibraltar with 19 FTE who perform finance, actuarial, underwriting and
claims functions. Under the outsourcing agreement with Retail, a dedicated outsourced team of
approximately 560 FTE operates from the Group’s office in Bexhill, England, which includes approximately
370 claims operations FTE as at 30 June 2015.
Outsourced service agreement with Retail

Under an outsourced service agreement, HISL provides intermediary, claims and underwriting support and
analytical services to AICL and may also receive additional commissions linked to counter-fraud activity and
other benefits materialising to AICL due to HISL’s service activities. HISL received commissions of £41.2
million, £45.1 million, £57.8 million and £36.3 million for the years ended 31 December 2012, 2013 and
2014 and the six months ended 30 June 2015, respectively. The commissions received represent 11.6 per
cent., 10.8 per cent., 11.6 per cent. and 12.4 per cent. of AICL’s GWP for the years ended 31 December 2012,
2013 and 2014 and the six months ended 30 June 2015, respectively, which are in line with the expected
range of commissions payable, as a percentage of GWP, under the outsourcing agreement.
The intermediary services that are provided by Retail, through HISL, include promoting, selling, arranging
and administering contracts to customers and potential customers, executing customer contracts, providing
the necessary documentation for the customer contracts, adjusting, renewing and cancelling customer
contracts, collecting premiums, handling customer complaints and ensuring compliance with all regulatory
requirements.
The underwriting support services provided by Retail include: (i) analysis and recommendations on footprint
selection, rate level and individual net rates; (ii) claims management including negotiating and settling
claims within agreed authorities from Underwriting; (iii) fraud detection; and (iv) conducting quarterly
reserve reviews to include reserve recommendations.
On a monthly basis HISL is required to submit to AICL a report detailing the activities of each of the services
it provides, which is presented at an operational review meeting. The outsourcing agreement provides for a
risk transfer arrangement. Pursuant to this arrangement, upon completion of a customer contract, risks from
any losses, fees, expenses, liabilities and costs arising from such customer contracts are passed to
Underwriting. Underwriting also acquires title to the net premiums of the policy at the point that Retail
83
collects them from the customer. The term of the outsourcing agreement is on a rolling basis and expires on
termination of the agreement. The agreement may be terminated by either party upon six months prior
written notice or in the event of insolvency, receivership or other material breaches of the agreement that are
unremedied after 30 days and three months of continuous prevention of performance of duties under the
terms of the agreement.
Dynamic footprint selection

The Group believes that dynamic footprint selection is critical to its success in the PCW market. The Group
utilises an analytical process to regularly adjust the market segments where it writes business. The process
involves reviewing segment level performance, adding new data, introducing new analytic techniques and
conducting rigorous test and learn experiments.
For the six months ended 30 June 2015, Underwriting offered quotes to approximately 51 per cent. of those
seeking quotes on PCWs. This represents a significant increase in Underwriting’s quotability since the year
ended 31 December 2013. The expansion is attributed primarily to additional external data which has added
new insights to the loss characteristics of certain segments as well as new analytic techniques and adjacency
analysis. All adjustments go through a rigorous test and learn process to ensure that they are performing as
anticipated. An example of this is the use of telematics data to quickly identify the best risks in certain high
risk segments. The telematics program began in 2012 and has been adjusted multiple times based on results.
Risk pricing
The Group rigorously analyses the adequacy of its current rate level utilising state of the art tools that project
the future profitability of the book of business. These tools take into account the precise mix of business
written, company loss trends, market loss trends, company actions and market actions. Individual
Underwriting net rates are set by utilising sophisticated statistical tools combined with extensive market
knowledge. The Group utilises Generally Linearized Models in conjunction with other statistical tools such
as SAS, R and other well-known industry software to create what it calls a technical pricing model. The
technical pricing model represents the best mathematical prediction of a risks prospective loss costs. The
model is then continuously reviewed and adjusted to find and fix where it is over- or under-pricing risk
segments. The review is conducted utilising standardised management information combined with the ability
to create customised segments. This process is augmented by proprietary software that searches regularly for
mispriced segments. The review is conducted by experienced underwriters who apply market knowledge and
data to review findings of the automated analytics as well as creating hypotheses to check. The Group
believes that it has created a market leading pricing scheme by combining the use of sophisticated statistical
tools with extensive market knowledge and rapid execution, which have resulted in a higher conversion for
rate decreases, and lower estimated cost of claims incurred per exposure (“burn cost”). During the six months
ended 30 June 2015, the Group has made 10 footprint changes and applied 35 rate table changes.
Investment portfolio
Underwriting holds investments to realise return from the capital it is required to hold and the Group believes
Underwriting holds a stable, low-risk portfolio of investments. The Group carefully balances the risk return
trade-off in the portfolio and adopt a cautious style to ensure compliance with FSC guidelines, with a
primary focus on maintaining capital.
To the extent the Group experiences gains and losses in its investments, such gains and losses impact the
results of Underwriting by providing the Group with more or less investment income. Changes in the
valuation of the Group’s investments also impact Underwriting’s results, as the Group is required to regularly
conduct valuations and write up or down the value of its assets under applicable accounting rules, with such
changes in valuation flowing through the Group’s consolidated statement of profit or loss and consolidated
statement of comprehensive income. In order to ensure diversification of the investment portfolio and ensure
compliance with regulatory capital requirements, the majority of the Group’s investments are in investment
grade corporate bonds, cash and cash equivalents and absolute return funds.
Investment income from dividends received by AICL from investments in securities it holds and capital gains
are not currently subject to taxation in Gibraltar.
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Reinsurance
The results of AICL are impacted by the availability and pricing of reinsurance. AICL purchases two forms
of reinsurance coverage: quota share reinsurance and non-proportional excess of loss reinsurance. Non-
proportional excess of loss reinsurance comprises a panel of reinsurers who reinsure all risk of loss on a
single claim exceeding an inflation-adjusted £1.0 million (£0.5 million pre-2014 underwriting year), with 50
per cent. of such amount met by quota share reinsurance.
AICL’s quota share reinsurance increases its capacity to underwrite volume and reduces its capital
requirements relative to the business it underwrites. AICL has engaged nine reinsurance partners, the
majority of which are rated AA and all are rated A- or higher by S&P, for its quota share reinsurance
programme in 2015 with quota share reinsurance provided under fixed and rolling annual contracts to
maximise the Group’s flexibility and pricing power. Quota share reinsurers pay AICL profit commission on
amounts they receive in excess of their expected margins based on net loss ratios. AICL has had strong
demand from its existing and prospective panel members, resulting in improved pricing in the past year.
The following table illustrates AICL’s quota share arrangements with respect to reinsurance partners.
Quota Share Arrangements

Six months
ended
Year ended 31 December 30 June
——————————————— ————
(1)
Capacity Provision Rating 2012 2013 2014 2015
———————————————— ———— ———— ———— ———— ————
Hastings Insurance Group ..................... n/a 49% 50% 50% 50%
SCOR..................................................... AA- 20% 15% 10% 10%
NewRe ................................................... AA- 6% 9% 8% 5%
PartnerRe ............................................... A+ 9% 6% 4% 1%
R&V Versicherung AG .......................... AA- – – 5% 8%
ACE Group ............................................ AA 5% 4% 4% 4%
Tokio Marine ......................................... A+ – 4% 4% 5%
Q-Re....................................................... A – 4% 6% 7%
AXIS ...................................................... A+ – 2% 3% 3%
Other(2) ................................................... n/a 11% 6% 6% 7%
Total Quota Share................................ 51% 50% 50% 50%
Average Cost as a Percentage of
Ceded Premium ............................... 3.5% 3.0% 2.9% 3.0%
Average Profit Commission ................ 92% 94% 96% 98%
Notes:
(1) S&P rating correct as at 15 September 2015.
(2) Historically other reinsurers have included Swiss Re, Faraday Re, Novae Re, Arch Re, Trans Re and Hannover Re.
AICL’s non-proportional excess of loss reinsurance is placed with a panel of 19 reinsurers, with some
crossover with its quota share reinsurers. AICL purchases non-proportional excess of loss reinsurance in
order to minimise volatility in Underwriting’s results. Under such non-proportional reinsurance
arrangements, the reinsurance partners cover claims in excess of a stated amount. In each case, AICL pays
a fee for the reinsurance coverage, which is based on market rates for such coverage and on reinsurers’
demand to participate on the panel.
For the six months ended 30 June 2015, AICL’s non-proportional excess of loss reinsurers provided cover
for losses on any single claim for risks accepted in 2015 exceeding an inflation-adjusted £1.0 million (with
50 per cent. of such amount met by quota share reinsurance), along with significant bodily injury and
periodical payment order protection at a cost, net of commission, of 7.7 per cent. of NWP.
85
Claims
Claim frequency, claim severity and the number of claimants per claim made against the Group’s insurance
policies impacts Group results. Risk selection and pricing primarily influence the frequency of the claims
received, and to some extent, the severity. However, it is the role of the claims department and counter-fraud
unit to ensure that customer claims are paid fairly and that third-party claims are validated and mitigated as
much as possible.
Inputs from across the Group drive continuous improvement, implementation of change and upskilling in the
change process. These include: audits and reviews; external benchmarks, operation and loss ratio data;
continuous improvement to the process, customer journey, system and implementation; and collaboration
and promotion of training and end-to-end learning.
The Group has defined claims management stages to optimise the customer journey, which includes case
management being trifurcated into own damage (“OD”), third-party property damage (“TPPD”) and bodily
injury (“BI”). During the year ended 31 December 2014, OD claims accounted for 68 per cent. of the
Group’s claims, while TPPD accounted for 23 per cent. and BI accounted for 9 per cent. However, during
the year ended 31 December 2014, BI claims accounted for 48 per cent. of the total value of claims while
TPPD accounted for 30 per cent. and OD accounted for 22 per cent.(4) The difference in the Group’s claims
spend on BI relative to its incurrence of BI claims demonstrates the importance of its management of small
value claims and focus on large BI claims. The Group’s retained BI spend is positively impacted by its
reinsurance coverage.
Where possible, the Group handles OD at-fault claims within its own network, managing approximately
75 per cent. of vehicle in-network during the year ended 31 December 2014, as its tight cost management
and a fixed average repair cost contract ensure efficiency and a more predictable settlement pattern. The
Group monitors total loss settlements against industry guides. Within the OD claims process, the Group is
focused on improving its fixed average repair contracts, customer experience and services, claim cycle times
and providing a full repair and mobility structure.
The Group has recently increased its focus on TPPD claims management through significant deployment of
resources into the function. The Group’s TPPD claims management focuses on intervention where the
customer is at fault and mitigation of damages through proactive engagement and servicing of third-party
claimant needs. TPPD claims management also works to prevent escalation of property damage costs in
addition to other benefits and to address market wide cost inflation in subrogated claims. The Group is
currently focused on a significant deployment of new resources towards TPPD within the Group’s claims
function as well as the recruitment of credit hire and intervention specialists to lead the team and reductions
in claims leakage.
The Group’s BI claims strategies to retain high volume, low value, claims within the Ministry of Justice
portal and negotiate robustly have been effective in reducing the severity of BI claims. The Group has
experienced significant improvement following the introduction of the “A2A MoJ” application, and BI claim
severity has decreased significantly recently as a result of recently implemented claims adviser outcome and
settlement matrix initiatives. The Group is currently focused on addressing the increasing trend for late
notified claims and training and preparing teams to deal with trends and factors related to BI claims,
including attention to details reducing average special damages.
Underwriting outsources its claims handling requirements to Retail, which has approximately 370 claims
operations FTE at the Group’s Bexhill office as at 30 June 2015. Under this arrangement, Retail has
delegated authority for all claims up to £100,000, with claims in excess thereof referred to Underwriting. All
claims are passed through a fraud database of proprietary and external data and reviewed by the Group and
third-party validation teams of claims handlers, including ex-police officers and data analysts. Any claims
not relating to policies underwritten by Retail are referred to the relevant panel insurer.
The handling of claims is undertaken by Retail, through HISL, pursuant to an outsourcing agreement with
AICL. The efficiency of the claims handling process is a driving factor in the mitigation of losses and
(4) Based on 2014 claims estimates as at 30 June 2015.
86
materially affects Retail’s financial results. During the year ended 31 December 2014, the Group applied
more focus on effective and pro-active claims management, particularly personal injury claims, aiming to
reach an indemnity and liability decision within the 15 day timeframes created by the Civil Procedure Rules
applied to the UK Ministry of Justice Claims Portal. This has been part of a broader strategy to optimise
opportunities to reduce the cost of bodily injury claims identified in the 2013 Jackson Reforms.
The Group also invests in its employees to enable them to be effective in helping its customers and increase
efficiency in claims handling. More than a quarter of the Group’s claims and counter-fraud staff are, or are
training towards being, Chartered Insurance Institute qualified.
The Group also has an award-winning counter-fraud capability which reduces its costs of claims through
identification of fraud at point of claim, increases premiums by identifying fraud at point of quote and at
point of sale and increases expansion of the Group’s underwriting footprint by enabling it to enter segments
of the market which would otherwise be at a higher risk of fraud. The Directors believe these factors have
been a driving a force in the Group continuing to achieve a strong Group calendar year loss ratio.
People and infrastructure

Employees (i) 17.1
The following table details the average number of the Group’s FTE during the years ended 31 December
2012, 2013 and 2014 and the six months ended 30 June 2015:
Six
months
ended
Year ended 31 December 30 June
————————————–————— ————
2012 2013 2014 2015
———— ———— ———— ————
(audited)
Customer facing staff ................................... 962 1,138 1,230 1,327
Support Staff ................................................ 349 395 456 466
———— ———— ———— ————
Total ............................................................. 1,311 1,533 1,686 1,793
———— ———— ———— ————
None of the Group’s employees is covered by a collective bargaining agreement or represented by a labour
organisation. To date, the Group has not experienced a labour-related work stoppage. The Group considers
its relations with its employees to be good.
Pensions (i) 15.2
The Company operates various defined contribution group personal pension schemes for employees
employed in the United Kingdom and in Gibraltar to which the relevant employer makes matching
contributions based on the employee’s level of contributions. The Company does not operate any defined
benefit pension schemes.
Information technology and Guidewire

The Group utilises sophisticated IT systems to analyse and process applications for insurance coverage,
deliver quotes and process transactions on secure information systems. The Group’s IT systems are managed
in-house by a team of IT professionals who are supported by third-parties.
The Group’s IT platforms are currently made up of two core systems: the CDL Classic broker platform,
which includes real-time pricing and links to the Group’s proprietary data analysis and rules engine; and the
IS2000 insurer platform, which holds policy and customer data and is supported by an in-house development
team. These are supported by a number of ancillary systems and databases, the key ones being those which
support the counter-fraud and data enrichment activities.
To support the business strategy, with delivery of digital/customer self-serve capabilities, together with
improvements in claims leakage and operational efficiencies, CDL and IS2000 systems are being replaced
87
by Guidewire PolicyCenter and Guidewire ClaimCenter, respectively. Guidewire is widely recognised as a
leading software solution for general insurance. Guidewire PolicyCenter provides underwriting and policy
administration capabilities, including providing a complete system-of-record and support for underwriting,
quoting, renewals and other key aspects of the lifecycle of the Group’s policies. Guidewire ClaimCenter
provides integrated claims handling through a web-based end-to-end claims lifecycle tool and records all
required claims-related financial data. The Directors believe that Guidewire will provide significant benefits
to the customer claims experience across OD, TPPD and BI claims while optimising the claims processes,
providing greater control to colleagues and reducing the claims lifecycle through workflow and activity
management and early liability decisions.
This replacement programme is already in its development phase, with implementation occurring through a
series of releases in 2015 and 2016. The Group has partnered with EY to deliver and integrate the Guidewire
platform.
Additionally, focused investment has been made to deliver leading data analytics capabilities and continued
development of delivery methods.
Intellectual property (i) 6.4
The Group relies on copyright and trademark laws, confidentiality procedures and contractual provisions to
protect its intellectual property rights. The Group actively takes steps to protect its intellectual property rights
when and where it deems appropriate. The Group markets the majority of its products under a number of
trademarks. The Group believes that its Hastings Direct trademark, as well as its major product brands,
enhance its competitive advantage and are essential to its business.
The Group also has registered the domain names used by its business to deliver services and information to
its customers or held to protect trading names and brands developed by its business.
Environment (i) 8.2
The Group believes that it does not have any material environmental compliance costs or environmental
liabilities.
Insurance
The Group’s operations are subject to various potential claims, lawsuits and other proceedings, risks and
hazards. The Group has insurance coverage for, among other things, property damage, business interruption,
third-party liability, including professional indemnity, terrorism, and in respect of liability of the Group’s
directors and officers. The Group’s business is subject to claims relating to disputed policyholder insurance
claims and contractual claims in the ordinary course of business.
In the Group’s view, its existing insurance coverage, including the limits of indemnity and the conditions
pursuant to which such coverage is provided, is reasonable taking into account the cost of the insurance
coverage and the potential risks to the Group’s business and operations. However, the Group cannot provide
any assurance that losses will not be incurred or that claims will not be filed against the Group which exceed
the scope of, or are not covered under, its existing insurance coverage.
Capital and risk management

Internal controls
The Group has an internal control framework based on a three lines of defence approach. Monitoring and
quality procedures are embedded in front line operations with clearly prescribed breach reporting and
escalation processes in place. Second line oversight is provided by separate and appropriately resourced risk
and compliance functions, and third line oversight is conducted by an internal audit function, managed and
resourced via a third-party relationship with Grant Thornton.
The effectiveness of the Group’s control functions is overseen by the respective Board of Directors and
committees of the Company, HISL, and AICL as appropriate. Customer and conduct issues are monitored
by HISL’s Board of Directors’ Customer and Financial Conduct Committee.
88
Risk function
A comprehensive risk management framework exists within the Group. This includes risk registers that
contain details of risks, controls, key risk indicators and ownership of each risk. Further developments during
the year ended 31 December 2014 included the development of strategic and conduct risks, including stress
and reverse stress testing, and increasing the strength of the risk management team. Additional focus has
been applied to ensure compliance with requirements under the forthcoming implementation of the Solvency
II Directive. There is clear reporting of the risk profile to operational risk management committees, who
review and manage the risk profile at an operational level, and Board of Directors’ risk committees at a
subsidiary and Group level.
Compliance function
The Group continues to invest appropriately in its compliance oversight function to ensure that it remains
effective in monitoring and providing assurance that appropriate regulatory adherence and customer conduct
outcomes are being met. The compliance function provides appropriate and effective advisory guidance to
the business as well providing second line monitoring of operations. AICL continues to develop its
compliance function as appropriate in context of the governance regime required to support adherence to
Solvency II requirements.
Insurance risk management

As the largest risk to which the Group’s business is exposed, the oversight, management and control of
insurance risk is considered of strategic importance to the Group. For a detailed overview of the Group’s
insurance risk management policies, see Part 9 (Operating and Financial Review—Financial risk
management—Insurance contracts risk).
Fraud detection
The Group believes it has a market-leading counter-fraud capability, which to date has generated significant
cost savings and which supports demand for participation by its insurer panel and reinsurance partners. The
Group’s counter-fraud operations team, Insight, operates as an integrated, comprehensive risk selection and
loss validation division. Insight includes a dedicated team of approximately 120 FTE, including new
business review agents, analysts, intel operatives, claims handlers, former police officers and field based
investigators. Within the Group’s counter-fraud operations, specialised teams work mining databases and
investigating claims and gain significant customer facing experience which help improve the Group’s
counter-fraud abilities and results. The business was a founding member of the Insurance Fraud Bureau’s
Application Fraud Steering Committee and has a very strong relationship with the Insurance Fraud
Enforcement Department, recently recruiting the retiring founding Detective Chief Inspector.
The Group employs a number of sophisticated validation methodologies and databases to identify potentially
fraudulent activity at various points in the application, sale and claims process. At the point of quote, the
Group focuses on risk scoring and referencing tools including data enrichment to identify and reduce
exposure to potentially fraudulent applications. At the point of sale, the Group again undertakes risk scoring
supported by a review of relational databases and check for any irregularities in the quotations created
(Quote Manipulation). During the claims process, the Group reviews relational databases and uses external
referencing and investigations to root out fraudulent claims.
If irregularities are detected, the Group takes appropriate action ranging from re-pricing or termination of a
relevant policy, claim repudiation, litigation or preparing material for criminal investigations with the police.
The strength of its Insight team is recognised in the industry and has been the recipient of a number of
industry awards.
Governance and regulation

Retail capital requirements
Retail is required by the FCA to hold sufficient assets to meet minimum capital requirements. Because Retail
performs activities as an insurance intermediary and does not hold client money, its minimum capital
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requirement is the greater of: (i) £5,000 and (ii) 2.5 per cent. of the regulated annual income from its
activities as an insurance intermediary.
In addition, Retail is subject to additional capital requirements under TC2.4. See Part 7 (Regulation—UK
Regulation—Insurance Intermediaries).
With a ratio of capital exceeding its minimum capital requirement of 894 per cent. as at 31 December 2014,
Retail holds assets necessary to meet its minimum capital requirements and maintains sufficient resources to
meet its TC2.4 requirements.
Solvency coverage
The capital position and the capital resources of Underwriting required to meet minimum solvency
requirements are dependent upon a number of factors, including the value of such capital resources and the
quantum of risk to which the Group is exposed. See Part 9 (Operating and Financial Review—Capital
management—Underwriting).
The EU is in the process of developing and implementing Solvency II. Solvency II aims to harmonise
minimum capital requirements for insurers across the EU and is scheduled to come into effect on 1 January
2016. It will require, among other things, the need to demonstrate adequate financial resources to satisfy
Solvency II capital requirements, develop systems to manage risk exposures and comply with the various
public disclosure and reporting obligations. Additionally, the FSC has agreed that AICL may distribute
dividend provided that at all times AICL’s Solvency I coverage ratio is above a minimum threshold on both
retrospective and prospective bases. AICL is also required to maintain claims reserves that are validated by
independent third-party actuarial reviews. This basis was agreed with the FSC as a transitional proxy for
solvency requirements after the implementation of Solvency II. As at 30 June 2015, AICL’s Solvency I
coverage ratio was 259 per cent. See Part 7 (Regulation—Gibraltar regulation—Capital requirements—
Solvency II) and Part 1 (Risk Factors—Risks related to the Group’s business and industry—The EU is
currently in the process of introducing a new regime governing solvency requirements, technical claims
reserves and other requirements for insurance companies, the effect of which is uncertain).
Tax proceedings
The Group is currently challenging HMRC regarding the amount of historical VAT it has paid. The dispute
centres around whether insurance intermediary supplies provided by HISL and received by AICL should be
treated as exempt from VAT. HMRC has taken the view that AICL has an establishment in the UK for VAT
purposes and, as a result, such supplies should be treated as exempt from VAT, so that any VAT incurred by
HISL in relation to insurance intermediary supplies provided to AICL would not be recoverable and would
constitute a cost to the business. The Group is contesting this position. As the contested amount of VAT has
already been paid, any decision in favour of HMRC would not result in an additional VAT cost to HISL.
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PART 7
REGULATION
Financial Services Regulation
The Group’s regulated business activities comprise retail insurance broking and ancillary services and
underwriting, which are carried on, respectively, through HISL in the United Kingdom and through AICL in
Gibraltar.
HISL, which carries out insurance intermediation, is authorised and regulated by the FCA.
AICL is the Group’s authorised insurance underwriting company. It is incorporated in Gibraltar and licensed
by the Gibraltar regulator, the FSC, to underwrite motor and personal accident insurance. It is authorised to
carry out business in the UK pursuant to Gibraltar insurers’ passporting rights to do business in the United
Kingdom.
United Kingdom – HISL

General
The statutory framework for the regulation of the financial services industry in the United Kingdom is set
out in the Financial Services and Markets Act 2000 (“FSMA”) which requires providers of financial services
in the United Kingdom to be authorised and regulated by the relevant regulatory authority. Financial services
firms are subject to the authority of one or both of the two UK regulators, the Prudential Regulation
Authority (“PRA”) and the Financial Conduct Authority (“FCA”) for their prudential supervision. The PRA
is responsible for the prudential regulation of all banks, insurers and some designated investment firms.
Although the PRA is responsible for the prudential regulation of these firms, they are dual-regulated as the
FCA regulates their conduct of business and consumer protection. For other financial services firms,
including insurance intermediaries, fund managers and investment firms, the FCA is the sole regulator in
both prudential and conduct matters. The UK regulated entity in the Group is solo-regulated by the FCA and
the remainder of this section refers specifically to the powers of the FCA although similar powers may also
be granted to the PRA in relation to those firms for which it has regulatory oversight powers.
As an authorised firm, HISL (and to a more limited extent AICL, as an entity entitled to conduct insurance
business by virtue of a right corresponding to the passporting rights under EU single market directives) must
comply with the requirements of FSMA as well as the supplementary rules made by the PRA and/or the
FCA, as the case may be, under powers granted by FSMA. There are a number of regulatory handbooks, but
some important sources of the rules, and accompanying guidance, relevant to the insurance intermediary
business undertaken within the Group include (but are not limited to) the General Prudential Sourcebook,
the Prudential Sourcebook for Mortgage and Home Finance Firms and Insurance Intermediaries (“MIPRU”),
and the Insurance: Conduct of Business Sourcebook (“ICOBS”), as well as the FCA’s Principles for
Businesses. HISL is also required to hold permissions under the Consumer Credit Act 2006, which have been
administered by the FCA since 1 April 2014.
HISL is subject to relatively limited minimum capital requirements (the higher of £5,000 and 2.5 per cent.
of annual income from regulated activities) and has capital resources in excess of its minimum capital
requirements.
Insurance intermediaries and investment firms

Insurance intermediaries are authorised and regulated by the FCA and investment firms are authorised and
regulated by the FCA and (in the case of the most significant investment firms) the PRA. Both insurance
intermediaries and investment firms must comply with certain conditions relating to capital and liquidity,
corporate governance and risk management and controls, among others, although these conditions will vary
dependent upon the nature of the regulated activities that the firm is authorised to conduct in the United
Kingdom. The relevant requirements are set out in Schedule 6 of FSMA and further supported by the
provisions of the FCA Handbook and PRA Handbook, as applicable. Due to the nature of the insurance
91
intermediation business, generally lower prudential requirements apply for insurance intermediaries,
particularly those who do not hold client money, than those for investment firms. The FCA and the PRA each
has the power to cancel or vary a firm’s permission or to withdraw a firm’s authorisation.
Insurance Mediation Directives I and II

The Insurance Mediation Directive I (“IMD I”) was implemented in EU Members States in 2005. IMD I sets
standards covering matters such as intermediary fitness and propriety, training, competence, prudential
requirements and complaints handling. It also requires a certain minimum of pre-sale information to be given
to customers by insurance intermediaries.
On 3 July 2012, the European Commission presented a proposal for the revision of IMD I, the Insurance
Mediation Directive II (“IMD II”). IMD II includes provisions intended to expand the scope of IMD I and
includes other proposed regulations which aim to address the weaknesses perceived in IMD I. The most
significant change will be a requirement for insurance intermediaries to disclose their remuneration to
clients.
The proposed IMD II requires disclosure of the nature of the payment, the amount or basis of remuneration
calculation and information on any contingent commission. Those requirements apply only to
intermediaries. The new disclosure duty will apply to those selling life insurance products as soon as IMD
II is implemented. For other intermediaries there will be a transitional period of five years, during which they
will be required to disclose information on remuneration if requested by customers.
Supervision and enforcement

The FCA has extensive powers to supervise and intervene in the affairs of an authorised firm under FSMA.
For example, it can require firms to provide information or documents with respect to any matter or prepare
and update a “skilled persons” report under sections 166 and 166A of FSMA (powers which are increasingly
being used in a wide variety of situations). It can also formally investigate a firm. The FCA has the power
to take a range of disciplinary enforcement actions, including public censure, restitution, fines or sanctions
and the award of compensation. The FCA’s approach to supervision has shifted in order to support a
judgement based and pre-emptive approach. The new FCA approach is more intrusive as it allows the FCA
to conduct in-depth and structured supervision of firms. The FCA’s Firm Systematic Framework means that
firms are supervised pro-actively in order to assess whether the firm is being run (both currently and
prospectively) in a way that treats customers fairly, minimises risks to market integrity and does not impede
competition. Such ongoing supervision is carried out through firm specific assessment and may result in the
Group being subject to a greater degree of regulatory scrutiny.
Approved persons
FSMA gives the FCA powers and responsibilities over individuals carrying on certain roles for or on behalf
of an authorised firm within the UK financial services industry. These roles are described as “controlled
functions” and the individuals performing them are described as “approved persons.” The main purpose of
the approved persons regime is the protection of consumers and the UK financial system through ensuring
the quality of individuals working in certain positions and roles within the financial services industry.
Approved persons are typically individuals. However, a body corporate can be an approved person, for
example, if the body corporate is a director of an authorised firm.
The controlled functions which an approved person performs are functions which have been identified by
the FCA as being key to the operations of the approved persons regime in accordance with the provisions of
Part V of FSMA. They are divided between “significant influence functions” and “the customer dealing
function.” Significant influence functions include governance functions, required functions, systems and
controls functions or any significant management functions. They are typically relevant to a firm’s directors,
non-executive directors, compliance officer, chief risk officer and heads of significant departments, among
others. The customer dealing function covers persons dealing with an authorised firm’s customers or
property belonging to such customers. A person must have regulatory approval before they can perform any
of these controlled functions.
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All persons performing controlled functions in HISL (being the Group’s UK authorised firm) must be, and
are, approved persons. As such, they are subject to ongoing regulatory obligations for which they are
personally accountable to the FCA. They are expected to be fit and proper persons, they must satisfy
standards of conduct that are appropriate to the role they perform and, in particular, they must comply with
the Statements of Principle and Code of Practice for Approved Persons (“APER”) issued by the FCA and
contained in the FCA Handbook. As a result of the Financial Services Act 2012, the scope of the Statements
of Principle in APER now extends to conduct expected of approved persons not just in relation to the
controlled functions that they perform, but also in relation to other functions they perform in connection with
their firms’ regulated activities. The FCA has wide-ranging powers under FSMA to act against any person
who fails to satisfy these standards of conduct or who ceases to be fit and proper, including withdrawal of
their approved status, granting a prohibition order, disciplinary action and/or fines.
Consumer complaints and compensation

Any disputes that arise, and which are not successfully resolved, may be dealt with by the Financial
Ombudsman Service (“FOS”). The FOS operates independently of the FCA and deals with disputes for
certain categories of complaints made by customers against UK authorised persons. The Financial Services
Compensation Scheme (“FSCS”) has been established under FSMA and provides compensation to certain
categories of customers who suffer losses as a consequence of the inability of a UK regulated firm to meet
its liabilities arising from claims made in connection with regulated activities.
The Motor Insurers’ Bureau (“MIB”) was set up in 1946 to provide a way of compensating the victims of
uninsured or untraced motorists. Every insurance company underwriting compulsory motor insurance is
obliged, by virtue of the Road Traffic Act 1988, to be a member of MIB and to contribute to its funding. The
amount that each member contributes is calculated by means of a formula and is relative to the level of gross
premium income generated by the member.
One of the FCA’s statutory objectives is to protect and enhance the integrity of the UK financial system and
the FCA is under a duty to consider the importance of minimising the risk of the firms it regulates being used
for financial crime. As part of this, it would consider the measures a firm takes to monitor, detect, and prevent
financial crime, including measures in respect of money laundering, terrorist financing, data security, bribery
and corruption, fraud and sanctions breaches.
FSMA authorised firms are required to undertake certain administrative procedures and checks, which are
designed to prevent money laundering. The FCA’s Senior Management Arrangements, Systems and Controls
sourcebook (“SYSC”) contains rules which require firms to take reasonable care to establish and maintain
effective systems and controls for countering the risk that the firm might be used to further financial crime.
For these purposes, financial crime includes any offence involving fraud or dishonesty, misconduct in, or
misuse of information relating to, a financial market or handling the proceeds of crime, as well as bribery
and corruption offences.
Gibraltar – AICL
Subject to certain exemptions (which do not apply to the Group), no person may carry on insurance business
in Gibraltar unless authorised to do so by the Commissioner of Insurance of the FSC pursuant to the
Insurance Companies Ordinance of Gibraltar 1987 (as subsequently amended). The FSC, in deciding
whether to grant authorisation, is required to determine whether the applicant satisfies the threshold
conditions set out in the Insurance Companies Ordinance to be engaged in insurance business and, in
particular, whether the applicant has and will continue to have appropriate resources, and that it is and will
continue to be a fit and proper person having regard to the objectives of the FSC (including in both cases
whether those who manage the applicant’s affairs have adequate skills and experience and those affairs are
conducted soundly and with probity). An authorisation to carry on insurance business may also be subject to
such requirements as the FSC considers appropriate.
In specific circumstances, the FSC may vary or cancel an insurer’s authorisation to carry on a particular class
or classes of business or insurance business generally. The circumstances in which the FSC can vary or
93
cancel an authorisation include a failure to meet the threshold conditions or where such action is desirable
in order to protect the interests of consumers or potential consumers.
As described above, AICL is also entitled to conduct insurance business in the United Kingdom by virtue of
rights corresponding to the passporting rights granted under the EU single market directives which allow
EEA insurers to exercise passport rights throughout EEA states. These rights extend to Gibraltar as if it were
an EEA state in relation to the United Kingdom by virtue of section 409 of FSMA and the Financial Services
and Markets Act 2000 (Gibraltar) Order 2001 (SI 2001/3084). Therefore, although prudential regulation is
the responsibility of the FSC, the Group’s (and therefore AICL’s) underwriting function is subject to conduct
of business regulation by the FCA in relation to insurance business undertaken in the United Kingdom. The
FCA has the power to intervene in the Group’s business to ensure compliance in this respect.
RMM
AICL is currently required by the FSC to hold a certain amount of regulatory capital to support its
underwriting operations. As at 31 December 2014, AICL’s RMM was £40.2 million. RMM currently is
determined annually as the greater of:
• Premium Method: the greater of GWP and gross earned premiums (“GEP”) multiplied by 18 per cent.
for the first €61.3 million of GWP or GEP, and 16 per cent. for amounts in excess thereof;
• Brought Forward Method: the required margin of solvency of the prior financial year multiplied by
the ratio of the amount of the technical provisions for claims outstanding at the end of the prior
financial year and the amount of the technical provisions for claims outstanding at the beginning of
the prior financial year;
• Claims Method: annualised gross claims incurred over a three year period multiplied by 26 per cent.
for the first €42.9 million of annualised gross claims and multiplied by 23 per cent. for amounts in
excess thereof; and
• Minimum Guarantee Fund of €3.7 million.
The FSC has agreed that AICL may distribute dividends provided that at all times AICL’s Solvency I
coverage ratio is above a minimum threshold on both retrospective and prospective bases. AICL is also
required to maintain claims reserves that are validated by independent third-party actuarial reviews. This
basis was agreed with the FSC as a transitional proxy for solvency requirements after the implementation of
Solvency II. Although AICL must first receive FSC approval before issuing a dividend, the FSC has said that
approval would not be withheld if these conditions are met. The total capital requirement is assessed against
the value of certain admissible assets which are specified according to FSC guidelines.
As at 30 June 2015, AICL had admissible assets of £122.6 million, which resulted in a ratio of admissible
assets to RMM of 259 per cent.
The RMM approach will be replaced by a new capital regime in accordance with Solvency II (see below).
The European Insurance Groups Directive

AICL is subject to the European Insurance Groups Directive as implemented by the FSC in Gibraltar.
The relevant legislation is the Insurance Companies (Parent Undertaking Solvency Margin Calculation)
Regulations 2004 and the Insurance Companies (Supplementary Supervision) Regulations 2007. The parent
undertaking solvency calculation as currently required by the FSC is only a requirement to provide
information rather than a formal test. If there is a negative result, the explanation should include sufficient
information for the FSC to determine whether there is a threat to the financial position of the insurance group
and the insurers within it.
Solvency II
The Solvency II Directive (2009/138/EC) (as amended by the Omnibus II Directive (2014/51/EU)
(“Solvency II”), together with a number of delegated acts, binding technical standards (both regulatory
94
technical standards and implementing technical standards) and guidelines will provide a new prudential
framework for insurance companies. The new approach will be based on the concept of three pillars:
(i) capital requirements; (ii) supervisory review of firms’ assessment of risk; and (iii) enhanced disclosure
requirements. Among other things, Solvency II will cover valuations, the treatment of insurance groups, the
definition of capital and the overall level of capital requirements.
A key aspect of Solvency II is that the assessment of risks and capital requirements will be aligned more
closely with economic capital methodologies, and will allow insurers to make use of internal capital models,
if approved by their local regulator. Of particular significance in this regard is the calculation of the Solvency
Capital Requirement and the Minimum Capital Requirement. Solvency II also provides for a standard
formula capital model. Insurers may use a combination of both an internal model and the standard formula
(known as a partial internal model).
AICL has notified the FSC that it intends initially apply to use the standard formula capital model supported
by undertaking specific parameters based on actual AICL historical data to calculate its capital requirement.
Over time, AICL aims to develop and report under a partial internal model approach. This decision will be
reviewed on an ongoing basis as part of the Own Risk and Self-Assessment (“ORSA”) process that AICL
will be undertaking as required under Solvency II.
Insurance companies who are subject to Solvency II (such as AICL) must comply with the new regime from
1 January 2016. Member States were required to transpose the Solvency II regime into national law by
31 March 2015. Gibraltar transposed the Solvency II regime into national law in the first quarter of 2015.
There remains considerable uncertainty surrounding the interpretation of the provisions of Solvency II with
more detailed level two implementing measures, binding technical standards and non-binding standards,
guidance at level three and/or delegated acts yet to be finalised.
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PART 8
DIRECTORS, SENIOR MANAGERS AND

CORPORATE GOVERNANCE
Directors
The following table lists the names, positions and ages of the Directors. In anticipation of the Offer and (i) 14.1
Admission, Mr. Hoffman became a Director of the Company on 15 June 2015 and the other Directors
became Directors of the Company on 3 September 2015.
Name Age Position LR 6.1.26

––––––––––––––––––––––––––––––––– –––––––––––– ––––––––––––––––––––––––––––––––––––
Michael Fairey ........................................ 67 Chairman
Gary Hoffman......................................... 54 Chief Executive Officer
Richard Hoskins ..................................... 51 Chief Financial Officer
Richard Brewster .................................... 59 Non-executive Director
Thomas Colraine..................................... 57 Senior Independent Director
Ian Cormack ........................................... 67 Independent Non-executive Director
Edward Fitzmaurice................................ 52 Non-executive Director
Pierre Lefèvre ......................................... 59 Independent Non-executive Director
Malcolm Le May .................................... 57 Independent Non-executive Director
Sumit Rajpal ........................................... 40 Non-executive Director
Michele Titi-Cappelli.............................. 39 Non-executive Director
Michael Fairey (Chairman)

Mr. Fairey has been the Chairman of the Group since June 2015. Mr. Fairey was Deputy Chief Executive of
Lloyds Banking Group for 10 years, until 2008. Currently, he holds a number of non-executive positions,
including as Non-executive Chairman of OneSavings Bank plc. He is also the Chairman of the Trustees of
the Lloyds TSB Pension Funds.
Gary Hoffman (Chief Executive Officer)

Mr. Hoffman has been the Chief Executive Officer of the Group since November 2012. Mr. Hoffman has
extensive experience in the banking and insurance industries. Prior to joining the Group, Mr. Hoffman was
Chief Executive Officer of NBNK Investments, an investment vehicle formed in August 2010 to establish
personal and business retail banking in the UK. Prior to that, he led the UK government’s turnaround of
Northern Rock as its Chief Executive. From 2006 to 2008, Mr. Hoffman was Vice-Chairman of Barclays
PLC, having previously been Chairman of UK Banking and Barclaycard at Barclays PLC following five
years as Chief Executive of Barclaycard. He is the Non-executive Chairman of VISA Europe.
Richard Hoskins (Chief Financial Officer)

Mr. Hoskins has been the Chief Financial Officer of the Group since April 2015. Mr. Hoskins is a chartered
accountant and has extensive experience in the insurance industry. Prior to joining the Group, Mr. Hoskins
was the Chief Financial Officer of Global Commercial Insurance at AIG. Prior to that Mr. Hoskins served at
Aviva as Chief Executive of the group’s North American operations and as Chief Financial Officer of Old
Mutual’s North American operations.
Richard Brewster (Non-executive Director)

Mr. Brewster was part of the MBO of Hastings which completed in February 2009. Mr. Brewster became
involved with the Hastings business in 2007 and has held non-executive director positions in Group entities,
including the Group’s FCA regulated subsidiary HISL, since the MBO. He previously held positions at Cox
Insurance Holdings plc, and Mercantile and General Reinsurance Company plc. Mr. Brewster is a chartered
accountant.
96
Thomas Colraine (Senior Independent Director)
Mr. Colraine joined the Group in August 2015 and brings a wealth of experience from the insurance and
financial services sector. He was previously Group Chief Financial Officer and Co-Chief Operating Officer
at Willis Group Holdings, and Chief Financial Officer at AIG Europe Limited. He is a chartered accountant
and is also on the Board of Schroder & Co. Limited.
Ian Cormack (Independent Non-executive Director)

Mr. Cormack joined the Group in August 2015. Mr. Cormack spent 30 years at Citibank where he was
appointed head of UK and Co-head of the Global Financial Institutions business before becoming CEO of
AIG’s European business in 2000. He currently serves as a non-executive on the boards of Partnership plc,
Xchanging plc, Bloomsbury Publishing plc, Phoenix Group Holdings plc, and National Angels Ltd, and is
Chairman of Temporis Capital LLP and Maven Income & Growth VCT4 plc.
Edward Fitzmaurice (Non-executive Director)

Mr. Fitzmaurice joined the Group in April 2008 to be CEO of Hastings and Equity Direct and was formerly
the CEO and subsequently Non-executive Chairman of HISL, and Group CEO prior to the appointment of
Gary Hoffman. He was part of the MBO of the Hastings Direct business which completed in February 2009
and previously worked at Homeserve plc, Dixons plc and Anglo America.
Pierre Lefèvre (Independent Non-executive Director)

Mr. Lefèvre joined the Board in September 2015. He also serves as a Non-executive Director on the Board
of the Group’s subsidiary AICL, where he is also Chairman of the Risk Committee and a member of the
Audit Committee. He has extensive international experience in the insurance industry and has previously
held chairman and chief executive roles at Groupama and Axa.
Malcolm Le May (Independent Non-executive Director)

Mr. Le May joined the Group in August 2015 and has extensive experience within the UK insurance industry
from his previous role as a Non-executive Director at RSA plc. He is a chartered accountant and currently a
Senior Independent Director on the board of Provident Financial plc, and is the Chairman and Co-Founder
of Juno Capital, and a Partner at Opus Corporate Finance.
Sumit Rajpal (Non-executive Director)

Mr. Rajpal leads the Goldman Sachs global financial services investment practice in the Goldman Sachs
Merchant Banking Division (“MBD”) in New York. He serves as a member of the Firmwide Finance
Committee, the Firmwide Risk Committee and the Corporate Investment Committee. Mr. Rajpal joined
Goldman Sachs in 2000 as an associate in the Financial Institutions Group (“FIG”) in London. From 2001
to 2004, he worked in FIG in New York. Mr. Rajpal then transferred to the Financing Group and focused on
macro derivatives for financial institutions. He became a vice president in 2003 and joined MBD in 2005.
Mr. Rajpal was named managing director in 2007 and partner in 2010.
Michele Titi-Cappelli (Non-executive Director)

Mr. Titi-Cappelli is a managing director in the MBD in London, where he is responsible for sourcing,
executing and managing corporate investments in Southern Europe and in financial institutions. He first
joined Goldman Sachs in 1999 as an analyst in the Investment Banking Division in London and rejoined the
firm in 2004 as an associate in MBD in London. Mr. Titi-Cappelli became an executive director in 2007 and
worked in the New York office in 2010. He was named managing director in 2012.
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Senior Managers
The Company’s Senior Managers, in addition to the Executive Directors listed above, are as follows: (i) 14.1
Name Age Position LR 6.1.26

––––––––––––––––––––––––––––––––– –––––––––––– ––––––––––––––––––––––––––––––––––––
Edward Biemer ....................................... 52 Managing Director, Underwriting Services
Ian Godfrey............................................. 59 Managing Director, AICL
Carole Jones............................................ 55 Group HR Director
Michael Lee ............................................ 42 Managing Director, Insurer Services
Anthony Leppard .................................... 57 Company Secretary
Timothy Money ...................................... 48 Finance Director, HISL
Tobias van der Meer ............................... 38 Managing Director, HISL
David Walker .......................................... 45 Director of Risk & Business Services
Edward Biemer (Managing Director, Underwriting Services)

Mr. Biemer joined the Group in December 2014 as Managing Director, Underwriting Services. In 1999
Mr. Biemer joined AllState, the largest publicly held personal lines property and casualty insurer in the
United States of America where he undertook a number of senior roles rising to Senior Vice-President, Auto,
based in Illinois. He was responsible for a $17 billion portfolio distributed through agent networks as well
as developing new rating plans which factored in economic modelling and competitive and market
intelligence to create a sophisticated decision engine.
Ian Godfrey (Managing Director, AICL)

Mr. Godfrey has been the Managing Director of AICL since April 2013. He formerly served as Underwriting
Director at HISL and was responsible for all underwriting and pricing activities carried out by HISL on
behalf of all of its providers, focusing solely on AICL from 2006. He was also a board member at HISL from
2002-2008.
Carole Jones (Group HR Director)

Ms. Jones joined the Group in August 2015 from Towergate Insurance. Ms. Jones previously held a number
of senior HR management roles and, prior to Towergate, worked for Aviva in the UK and North America,
most recently as Group HR Director.
Michael Lee (Managing Director, Insurer Services)

Mr. Lee joined the Group in 2011 as Managing Director of Insurer Services. Mr. Lee has over 20 years of
experience in insurance working in marketing, product development, underwriting and claims management.
Mr. Lee spent almost ten years with Provident Insurance and completed his ACII exams during that period.
He co-founded and was managing director of a Gibraltar-based insurer. Mr. Lee also developed the Ebike,
Ecar and Evan brands and partnerships with Aviva and Asda, and was managing director of Eldon Insurance
Services in 2008.
Anthony Leppard (Company Secretary)

Mr. Leppard is a Fellow of the Institute of Chartered Secretaries and Administrators, having qualified in
1985. Since that time Mr. Leppard has held numerous senior management positions, including Chief
Financial Officer and Company Secretary of GE Capital IT Solutions UK, a £300 million subsidiary of GE
Capital. Mr. Leppard joined the Group in April 2009, and leads the Group’s legal, compliance, and corporate
governance functions.
Timothy Money (Finance Director, HISL)

Mr. Money took over the position of Finance Director of HISL in April 2015, having previously served as
Chief Financial Officer of the Group since April 2013. Mr. Money is a chartered accountant with extensive
experience in private equity-backed and fast-growing businesses. Previously, Mr. Money was Finance
98
Director at Terra Firma Capital Partners Ltd., Chief Financial Officer at P&O Nedlloyd, Director of Financial
Control at Chubb plc and Group Chief Accountant at United Biscuits plc. Mr. Money started his career with
Deloitte.
Tobias van der Meer (Managing Director, HISL)

Mr. van der Meer joined the Group in 2011 and is the Managing Director of Retail. Prior to joining the
Group, Mr. van der Meer was a managing director of Moneysupermarket.com, where he was responsible for
the money and broker lead businesses and all front and back office operations. Prior to that, Mr. van der Meer
spent just under ten years in direct banking, including senior positions at Egg Internet Banking, UK
marketing director and head of retail banking at Citigroup and head of retail banking Europe at Anglo Irish
Bank.
David Walker (Director of Risk & Business Services)

Mr. Walker joined the Group in May 2013 and has executive responsibility for business support services
including Risk, IT Infrastructure and Services, and Property Services. He has a successful track record and
a wealth of experience of the financial services sector, specifically general insurance, having occupied senior
management roles in Operations and Change/IT at RSA Insurance Group over a 23 year career with them.
Mr. Walker was involved in the start-up and build of the More Than business for RSA. Mr. Walker is ACII
and MBA qualified.
Corporate governance (i) 16.4
UK Corporate Governance Code

As envisaged by the UK Corporate Governance Code (the “Governance Code”) published in September
2012 by the Financial Reporting Council, the Board has established an Audit Committee, a Nomination
Committee, a Remuneration Committee and a Risk Committee (together, the “Committees”). If the need
should arise, the Board will set up additional committees as appropriate.
The Governance Code recommends that at least half the board of directors, excluding the chairman, should
comprise non-executive directors determined by the board to be independent in character and judgement and
free from relationships or circumstances which may affect, or could appear to affect, the director’s
judgement. Following the Offer, Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. and the
Founder Shareholders (collectively) will continue to be significant direct and indirect investors in the
Company through the Principal Shareholder. Pursuant to the Relationship Agreement, Hastings A, L.P.,
Hastings B, L.P. and Goldman, Sachs & Co. and the Founder Shareholders (collectively) are each able to
appoint two of the Directors to the Board while they (or persons connected to them) continue to hold a direct
or indirect interest in 20 per cent. or more of the Shares and one Director while they (or persons connected
to them) continue to hold a direct or indirect interest in at least five per cent. but less than 20 per cent. of the
Shares. The first such appointees are Sumit Rajpal and Michele Titi-Cappelli (for Hastings A, L.P., Hastings
B, L.P. and Goldman, Sachs & Co.) and Richard Brewster and Edward Fitzmaurice (for the Founder
Shareholders). The Board is mindful of the need to also consider the interest of the Company’s new investors.
The Directors believe the Board and Committees will provide the appropriate corporate governance balance
in light of the interests of both the existing shareholders and new shareholders. For the reasons above, at
Admission, the Board and Committees will not be following the full provisions of the Governance Code in
that at least half the Board, excluding the Chairman, will not comprise Independent Non-executive Directors
and Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. and/or the Founder Shareholders may
appoint members of certain of the Committees. However, the Company intends to achieve full compliance
with the number of independent directors on the Board envisaged by the Governance Code over the next 12
months and to increase gender diversity.
Audit Committee (i) 16.3
The Audit Committee’s role is to assist the Board with the discharge of its responsibilities in relation to
financial reporting, including reviewing the Group’s annual and half year financial statements and
accounting policies, internal and external audits and controls, reviewing and monitoring the scope of the
99
annual audit and the extent of the non-audit work undertaken by external auditors, advising on the
appointment of external auditors and reviewing the effectiveness of the internal audit, internal controls,
whistleblowing and fraud systems in place within the Group. The Audit Committee will normally meet not
less than four times a year.
The Audit Committee is chaired by Thomas Colraine and its other members are Malcolm Le May, Ian
Cormack and Pierre Lefèvre. The Governance Code recommends that all members of the Audit Committee
be non-executive directors, independent in character and judgment and free from any relationship or
circumstance which may, could or would be likely to, or appear to, affect their judgment and that one such
member has recent and relevant financial experience. The Board considers that the Company complies with
the recommendation of the Governance Code in this respect.
Risk Committee
The Risk Committee is responsible for providing oversight and advice to the Board in relation to risk
management systems, risk appetite, strategy and exposure, reviewing and approving risk assessment and
reporting processes within the Group. The Risk Committee will normally not meet less than four times a
year.
The Risk Committee is chaired by Pierre Lefèvre and its other members are Ian Cormack, Malcolm Le May
and Michele Titi-Cappelli.
Nomination Committee
The Nomination Committee assists the Board in reviewing the structure, size and composition of the Board.
It is also responsible for reviewing succession plans for the Directors, including the Chairman and Chief
Executive and other senior executives. The Nomination Committee will normally meet not less than twice a
year.
The Nomination Committee is chaired by Michael Fairey and its other members are Thomas Colraine, Ian
Cormack, Sumit Rajpal, Richard Brewster and Gary Hoffman. The Governance Code recommends that a
majority of the Nomination Committee be non-executive directors, independent in character and judgment
and free from any relationship or circumstance which may, could or would be likely to, or appear to, affect
their judgment. The Board acknowledges that, while the Group will not fully comply with the requirements
of the Governance Code at Admission, it believes that the independence of the Nomination Committee is not
compromised as it has an independent chairman.
Remuneration Committee (i) 16.3
The Remuneration Committee recommends the Group’s overarching policy on remuneration including
executive remuneration, share arrangements, all employee plans, bonus plans and pensions. The
Remuneration Committee sets the levels of remuneration for Executive Directors and the Chairman and
other senior executives and prepares an annual remuneration report for approval by the Shareholders at the
annual general meeting. The Remuneration Committee will normally meet not less than three times a year.
The Remuneration Committee is chaired by Malcolm Le May and its other members are Michael Fairey,
Thomas Colraine, Sumit Rajpal and Edward Fitzmaurice. The Governance Code recommends that all
members of the Remuneration Committee be non-executive directors, independent in character and
judgment and free from any relationship or circumstance which may, could or would be likely to, or appear
to, affect their judgment. The Board acknowledges that, while the Group does not fully comply with the
requirements of the Governance Code in this respect, it believes that the independence of the Remuneration
Committee is not compromised as it has an independent chairman and a majority of independent
non-executive directors.
Share dealing code

The Company has adopted, with effect from Admission, a code of securities dealings in relation to the Shares
which is based on, and is at least as rigorous as, the model code as published in the Listing Rules. The code
adopted will apply to the Directors and other relevant employees of the Group.
100
Relationship Agreement
Immediately following the Offer and Admission, the Company expects that the Principal Shareholder will
control more than 30 per cent. of the votes to be cast on all or substantially all matters at general meetings
of the Company. On 9 October 2015, the Company, Hastings A, L.P., Hastings B, L.P., Goldman, Sachs &
Co., the Founder Shareholders, the Principal Shareholder and Holdco entered into the Relationship
Agreement. The Relationship Agreement will, conditional upon Admission, regulate the ongoing
relationship between the Company, the Principal Shareholder and Hastings A, L.P., Hastings B, L.P.,
Goldman, Sachs & Co. and the Founder Shareholders (together, the “Ultimate Shareholders”).
The principal purpose of the Relationship Agreement is to ensure that the Company can carry on an
independent business as its main activity. The Relationship Agreement contains, among others, undertakings
from the Principal Shareholder, Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co. and the Founder
Shareholders that: (i) transactions and arrangements with it or them (and/or any of its or their associates) will
be conducted at arm’s length and on normal commercial terms; (ii) neither it or them nor any of its or their
associates will take any action that would have the effect of preventing the Company from complying with
its obligations under the Listing Rules, and (iii) neither it or them nor any of its or their associates will
propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to
circumvent the proper application of the Listing Rules (together the “Independence Provisions”).
Pursuant to the Relationship Agreement, Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co.
(collectively) and the Founder Shareholders (collectively) are each able to appoint two of the Directors to the
Board while they (or persons connected to them) continue to hold a direct or indirect interest in 20 per cent.
or more of the Shares and one Director while they (or persons connected to them) continue to hold a direct
or indirect interest in at least five per cent. but less than 20 per cent. of the Shares. The first such appointees
are Sumit Rajpal and Michele Titi-Cappelli (for Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs &
Co.) and Richard Brewster and Edward Fitzmaurice (for the Founder Shareholders).
The Relationship Agreement also provides that:
• The Founder Shareholders (collectively) will be able to appoint one Director appointed by the
Founder Shareholders to the Nomination Committee and one Director appointed by the Founder
Shareholders to the Remuneration Committee;
• The Founder Shareholders (collectively) will be able to appoint one Director appointed by the
Founder Shareholders as an Audit Committee observer; and
• Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. (collectively) will be entitled to appoint,
one Director appointed by them to the Nomination Committee, one such Director to the Remuneration
Committee and one such Director to the Risk Committee.
The Company has agreed in the Relationship Agreement not to effect any buy-back of Shares or any
equivalent transaction which would cause any of Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co.
or the Founder Shareholders or their respective associates to have to make a mandatory offer for the
Company under Rule 9 of the City Code unless the Company has obtained the necessary consents and
waivers to prevent a mandatory offer obligation from applying.
The Relationship Agreement will continue for so long as (a) the Shares are listed on the premium listing
segment of the Official List and traded on the London Stock Exchange’s main market for listed securities
and (b) either Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. (collectively) or the Founder
Shareholders (collectively) hold a direct or indirect interest in at least five per cent. of the Shares. The
Directors believe that the terms of the Relationship Agreement will enable the Group to carry on its business
independently of the Principal Shareholder and the Ultimate Shareholders.
Following Admission, for so long as there is a controlling shareholder (as defined in the Listing Rules), the
Articles allow for the election or re-election of any Independent Director to be approved by separate
resolutions of (i) the Company’s shareholders and (ii) the Company’s shareholders excluding any controlling
shareholder. If either of the resolutions is defeated, the Company may propose a further resolution to elect
or re-elect the proposed Independent Director, which (a) may be voted on within a period commencing
101
90 days and ending 120 days from the original vote, and (b) may be passed by a vote of the shareholders of
the Company voting as a single class. Furthermore, in the event that the Company wishes the FCA to cancel
the listing of the Shares on the premium listing segment of the Official List or transfer the Shares to the
standard listing segment of the Official List, the Company must obtain at a general meeting the prior
approval of (y) a majority of not less than 75 per cent. of the votes attaching to the shares voted on the
resolution, and (z) a majority of the votes attaching to the shares voted on the resolution excluding any shares
voted by a controlling shareholder. In all other circumstances, controlling shareholders have and will have
the same voting rights attached to the Shares as all other shareholders.
Post-Admission Restructuring
Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co., the Founder Shareholders, the Principal
Shareholder and the Company have agreed that, not later than the first to occur of (i) the date on which
Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. (collectively) cease to hold an indirect interest
in the Company of at least 15 per cent. of the total issued Shares; and (ii) 1 March 2017, they will (subject
to compliance with applicable law and regulation) effect a restructuring of Holdco and the Principal
Shareholder so that all shareholders in Holdco and the Principal Shareholder hold shares directly in the
Company (the “Post-Admission Restructuring”). It is intended that such Post-Admission Restructuring will
be effected by way of transfers of Shares held by the Principal Shareholder to Holdco and by Holdco to its
shareholders. Holdco and the Principal Shareholder would subsequently be dissolved. In addition, Hastings
A, L.P., Hastings B, L.P. and Goldman, Sachs & Co. may also, at their option, initiate the Post-Admission
Restructuring at any time after the Principal Shareholder ceases to hold 50 per cent. of the Shares.
Related parties
In October 2011, in connection with Neil Utley’s previous position at Equity Syndicate Management Limited
(“Equity”) during 2008 and 2009, and unrelated to his previous work for the Group, enforcement
proceedings were brought against Mr. Utley by Lloyd’s of London (“Lloyd’s”). The two charges of
detrimental conduct alleged that as CEO, Mr. Utley had overall responsibility for corporate governance and
for overseeing the establishment of effective systems and controls within Equity, and he failed to take
sufficient steps to ensure that these standards were met. In February 2013, Mr. Utley agreed to settle these
proceedings. He was not fined, but he accepted the terms of a Notice of Censure, undertook not to apply for
a position as a director of a Lloyd’s firm for two years and paid a contribution towards Lloyd’s costs. Lloyd’s
took into account certain mitigating factors including that: Mr. Utley’s behaviour was not deliberate, wilful
or reckless; he cooperated fully with the Lloyd’s investigation; detrimental conduct is the least serious of the
two forms of “epithet” misconduct under the Lloyd’s Enforcement Byelaw; he made no personal financial
gain; and he was responsible for significant improvements in a number of systems and controls within
Equity.
Conflicts of interest (i) 14.2
Save as set out in this Part 8, there are no potential conflicts of interest between any duties owed by the
Directors or Senior Managers to the Company and their private interests or other duties.
102
PART 9
SELECTED FINANCIAL INFORMATION

On 17 April 2012, the HIG Group was formed upon completion of the Advantage Acquisition. On 8 January (i) 3.1
2014 as part of the 2014 Reorganisation, a wholly owned subsidiary of HIG(H) acquired 100 per cent. of the (i) 3.2
issued share capital of the HIG Group, to form the HIG(H) Group. The Advantage Acquisition and 2014
Reorganisation are described further in Note 34 of Part 12 (Historical Financial Information).
The selected financial information set out below has been extracted without material amendment from
Part 12 (Historical Financial Information) of this Prospectus, where it is shown with important notes
describing some of the line items.
Consolidated statement of profit or loss

HIG(H)
Group Group Group Six months Group
Year ended Year ended Year ended ended Six months
31 December 31 December 31 December 30 June 2014 ended
2012 2013 2014 (unaudited) 30 June 2015
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(£ millions, unless otherwise noted)
Gross written premiums ................................ 263.5 407.2 475.4 219.3 282.7
Gross earned premiums ................................. 237.5 379.6 441.4 204.4 252.2
Earned premiums ceded to reinsurers ........... (128.5) (214.6) (242.3) (114.2) (134.2)
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net earned premiums .................................. 109.0 165.0 199.1 90.2 118.0
Other revenue ................................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
121.3 173.2 180.2 82.6 101.6
Investment and interest income ..................... 3.7 4.2 3.7 1.8 3.0
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net revenue................................................... 234.0 342.4 383.0 174.6 222.6
Claims incurred .............................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(179.4) (324.7) (354.9) (199.0) (204.8)
Reinsurers’ share of claims incurred............. 96.3 197.0 205.2 128.4 118.0
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Net insurance claims ................................... (83.1) (127.7) (149.7) (70.6) (86.8)
Acquisition costs ...........................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(16.9) (31.3) (25.7) (8.4) (21.0)
Other operating expenses .............................. (70.7) (117.9) (140.4) (72.7) (69.3)
Finance costs ................................................. (7.4) (9.5) (68.6) (33.7) (36.2)
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total expenses .............................................. (95.0) (158.7) (234.7) (114.8) (126.5)
Profit/(loss) before tax .................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
55.9 56.0 (1.4) (10.8) 9.3
Taxation expense ...........................................

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
(16.4) (14.9) (7.0) (3.5) (4.5)
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total profit/(loss) attributable to the equity
holders of the parent ................................... 39.5 41.1 (8.4) (14.3) 4.8
Earnings per share attributable to the

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
owners of the parent (expressed in pence
or £ per share)
Basic and diluted earnings/(loss)
per share ....................................................... £357.41 £364.80 (5.9)p (10.3)p 3.3p
103
HIG HIG HIG(H) HIG(H)
Group Group Group Group
2012 2013 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
ASSETS
Property and equipment.......................... 9.2 10.1 10.1 12.4
Intangible assets...................................... 14.4 19.4 120.0 121.0
Goodwill ................................................. 28.5 28.5 470.0 470.0
Investments in associates........................ 0.3 – – –
Deferred income tax asset ...................... 2.5 2.2 5.6 2.9
Loans receivable ..................................... 4.5 – – –
Reinsurance assets .................................. 231.5 343.5 426.5 471.2
Prepayments............................................ 0.9 1.0 1.2 5.4
Insurance and other receivables.............. 145.8 190.4 212.6 234.0
Financial assets ....................................... 140.0 172.1 224.9 264.1
Cash and cash equivalents ...................... 102.8 110.8 123.4 125.2
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total assets............................................. 680.4 878.0 1,594.3 1,706.2
EQUITY
––––––––––– ––––––––––– ––––––––––– –––––––––––
Share capital ........................................... 1.1 1.1 1.0 1.0
Share premium account .......................... 0.1 0.1 – –
Treasury shares ....................................... (0.1) – – –
Merger reserve ........................................ (1.0) (1.0) – –
Other reserves ......................................... – – – (0.9)
Retained earnings(1) ................................. 25.7 54.8 (14.9) (10.1)
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total equity............................................ 25.8 55.0 (13.9) (10.0)
LIABILITIES
––––––––––– ––––––––––– ––––––––––– –––––––––––
Preference shares .................................... – – 319.3 338.4
Senior Secured Notes ............................. – – 403.6 404.6
Loans and borrowings ............................ 82.5 83.8 – –
Insurance contract liabilities................... 462.3 590.9 704.7 785.7
Insurance and other payables ................. 94.9 137.1 146.9 160.3
Provisions ............................................... 1.5 0.9 0.3 –
Deferred income tax liability.................. 4.9 5.6 27.0 22.9
Current tax liabilities .............................. 8.5 4.7 6.4 4.3
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total liabilities....................................... 654.6 823.0 1,608.2 1,716.2
Total equity and liabilities....................

––––––––––– ––––––––––– ––––––––––– –––––––––––
680.4 878.0 1,594.3 1,706.2
Total equity at HIG/HIG(F)(2) ..............

––––––––––– ––––––––––– ––––––––––– –––––––––––
25.8 55.0 305.4 328.5
––––––––––– ––––––––––– ––––––––––– –––––––––––
Notes:
(1) Under local laws and regulations, the Company and the holding companies of the Group have the capacity to distribute any
dividends they receive from the Group’s trading subsidiaries. There is expected to be significant distributable reserves capacity
following the capital reduction exercise to be performed by the Company.
(2) Total equity at HIG/HIG(F) presents equity in the Group’s audited consolidated balance sheet at the HIG level for 31 December
2012 and 31 December 2013, and at the HIG(F) level for 31 December 2014 and 30 June 2015, prepared in accordance with
IFRS. These represent the lowest levels in the corporate structure which includes all operational debt.
104
HIG(H)
HIG(H) Group HIG(H)
HIG Group HIG Group Group Six months Group
Year ended Year ended Year ended ended Six months
2012 2013 2014 (unaudited) 30 June 2015
–––––––––– –––––––––– –––––––– –––––––––– ––––––––––
(£ millions)
Profit/(loss) after tax ............................................ 39.5 41.1 (8.4) (14.3) 4.8
Non-cash adjustments
Depreciation of property and equipment............. 1.8 2.0 1.4 0.8 1.2
Amortisation of intangible assets ........................ 0.6 1.3 26.5 13.5 12.6
Net fair value (gains)/losses on investments ....... (2.5) (1.4) (3.6) (1.6) 1.1
Net unrealised (gains)/losses on property and
equipment............................................................. – 0.2 – – –
Interest receivable ................................................ (1.3) – – – –
Loss on derecognition of property and
equipment............................................................. 0.2 – – – –
Loss on derecognition of intangible assets.......... 0.1 – – – –
Finance costs........................................................ 7.4 9.5 68.6 33.7 36.2
Taxation expense.................................................. 16.4 14.9 7.0 3.5 4.5
Change in insurance and other receivables
and prepayments .................................................. (23.4) (48.0) (8.7) 7.6 (25.7)
Change in insurance and other payables ............. 14.8 45.7 (9.5) (19.2) 10.8
Change in reinsurance assets ............................... (37.3) (112.0) (83.8) (70.5) (46.2)
Change in deferred acquisition costs................... (10.8) (3.1) (13.2) (10.8) (2.6)
Write off of investments in associates ................. – 0.3 – – –
Change in insurance contract liabilities............... 84.4 128.5 115.5 86.4 83.5
Change in loans receivable .................................. – 4.4 – – –
Change in provisions ........................................... (0.6) (0.5) (0.6) (0.2) (0.3)
Taxation paid........................................................ (6.5) (17.7) (9.0) (4.9) (7.9)
–––––––– –––––––– –––––––– –––––––– ––––––––
Net cash flows from operating activities..........
Purchase of property and equipment ...................

–––––––– –––––––– –––––––– –––––––– ––––––––
82.8
(1.9)
65.2
(3.1)
82.2
(2.3)
24.0
(0.8)
72.0
(2.5)
Acquisition of intangible assets........................... (1.5) (3.2) (5.8) (1.3) (10.7)
Interest received ................................................... – 1.4 – – –
Receipt of cash in escrow .................................... – – 415.0 415.0 –
Net outlay for acquisition of subsidiary .............. 4.8 – (343.1) (343.1) –
Outlays for investments acquired ........................ (81.1) (89.0) (98.6) (4.5) (98.8)
Proceeds from disposal of investments................ 73.1 56.9 48.9 7.0 57.6
–––––––– –––––––– –––––––– –––––––– ––––––––
Net cash flows from investing activities ...........
Proceeds from issue of preference shares............

–––––––– –––––––– –––––––– –––––––– ––––––––
(6.6)
–
(37.0)
–
14.1
144.6
72.3
144.6
(54.4)
–
Proceeds from issue of ordinary share capital..... – 0.1 1.0 1.0 –
Increase in loans payable..................................... 25.0 1.2 – – –
Repayment of loans ............................................. – – (83.8) (83.8) –
Interest on loans and borrowings paid................. (6.8) (8.3) (34.0) (16.3) (15.6)
Other interest paid ............................................... – (1.2) (0.7) – –
Performance fees paid ......................................... (0.6) – – (0.3) (0.2)
Dividends paid ..................................................... (25.0) (12.0) – – –
–––––––– –––––––– –––––––– –––––––– ––––––––
Net cash flows from financing activities .......... (7.4) (20.2) 27.1 45.2 (15.8)
Net increase in cash and cash equivalents.......

–––––––– –––––––– –––––––– –––––––– ––––––––
68.8 8.0 123.4 141.5 1.8
Cash and cash equivalents at beginning of

–––––––– –––––––– –––––––– –––––––– ––––––––
year/period ........................................................... 34.0 102.8 – – 123.4
Cash and cash equivalents inflow for the
year/period ........................................................... 68.8 8.0 123.4 141.5 1.8
year/period ........................................................... 102.8 110.8 123.4 141.5 125.2
–––––––– –––––––– –––––––– –––––––– ––––––––
105
Group cash flow available for debt service and dividend distribution
The Group’s operating activities are highly cash generative. However, the cash generated by the Group for
an accounting period does not equate to cash flow available for debt service and dividend distribution, which
is the result of Retail holding cash on behalf of insurers or for regulatory purposes and Underwriting being
subject to capital requirements imposed by the FSC.
The financial information set out below has been reproduced from the Group’s management accounts and
has not been extracted from Part 12 (Historical Financial Information).
Year ended Year ended Six months Six months
31 December 31 December ended ended
2013 2014 30 June 2014 30 June 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
Retail cash flow generation
Retail operating profit(1) ..................................... 51.8 69.9 36.0 40.6
Movement in net operating working capital ..... (8.3) (6.6) (6.9) (1.9)
Capital expenditure............................................ (6.3) (6.4) (2.6) (13.2)
Taxation paid(2) .................................................. (17.5) (5.7) (1.9) (3.3)
––––––––––– ––––––––––– ––––––––––– –––––––––––
Cash flow before interest, debt service
and dividend distribution ............................... 19.7 51.2 24.6 22.2
Cash conversion (cash flow as % of

––––––––––– ––––––––––– ––––––––––– –––––––––––
Retail operating profit) ................................... 38% 73% 68% 55%
Underwriting cash flow generation

––––––––––– ––––––––––– ––––––––––– –––––––––––
Net admissible assets brought forward ............. 73.4 104.2 104.2 107.9
Profit after tax (IFRS)(3) ..................................... 29.8 34.5 13.3 15.8
Dividends approved and paid ............................ – (33.3) (21.1) –
Other movements in admissible assets.............. 1.0 2.5 2.2 (1.1)
––––––––––– ––––––––––– ––––––––––– –––––––––––
Net admissible assets carried forward........... 104.2 107.9 98.6 122.6
Required minimum margin for

––––––––––– ––––––––––– ––––––––––– –––––––––––
dividend capacity(4) ............................................ 43.2 49.7 43.2 49.7
––––––––––– ––––––––––– ––––––––––– –––––––––––
Solvency margin %(5)....................................... 241% 217% 228% 247%
Underwriting cash flow available for

––––––––––– ––––––––––– ––––––––––– –––––––––––
debt service and dividend distribution
Dividends approved(6) ........................................ – 33.3 21.1 8.6
Intercompany debt repaid.................................. – (6.4) (6.4) –
2014 Reorganisation related costs paid............. – (7.9) (7.9) –
––––––––––– ––––––––––– ––––––––––– –––––––––––
debt service and dividend distribution .......... – 19.0 6.8 8.6
Group cash flow available for debt

––––––––––– ––––––––––– ––––––––––– –––––––––––
service and dividend distribution................... 19.7 70.2 31.4 30.8
––––––––––– ––––––––––– ––––––––––– –––––––––––
Notes:
(1) Retail operating profit is audited in each period except for the six months ended 30 June 2014.
(2) Taxation paid for 2013 includes £6.5 million of tax paid in respect of the year ended 31 December 2012, which was partially as
a result of the timing of performance commission, which is paid from AICL to HISL, as well as a quarterly tax payment of
£3.7 million due in January 2014 which was prepaid in December 2013.
(3) AICL profit after tax is audited in each period except for the six months ended 30 June 2014.
(4) RMM quoted is the higher of retrospective and prospective, as appropriate for determining dividend capacity.
(5) Solvency margin is calculated as net admissible assets carried forward divided by the RMM for determining dividend capacity.
(6) This comprises dividends that have been approved by the FSC for distribution.
106
PART 10
OPERATING AND FINANCIAL REVIEW

This Part 10 (Operating and Financial Review) should be read in conjunction with Part 2 (Presentation of (i) 9.1
Financial and Other Information), Part 5 (Industry Overview), Part 6 (Business Description) and Part 12 ESMA 27-32
(Historical Financial Information). Prospective investors should read the entire document and not just rely ESMA 33-37
on the summary set out below. The financial information considered in this Part 10 (Operating and Financial
Review) is extracted from the financial information set out in Part 12 (Historical Financial Information)
unless otherwise stated.
The following discussion of the Group’s results of operations and financial condition contains forward- (i) 6.1.1
looking statements. The Company’s actual results could differ materially from those that it discusses in these (i) 6.2
forward-looking statements. Factors that could cause or contribute to such differences include those (i) 6.3
discussed below and elsewhere in this Prospectus, particularly under Part 1 (Risk Factors) and Part 2 (i) 6.4
(Presentation of Financial and Other Information). In addition, certain industry issues also affect the
Group’s results of operations and are described in Part 5 (Industry Overview).
(i) 5.2.1
Overview (i) 5.2.2
Hastings is a fast growing, agile, digital general insurance provider operating principally in the UK motor (i) 5.2.3
market. It provides private car and other forms of personal insurance cover in the UK. In recent years, the (i) 9.2.1
Group has achieved significant growth within its chosen markets through a combination of heightened (i) 9.2.2
strategic focus, optimised digital distribution, superior data generation and utilisation, sophisticated risk (i) 9.2.3
selection and advanced fraud detection and claims management. As at 30 June 2015, the Group had a
5.5 per cent. share of the UK private car insurance market (Source: UK Department for Transport and
Company data) and 1.88 million live customer policies, having grown the number of live customer policies
at a CAGR of 22.5 per cent. across the last three financial years. The Group’s success in capturing market
share has been combined with consistently strong underwriting performance and growing retail profitability,
and as a result has translated into significant bottom line growth with the Group achieving a CAGR of
22.6 per cent. in operating profit between 2012 and 2014. Group Operating Profit for the six months ended
30 June 2015 was £59.2 million (for the year ended 31 December 2014: £105.7 million and for the year
ended 31 December 2012: £70.3 million).
Additionally, in the six months ended 30 June 2015, the Group generated £222.6 million of net revenue (in
the year ended 31 December 2014: £383.0 million and in the year ended 31 December 2012: £234.0 million).
The Group operates as an integrated, direct insurance provider with strategic coverage of the UK insurance
value chain through two principal segments. The Group’s retail business (“Retail”) is responsible for end
customer pricing, product design, distribution and the management of the underlying customer relationship.
The Group’s underwriting business (“Underwriting”) engages in risk selection, underlying technical pricing,
fraud management, reserving and claims handling. Retail is supported by, and benefits from, Underwriting’s
prudent approach to risk and reserving and a conservative and capital efficient reinsurance programme, as
detailed further below. The Retail business also benefits from the Group’s panel insurance partners who can
provide underwriting capacity where Underwriting declines to quote on a policy or is uncompetitive. The
Group’s integrated model deliberately separates underlying product manufacturing from its distribution.

insurance intermediaries. Retail operates across a number of products, the largest of which being private car
insurance, which are distributed through an extensive suite of brands, including Hastings Direct, Hastings
Essential, Hastings Direct SmartMiles and Hastings Premier. Retail has full flexibility and responsibility for
managing the relationships with the Group’s customers, including policy sales, customer service and
customer retention. Within Retail, the Group’s quote delivery systems are designed for PCWs and direct
distribution, with PCWs having in recent years become the most important distribution channel for
107
customers seeking to purchase a new private car insurance policy. Retail’s customer acquisition model is
optimised in particular for PCW distribution, with the Group having a significant share of new business
private motor insurance sales on PCWs (11.0 per cent. for the six months ended 30 June 2015 (Source:
eBenchmarkers)), strong and balanced distribution across all the major PCWs, and superior customer
retention rates. This is facilitated through Retail’s advanced pricing capabilities, agile and highly responsive
implementation, and data sophistication. The Group generates revenue in Retail primarily through fee and
commission income, the provision of ancillary products, including, for example, breakdown insurance and
substitute vehicle coverage, and the provision of premium financing, where customers choose to pay for their
policies in monthly instalments instead of in one single, upfront payment, for an additional credit charge. In
the six months ended 30 June 2015, Retail generated revenue of £115.0 million (in the year ended
31 December 2014: £205.5 million and in the year ended 31 December 2012: £144.0 million) and Retail
operating profit of £40.6 million (in the year ended 31 December 2014: £69.9 million and in the year ended
sophisticated data-driven approach to risk selection and risk pricing, optimised for the PCW marketplace,
resulting in a high quality underwriting portfolio. Underwriting’s primary goal is the delivery of consistent
underwriting profitability. This is achieved through prudent, dynamic footprint selection (i.e. management of
the risks that Underwriting will accept) and where risks lie within the footprint, through a sophisticated
determination of the technical net rate (the premium passed through to Retail). This sophisticated data-driven
approach includes the consideration of both traditional underwriting data sources such as historic loss
probability, customer and vehicular characteristics, overlaid with significant data enrichment (the Group’s
proprietary method of supplementing traditional broking and underwriting analysis with both external data
sources and internally created data sets), and consideration of real-time behavioural data. Underwriting
further manages the risks underwritten through claims cost control as well as through use of the Group’s
proprietary counter-fraud analysis both by increasing premiums through identification of manipulation at
point of quote and sale as well as reducing claims costs through identification of fraud at point of claim.
cancelling policies as appropriate. Like Retail, these processes are optimised for PCW distribution, with
rapid execution capabilities and a culture of continuous improvement – Underwriting regularly monitors and
assesses pricing accuracy and refines risk selection and pricing modelling. The Group generates income and
profit in Underwriting principally through underwriting premiums and, to a lesser extent, through profit
commission from its reinsurance partners and income generated on invested assets. In the six months ended
30 June 2015, Underwriting generated GWP of £292.7 million (in the year ended 31 December 2014:
£496.2 million and in the year ended 31 December 2012: £354.2 million) and Underwriting operating profit
of £17.0 million (in the year ended 31 December 2014: £37.4 million and in the year ended 31 December
2012: £21.2 million).
The bifurcation of technical net rate pricing from ultimate PCW quote delivery has, together with various of
the Group’s other capabilities, facilitated the Group’s ability to grow significantly whilst maintaining strong
and consistent loss ratios on both an accident year and calendar year basis. For the six months ended 30 June
2015, the Group calendar year loss ratio was 73.6 per cent. and its combined ratio was 90.0 per cent., with
the Group also reporting calendar year loss ratios of 73.9, 71.5 and 72.4 per cent. for the years ended
31 December 2012, 2013 and 2014, respectively. The Group believes that Underwriting employs a prudent
claims reserving policy, as demonstrated by its reserves being consistently above both the internal actuarial
best estimate of its insurance contract liabilities and that of the half yearly claims reserves reviews performed
by an independent third-party actuary.
The Group’s underwriting performance benefits from the purchase of non-proportional reinsurance, whereby
all risk of loss on a single claim exceeding an inflation-adjusted £1.0 million (£0.5 million pre-2014
underwriting year) is ceded to a high quality panel of reinsurers, and from naturally lower large loss
frequency driven by the Group’s approach to risk selection, with the Group only having two claims currently
that have settled as PPOs. Underwriting’s capital efficiency is also enhanced by the Group’s proportional
reinsurance strategy, whereby the Group cedes 50 per cent. of underwritten premiums and attaching claims
108
to its reinsurance partners. The Group typically receives cost contributions and profit commission from its
reinsurance partners, resulting in strong returns on deployed capital (for the year ended 31 December 2014
the Group returned a return on capital employed of 38.8 per cent.). The Group’s cost of reinsurance has
declined materially since the inception of the programme, with the Group’s reinsurance partners having
access to, and validating, the Group’s underwriting.
With offices in Bexhill, Newmarket, Leicester and Gibraltar, the Group had approximately 1,800 full-time
employees on average during the six months ended 30 June 2015.
Significant factors affecting the Group’s results of operations (i) 9.2.1

(i) 12.1
Factors affecting Retail results
ESMA 27
Number of live customer policies
The amount of revenue generated by Retail is driven by the number of live customer policies the Group has
in place, as well as the income each live customer policy generates and the expenses and the costs of
acquiring each live customer policy. The Group has rapidly increased its number of live customer policies,
from 1.14 million as at 31 December 2012 to 1.88 million as at 30 June 2015 (with 1.42 million and 1.71
million live customer policies as at 31 December 2013 and 2014, respectively). Changes in the number of
live customer policies are the result of a number of factors, including the Group’s ability to attract new
customers, its ability to retain existing customers on renewal and its ability to minimise cancellation rates
among its existing customers. Given the Group’s relatively immature portfolio, new business volumes
represent a more substantial proportion of the Group’s overall live customer policies than is the case for
certain of the Group’s competitors. As a result of, among other things, its strong positioning on PCWs, the
Group has achieved double digit compound growth in new business volumes across the last three financial
years, with that trend continuing in the six months ended 30 June 2015.
The growth in the number of new live customer policies in recent years was primarily driven by the Group’s
strategy to focus on PCWs, as well as by its competitive risk-based pricing. The Group’s ability to retain its
existing customers is a factor of increased customer retention and reduced customer cancellation. Retention
and cancellation are in turn impacted by the maturity of the Group’s policy portfolio, by its renewal pricing
strategy and by its ability to target customers that are more likely to renew their policies with the Group, such
as those with higher credit scores and those who purchase Hastings Premier, which includes additional
features such as breakdown cover and legal expenses cover with a lower policy excess.
Increased customer retention helps maintain volumes of customer policies, and has a lower, essentially nil,
acquisition cost per policy compared to acquiring new customers. For the years ended 31 December 2012,
2013 and 2014 and the six months ended 30 June 2015, the Group’s retention rate was 69.5 per cent.,
74.5 per cent., 77.2 per cent. and 77.3 per cent., respectively. During the six months ended 30 June 2015,
Hastings Premier policyholders exhibited a retention rate 2.8 percentage points higher than the Group’s
overall private car retention rate.
Income per policy

Retail’s results are impacted by income per policy, being the sum of the broking commissions, fee income,
ancillary product income and premium finance income earned on policies sold.
Broking commission constitutes the difference between the technical net rate passed to Retail by the
underwriter (whether Underwriting or a member of the Group’s third-party insurer panel) and the premium
the Group charges its customers for a policy. Broking commission income is, to a certain extent, impacted
by competition, the insurance pricing cycle in the industry and risk selection.
Fee income includes policy arrangement fees, paper document fees and credit card fees.
Ancillary products offered to the Group’s customers include breakdown cover, motor legal expenses
insurance and substitute vehicle cover. Ancillary products are either offered as optional add-ons, or built into
the policy.
109
Income per policy is also driven by the Group’s premium finance offering to customers who wish to pay in
monthly instalments for their insurance products rather than in one annual upfront payment.
Cost per policy

Retail’s results are also impacted by the Group’s operating expenses and the costs of acquiring customers.
New customer acquisition costs primarily comprise of fees paid to PCWs, which typically represent
approximately 90 per cent. of the Group’s total acquisition costs. The remainder of the Group’s acquisition
costs primarily relate to hardware for the Group’s SmartMiles product, which have increased since 2012
primarily due to increased sales volumes of this product, and web affiliate costs, which are linked to other
channels of distribution and have remained relatively stable since 2012. Fees paid to PCWs, which averaged
approximately £50 per policy sold through PCWs for each of the years ended 31 December 2012, 2013 and
2014 and for the six months ended 30 June 2015, constitute fees the Group pays to PCWs for business
generated through a given site and is correlated with the volume of policies the Group places with a given
site.
The Group’s marketing and advertising spend makes up a smaller component, approximately £4 per new
policy. The Group’s current marketing spend per new policy is lower than that of most of its main
competitors, and while the Group expects to increase its marketing spend, it expects its marketing spend per
policy to remain below that of most of its main competitors due to the Group’s continued focus on the PCW
distribution channel. The Group’s operating expenses include general overheads, salaries, transaction costs
and other costs necessary for conducting Retail, as well as the cost of services Retail provides to
Underwriting paid for by Underwriting in the form of a performance commission, which is eliminated on
consolidation. As the Group has grown its business, it has increasingly been able to benefit from economies
of scale and has been able to increase the number of policies per full-time employee. The Group believes
that its infrastructure is scalable for additional growth.
Factors affecting Underwriting results

Volume of policies underwritten
The volume of policies underwritten drives Underwriting’s results, and is a factor of the number of policies
sold by Retail. As Underwriting distributes its insurance products exclusively through Retail, the volumes of
business underwritten by Underwriting are impacted by substantially the same factors that affect the number
of live customer policies in Retail.
Risk selection, pricing and claims handling

Risk selection and pricing drive Underwriting’s results and determine the footprint of risk the Group insures,
as well as the premium charged for such risk. Underwriting takes a data-driven approach to risk selection
through claims cost modelling, data enrichment and market expertise. This process results in a technical net
rate, which is passed on to Retail. In general, the more accurately the Group is able to select and
appropriately price risks, the better the results of Underwriting. While overly conservative risk selection and
pricing could result in reduced volumes or reduced premiums per policy, imprudence in risk selection and
pricing could result in excess risk and losses from claims.
The Group believes it has experienced consistent success in risk selection and pricing, resulting in Group
calendar year loss ratios of 73.9 per cent., 71.5 per cent., 72.4 per cent. and 73.6 per cent. for the years ended
31 December 2012, 2013 and 2014 and for the six months ended 30 June 2015, respectively. The Group’s
ability to mitigate losses through efficient, skilled claims handling also materially impacts its profitability
and the use of technology and strategy to negotiate fair settlements with third parties is vital to the
maintenance of the Group’s relatively low calendar year loss ratio.
Pricing and availability of reinsurance

Underwriting’s results are impacted by the availability and pricing of reinsurance. The Group purchases two
forms of reinsurance coverage: quota share reinsurance, whereby a panel of reinsurers covers 50 per cent. of
the liabilities of a given policy, and non-proportional excess of loss reinsurance, whereby reinsurance
providers cover losses on any single claim in excess of an inflation-adjusted £1.0 million (with 50 per cent.
110
of such amount met by quota share reinsurance). The Group’s quota share reinsurance increases its capacity
to underwrite greater volumes of policies sold by Retail and reduces the Group’s capital requirements
relative to the business it underwrites. The Group has nine reinsurer partners for its quota share reinsurance
programme in 2015 with quota share reinsurance provided under fixed and rolling annual contracts to
maximise the Group’s flexibility and pricing power. In addition, the Group’s quota share reinsurers pay the
Group profit commission on amounts they receive in excess of their expected margins (based on net loss
ratios), with an average of 96 per cent. (based on current expected loss ratios) of excess being paid to the
Group in profit commission in the six months ended 30 June 2015. The Group’s non-proportional excess of
loss reinsurance is placed with a panel of 19 reinsurers, with some crossover with the Group’s quota share
reinsurance providers. The Group purchases non-proportional excess of loss reinsurance in order to minimise
volatility in Underwriting’s results. In each case, the Group pays a fee for the reinsurance coverage, which
is based on market rates for such coverage and on reinsurers’ demand to participate in the Group.
The Group has consistently experienced strong demand from existing and prospective participants in its
quota share reinsurance programme, which has resulted in a decrease in its quota share reinsurance costs,
from 3.5 per cent. of ceded premium for the underwriting year ended 31 December 2012 to 3.0 per cent. of
ceded premium for the underwriting period ended 30 June 2015, and the Group’s strong performance has
resulted in increased profit commission from quota share reinsurers.
Claim frequency and claim value

The costs of claims made against the Group’s insurance policies impacts the results of Underwriting. A claim
is a formal request for payment based on the terms of an insurance policy and, on a fundamental level,
reflects the realisation of the potential liabilities the Group underwrites. During the six months ended 30 June
2015, the Group handled approximately 17,500 claims (including 5,500 windscreen claims) on a monthly
basis. Claim frequency represents the percentage of policies underwritten pursuant to which claims are made
in a given year and claim value represents the average value of each claim made in a given year. Claim
frequency and claim value are related to risk selection and pricing.
The Group has experienced an increase in claim frequency from 2012 to the six months ended 30 June 2015.
Claim value has generally remained flat over the same period. Although costs of claims impact
Underwriting’s results, claims handling is undertaken by Retail pursuant to the outsourcing agreement with
AICL. See Part 5 (Business Description—Business segments—Underwriting).
Counter-fraud capability
The Group has an award-winning counter-fraud capability that reduces its costs of claims, increases
premium income and increases expansion of Underwriting’s footprint. The Group believes for the six months
ended 30 June 2015, its counter-fraud capability resulted in approximately £2.3 million of increased
premiums (including third-party panel and AICL premiums as well as broker fees) collected on application,
claims savings of £7.4 million (comprising first and third-party reserve releases) and a 0.5 per cent. loss ratio
benefit which delivered further indirect savings of approximately £1.5 million. As a result of the Group’s
counter-fraud capability, it instigated the cancellation of 1.6 per cent. of policies in the year ended
31 December 2014, creating what the Group believes to be a healthier risk profile for it in the future. The
Group also believes that its counter-fraud capabilities have increased demand for participation in its insurer
panel for Retail and for participation in its reinsurer panels in Underwriting, which have resulted in the
Group’s ability to negotiate lower fees.
Investments
Underwriting holds investments to realise return from the capital it is required to hold and from premiums
received from policyholders. The Group carefully balances the risk return trade-off in the portfolio and
adopts a cautious style to ensure compliance with FSC guidelines, with a primary focus on maintaining
capital. To the extent the Group experiences gains and losses in its investments, such gains and losses impact
the results of Underwriting by providing the Group with more or less investment income. Investment income
from capital gains and dividends received from investments it holds are not currently subject to taxation in
Gibraltar. This does not impact the investment portfolios held by AICL in accounts with financial brokers,
111
investment managers or other financial institutions (such as corporate bonds and other debt securities) in the
ordinary course of investment, nor interest received from deposits of cash representing an investment of
corporate funds held by AICL with a bank or financial institution. Changes in the valuation of the Group’s
investments also impact Underwriting’s results, as the Group recognises the value of its investments in line
with market value under applicable accounting rules, with such changes in valuation flowing through the
Group’s consolidated statement of profit or loss and consolidated statement of comprehensive income. The
Group targets a conservative 2 per cent. return per annum net of fees from its investments. During the six
months ended 30 June 2015, the Group experienced investment returns net of fees of 1.1 per cent. The
majority of the Group’s investments are in cash and cash equivalents and investment grade corporate bonds.
Solvency coverage
AICL is required to maintain a significant margin of net admissible assets in excess of the RMM to comply
with a number of regulatory requirements imposed by the FSC. The FSC has agreed that AICL may
distribute dividends provided that at all times AICL’s Solvency I coverage ratio is above a minimum
threshold on both retrospective and prospective bases. AICL is also required to maintain claims reserves that
are validated by independent third-party actuarial reviews. AICL’s capital position and the capital resources
required to meet minimum solvency requirements are dependent upon a number of factors, including the
value of such capital resources and the quantum of risk to which AICL is exposed. Increases in required
solvency coverage generally would require AICL to devote more capital resources to meeting its minimum
solvency requirements, while decreases in required solvency coverage would potentially free up capital
resources previously dedicated to meeting its minimum solvency requirements, leaving the Group with more
free cash to invest in the business or use to repay indebtedness.
The EU is in the process of developing and implementing Solvency II within each Member State. It is
intended that the new regime for insurers and reinsurers domiciled in the EU will apply more risk sensitive
standards to capital requirements, bringing European insurance regulation more closely in line with banking
and securities regulation with a view to avoiding regulatory arbitrage, aligning regulatory capital with
economic capital and enhancing public disclosure and transparency. This basis was agreed with the FSC as
a transitional proxy for solvency requirements after the implementation of Solvency II. See Part 1 (Risk
Factors—The EU is currently in the process of introducing a new regime governing solvency requirements,
technical claims reserves and other requirements for insurance companies, the effect of which is uncertain).
Factors affecting the Group’s consolidated results

Competition and the insurance pricing cycle
The Group operates in the highly fragmented industry for personal lines of insurance in the UK, with a focus
on the private car insurance market. Competition in this industry is intense, and the Group’s success in
competing with other private car insurance providers, particularly in terms of price, but also in terms of brand
awareness, on PCWs is a significant factor that impacts the Group’s consolidated results. The UK private car
insurance industry has historically experienced significant fluctuations in operating results due to
competition, the frequency or severity of catastrophic events, the levels of underwriting capacity, general
social, legal, regulatory or economic conditions and other factors. The supply of insurance is related to
prevailing prices, the level of insured losses and the level of industry profitability and capital surplus which,
in turn, may fluctuate in response to changes in inflation rates, the rates of return on investments being
earned by the insurance industry, as well as other social, economic, legal, regulatory and political changes.
As a result, the insurance industry has historically been cyclical, characterised by periods of intense
competition in relation to price and legislative changes often due to excessive underwriting capacity, as well
as periods when shortages of capacity have seen increased premium rates and policy terms and conditions
that are more advantageous to underwriters.
Regulation
The Group operates in a highly regulated consumer industry and regulation impacts its results. Regulation
affects all aspects of the Group’s operations, from the requirement that all drivers in the United Kingdom be
insured, to the regulated minimum capital positions required for AICL in Gibraltar. While the Group believes
it is well-positioned to adapt to anticipated regulatory changes, compliance with regulation, and particularly
compliance with complex new regulations such as Solvency II, may increase the Group’s costs of operations.
112
Current trading and prospects (i) 9.2.1
(i) 12.1
Since 30 June 2015, overall trading performance has continued the positive momentum experienced during
(i) 12.2
the first six months of the year. In July and August, the Group’s sales volumes have increased compared with
the equivalent period in 2014. Revenue and Group Operating Profit growth has been strong and the Group
remains on track to achieve Group Operating Profit in line with the Company’s expectations. The Company
remains confident of the Group’s ability to achieve its performance objectives set out in the Group Strategy
and in the outlook for the Group’s longer term prospects.
Key performance indicators (“KPIs”) ESMA 28
The Group reviews several KPIs to track the financial and operating performance of its business. These
measures are derived from the Group’s internal operating and financial systems. Because these measures are
not determined in accordance with generally accepted accounting principles and are thus susceptible to
varying calculations, they may not be comparable with other similarly titled measures of performance of
other companies. For more information on the Group’s methods of calculating KPIs, see Part 2 (Presentation
of Financial and Other Information— Supplementary and non-IFRS financial information).
The table below presents the Group’s KPIs for the years ended 31 December 2012, 2013 and 2014 and the
six months ended 30 June 2014 and 2015.
Six months
Year ended 31 December ended 30 June
––––––––––––––––––––––––––––––– ––––––––––––––––––––
2012 2013 2014 2014 2015
–––––––– –––––––– –––––––– –––––––– ––––––––
KPIs
Group Operating Profit (£m)(1) .............. 70.3 90.1 105.7 49.8 59.2
Group Operating Profit margin(2) ............ 24.2% 26.2% 26.4% 26.0% 26.6%
Group calendar year loss ratio................ 73.9% 71.5% 72.4% 73.8% 73.6%
Group expense ratio................................ 13.8% 17.4% 16.3% 16.6% 16.4%
Group combined operating ratio ............ 87.7% 88.9% 88.7% 90.4% 90.0%
Share of total stock (private car)(3).......... 3.6% 4.3% 5.1% 4.8% 5.5%
Solvency I coverage ratio(4) .................... 196% 280% 268% 262% 259%
Net leverage multiple(5) .......................... N/A 4.6x 3.6x 4.1x 3.2x
Other performance indicators
Total live customer policies (in 000s) .... 1,145 1,418 1,711 1,600 1,876
Retention rate(6) ...................................... 69.5% 74.5% 77.2% 77.8% 77.3%
Share of new business sales on PCWs
(private car)(7) .......................................... 9.1% 9.7% 10.3% 10.1% 11.0%
Live customer policies per FTE(8) .......... 807.1 851.9 942.7 924.9 1,005.3
Group net free cash generation (£m)...... – 19.7 70.2 31.4 30.8
Retail operating profit (£m).................... 43.0 51.8 69.9 36.0 40.6
Underwriting operating profit (£m)........ 21.2 33.4 37.4 13.8 17.0
Solvency I coverage ratio calculation
Net admissible assets (£m)(9) .............. 73.4 104.2 107.9 98.6 122.6
RMM for solvency purposes (£m) .... 37.4 37.2 40.2 37.7 47.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Solvency I coverage ratio ...................... 196% 280% 268% 262% 259%
Group combined operating ratios
Group accident year loss ratio ................ 74.4% 73.3% 74.6% 74.8% 77.0%
Group calendar year loss ratio................ 73.9% 71.5% 72.4% 73.8% 73.6%
Acquisition expense ratio.................... 8.7% 10.3% 9.6% 10.2% 9.8%
Other expense ratio ............................ 5.1% 7.1% 6.7% 6.4% 6.6%
Group expense ratio................................ 13.8% 17.4% 16.3% 16.6% 16.4%
Group combined operating ratio ............ 87.7% 88.9% 88.7% 90.4% 90.0%
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Notes:
(1) Operating profit is defined as profit before taxation expense, interest expense, amortisation and depreciation, revaluation of
property, certain non-trading costs and the effects of accounting for business combinations. Audited for the years ended
31 December 2012, 2013 and 2014 and for the six months ended 30 June 2015.
(2) Group Operating Profit margin represents Group Operating Profit divided by adjusted Group net revenue.
(3) Source: UK Department for Transport and Company data.
(4) Represents AICL’s solvency I coverage ratio as stipulated by the FSC, calculated as net admissible assets divided by the required
minimum margin (“RMM”), both as at the end of the period.
(5) Net leverage multiple refers to net debt expressed relative to Group Operating Profit. The net debt used represents gross debt less
Retail free cash, Underwriting dividend capacity and corporate free cash. The Group’s net leverage multiple represents the
Group’s net debt divided by LTM operating profit at each period end. Preference shares, and associated dividends and interest
accrued thereon, are excluded for the year ended 31 December 2014 and the six months ended 30 June 2014 and 2015.
(6) Calculated as total renewed policies, before the 14 day cancellation period has occurred, divided by total invites.
(7) This is sourced from eBenchmarkers data.
(8) Calculated as average live customer policies per average FTE.
(9) Net admissible assets as stated in FSC returns.
Group Operating Profit and margin

Group Operating Profit has consistently grown period on period primarily as a result of the growth in live
customer policies.
Group Operating Profit increased by £9.4 million, or 18.9 per cent., to £59.2 million for the six months ended
30 June 2015 from £49.8 million for the six months ended 30 June 2014. For the years ended 31 December
2012, 2013 and 2014 the Group generated Operating Profit of £70.3 million, £90.1 million and
£105.7 million, respectively. The increase in Group Operating Profit from the year ended 31 December 2012
to the year ended 31 December 2013 was £19.8 million, or 28.2 per cent., boosted by an improved loss ratio,
and from the year ended 31 December 2013 to the year ended 31 December 2014 the increase was
£15.6 million, or 17.3 per cent.
This consistent profitable growth has been driven by the marked increase in sales volumes exhibited by the
growth of the Group’s gross written premiums and live customer policies in these periods. The Group
Operating Profit margin, which represents Group Operating Profit divided by adjusted Group net revenue,
has increased from 24.2 per cent. in the year ended 31 December 2012 to 26.2 per cent. in the year ended
31 December 2013, 26.4 per cent. in the year ended 31 December 2014 and 26.6 per cent. in the six months
ended 30 June 2015.
This is demonstrative of the capabilities of the Group’s Retail business in generating profitability in
combination with the Group’s strong underwriting discipline and the successful achievement of operating
leverage and economies of scale, servicing more live customer policies per FTE than ever before. This
ensures that the rapid growth of the business is obtained without sacrificing profitability, whilst continuing
to invest in improving the business.
These factors combine to drive the sustainable, profitable growth presented.
Group combined operating ratios

Group calendar year and accident year loss ratio
Six months ended 30 June 2015 compared with the six months ended 30 June 2014
The Group calendar year loss ratio of 73.6 per cent. for the six months ended 30 June 2015 is 0.2 percentage
points lower than the Group calendar year loss ratio of 73.8 per cent. for the six months ended 30 June 2014.
The Group accident year loss ratio increased to 77.0 per cent. in the six months ended 30 June 2015 from
74.8 per cent. in the six months ended 30 June 2014, which was due to moderate increases in claim
frequency. Claim severity was broadly stable between the periods, comprising some increases in severity
114
relating to claims on TPPD offset by a reduction in severity of high value personal injury claims. Accident
frequency has increased due to, amongst other factors, additional miles driven in an improving economy.
The Group has increased premiums written in excess of incurred claims inflation, but these increases to
premiums written have yet to fully earn through in the Group’s results.
Positive prior year developments to reserves in the six months ended 30 June 2015 of 3.4 per cent., or
£4.1 million, were recorded, primarily as a result of a reduction to the anticipated and actual costs of
medium-sized severe personal injury claims as the Group has been able to manage claim liabilities below
original estimates. These developments have been recorded while maintaining a consistent risk margin over
the internal actuarial best estimate of ultimate claims liabilities.
Year ended 31 December 2014 compared with the years ended 31 December 2013 and 2012
The Group accident year loss ratio for each year has been broadly consistent for the three years ended
31 December 2012, 2013 and 2014 being 74.4 per cent., 73.3 per cent. and 74.6 per cent., respectively, which
reflects the Group’s underwriting discipline despite these years representing periods of continued market
premium deflation, until mid-2014 when the Group began to apply increases to premiums written. The
improvement experienced from the year ended 31 December 2012 to the year ended 31 December 2013
reflects, among other things, the greater use of data enrichment in risk selection, and the slight deterioration
from the year ended 31 December 2013 into the year ended 31 December 2014 reflects the earn through of
the aforementioned premium deflation which was experienced across the market. The Group accident year
loss ratio includes the effect of movements in margin over and above the internal actuarial best estimate.
Prior year development to reserves were greater in the years ended 31 December 2013 and 2014 than in the
year ended 31 December 2012 (1.8 per cent., 2.2 per cent. and 0.5 per cent. respectively) resulting in lower
Group calendar year loss ratios in these years (year ended 31 December 2012: 73.9 per cent., year ended 31
December 2013: 71.5 per cent. and year ended 31 December 2014: 72.4 per cent.). These releases consist of
development in prior period internal actuarial best estimate and exclude movements in margin over that best
estimate.
Group expense ratio
The Group expense ratio improved by 0.2 percentage points from 16.6 per cent. in the six months ended
30 June 2014 to 16.4 per cent. in the six months ended 30 June 2015, primarily reflecting further operating
leverage from growth in live customer policies and building on the economies of scale as in prior periods,
despite continued investment in the business’ underwriting capabilities.
The Group expense ratio for the year ended 31 December 2014 of 16.3 per cent. showed an improvement
from the Group expense ratio of 17.4 per cent. for the year ended 31 December 2013 which had increased
by 3.6 percentage points from an expense ratio of 13.8 per cent. for the year ended 31 December 2012. The
Group expense ratio in 2012 included a refund of MIB levies from earlier periods, whilst the increase in the
year ended 31 December 2013 reflects a step up in the Group’s direct marketing expenditure as the Group
increased targeted advertising and investment in its data enrichment capabilities and insurer services
department.
During the year ended 31 December 2014, the Group maintained its direct marketing expenditure and
continued its investment in insurer services and data enrichment. The Group’s expense ratio improved due
to the operating leverage generated from growth in live customer policies and resulting economies of scale,
despite continued investment in capabilities across the business.
115
Group combined operating ratio
The Group’s combined operating ratio improved by 0.4 percentage points to 90.0 per cent. in the six months
ended 30 June 2015 (six months ended 30 June 2014: 90.4 per cent.), reflecting the underlying improvement
in both the Group calendar year loss ratio and Group expense ratio.
The Group’s combined operating ratio has been broadly consistent across the years ended 31 December
2012, 2013 and 2014, with Group combined operating ratios of 87.7 per cent., 88.9 per cent. and 88.7 per
cent, respectively.
Share of total stock (private car)

The Group’s share of the UK private car insurance market has steadily increased period on period, while
maintaining underlying underwriting discipline and driving profitability as evidenced by the KPIs.
Solvency I coverage ratio

Underwriting’s Solvency I coverage ratio is calculated as AICL’s net admissible assets divided by AICL’s
RMM. Underwriting has maintained a Solvency I coverage ratio in excess of the FCA’s Solvency I
requirements and is well placed for the implementation of Solvency II in January 2016.
Net leverage multiple

Net leverage multiple represents the Group’s net debt divided by the LTM Group Operating Profit at each
period end. Net leverage multiple has consistently decreased period on period; while Group Operating Profit
has increased at a significant rate, net debt has reduced in each period as the Group retains free cash. The
reduction in net leverage multiple demonstrates the Group’s strong and cash generative performance in each
period.
Description of key line items

Gross written premiums
Gross written premiums (“GWP”) represent the total premiums the Group expects to receive over the life of
insurance contracts underwritten by Underwriting before ceding its reinsurers’ share of premiums, and is
recognised as revenue proportionally over the period of cover. Negative commissions and premium discounts
offered by Retail for policies underwritten by Underwriting are deducted from GWP and earned alongside
the premiums to which they relate.
Gross earned premiums

Gross earned premiums (“GEP”) represent GWP in the current and prior periods being recognised over the
life of the underlying insurance contracts. As at the balance sheet date, the proportion of premiums on live
customer policies relating to the remaining period of insurance cover is recognised in the unearned premiums
provision, with the difference between the amount of unearned premiums brought forward and the unearned
premiums carried forward constituting the difference between GWP and GEP.
Earned premiums ceded to reinsurers

Earned premiums ceded to reinsurers represent the amount of GEP ceded to reinsurers pursuant to the
Group’s quota share and non-proportional excess of loss reinsurance contracts.
Net earned premiums

Net earned premiums represent GEP after deducting earned premiums ceded to reinsurers.
116
Other revenue
Other revenue consists primarily of revenue generated by Retail, including fees and commissions,
ancillaries, premium finance interest and other income, as well as Underwriting’s reinsurance commissions.
Investment and interest income

Investment income represents income from financial assets, which consists of interest income and net gains
and losses (both realised and unrealised) on financial assets. Interest income is recognised on the accrual
basis.
Claims incurred
Claims incurred represent claims paid in the applicable year and any change in the provision for claims
reserves.
Reinsurers’ share of claims incurred

Reinsurers’ share of claims incurred represents reinsurers’ share of claims incurred in the applicable year
pursuant to the Group’s quota share and non-proportional excess of loss reinsurance contracts.
Net insurance claims

Net insurance claims represent claims incurred in the applicable year excluding the reinsurers’ share of
claims incurred.
Acquisition costs
Acquisition costs primarily represent fees paid to PCWs per new policy acquired and other direct and
incremental costs of sale. Acquisition costs incurred on policies underwritten by Underwriting are
recognised over the life of the underlying insurance contract. They are recognised in full at inception of the
policy for policies underwritten by the Group’s panel of third-party insurers.

Other operating expenses represent salaries, social security charges, defined contribution pension plan costs,
depreciation, amortisation, operating lease rentals, auditor’s remuneration, MIB levies and other
administration and distribution costs.
Finance costs
Finance costs represents interest and non-cash amortisation on Senior Secured Notes, preference shares
dividends accrued and interest accrued, and other interest expense.
Taxation expense
Taxation expense represents corporation tax on profits for the applicable year, as adjusted for prior periods
and deferred tax, including consolidation adjustments.
Results of operations (i) 9.2.2

ESMA 29
On 17 April 2012, pursuant to the Advance Acquisition, the HIG Group was formed upon HIG’s acquisition
ESMA 30
of 100 per cent. of the share capital of AGH, whose group principally comprises AICL, Underwriting’s
ESMA 31
regulated trading entity.
ESMA 32
On 8 January 2014 pursuant to the 2014 Reorganisation, a wholly owned subsidiary of HIG(H) acquired
100 per cent. of the issued share capital of HIG, to form the enlarged HIG(H) Group with HIG(H) as the new
parent entity within the corporate structure. The Advantage Acquisition and the 2014 Reorganisation are
described further in Note 34 of Part 12 (Historical Financial Information).
117
Additionally, in all of the financial performance analyses presented below, results adjusting for the
acquisition accounting, certain non-trading costs, certain finance costs and property revaluations, as well as
the tax effect of these items are also provided.
The table below presents the Group’s results of operations for the six months ended 30 June 2014 and 2015
and the years ended 31 December 2012, 2013 and 2014, which have been extracted without material
adjustment from the consolidated historical financial information set out in Part 12 (Historical Financial
Information).
HIG(H)
Group Year Group Year Group Year Six months Group
ended ended ended ended Six months
2012 2013 2014 (unaudited) 30 June 2015
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(£ millions, unlesss otherwise noted)
Gross written premiums ........................ 263.5 407.2 475.4 219.3 282.7
Gross earned premiums .......................... 237.5 379.6 441.4 204.4 252.2
Earned premiums ceded to reinsurers .... (128.5) (214.6) (242.3) (114.2) (134.2)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net earned premiums .......................... 109.0 165.0 199.1 90.2 118.0
Other revenue.......................................... 121.3 173.2 180.2 82.6 101.6
Investment and interest income .............. 3.7 4.2 3.7 1.8 3.0
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net revenue............................................ 234.0 342.4 383.0 174.6 222.6
Claims incurred ...................................... (179.4) (324.7) (354.9) (199.0) (204.8)
Reinsurers’ share of claims incurred ...... 96.3 197.0 205.2 128.4 118.0
Net insurance claims ............................ (83.1) (127.7) (149.7) (70.6) (86.8)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Acquisition costs .................................... (16.9) (31.3) (25.7) (8.4) (21.0)
Other operating expenses ...................... (70.7) (117.9) (140.4) (72.7) (69.3)
Finance costs .......................................... (7.4) (9.5) (68.6) (33.7) (36.2)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total expenses........................................ (95.0) (158.7) (234.7) (114.8) (126.5)
Profit/(loss) before tax ..........................

––––––––– ––––––––– ––––––––– ––––––––– –––––––––
55.9 56.0 (1.4) (10.8) 9.3
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Taxation expense .................................... (16.4) (14.9) (7.0) (3.5) (4.5)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
equity holders of the parent ................ 39.5 41.1 (8.4) (14.3) 4.8
Earnings per share attributable to the

––––––––– ––––––––– ––––––––– ––––––––– –––––––––
owners of the parent (expressed in
pence or £ per share)
Basic and diluted earnings/(loss)
per share ................................................ £357.41 £364.80 (5.9)p (10.3)p 3.3p
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Gross written premiums and gross earned premiums
GWP increased by £63.4 million, or 28.9 per cent., from £219.3 million for the six months ended 30 June
2014 to £282.7 million for the six months ended 30 June 2015. After adjusting for acquisition accounting,
adjusted GWP for the six months ended 30 June 2015 was £282.7 million, an increase of £55.5 million, or
24.4 per cent., from £227.2 million for the six month ended 30 June 2014. This was largely the result of
increased sales volumes to both new and renewal customers combined with applied rate increases. As a result
of these rate increases, average GWP rose faster than incurred claims inflation.
GEP, which represents GWP being recognised over the life of the underlying insurance contracts, has
increased by £47.8 million, or 23.4 per cent., from £204.4 million for the six months ended 30 June 2014 to
118
£252.2 million for the six months ended 30 June 2015. After adjusting for acquisition accounting, adjusted
GEP was £212.3 million and £252.2 million for the six months ended 30 June 2014 and 2015, respectively,
an increase of £39.9 million, or 18.8 per cent., period on period. The majority of the increase was driven by
increased live customer policies. Average GEP in the six months ended 30 June 2015 was comparable to the
six months ended 30 June 2014.
GWP increased by £68.2 million, or 16.7 per cent., from £407.2 million for the year ended 31 December
2013 to £475.4 million for the year ended 31 December 2014. After adjusting for acquisition accounting,
adjusted GWP for the year ended 31 December 2014 was £483.4 million, an increase of £76.2 million, or
18.7 per cent., from £407.2 million for the year ended 31 December 2013. This was largely as a result of an
increase in sales volumes to new customers together with an increase in the retention rate from 74.5 per cent.
in the year ended 31 December 2013 to 77.2 per cent. in the year ended 31 December 2014 on a growing
book of existing customers.
Average premium decreased slightly year on year, but increased in the second half of 2014 as a result of the
application of a number of targeted rate increases during this period.
GEP increased by £61.8 million, or 16.3 per cent., from £379.6 million for the year ended 31 December 2013
to £441.4 million for the year ended 31 December 2014. After adjusting for acquisition accounting, adjusted
GEP was £379.5 million and £449.3 million for the years ended 31 December 2013 and 2014, respectively,
an increase of £69.8 million, or 18.4 per cent., primarily as a result of increases in GWP during the year
ended 31 December 2014 compared to the year ended 31 December 2013 and also in preceding periods.
GWP increased by £143.7 million, or 54.5 per cent., from £263.5 million for the year ended 31 December
adjusted GWP for the year ended 31 December 2012 was £350.2 million, which increased by £57.0 million,
or 16.3 per cent., to £407.2 million for the year ended 31 December 2013. This was largely a result of
increased sales to new customers during the year ended 31 December 2013 compared to the year ended 31
December 2012 and an increase in the retention rate from 69.5 per cent. in the year ended 31 December 2012
to 74.5 per cent. in the year ended 31 December 2013. These volume related increases in premiums were
partially offset by a reduction in average premium following realignment of rates to reflect increased use of
data enrichment in risk selection and the impact of the Jackson Review, which resulted in changes to the
process of personal injury litigation.
GEP increased by £142.1 million, or 59.8 per cent., from £237.5 million for the year ended 31 December
adjusted GEP was £327.1 million and £379.5 million for the years ended 31 December 2012 and 2013,
respectively, an increase of £52.4 million, or 16.0 per cent., year on year.
Net earned premiums (“NEP”)

NEP, which represents GEP less earned premiums ceded to reinsurers, increased by £27.8 million, or
30.8 per cent., from £90.2 million for the six months ended 30 June 2014 to £118.0 million for the six months
ended 30 June 2015. After adjusting for acquisition accounting, adjusted NEP was £93.6 million and
£118.0 million for the six months ended 30 June 2014 and 2015, respectively, an increase of £24.4 million,
or 26.1 per cent., period on period. NEP increased more rapidly than GEP due to changes to the structure of
the Group’s quota share contracts for the 2014 and 2015 underwriting years whereby the Group retains a
higher proportion of premiums, but subsequently receives reduced reinsurance commissions. The net effect
of these commercial changes on the Group’s consolidated statement of profit or loss is broadly neutral.
NEP increased by £34.1 million, or 20.7 per cent., from £165.0 million for the year ended 31 December 2013
NEP was £164.9 million and £202.5 million for the years ended 31 December 2013 and 2014, respectively,
an increase of £37.6 million, or 22.8 per cent., year on year. NEP increased by a greater percentage than GEP
because of changes to the structure of the Group’s quota share contracts during the year ended 31 December
2014 whereby the Group retains a higher proportion of premiums but receives reduced reinsurance
commissions subsequently. The net effect of these commercial changes is broadly neutral.
119
NEP increased by £56.0 million, or 51.4 per cent., from £109.0 million for the year ended 31 December 2012
NEP was £149.9 million and £164.9 million for the years ended 31 December 2012 and 2013, respectively,
an increase of £15.0 million, or 10.0 per cent. This increase was primarily driven by the increase in GEP,
which was partly offset by a year on year increase in the proportion of GEP ceded to reinsurers. Adjusted
GEP ceded to reinsurers increased from 54 per cent. of adjusted GEP for the year ended 31 December 2012
to 57 per cent. for the year ended 31 December 2013, primarily due to increased rates for the Group’s
non-proportional excess of loss reinsurance.
Other revenue
Other revenue, which consists of fees and commissions, ancillaries, premium finance interest, reinsurance
commissions and other income, increased by £19.0 million, or 23.0 per cent., from £82.6 million for the six
months ended 30 June 2014 to £101.6 million for the six months ended 30 June 2015. After adjusting for
acquisition accounting, adjusted other revenue was £95.9 million and £101.6 million for the six months
ended 30 June 2014 and 2015, respectively, an increase of £5.7 million, or 5.9 per cent., period on period as
explained below.
Other revenue increased by £7.0 million, or 4.0 per cent., from £173.2 million for the year ended
31 December 2013 to £180.2 million for the year ended 31 December 2014. After adjusting for acquisition
accounting, adjusted other revenue was £174.2 million and £194.6 million for the years ended 31 December
2013 and 2014, respectively, an increase of £20.4 million, or 11.7 per cent., as explained below.
Other revenue increased by £51.9 million, or 42.8 per cent., from £121.3 million for the year ended
accounting, adjusted other revenue was £136.0 million and £174.2 million for the years ended 31 December
2012 and 2013, respectively, an increase of £38.2 million, or 28.1 per cent., as explained below.
Fees and commissions

Revenue from fees and commissions on the sale of insurance contracts increased by £4.8 million, or
15.9 per cent., from £30.1 million for the six months ended 30 June 2014 to £34.9 million for the six months
ended 30 June 2015. After adjusting for acquisition accounting, adjusted revenue from fees and commissions
increased by £3.8 million, or 12.2 per cent., from £31.1 million in the six months ended 30 June 2014 to
£34.9 million in the six months ended 30 June 2015. This is primarily driven by increased sales volumes to
new and renewal customers during the same period which has been partly offset by a reduction in the
administration fees charged to the Group’s customers, which was effected in July 2014.
22.7 per cent., from £50.2 million for the year ended 31 December 2013 to £61.6 million for the year ended
31 December 2014. After adjusting for acquisition accounting, adjusted revenue from fees and commissions
increased by £12.4 million, or 24.7 per cent., from £50.2 million in the year ended 31 December 2013 to
£62.6 million in the year ended 31 December 2014. This was primarily driven by increased sales to new
customers and an increase in the retention rate from 74.5 per cent. in 2013 to 77.2 per cent. in 2014 year on
year combined with an increase in income from distributing policies which provide motor legal expenses
cover.
75.5 per cent., from £28.6 million for the year ended 31 December 2012 to £50.2 million for the year ended
31 December 2013. After adjusting for acquisition accounting, adjusted revenue from fees and commissions
for the year ended 31 December 2012 was £23.4 million, which increased by £26.8 million to £50.2 million
for the year ended 31 December 2013. This was primarily driven by the introduction of arrangement fees in
the period combined with increased sales to new customers and an increase in the retention rate from
69.5 per cent. in 2012 to 74.5 per cent. in 2013.
120
Ancillary products
Revenue from the sale of ancillary products comprises the income earned from the sale of ancillary products
such as breakdown insurance, substitute vehicle coverage and motor legal expense cover, a significant
proportion of which relates to the income attributable to these products where they are included as part of
the Group’s Hastings Premier product. Revenue from the sale of ancillary products increased by
£4.2 million, or 24.1 per cent., from £17.4 million for the six months ended 30 June 2014 to £21.6 million
for the six months ended 30 June 2015. After adjusting for acquisition accounting, adjusted revenue from
ancillaries increased by £3.5 million, or 19.3 per cent., from £18.1 million in the six months ended 30 June
2014 to £21.6 million in the six months ended 30 June 2015. This is primarily driven by increased live
customer policies.
Revenue from the sale of ancillary products increased by £3.7 million, or 11.0 per cent., from £33.7 million
for the year ended 31 December 2013 to £37.4 million for the year ended 31 December 2014. After adjusting
for acquisition accounting, adjusted revenue from ancillaries increased by £4.4 million, or 13.1 per cent., in
the year from £33.7 million in the ended 31 December 2013 to £38.1 million in the year ended 31 December
2014. This is largely due to volume-related increases.
Revenue from the sale of ancillary products increased by £4.2 million, or 14.2 per cent., from £29.5 million
for the year ended 31 December 2012 to £33.7 million for the year ended 31 December 2013, with no
impacts of acquisition accounting. The increase was primarily due to increased sales volumes year on year,
partly offset by reduced ancillary penetration rates in the year ended 31 December 2012 to the year ended
31 December 2013 as a result of changes to the sales process in both the second half of 2012 and during
2013 to enhance the customer experience.
Premium finance interest

Premium finance interest increased by £5.5 million, or 24.3 per cent., from £22.6 million for the six months
ended 30 June 2014 to £28.1 million for the six months ended 30 June 2015. After adjusting for acquisition
accounting, adjusted premium finance interest, increased by £4.6 million, or 19.6 per cent., from
£23.5 million in the six months ended 30 June 2014 to £28.1 million in the six months ended 30 June 2015,
which was predominantly due to growth in live customer policies.
Premium finance interest increased by £7.1 million, or 17.1 per cent., from £41.4 million for the year ended
accounting, adjusted premium finance interest increased by £8.0 million, or 19.3 per cent., from
£41.4 million in the year ended 31 December 2013 to £49.4 million in the year ended 31 December 2014,
which was predominantly due to the continued increase in the number of policies sold with premium finance
offset by a year on year decrease in average premium.
Premium finance interest increased by £6.1 million, or 17.3 per cent., from £35.3 million for the year ended
31 December 2012 to £41.4 million for the year ended 31 December 2013, with no impacts of acquisition
accounting. The increase was predominantly due to the continued increase in the number of policies sold
with premium finance income for the year ended 31 December 2013 compared to the year ended 31
December 2012, partially offset by the impact of a commercial change in the premium finance funding
arrangements, moving from an outsourced provider to being funded by the Group. As a result of this change,
income that would otherwise have been recognised immediately was deferred as at 31 December 2013 to be
recognised over the future life of the underlying insurance contracts.
Reinsurance commissions
Reinsurance commissions increased by £4.5 million, or 57.7 per cent., from £7.8 million for the six months
accounting, adjusted reinsurance commissions were £18.3 million and £12.3 million for the six months
ended 30 June 2014 and 2015, respectively, a decrease of £6.0 million, or 32.8 per cent., period on period.
This reduction was due to a combination of factors including the changes to the structure of the Group’s
quota share contracts and an increase in the underlying accident year loss ratio for the six months ended
30 June 2015 due to higher average settled claims costs.
121
Reinsurance commissions decreased by £14.3 million, or 38.3 per cent., from £37.3 million for the year
ended 31 December 2013 to £23.0 million for the year ended 31 December 2014. After adjusting for
acquisition accounting, adjusted reinsurance commissions were £38.3 million and £34.5 million for the years
ended 31 December 2013 and 2014, respectively, a decrease of £3.8 million, or 9.9 per cent., year on year.
This reflected an increase in the underlying accident year loss ratio for the year ended 31 December 2014
combined with the impact of the changes to the structure of the Group’s quota share contracts as described
earlier.
Reinsurance commissions increased by £26.3 million from £11.0 million for the year ended 31 December
adjusted reinsurance commissions were £30.9 million and £38.3 million for the years ended 31 December
2012 and 2013, respectively, an increase of £7.4 million, or 23.9 per cent., year on year. This increase reflects
the continued increase in GWP, as described above, and improved margins with reinsurers, partly offset by
a year on year decrease in profit commission as a result of a non-recurring adjustment in the year ended
31 December 2012 in respect of previous underwriting years.
Other income
Other income, which primarily comprises claims income, remained consistent at £4.7 million in the
six months ended 30 June 2015 when compared to the six months ended 30 June 2014. After adjusting for
acquisition accounting, adjusted other income decreased by £0.2 million, or 4.1 per cent., from £4.9 million
in the six months ended 30 June 2014 to £4.7 million in the six months ended 30 June 2015.
Other income decreased by £0.9 million, or 8.5 per cent., from £10.6 million for the year ended 31 December
adjusted other income decreased by £0.6 million, or 5.7 per cent., from £10.6 million in the year ended
31 December 2013 to £10.0 million in the year ended 31 December 2014. This decrease was largely due to
the impact of the termination of referral income relating to bodily injury cases on 31 March 2013 in
accordance with the UK LASPO Act, partly offset by volume-related increases.
Other income decreased by £6.3 million, or 37.3 per cent., from £16.9 million for the year ended
31 December 2012 to £10.6 million for the year ended 31 December 2013, with no impacts of acquisition
accounting. The decrease was largely due to the termination of referral income arising from bodily injury
cases as described above.
Net insurance claims

Net insurance claims increased by £16.2 million, or 22.9 per cent., from £70.6 million for the six months
accounting, adjusted net insurance claims increased by £13.4 million, or 18.3 per cent., from £73.4 million
in the six months ended 30 June 2014 to £86.8 million in the six months ended 30 June 2015. The increase
was largely as a result of increased policy exposure due to increased live customer policies. Part of the
increase is also attributable to moderate accident year claims inflation as a result of an increase in accident
frequency. This has been partially offset by positive development in the Group’s prior year reserves.
Net insurance claims increased by £22.0 million, or 17.2 per cent., from £127.7 million for the year ended
accounting, adjusted net insurance claims increased by £24.7 million, or 19.3 per cent., from £127.7 million
in the year ended 31 December 2013 to £152.4 million in the year ended 31 December 2014. The increase
was largely a result of increased policy exposure from the year ended 31 December 2013 to the year ended
31 December 2014.
Net insurance claims increased by £44.6 million, or 53.7 per cent., from £83.1 million for the year ended
accounting, adjusted net insurance claims for the year ended 31 December 2012 were £117.5 million, which
increased by £10.2 million, or 8.7 per cent., from £127.7 million in the year ended 31 December 2013. The
increase was largely driven by increased policy exposure from the year ended 31 December 2012 to the year
122
ended 31 December 2013 partially offset by an improvement in the Group calendar year loss ratio as
explained earlier.
Acquisition costs
Acquisition costs relate primarily to fees paid to PCWs per new policy acquired, which are recognised over
the life of the underlying insurance contract on policies underwritten by the Group and in full at inception
of policies underwritten by the Group’s panel of third-party insurers.
Acquisition costs increased by £12.6 million from £8.4 million for the six months ended 30 June 2014 to
£21.0 million for the six months ended 30 June 2015. After adjusting for acquisition accounting, adjusted
acquisition costs were £18.2 million and £21.0 million for the six months ended 30 June 2014 and 2015,
respectively, an increase of £2.8 million, or 15.4 per cent., period on period. This was primarily as a result
of the continued increase in both private car and home new business sales.
Acquisition costs decreased by £5.6 million, or 17.9 per cent., from £31.3 million for the year ended
accounting, adjusted acquisition costs were £32.2 million and £37.9 million for the years ended
31 December 2013 and 2014, respectively, an increase of £5.7 million, or 17.7 per cent., year on year. This
was primarily a result of the continued increase in new business volumes and an increase in the average fee
paid to PCWs.
Acquisition costs increased by £14.4 million, or 85.2 per cent., from £16.9 million for the year ended
accounting, adjusted acquisition costs were £26.0 million and £32.2 million for the years ended
was primarily a result of the continued increase in new business volumes.

The most significant elements within other operating expenses are salaries and related staff expenses,
advertising, brand development, postage, telephone, information technology systems, property expenses,
outsourcing, underwriting levies and general corporate costs; a high proportion of which are variable and
semi variable in nature and increase as sales volumes increase.
Other operating expenses decreased by £3.4 million, or 4.7 per cent., from £72.7 million for the six months
accounting, excluding other operating expenses incurred in respect of the 2014 Reorganisation in the six
months ended 30 June 2014, and excluding other non-recurring expenses, adjusted other operating expenses
were £51.1 million and £57.6 million for the six months ended 30 June 2014 and 2015, respectively, an
increase of £6.5 million, or 12.7 per cent., period on period.
Total salaries and other staff expenses increased by £2.0 million, or 8.3 per cent., from £24.1 million for the
six months ended 30 June 2014 to £26.1 million for the six months ended 30 June 2015. After adjusting for
acquisition accounting and excluding non-recurring salary payments relating to the 2014 Reorganisation,
adjusted total salaries and other staff expenses were £24.7 million and £26.1 million for the six months ended
30 June 2014 and 2015, respectively, an increase of £1.4 million, or 5.7 per cent., period on period. This
reflects the growth in average staff levels, with an additional 141 FTE employed by the Group on average
during the six months ended 30 June 2015 compared to the six months ended 30 June 2014, an increase of
9 per cent. FTE growth has been slower than the increase in live customer policies, leading to live customer
policies per FTE increasing from 925 in the six months ended 30 June 2014 to 1,005 in the six months ended
30 June 2015.
Other operating expenses, excluding staff costs, adjusted for acquisition accounting and excluding the impact
of non-staff related operating costs in respect of the 2014 Reorganisation and other non-recurring expenses,
were £26.4 million and £31.5 million for the six months ended 30 June 2014 and 2015, respectively, an
increase of £5.1 million, or 19.3 per cent., period on period. This was largely due to an underlying increase
in variable and semi-variable costs in line with the Group’s growth and reflects continued investment in data,
123
pricing, advertising and digital capabilities. The increase also partly relates to the opening of the Group’s
new site in Leicester, which opened in May 2015.
Other operating expenses for the year ended 31 December 2014 increased by £22.5 million, or 19.1 per cent.,
from £117.9 million for the year ended 31 December 2013 to £140.4 million. After adjusting for acquisition
accounting and excluding other operating expenses incurred in respect of the 2014 Reorganisation in both
the years ended 31 December 2013 and 2014, and certain other non-trading costs in the year ended
31 December 2013, adjusted other operating expenses were £95.3 million and £107.8 million for the years
ended 31 December 2013 and 2014, respectively, an increase of £12.5 million, or 13.1 per cent., year on year.
Total salaries and other staff expenses decreased by £0.6 million, or 1.2 per cent., from £52.0 million for the
year ended 31 December 2013 to £51.4 million for the year ended 31 December 2014. After adjusting for
acquisition accounting and excluding non-recurring salary payments relating to the 2014 Reorganisation,
adjusted total salaries and other staff expenses were £48.1 million and £51.9 million for the years ended
reflects the growth in average staff levels, with an additional 153 FTE, an increase of 10.0 per cent.,
employed by the Group on average during the year ended 31 December 2014 compared to the year ended
31 December 2013. FTE growth was at a significantly lower rate than the increase in live customer policies
of 20.4 per cent., which demonstrates continued efficiency gains across the Group.
Other operating expenses, excluding staff costs, adjusted for acquisition accounting and excluding the impact
of non-staff related operating costs in respect of the 2014 Reorganisation in both the years ended
31 December 2013 and 2014, and certain other non-trading costs in the year ended 31 December 2013, were
£47.2 million and £55.9 million for the years ended 31 December 2013 and 2014, respectively, an increase
of £8.7 million, or 18.4 per cent., year on year. This was largely due to an underlying increase in variable
and semi-variable costs in line with the Group’s growth and strategic project costs that were incurred during
the year ended 31 December 2014. These increases were partly offset by the effect of operating efficiencies
achieved as the business grows and reduced bad debt expenses.
Other operating expenses increased by £47.2 million, or 66.8 per cent., from £70.7 million for the year ended
accounting and excluding other operating expenses incurred in respect of the 2014 Reorganisation and
certain other non-trading costs in the year ended 31 December 2013, adjusted other operating expenses were
£78.6 million and £95.3 million for the years ended 31 December 2012 and 2013, respectively, an increase
of £16.7 million, or 21.2 per cent., year on year.
Total salaries and other staff expenses increased by £11.5 million, or 28.4 per cent., from £40.5 million for
the year ended 31 December 2012 to £52.0 million for the year ended 31 December 2013. After adjusting
for acquisition accounting and excluding non-recurring salary payments relating to the 2014 Reorganisation
in the year ended 31 December 2013, adjusted total salaries and other staff expenses were £40.9 million and
£48.1 million for the years ended 31 December 2012 and 2013, respectively, an increase of £7.2 million, or
17.6 per cent., year on year. This reflects the growth in average staff levels, with an additional 222 FTE, an
increase of 17.0 per cent., employed by the Group on average during the year ended 31 December 2013
compared to the year ended 31 December 2012. This increase in FTE was principally in frontline support in
order to support the increase in sales volumes and to provide necessary levels of customer service, which
benefits retention.
Other operating expenses, excluding staff costs, increased by £35.7 million from £30.2 million for the year
ended 31 December 2012 to £65.9 million for the year ended 31 December 2013. After adjusting for
acquisition accounting and excluding the impact of non-staff related operating costs in respect of the 2014
Reorganisation and certain other non-trading costs in the year ended 31 December 2013, adjusted other
operating expenses, excluding staff costs, were £37.7 million and £47.2 million for the years ended
was largely due to an underlying increase in variable and semi-variable costs in line with the Group’s growth
combined with the Group’s focus on brand awareness including television advertising during the year ended
31 December 2013.
124
Finance costs
Finance costs increased by £2.5 million, or 7.4 per cent., from £33.7 million for the six months ended
30 June 2014 to £36.2 million for the six months ended 30 June 2015. Finance costs for the six months ended
30 June 2015 include £16.6 million of interest and non-cash amortisation costs incurred arising on the issue
of the Senior Secured Notes and £19.1 million of dividends and interest accrued on the Group’s preference
shares. Both the Senior Secured Notes and the preference shares were issued as part of the 2014
Reorganisation, in October 2013 and January 2014, respectively.
Finance costs for the six months ended 30 June 2014 include £16.5 million of interest and non-cash
amortisation costs incurred arising on the issue of the Senior Secured Notes and £16.3 million of preference
shares dividends.
Finance costs increased by £59.1 million from £9.5 million for the year ended 31 December 2013 to
£68.6 million for the year ended 31 December 2014. Finance costs for the year ended 31 December 2013
included interest of £7.6 million on loan notes and loans issued to shareholders which were repaid as part of
the 2014 Reorganisation on 8 January 2014. For the year ended 31 December 2014 finance costs included
£33.0 million of interest and non-cash amortisation costs incurred arising on the issue of the Senior Secured
Notes and £33.7 million of preference shares dividends.
After adjusting for acquisition accounting, excluding the interest on loan notes and loans issued to
shareholders and the preference shares dividends, and including interest and non-cash amortisation costs
incurred in the year ended 31 December 2013 arising on the issue of the Senior Secured Notes which are not
recognised in the results of the HIG Group for the year ended 31 December 2013, adjusted finance costs,
which represent operating business indebtedness, were £7.8 million and £33.9 million for the years ended
31 December 2013 and 2014, an increase of £26.1 million, year on year. This is primarily due to a full year
of interest and non-cash amortisation costs incurred in the year ended 31 December 2014 arising on the issue
of the Senior Secured Notes.
Finance costs increased by £2.1 million, or 28.4 per cent., from £7.4 million for the year ended 31 December
2012 to £9.5 million for the year ended 31 December 2013. Finance costs include interest on loan notes and
loans issued to shareholders which were repaid as part of the transaction on 8 January 2014 of £5.4 million
for the year ended 31 December 2012 and £7.6 million for the year ended 31 December 2013. After adjusting
for acquisition accounting, excluding the interest on loan notes and loans issued to shareholders, and
including interest and non-cash amortisation costs incurred in the year ended 31 December 2013 arising on
the issue of the Senior Secured Notes which are not recognised in the results of the HIG Group for the year
ended 31 December 2013, adjusted finance costs were £0.7 million and £7.8 million for the years ended 31
December 2012 and 2013, an increase of £7.1 million year on year. This is primarily due to the interest and
non-cash amortisation costs incurred in the year ended 31 December 2013 arising on the issue of the Senior
Secured Notes.
Taxation expense
Taxation expense increased by £1.0 million, or 28.6 per cent., from £3.5 million for the six months ended
30 June 2014 to £4.5 million for the six months ended 30 June 2015. After adjusting for acquisition
accounting and for the tax effects of the items of interest adjusted for above, the adjusted taxation expense
was £5.4 million and £6.7 million for the six months ended 30 June 2014 and 2015, respectively, an increase
of £1.3 million, or 24.1 per cent., period on period, as a result of the increase in adjusted profit before tax
period on period.
Taxation expense decreased by £7.9 million, or 53.0 per cent., from £14.9 million for the year ended
accounting and for the tax effects of excluding the non-trading items and the items of interest adjusted for
above, adjusted taxation expense for the year ended 31 December 2013 was £15.5 million, compared to
£11.4 million for the year ended 31 December 2014, a decrease of £4.1 million, or 26.5 per cent., year on
year. The effective tax rate on the adjusted taxation expense decreased from 19.3 per cent. for the year ended
31 December 2013 to 16.5 per cent. for the year ended 31 December 2014, primarily due to the recognition
125
of a £7.1 million corporation tax credit in relation to finance costs incurred on the Senior Secured Notes in
the year ended 31 December 2014.
Taxation expense decreased by £1.5 million, or 9.1 per cent., from £16.4 million for the year ended
accounting and for the tax effects of excluding the non-trading items and the items of interest adjusted for
above, adjusted taxation expense for the year ended 31 December 2012 was £14.9 million, compared to
£15.5 million for the year ended 31 December 2013, an increase of £0.6 million, or 4.0 per cent., year on
year.
The effective tax rate on the adjusted taxation expense decreased from 21.9 per cent. for the year ended
31 December 2012 to 19.3 per cent. for the year ended 31 December 2013. This decrease was largely due to
a change in the mix of profits generated by HISL and AICL, which are resident in the UK and Gibraltar
respectively for corporation tax purposes, and the change in the UK corporation tax rate (rate of 24.5 per
cent. and 23.3 per cent. for the years ended 31 December 2012 and 2013, respectively).

The table below presents the consolidated balance sheet as at 30 June 2015 and 31 December 2012, 2013
and 2014, which have been extracted without material adjustment from the consolidated historical financial
information set out in Part 12 (Historical Financial Information).
HIG(H)
HIG Group HIG Group HIG(H) Group Group
2012 2013 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
ASSETS
Property and equipment.......................... 9.2 10.1 10.1 12.4
Intangible assets...................................... 14.4 19.4 120.0 121.0
Goodwill ................................................ 28.5 28.5 470.0 470.0
Investments in associates........................ 0.3 – – –
Deferred income tax asset ...................... 2.5 2.2 5.6 2.9
Loans receivable .................................... 4.5 – – –
Reinsurance assets .................................. 231.5 343.5 426.5 471.2
Prepayments............................................ 0.9 1.0 1.2 5.4
Insurance and other receivables.............. 145.8 190.4 212.6 234.0
Financial assets ...................................... 140.0 172.1 224.9 264.1
Cash and cash equivalents ...................... 102.8 110.8 123.4 125.2
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total assets ............................................ 680.4 878.0 1,594.3 1,706.2
EQUITY
––––––––––– ––––––––––– ––––––––––– –––––––––––
Share capital .......................................... 1.1 1.1 1.0 1.0
Share premium account .......................... 0.1 0.1 – –
Treasury shares ...................................... (0.1) – – –
Merger reserve ........................................ (1.0) (1.0) – –
Other reserves ........................................ – – – (0.9)
Retained earnings(1) ................................ 25.7 54.8 (14.9) (10.1)
–––––––– –––––––– –––––––– ––––––––
Total equity............................................ 25.8 55.0 (13.9) (10.0)
–––––––– –––––––– –––––––– ––––––––
126
HIG(H)
HIG Group HIG Group HIG(H) Group Group
2012 2013 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
LIABILITIES
Preference shares .................................... – – 319.3 338.4
Senior Secured Notes ............................ – – 403.6 404.6
Loans and borrowings ............................ 82.5 83.8 – –
Insurance contract liabilities .................. 462.3 590.9 704.7 785.7
Insurance and other payables ................ 94.9 137.1 146.9 160.3
Provisions .............................................. 1.5 0.9 0.3 –
Deferred income tax liability.................. 4.9 5.6 27.0 22.9
Current tax liabilities .............................. 8.5 4.7 6.4 4.3
–––––––– –––––––– –––––––– ––––––––
Total liabilities ...................................... 654.6 823.0 1,608.2 1,716.2
Total equity and liabilities....................

––––––––
680.4
––––––––
878.0
––––––––
1,594.3
––––––––
1,706.2
Total equity at HIG/HIG(F)(2) ..............

––––––––
25.8
––––––––
55.0
––––––––
305.4
––––––––
328.5
Notes:
–––––––– –––––––– –––––––– ––––––––
(1) Under local laws and regulations, the Company and the holding companies of the Group have the capacity to distribute any
dividends they receive from the Group’s trading subsidiaries. There is expected to be significant distributable reserves capacity
following the capital reduction exercise to be performed by the Company.
(2) Total equity at HIG/HIG(F) presents equity in the Group’s audited consolidated balance sheet at the HIG level for 31 December
2012 and 31 December 2013, and at the HIG(F) level for 31 December 2014 and 30 June 2015, prepared in accordance with
IFRS. These represent the lowest levels in the corporate structure which includes all operational debt.
As part of the 2014 Reorganisation, the Group issued its 2019 Notes and 2020 Notes (together, the “Senior
Secured Notes”), both as described below, and the preference shares, the proceeds from which funded the
purchase of HIG, the repayment of existing loans and borrowings and the payment of costs relating to the
2014 Reorganisation.
Goodwill on the purchase of HIG is derived by taking the purchase price of HIG less the fair value of net
assets acquired, including any increases or decreases resulting from fair valuing the acquired intangible
assets. Therefore the increase in intangible assets, the establishment of goodwill, the repayment of loans and
borrowings, the elimination of pre-acquisition retained earnings and the issue of Senior Secured Notes and
preference shares all form part of accounting for the 2014 Reorganisation and do not reflect the underlying
trading of the business for the year ended 31 December 2014.
Assets
Total assets held by the Group increased by £111.9 million, or 7.0 per cent., from £1,594.3 million as at
31 December 2014 to £1,706.2 million as at 30 June 2015.
Reinsurance assets increased by £44.7 million, or 10.5 per cent., from £426.5 million as at 31 December
2014 to £471.2 million as at 30 June 2015 in line with the increase in insurance contract liabilities and policy
exposure.
Financial assets increased by £39.2 million, or 17.4 per cent., from £224.9 million as at 31 December 2014
to £264.1 million as at 30 June 2015, as the Group seeks to best utilise the Underwriting’s cash reserves.
Insurance and other receivables increased by £21.4 million, or 10.1 per cent., from £212.6 million as at
31 December 2014 to £234.0 million as at 30 June 2015. This increase is principally driven by the continued
increase in the number of policies sold.
Intangible assets of £121.0 million held by the Group as at 30 June 2015 comprise deferred acquisition costs,
brands, customer relationships and software including work in progress. The Group has undertaken
127
increased capital expenditure during the period, which is reflective of the Group’s strategy to continue to
invest in infrastructure and systems, including the development and implementation of Guidewire, the
Group’s new claims and broking platform. Such additions have been offset by £11.4 million of amortisation
of intangible assets identified and fair valued as part of the 2014 Reorganisation during the period.
Total assets held by the Group increased by £716.3 million, or 81.6 per cent., from £878.0 million as at
31 December 2013 to £1,594.3 million as at 31 December 2014. After adjusting for the effects of the 2014
Reorganisation on goodwill and intangible assets, total assets increased by £151.2 million, or 17.2 per cent.,
from £878.0 million as at 31 December 2013 to £1,029.2 million as at 31 December 2014. This increase was
primarily due to increases in reinsurance assets, insurance and other receivables and financial assets, as
described below.
2013 to £426.5 million as at 31 December 2014. £20.4 million of this increase was due to grossing up of the
risk margin held within claims reserves over and above the internal actuarial best estimate for both quota
share and non-proportional excess of loss reinsurance partners’ shares of claims costs, with a corresponding
increase in insurance contract liabilities. This presentational change has no impact on overall net assets. The
remainder was primarily driven by the increase in policy exposure during the year ended 31 December 2014.
31 December 2013 to £212.6 million as at 31 December 2014. This increase was primarily due to an increase
in receivables from policyholders who choose to pay by instalment, as a result of the continued increase in
the number of these policies sold, combined with a year on year decrease in average premium.
to £224.9 million as at 31 December 2014. The increase was as a result of investment of additional cash
generated by AICL in the year ended 31 December 2014.
Total assets held by the Group increased by £197.6 million, or 29.0 per cent., from £680.4 million as at
31 December 2012 to £878.0 million as at 31 December 2013, primarily due to increases in reinsurance
assets, insurance and other receivables and financial assets, as described below.
2012 to £343.5 million as at 31 December 2013. In the year ended 31 December 2013, the Group grossed
up its claims reserves for large losses, including potential PPOs, which resulted in an increase in both
insurance contract liabilities and reinsurance assets. After adjusting for the gross up, reinsurance assets
increased by 33.4 per cent., which is largely due to the increase in policy exposure year on year. This is
combined with the effect of reserving for an increased number of large claims during the year ended
31 December 2013, the majority of which are recovered through reinsurance contracts, and an increase
relating to funds withheld quota share contracts, whereby the quota share partner’s share of claims incurred
is received in total at contract conclusion rather than following settlement of a claim.
31 December 2012 to £190.4 million as at 31 December 2013. This increase was primarily driven by
increases in receivables due from policyholders who have chosen to pay by instalment, due to the continued
increase in the number of these policies sold.
to £172.1 million as at 31 December 2013. This increase was as a result of investment of additional cash
generated by AICL in the year ended 31 December 2013.
Liabilities
Total liabilities increased by £108.0 million, or 6.7 per cent., from £1,608.2 million as at 31 December 2014
to £1,716.2 million as at 30 June 2015, principally as a result of an increase in insurance contract liabilities
as well as an increase in insurance and other payables.
128
Insurance contract liabilities increased by £81.0 million, or 11.5 per cent., from £704.7 million as at
31 December 2014 to £785.7 million as at 30 June 2015. This was primarily due to the increase in policy
exposure during the six months ended 30 June 2015.
Insurance and other payables increased by £13.4 million, or 9.1 per cent., from £146.9 million as at
31 December 2014 to £160.3 million as at 30 June 2015. This is mainly due to the increased cost base of the
company driven by increased live customer policies.
Total liabilities increased by £785.2 million, or 95.4 per cent., from £823.0 million as at 31 December 2013
to £1,608.2 million as at 31 December 2014. £722.9 million of this increase was due to the issue of the Senior
Secured Notes and the preference shares, partially offset by the repayment of shareholder loans and loan
notes of £83.8 million in the year ended 31 December 2014.
31 December 2013 to £704.7 million as at 31 December 2014. This was due to the increase in policy
exposure during the year ended 31 December 2014 and the effect of grossing up of the risk margin as
described above.
Deferred income tax liability increased by £21.4 million, from £5.6 million as at 31 December 2013 to
£27.0 million as at 31 December 2014. This increase was primarily a result of additional deferred tax relating
to the increase in intangible assets which were identified as part of the 2014 Reorganisation.
Total liabilities increased by £168.4 million, or 25.7 per cent., from £654.6 million as at 31 December 2012
to £823.0 million as at 31 December 2013. This increase was largely due to increases in insurance contract
liabilities and insurance and other payables.
31 December 2012 to £590.9 million as at 31 December 2013. This increase was impacted by the effects of
grossing up of the Group’s claims reserves in the year ended 31 December 2013 for large losses, including
potential PPOs, as outlined above. After adjusting for this gross up, insurance contract liabilities increased
by 19.5 per cent. This increase was primarily due to increased policy exposure and the effect of reserving for
an increased number of large claims during the year ended 31 December 2013, as described above.
Insurance and other payables increased by £42.2 million, or 44.5 per cent., from £94.9 million as at
31 December 2012 to £137.1 million as at 31 December 2013. This was partly due to non-recurring
restructuring and transaction costs accrued as at 31 December 2013, which were subsequently settled in the
first quarter of 2014 following completion of the 2014 Reorganisation. Excluding these accruals, insurance
and other payables increased by 33.0 per cent., primarily due to increased ceded premiums owed to
reinsurers driven by the increase in GWP, combined with an increase in ceded premiums owed to reinsurers
relating to funds withheld quota share contracts as described earlier.
Liquidity and capital resources (i) 5.2.1

(i) 5.2.2
Liquidity describes the ability of a business to generate sufficient cash flows to meet the cash requirements
(i) 5.2.3
of its business operations, including working capital needs, capital expenditures, debt service obligations,
(i) 6.4
contractual obligations and other commitments and acquisitions. The Group’s primary sources of liquidity
(i) 10.1 – 10.5
are provided by cash generated from its operating activities and third-party financing, as well as any
ESMA 31
drawings under the £20.0 million Revolving Credit Facility that the Group entered into on 21 October 2013
ESMA 33
(the “Revolving Credit Facility”). Going forward, the Group’s liquidity requirements will arise to meet its
ESMA 34
obligations under the Senior Secured Notes, and following redemption of these, the New Facilities
ESMA 36
Agreement (see below), as well as to fund its operations, contractual obligations, working capital needs and
ESMA 37
capital expenditures.
129
HIG(H)
2012 2013 2014 (unaudited) 30 June 2015
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(£ millions)
Profit/(loss) after tax .............................. 39.5 41.1 (8.4) (14.3) 4.8
Non-cash adjustments
Depreciation of property and equipment .. 1.8 2.0 1.4 0.8 1.2
Amortisation of intangible assets .......... 0.6 1.3 26.5 13.5 12.6
Net fair value (gains)/losses on
investments ............................................ (2.5) (1.4) (3.6) (1.6) 1.1
Net unrealised (gains)/losses on
property and equipment.......................... – 0.2 – – –
Interest receivable .................................. (1.3) – – – –
Loss on derecognition of property
and equipment ........................................ 0.2 – – – –
Loss on derecognition of intangible
assets ...................................................... 0.1 – – – –
Finance costs .......................................... 7.4 9.5 68.6 33.7 36.2
Taxation expense .................................... 16.4 14.9 7.0 3.5 4.5
Change in insurance and other
receivables and prepayments .................. (23.4) (48.0) (8.7) 7.6 (25.7)
Change in insurance and other payables.. 14.8 45.7 (9.5) (19.2) 10.8
Change in reinsurance assets.................. (37.3) (112.0) (83.8) (70.5) (46.2)
Change in deferred acquisition costs...... (10.8) (3.1) (13.2) (10.8) (2.6)
Write off of investments in associates.... – 0.3 – – –
Change in insurance contract liabilities .. 84.4 128.5 115.5 86.4 83.5
Change in loans receivable .................... – 4.4 – – –
Change in provisions .............................. (0.6) (0.5) (0.6) (0.2) (0.3)
Taxation paid .......................................... (6.5) (17.7) (9.0) (4.9) (7.9)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
activities ................................................ 82.8 65.2 82.2 24.0 72.0
Purchase of property and equipment ......

––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(1.9) (3.1) (2.3) (0.8) (2.5)
Acquisition of intangible assets.............. (1.5) (3.2) (5.8) (1.3) (10.7)
Interest received...................................... – 1.4 – – –
Receipt of cash in escrow ...................... – – 415.0 415.0 –
Net outlay for acquisition of subsidiary.. 4.8 – (343.1) (343.1) –
Outlays for investments acquired .......... (81.1) (89.0) (98.6) (4.5) (98.8)
Proceeds from disposal of investments .. 73.1 56.9 48.9 7.0 57.6
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net cash flows from investing
activities ................................................ (6.6) (37.0) 14.1 72.3 (54.4)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
130
HIG(H)
2012 2013 2014 (unaudited) 30 June 2015
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(£ millions)
Proceeds from issue of preference shares.. – – 144.6 144.6 –
Proceeds from issue of ordinary
share capital ............................................ – 0.1 1.0 1.0 –
Increase in loans payable........................ 25.0 1.2 – – –
Repayment of loans ................................ – – (83.8) (83.8) –
Interest on loans and borrowings paid.... (6.8) (8.3) (34.0) (16.3) (15.6)
Other interest paid .................................. – (1.2) (0.7) – –
Performance fees paid ............................ (0.6) – – (0.3) (0.2)
Dividends paid ........................................ (25.0) (12.0) – – –
–––––––– –––––––– –––––––– –––––––– ––––––––
activities ................................................ (7.4) (20.2) 27.1 45.2 (15.8)
Net increase in cash and cash

–––––––– –––––––– –––––––– –––––––– ––––––––
equivalents ............................................ 68.8 8.0 123.4 141.5 1.8
Cash and cash equivalents at beginning

–––––––– –––––––– –––––––– –––––––– ––––––––
of year/period.......................................... 34.0 102.8 – – 123.4
Cash and cash equivalents inflow for the
year/period .............................................. 68.8 8.0 123.4 141.5 1.8
year/period .............................................. 102.8 110.8 123.4 141.5 125.2
–––––––– –––––––– –––––––– –––––––– ––––––––
The Group had positive cash flows during the six months ended 30 June 2015, with a cash inflow of
£1.8 million compared to positive cash flows of £141.5 million for the six months ended 30 June 2014. This
reduction in cash inflow is primarily due to the additional £41.2 million investment in financial assets in the
six months ended 30 June 2015 and because the six months ended 30 June 2014 includes £111.8 million of
cash held in HIG on 8 January 2014, and therefore acquired as part of the 2014 Reorganisation.
Cash flows from operating activities increased by £48.0 million from £24.0 million in the six months ended
30 June 2014 to £72.0 million in six months ended 30 June 2015. This was largely as a result of a
£19.1 million increase in profit after tax and the effect of receiving cash for premiums in advance of the
Group earning that premium.
The Group continued to invest in infrastructure and systems in the six months ended 30 June 2015 driving
an £11.1 million increase in the purchase of property and equipment and intangible assets period on period
to £13.2 million which includes outflows associated with the development and implementation of Guidewire,
the Group’s new claims and broking platform.
The Group paid £15.6 million of interest on the Senior Secured Notes in the six months ended 30 June 2015,
which decreased from the six months ended 30 June 2014 when £16.3 million of interest was paid. An
additional £2.2 million of interest was paid in the six months ended 30 June 2014 relating to the shareholder
loans and loan notes, which were repaid on 8 January 2014.
Group Operating Profit increased by £15.6 million, or 17.3 per cent., from £90.1 million in the year ended
31 December 2013 to £105.7 million in the year ended 31 December 2014, primarily as a result of the
increase in live customer policies during the year. This resulted in strong net cash flows from operating
activities of £82.2 million for the year ended 31 December 2014, an increase of £17.0 million from
£65.2 million for the year ended 31 December 2013.
131
Partly offsetting this increase in operating cash inflows, the Group continued to support its growth during the
year ended 31 December 2014, with ongoing investment in infrastructure and systems driving a £1.8 million
increase in the purchase of property and equipment and acquisition of intangible assets year on year to
£8.1 million in the year ended 31 December 2014.
Additional investment of surplus cash in financial assets during the year ended 31 December 2014 resulted
in a £17.6 million increase in the net outlay for investments acquired to £49.7 million in the year ended
31 December 2014. Additionally, interest paid on loans and borrowings increased by £25.7 million in the
year ended 31 December 2014, primarily due to interest payments on the Senior Secured Notes falling due
for the first time in the year ended 31 December 2014.
These outflows were partly offset by the absence of any dividend in the year ended 31 December 2014
whereas the Group paid dividends of £12.0 million in the year ended 31 December 2013.
As part of the 2014 Reorganisation on 8 January 2014, the Group acquired £111.8 million of cash upon its
acquisition of HIG and retained a small portion of the transaction funds, which were used to service
associated non-recurring costs.
Group Operating Profit increased by £19.8 million, or 28.2 per cent., from £70.3 million in the year ended
31 December 2012 to £90.1 million in the year ended 31 December 2013, primarily due to the increase in
live customer policies during the year ended 31 December 2013. The effects of acquisition accounting and
non-recurring costs relating to the transaction, as well as the timing of tax payments, resulted in a decrease
in the net cash inflow from operating activities from £82.8 million in the year ended 31 December 2012 to
£65.2 million in the year ended 31 December 2013.
As part of the Group’s strategy to invest in infrastructure and systems to support its future growth, investment
in property and equipment and acquisition of intangible assets increased by £2.9 million during the year
ended 31 December 2013, from £3.4 million in the year ended 31 December 2012 to £6.3 million in the year
ended 31 December 2013.
Additional investment of surplus cash in financial assets during the year ended 31 December 2013 resulted
in a £24.1 million increase in the net outlay for investments acquired, from £8.0 million in the year ended
31 December 2012 to £32.1 million in the year ended 31 December 2013.
The Group paid £25.0 million of dividends during the year ended 31 December 2012 compared to
£12.0 million during the year ended 31 December 2013.
The Group acquired £29.8 million of cash as part of the acquisition of AGH in 2012. AGH was acquired for
consideration of £82.5 million, £57.5 million of which consisted of loan notes issued to the former
shareholders of AGH and £25.0 million of which was funded through the issue of a loan from a shareholder
of HIG.
Group cash flow available for debt service and dividend distribution
The Group’s operating activities are highly cash generative. However, the cash generated by the Group for
an accounting period does not equate to cash flow available for debt service and dividend distribution, which
is the result of Retail holding cash on behalf of insurers or for regulatory purposes and Underwriting being
subject to capital requirements imposed by the FSC.
To establish the cash flow available for debt service and dividend distribution from Retail, Retail operating
profit, which excludes non-recurring costs, is used as a starting point and is then adjusted for movements in
working capital, capital expenditure and taxation to give Retail cash flow before interest, debt service and
dividend distribution.
132
The FSC capital requirements mean that the dividend capacity of AICL is more determinative of
Underwriting cash flow available for dividend distribution than Underwriting operating profit. The dividend
capacity of AICL is currently a function of the surplus of AICL’s net admissible assets above the RMM for
determining dividend capacity, as stipulated by the FSC.
On 1 January 2016, Solvency II, the EU’s new framework for the above capital adequacy regime, is
scheduled to be implemented. It establishes a revised set of EU-wide capital requirements and risk
management standards which aim to better protect policyholders. AICL has a well-developed Solvency II
programme and is on track to meet all requirements.
AICL must receive FSC approval prior to distributing a dividend. Under the current solvency requirements,
the FSC has agreed that AICL may distribute dividends provided that at all times AICL’s Solvency I coverage
ratio is above a minimum threshold on both retrospective and prospective bases. AICL is also required to
maintain claims reserves that are validated by independent third-party actuarial reviews. This basis was
agreed with the FSC as a transitional proxy for solvency requirements after the implementation of Solvency
II. From 1 January 2016, it is expected that AICL will agree a similar arrangement with the FSC, to enable
AICL to continue to pay dividends, provided that its net assets on a Solvency II basis remain at all times in
excess of Solvency II requirements. That four such dividends were approved in 2014 and 2015 is
demonstrative of Underwriting’s ability to continue to be cash generative through the transition, while
satisfying all such requirements, into the Solvency II regime and beyond.
2013 2014 30 June 2014 30 June 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
Retail cash flow generation
Retail operating profit(1) .......................... 51.8 69.9 36.0 40.6
Movement in net operating working
capital...................................................... (8.3) (6.6) (6.9) (1.9)
Capital expenditure ................................ (6.3) (6.4) (2.6) (13.2)
Taxation paid(2)........................................ (17.5) (5.7) (1.9) (3.3)
––––––––––– ––––––––––– ––––––––––– –––––––––––
Cash flow before interest, debt service
and dividend distribution .................... 19.7 51.2 24.6 22.2
Cash conversion (cash flow as % of

––––––––––– ––––––––––– ––––––––––– –––––––––––
Retail operating profit) ........................ 38% 73% 68% 55%
––––––––––– ––––––––––– ––––––––––– –––––––––––
Underwriting cash flow generation
Net admissible assets brought forward .. 73.4 104.2 104.2 107.9
Profit after tax (IFRS)(3) .......................... 29.8 34.5 13.3 15.8
Dividends approved and paid ................ – (33.3) (21.1) –
Other movements in admissible assets .. 1.0 2.5 2.2 (1.1)
––––––––––– ––––––––––– ––––––––––– –––––––––––
Net admissible assets carried forward 104.2 107.9 98.6 122.6
Required minimum margin for dividend

––––––––––– ––––––––––– ––––––––––– –––––––––––
capacity(4) ................................................ 43.2 49.7 43.2 49.7
––––––––––– ––––––––––– ––––––––––– –––––––––––
Solvency margin %(5) ............................ 241% 217% 228% 247%
––––––––––– ––––––––––– ––––––––––– –––––––––––
133
2013 2014 30 June 2014 30 June 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
debt service and dividend distribution
Dividends approved(6) ............................ – 33.3 21.1 8.6
Intercompany debt repaid ...................... – (6.4) (6.4) –
2014 Reorganisation related costs paid .. – (7.9) (7.9) –
––––––––––– ––––––––––– ––––––––––– –––––––––––
debt service and dividend distribution .. – 19.0 6.8 8.6

––––––––––– ––––––––––– ––––––––––– –––––––––––
service and dividend distribution........ 19.7 70.2 31.4 30.8
––––––––––– ––––––––––– ––––––––––– –––––––––––
Notes:
(1) Retail operating profit is audited in each period except for the six months ended 30 June 2014.
(2) Taxation paid for 2013 includes £6.5 million of tax paid in respect of the year ended 31 December 2012, which was partially as
a result of the timing of performance commission, which is paid from AICL to HISL, as well as a quarterly tax payment of
£3.7 million due in January 2014 which was prepaid in December 2013.
(3) AICL profit after tax is audited in each period except for the six months ended 30 June 2014.
(4) RMM quoted is the higher of retrospective and prospective, as appropriate for determining dividend capacity.
(5) Solvency margin is calculated as net admissible assets carried forward divided by the RMM for determining dividend capacity.
The Group generated cash flow available for debt service and dividend distribution of £30.8 million in the
six months ended 30 June 2015 compared with £31.4 million in the six months ended 30 June 2014 despite
investing more than five times as much in capital expenditure than in the previous half year. This was driven
by the Group’s ongoing investment in infrastructure and systems, including the development and
implementation of Guidewire, the Group’s new claims and broking platform. Retail operating profit
increased by £4.6 million, or 12.8 per cent., from £36.0 million in the six months ended 30 June 2014 to
£40.6 million in the six months ended 30 June 2015.
The increase in working capital in both the six months ended 30 June 2015 and 2014 primarily reflects the
continued growth of the Group’s premium finance customer base in line with increased live customer
policies, which increases receivables in the Retail business, offset to some degree by the timing of payables.
The increase in taxation paid from £1.9 million in the six months ended 30 June 2014 to £3.3 million in the
six months ended 30 June 2015 is primarily a timing difference due to the payment of taxation in the last
quarter of the year ended 31 December 2013 which would ordinarily have been paid in the six months ended
30 June 2014.
The increase in AICL’s net admissible assets is as a result of increased profits generated by AICL. No
dividends were paid by AICL during the six months ended 30 June 2015, although £8.6 million has been
approved by the FSC for distribution.
The Group generated cash flow available for debt service and dividend distribution of £70.2 million in the
year ended 31 December 2014 compared with £19.7 million in the year ended 31 December 2013. This
reflects both the 34.9 per cent. growth in Retail operating profit in the year and the payment of dividends by
AICL, which were not paid in the year ended 31 December 2013, and has resulted in an interest coverage
(which represents Group cash flow available for debt service and dividend distribution as presented in the
table above divided by debt service presented in the table below) of 2.2x for the year ended 31 December
2014.
134
The increase in working capital in both the years ended 31 December 2013 and 2014 primarily reflects the
continued growth of the Group’s premium finance customer base in both years in line with increased live
customer policy volumes, which increases receivables in the Retail business.
Capital expenditure was consistent year on year, reflecting the Group’s commitment to ongoing investment
in infrastructure and systems to support the Group’s growth. The decrease in taxation paid from
£17.5 million in the year ended 31 December 2013 to £5.7 million in the year ended 31 December 2014 was
primarily due to lower payments on account in the year ended 31 December 2014, as a result of a
£7.1 million corporation tax credit in relation to finance costs incurred on the Group’s Senior Secured Notes
during the year ended 31 December 2014, as well as the timing of tax payments made in the year ended
31 December 2013 described in footnote (2) to the table above.
Profits generated by AICL drove £33.3 million of dividends available to be distributed that were paid during
the year ended 31 December 2014. Despite the dividends paid, AICL’s net admissible assets still increased
year on year. The dividends paid during the year ended 31 December 2014 were partly used to repay
intercompany debt and transaction related costs whilst the remainder, £19.0 million, was made available to
pay interest due on the Senior Secured Notes.
Other movements in net admissible assets of £2.5 million in the year ended 31 December 2014 primarily
represent a higher threshold value for admissibility of assets in the year ended 31 December 2014, thus a
lower value of assets is in excess of the limit. The regulatory RMM for dividend capacity increased from
£43.2 million in the year ended 31 December 2013 to £49.7 million in the year ended 31 December 2014.
AICL, as a result of its continuing premium growth, currently applies the premium method in establishing
its RMM. See Part 7 (Regulation). For the purposes of calculating solvency margin available for distribution,
the higher of RMM calculated on a retrospective basis and on a prospective basis is used. The retrospective
basis is calculated on premiums for the preceding 12 months, while the prospective basis is calculated on
expected premiums for the next 12 months, based upon the latest management forecast.
Group cash available for debt service and dividend distribution

2013 2014 30 June 2014 30 June 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(£ millions)
Opening Group cash available for debt
service and dividend distribution............ 10.5 6.7 6.7 38.0
service and dividend distribution............ 19.7 70.2 31.4 30.8
Corporate costs ...................................... – (1.1) (0.6) (0.6)
2014 Reorganisation related payments .. (5.2) (10.4) (13.7) (0.1)
Loan received from AICL ...................... – 7.9 7.9 –
Group dividends paid.............................. (12.0) – – –
Interest payments on shareholder loans .. (6.3) (3.4) – –
Debt service on Senior Secured Notes .. – (31.9) (18.8) (15.6)
Movement in Retail regulatory capital
required (MIPRU) .................................. – – – (0.6)
–––––––– –––––––– –––––––– ––––––––
Net Group cash flow available for debt
service and dividend distribution........ (3.8) 31.3 6.2 13.9
Closing Group cash available for debt

–––––––– –––––––– –––––––– ––––––––
service and dividend distribution........ 6.7 38.0 12.9 51.9
–––––––– –––––––– –––––––– ––––––––
135
The net Group flow cash available for debt service and dividend distribution increased by £7.7 million to
£13.9 million in the six months ended 30 June 2015, driven by strong Group cash flow available for debt
service and dividend distribution as outlined in the previous pages, which demonstrates the highly cash
generative nature of the Group’s operating activities.
Corporate costs of £0.6 million in the six months ended 30 June 2015 include fees paid to non-executive
directors of the Group’s Board, commitment fees in respect of the revolving credit facility (described in the
following section) and other corporate administration and advisory fees.
2014 Reorganisation related payments in the six months ended 30 June 2014 include advisory costs relating
to the 2014 Reorganisation and the issue of the Senior Secured Notes. As presented earlier, £7.9 million of
AICL’s approved dividends were utilised for the repayment of a loan from the Retail business as part of the
2014 Reorganisation. These funds were then used to contribute towards these advisory costs.
As a result of the above, the closing Group cash available for debt service and dividend distribution was
£51.9 million as at 30 June 2015.
The net Group flow cash available for debt service and dividend distribution increased by £35.1 million to
£31.3 million in the year ended 31 December 2014, again driven by strong Group cash flow available for
debt service and dividend distribution as outlined in the previous pages.
Corporate costs of £1.1 million in the year ended 31 December 2014 include fees paid to non-executive
directors of the Group’s Board, commitment fees in respect of the revolving credit facility and other
corporate administration and advisory fees.
2014 Reorganisation related payments in the years ended 31 December 2013 and 2014 include advisory
costs relating to the 2014 Reorganisation and the issue of the Senior Secured Notes and as described above,
in the year ended 31 December 2014, £7.9 million of AICL’s approved dividends were utilised for the
repayment of an intercompany loan.
Dividends of £12.0 million were paid to the Founder Shareholders in the year ended 31 December 2013,
while no such dividends were declared by the Group in the year ended 31 December 2014. Debt service on
Senior Secured Notes of £31.9 million for the year ended 31 December 2014 reflect the first interest
payments falling due and are indicative of the annual amount payable.
Group net debt and liquidity

As at As at As at As at
31 December 30 June 31 December 30 June
2013 2014 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(unaudited/non-IFRS, except where noted)
(£ millions)
Gross debt(1) ....................................... (416.5) (416.5) (416.5) (416.5)
Retail free cash.................................. 6.5 15.2 17.4 20.0
Underwriting dividend capacity(2) ..... – – – 8.6
Corporate free cash(3)......................... 0.2 – 20.6 23.3
–––––––– –––––––– –––––––– ––––––––
Total free cash ................................... 6.7 15.2 38.0 51.9
Net debt ............................................ (409.8) (401.3) (378.5) (364.6)
LTM Group Operating Profit(4) .....
––––––––
90.1
––––––––
97.5
––––––––
105.7
––––––––
115.1
Net leverage multiple(5)....................

––––––––
4.6x
––––––––
4.1x
––––––––
3.6x
––––––––
3.2x
–––––––– –––––––– –––––––– ––––––––
Retail free cash.................................. 6.5 15.2 17.4 20.0
Underwriting dividend capacity ........ – – – 8.6
Corporate free cash ........................... 0.2 – 20.6 23.3
Undrawn Revolving Credit Facility .. 20.0 20.0 20.0 20.0
–––––––– –––––––– –––––––– ––––––––
Liquidity available........................... 26.7 35.2 58.0 71.9
–––––––– –––––––– –––––––– ––––––––
136
Notes:
(1) Gross debt comprises £266.5 million of 8 per cent. Senior Secured Fixed Rate Notes due 21 October 2020 and £150.0 million of
LIBOR + 6 per cent. Senior Secured Floating Rate Notes due 21 October 2019 issued by HIG(F), excluding IFRS adjustments.
(3) Corporate free cash includes cash held in the Group’s unregulated corporate entities HIG and HIG(F) only and excludes cash
held by HIG(I) and HIG(H).
(4) LTM Group Operating Profit is audited for 31 December 2013 and 31 December 2014.
(5) Net leverage multiple refers to net debt expressed relative to Group Operating Profit. The net debt used represents gross debt less
Retail free cash, Underwriting dividend capacity and corporate free cash. The Group’s net leverage multiple represents the
Group’s net debt divided by LTM operating profit at each period end.
Net debt comprises the Group’s gross debt less the components of the free cash held by the Retail business,
the Underwriting business’ dividend capacity and corporate free cash in each period. At 30 June 2015 net
debt was £364.6 million (£401.3 million at 30 June 2014) with a net leverage multiple of 3.2x compared to
a net leverage multiple of 4.1x at 30 June 2014.
Net debt comprises the Group’s gross debt less the components of the free cash held by Retail,
Underwriting’s dividend capacity and corporate free cash in each period. At 31 December 2014, net debt was
£378.5 million (£409.8 million at 31 December 2013) with a net leverage multiple of 3.6x compared to a net
leverage multiple of 4.6x at 31 December 2013 and 4.9x as at the issue of the Senior Secured Notes.
£120.0 5.0
£115.0 4.5
4.6 x
£110.0 4.0
4.1 x
LTM Group Operating Profit
£105.0
3.5
3.6 x
£115.1m
£100.0
Net Leverage Multiple

3.0
£ millions
£95.0 3.2 x
2.5
£90.0 £105.7m
2.0
£85.0 £97.5m
1.5
£80.0
£90.1m
1.0
£75.0
£70.0 0.5
£409.8m £401.3m £378.5m £364.6m
£65.0 0.0
As at As at As at As at
31 December 2013 30 June 2014 31 December 2014 30 June 2015
Net debt LTM Group operating profit Net leverage multiple
The Group’s Senior Secured Notes were issued in 2013. As such, Group cash flow available for debt service
and dividend distribution for the year ended 31 December 2012 is not relevant and has not been presented in
this prospectus.
137
Borrowings ESMA 37
The table below presents a breakdown of the Group’s interest-bearing loans and borrowing as at
31 December 2012, 2013 and 2014 and 30 June 2015.
HIG Group HIG Group HIG(H) Group HIG(H) Group

as at as at as at as at
2012 2013 2014 2015
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
(audited/IFRS)
(£ millions)
Non-current liabilities
8 per cent. Senior Secured Fixed Rate
Notes due 2020(1) ................................. – – 258.9 259.4
LIBOR+6 per cent. Senior Secured
Floating Rate Notes due 2019(1) .......... – – 144.7 145.2
Loan notes in issue to related
parties .................................................. 46.9 – – –
Other loan notes in issue ..................... 10.6 – – –
Loans payable...................................... 25.0 – – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total non-current loans and
borrowings.......................................... 82.5 – 403.6 404.6
Current liabilities
––––––––––– ––––––––––– ––––––––––– –––––––––––
parties .................................................. – 46.9 – –
Other loan notes in issue ..................... – 10.6 – –
Loans payable...................................... – 26.3 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total current loans and
borrowings.......................................... – 83.8 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total loans and borrowings .............. 82.5 83.8 403.6 404.6
––––––––––– ––––––––––– ––––––––––– –––––––––––
Note:
(1) The Senior Secured Notes were issued by HIG(F) in October 2013 before the 2014 Reorganisation when HIG(F) acquired the
HIG Group. As such, the Senior Secured Notes were not included in the HIG Group’s financial information as at 31 December
2013.
2019 Notes
On 21 October 2013, HIG(F) issued £150.0 million in aggregate principal amount of its 2019 Notes, the
Senior Secured Floating Rate Notes due 21 October 2019. The 2019 Notes were issued pursuant to an
indenture dated 21 October 2013 (the “Indenture”). The 2019 Notes are senior secured indebtedness ranking
pari passu in right of payment to all of HIG(F)’s existing and future senior indebtedness (including the 2020
Notes), subject to the terms of the Intercreditor Agreement (see “—The Intercreditor Agreement”). The 2019
Notes are guaranteed on a senior secured basis by HIG, Advantage Global Holdings Limited (“AGH”),
Hastings Holdings Limited (“HHL”), Hastings (UK) Limited (“HUK”) and, subject to certain limitations,
HISL. The 2019 Notes and the guarantees thereof are secured by first priority liens on the assets of the Group
and each of the guarantors of the 2019 Notes; to the extent such security interests also secure the Revolving
Credit Facility. The 2019 Notes accrue interest at a floating rate per annum, reset quarterly, equal to three-
month GBP LIBOR plus 6 per cent., payable in cash quarterly in arrears.
Under the terms of the Indenture, prior to 30 October 2015, HIG(F) may redeem all or part of the 2019 Notes
at a redemption price equal to 101 per cent. of the principal amount of the 2019 Notes. On 30 October 2015
and thereafter, HIG(F) may redeem all or part of the 2019 Notes at par. If the Group undergoes a change of
control or sells certain of its assets, HIG(F) may be required to make an offer to purchase the 2019 Notes.
In the event of certain developments affecting taxation, HIG(F) may redeem all, but not less than all, of the
138
2019 Notes at par. The 2019 Notes contain certain negative incurrence and reporting covenants customary
for high yield notes of this type. The 2019 Notes are listed on the Irish Stock Exchange and trade on the
Global Exchange Market thereof.
2020 Notes
On 21 October 2013, HIG(F) issued £266.5 million in aggregate principal amount of its 2020 Notes, the
8 per cent. Senior Secured Fixed Rate Notes due 21 October 2020. The 2020 Notes were issued pursuant to
the same Indenture under which the 2019 Notes were issued. The 2020 Notes are senior secured
indebtedness ranking pari passu in right of payment to all of HIG(F)’s existing and future senior
indebtedness (including the 2019 Notes), subject to the terms of the Intercreditor Agreement. The 2020
Notes are guaranteed on a senior secured basis by the same entities that guarantee the 2019 Notes. The
2020 Notes and the guarantees thereof are secured by first priority liens on the same assets that secure the
2019 Notes. The 2020 Notes accrue interest at a fixed rate of 8 per cent. per annum, payable in cash semi-
annually in arrears.
Under the terms of the Indenture, Prior to 30 October 2016, HIG(F) may redeem all or part of the 2020
Notes, subject to a “make-whole” premium. On or after 30 October 2016, but prior to 30 October 2017,
HIG(F) may redeem all or part of the 2020 Notes at a redemption price equal to 104 per cent. of the principal
amount of the 2020 Notes, and on or after 30 October 2017, but prior to 30 October 2018, HIG(F) may
redeem all or part of the 2020 Notes at a redemption price equal to 102 per cent. of the principal amount of
the 2020 Notes. On 30 October 2018 and thereafter, HIG(F) may redeem all or part of the 2020 Notes at par.
Prior to 30 October 2016, HIG(F) may also redeem, at its option, up to 40 per cent. of the principal amount
of the 2020 Notes at a redemption price equal to 108 per cent. of the principal amount of the 2020 Notes,
plus accrued and unpaid interest and additional amounts, if any, up to the redemption date using the net
proceeds from certain equity offerings and with repayment being made within 180 days of such offerings. If
the Group undergoes a change of control or sells certain of its assets, HIG(F) may be required to make an
offer to purchase the 2020 Notes. In the event of certain developments affecting taxation, HIG(F) may
redeem all, but not less than all, of the 2020 Notes at par. The 2020 Notes contain certain negative incurrence
and reporting covenants customary for high yield notes of this type. The 2020 Notes are listed on the Irish
Stock Exchange and trade on the Global Exchange Market thereof.
2013 Revolving Credit Facility

On 21 October 2013, HIG(F) entered into a revolving credit facility agreement with Credit Suisse AG,
London Branch, Goldman Sachs International and J.P. Morgan Limited as arrangers, J.P. Morgan Europe
Limited as the agent and U.S. Bank Trustees Limited as security agent (the “Revolving Credit Facility
Agreement”). HIG(F) is the original borrower and guarantor under the terms of the Revolving Credit
Facility Agreement. The Revolving Credit Facility Agreement provides for the Revolving Credit Facility, a
multi-currency revolving facility of up to £20.0 million on a committed basis, which can be utilised by way
of loans, letters of credit or other ancillary facilities. The Revolving Credit Facility Agreement provides that
the Revolving Credit Facility may be utilised by any future borrower in sterling, euro, US dollar (or other
currencies agreed by all of the lenders of the relevant facility and freely convertible into sterling). The
Revolving Credit Facility is expected to be used to finance working capital and general corporate needs of
HIG(F) and its subsidiaries, subject to certain prohibitions, such as a prohibition on the prepayment of
certain other indebtedness. As at 31 December 2014 and 31 December 2013, the Revolving Credit Facility
was undrawn.
The Revolving Credit Facility is guaranteed by the Hastings Insurance Group Limited, HIG, AGH, HHL,
HUK and, subject to certain limitations, HISL. The Revolving Credit Facility is secured by the bank accounts
of and certain intercompany receivables due from, Hastings Insurance Group Limited, as well as over the
entire issued share capital of HIG. Upon their accession, security over substantially all of the assets of the
other guarantors (subject to certain limitations in the case of HISL) will be granted in favour of the Revolving
Credit Facility.
The Revolving Credit Facility Agreement terminates on the earlier of 8 January 2019, and the date falling
six months prior to the scheduled maturity date of the Senior Secured Notes.
139
The Revolving Credit Facility Agreement contains customary operating and negative covenants (including
certain of the same restrictive covenants and related definitions (with certain adjustments) that apply to the
Senior Secured Notes), subject to certain agreed exceptions. In addition, the Revolving Credit Facility
Agreement has a financial maintenance covenant tested quarterly that requires that Combined EBITDA (as
defined in the Revolving Credit Facility Agreement) shall not be less than an agreed upon level so long as a
certain threshold amounts remains outstanding under the Revolving Credit Facility.
Amounts drawn under the Revolving Credit Facility bear interest at a rate per annum equal to LIBOR or
Euribor, as applicable (with a floor of zero), and an initial margin of 4 per cent. per annum.
The Intercreditor Agreement

In connection with the entry into the Revolving Credit Facility and the Indenture governing the Senior
Secured Notes, HIG(F) and HIG(I) entered into an intercreditor agreement (the “Intercreditor Agreement”)
to govern the relationships and relative priorities amongst: (i) the lenders under the Revolving Credit
Facility; (ii) any persons that accede to the Intercreditor Agreement as counterparties to certain hedging
arrangements; (iii) the trustee under the Indenture for the Senior Secured Notes, on its own behalf, and on
behalf of the holders of the Senior Secured; (iv) certain intragroup creditors and debtors; and (v) certain
direct or indirect shareholders of HIG(F) in respect of certain structural debt that HIG(F) or another member
of the Group has incurred or may incur in the future (including any subordinated shareholder loans). The
Intercreditor Agreement sets forth the relative ranking of certain indebtedness, the relative ranking of certain
security granted to secure such indebtedness, when payments can be made in respect of certain indebtedness,
when enforcement actions can be taken in respect of such indebtedness, the terms pursuant to which certain
indebtedness will be subordinated upon the occurrence of certain insolvency events, turnover provisions, and
when security and guarantees will be released to permit a sale of any assets subject to transaction security.
HIG, AGH, HHL, HUK and HISL acceded to the Intercreditor Agreement on 21 February 2014.
Under the terms of the Intercreditor Agreement, obligations under the Senior Secured Notes, the Revolving
Credit Facility Agreement and certain hedging arrangements rank pari passu, except that in the event of
enforcement of the security over the assets securing such indebtedness or in the event of certain distressed
disposals, holders of the Senior Secured Notes will receive proceeds from such assets only after the lenders
under the terms of the Revolving Credit Facility Agreement and certain hedging arrangements have been
repaid in full.
2015 Banking Facilities

On 12 August 2015, the Company, HIG(F), HIG and HISL as borrowers (the “New Facilities Borrowers”)
and the Company, HIG(F), HIG, Hastings Insurance Group (Holdings) plc, Hastings Insurance Group
(Investment) plc, Advantage Global Holdings Limited, Hastings (Holdings) Limited, Hastings (UK) Limited
and HISL as guarantors (the “New Facilities Guarantors”) entered into a facilities agreement (the “New
Facilities Agreement”) documenting a £300.0 million term loan facility (which is scheduled to mature five
years from date of Admission) and a £20.0 million revolving loan facility (which is scheduled to mature
five years from the date of Admission) (together, the “New Facilities”) with HSBC Bank plc, Barclays Bank
plc, Lloyds Bank plc and The Royal Bank of Scotland plc.
Initial utilisation under the New Facilities is subject to certain conditions precedent, including evidence that
the Company has received primary proceeds from the Offer of no less than £150.0 million.
The revolving loan facility is available for drawing until the date falling one month prior to its scheduled
maturity. Unless prepaid in accordance with the New Facilities Agreement, the term loan facility is repayable
on its maturity, which is five years from the date of Admission under the New Facilities, with an ongoing
repayment obligation for the life of the New Facilities of an amount equal to the amount of any dividend
made by the Company provided that any such repayment amount shall not exceed in aggregate £10.0 million
in any financial year of the Company.
The obligations under the New Facilities are unsecured. Subject to certain exceptions and limitations
imposed by applicable law, the New Facilities Borrowers’ obligations as borrowers under the New Facilities
are guaranteed on a senior basis by the New Facilities Guarantors.
140
The New Facilities Agreement restricts the manner in which the Group’s business is conducted, including
the ability to make disposals and acquisitions or grant security. The New Facilities Agreement also imposes
financial covenants, requiring (i) the ratio of total net debt of the Group to EBITDA (as defined in the New
Facilities Agreement) and (ii) the ratio of EBITDA to net finance charges of the Group, to be within certain
limits. The New Facilities contain customary conditions precedent, representations, covenants, events of
default and mandatory prepayment events (including upon a change of control).
Post-IPO finance structure

date of Admission, the Company expects to use the entirety of the New Facilities (£300.0 million) towards
repayment of the remainder of the 2020 Notes (£159.9 million) and the entirety of the 2019 Notes
(£150.0 million). The Company expects the Group to pay an early redemption charge of approximately
£25.0 million related to the 2020 Notes, £8.5 million of which will be paid immediately and approximately
£16.5 million upon redemption of the remaining 2020 Notes. These amounts have been taken into account
for the purposes of the working capital statement included in this Prospectus. The Company expects the
Group to pay no early redemption charge related to the 2019 Notes.
Contractual obligations (i) 6.4

(i) 10.3
The table below sets forth the nominal amount of the Group’s contractual obligations and commitments as
at 31 December 2014:
Less than More than

1 year 1 year Total
–––––––– –––––––– ––––––––
(audited/IFRS)
(£ millions)
Senior Secured Notes ........................................................ 31.2 561.7 592.9
Reserves for insurance claims and claims expense .......... 152.4 308.5 460.9
Operating lease payments.................................................. 0.4 0.4 0.8
IT projects, transactions and costs .................................... 5.4 5.8 11.2
–––––––– –––––––– ––––––––
Total .................................................................................. 189.4 876.4 1,065.8
–––––––– –––––––– ––––––––
Off balance sheet arrangements
As at 30 June 2015, the Group did not have any off balance sheet arrangements.
Dividend policy (i) 20.7

(i) 20.7.1
The Company’s aim is to generate long term value for its stakeholders, with its shareholder distribution
ESMA 31
policy reflecting the growth prospects, capital efficiency and profitability of the Company, whilst also
ESMA 35
maintaining appropriate levels of dividend cover, regulatory capital coverage and operational liquidity.
Subject to, inter alia, regulatory capital requirements and sufficient liquidity to meet forecast working capital
requirements, the Board intends to target an annual total dividend of between 50 per cent. and 60 per cent.
of Group profits after tax, adjusted to exclude the impact of non-operational amortisation, share scheme costs
and other non-recurring items. It is envisaged that interim dividends will be paid in November of each
financial year, and that final dividends will be paid in May of the next financial year. It is intended that the
interim and final payments will represent approximately one third and two thirds of the total annual dividend
respectively. Subject to cash not being used for growth or the Group’s capital management requirements, the
Directors may also seek to redistribute surplus capital to shareholders.
It is expected that the first dividend to be declared by the Company following Admission will be half of the
usual final dividend, to reflect approximately the period between Admission and the Company’s financial
year end.
141
The Board may periodically reassess the Company’s dividend policy. The ability of the Company to pay
dividends is dependent on various factors, including those outside of the direct control of the Group. There
can be no assurance that the Company will pay a dividend or, if one is paid, that it will be of the quantum
outlined above.
The Company has not traded since incorporation and lacks distributable reserves. This could restrict the
Company’s ability to pay future dividends. Therefore, the Company proposes to undertake a court-approved
capital reduction in accordance with the Act and the Company (Reduction of Share Capital) Order 2008
following Admission in order to provide it with the distributable reserves required to support the dividend
policy described above. The proposed capital reduction will reduce the Company’s share premium account
by £1,089,000,000. The capital reduction has been approved (conditional on Admission) by a special
resolution of the current shareholders of the Company and will require the approval of the Companies Court.
Quantitative and qualitative disclosures about market risks

The Group is exposed to financial risk through its financial assets and liabilities. The key financial risk is
that the proceeds from financial assets are not sufficient to fund the obligations arising from liabilities as they
fall due. The most important components of financial risk for the Group are credit risk, market risk and
liquidity risk.
Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The main areas
where the Group is exposed to credit risk are reinsurance assets, financial assets, loans receivable and cash
and cash equivalents holdings.
The Group manages its exposure to credit risk on high liquidity investments by establishing investments only
in money market funds with credit ratings of AA or above. The credit ratings of the Group’s banks are
monitored on a regular basis and where there is adverse movement appropriate action would be determined
by the Risk Committee.
Investment funds are assessed by management to ensure that the level of credit risk is acceptable, ratings are
sufficiently strong and that the investment is in line with the Group’s investment policy.
The Standard & Poor’s credit ratings of the institutions with which the Group has significant credit risk were
as follows.

2012 2013 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(audited/IFRS)
Rating (£ millions)
–––––––––––
Money market funds ...... AAA 30.9 65.3 74.5 84.2
Bank current account...... A or above 71.9 45.5 48.9 41.0
Investment funds ............ BBB or above 112.9 126.1 194.5 241.3
Investment funds ............ B to BB 1.9 6.2 5.1 1.1
Investment funds ............ Unrated 25.2 39.8 25.3 21.7
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total investments .......... 242.8 282.9 348.3 389.3
––––––––––– ––––––––––– ––––––––––– –––––––––––
In addition, the Group has investment guidelines that restrict the amount of the investment portfolio that can
be placed with a single counterparty other than related companies.
Insurance receivables are monitored closely with a view to minimising the collection period of those items.
The Group’s maximum exposure to credit risk as at 30 June 2015 was £1,094.5 million (as at 31 December
2012: £637.0 million, as at 31 December 2013: £834.0 million and as at 31 December 2014: £987.4 million),
142
being the carrying value of insurance and other receivables, reinsurance assets, financial assets, cash in
escrow and cash and cash equivalents. The exposure is not hedged by the use of derivatives or similar
instruments. Bad debt expense exposure relates to policyholder debt charged to profit or loss and the value
of past due financial assets, which has not resulted in impairment in either the current or prior periods. There
were no other impairments in either the current or prior periods.
The Group’s policyholder receivables are an aggregation of small receivables and the Group uses multiple
reinsurance providers to ensure that there are no significant concentrations of reinsurance risk. Since other
assets such as cash and investments are sufficiently diversified the Directors believe that the Group does not
hold any significant concentrations of risk.
Reinsurance contracts are used to manage insurance risk. This does not, however, discharge the Group’s
liability as primary insurer. If a reinsurer fails to pay a claim the Group remains liable for the payment to the
policyholder. The creditworthiness of reinsurers is considered on a quarterly basis by reviewing their
financial strength prior to finalisation of any contract. In addition, management assesses the creditworthiness
of all reinsurers and intermediaries by reviewing credit grades provided by rating agencies and other publicly
available financial information. The recent payment history of reinsurers is also used to update the
reinsurance purchasing strategy.
The credit ratings of the Group’s reinsurers are analysed below:

2012 2013 2014 2015
––––––––––– ––––––––––– ––––––––––– –––––––––––
(audited/IFRS)
(£ millions)
A- or above .................................. 231.5 343.5 426.5 471.2
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total reinsurance assets .............. 231.5 343.5 426.5 471.2
––––––––––– ––––––––––– ––––––––––– –––––––––––
Market risk
The only significant market risk the Group is exposed is interest rate risk.
Interest rate risk is defined by the Group as the impact of unfavourable movements in market interest rates
which consequently could produce adverse result on the values of financial assets and liabilities, or the future
cash flows from them. This is only applicable to cash and cash equivalents, financial assets and the 2019
Notes issued by the Group in the prior period.
Cash and cash equivalents balances are held in current accounts or in short term money market instruments.
These are generally less than 60 days in duration, considerably reducing sensitivity to significant movements
in interest rates compared to longer duration assets. The Directors consider that the exposure to interest rate
risk is immaterial for the purposes of sensitivity analysis.
The carrying value of the Group’s financial assets are more susceptible to movements in interest rates. The
2019 Notes are also exposed to movements in interest rates, incurring interest at a rate of LIBOR plus
6 per cent.
For the six months ended 30 June 2015 a 1.0 per cent. increase in interest rates would have a positive impact
of £2.0 million on profit after tax and equity (year ended 31 December 2012: £0.9 million adverse impact,
year ended 31 December 2013: £0.3 million adverse impact and year ended 31 December 2014: £0.7 million
positive impact).
The Group does not use derivatives or similar instruments to mitigate exposure therefore a change in interest
rates at the end of the reporting period would not further affect profit or loss.
143
Liquidity risk
Liquidity risk is the risk that cash may not be available to meet obligations when they fall due. The Group
maintains significant holdings in liquid funds to mitigate this risk. The Group makes use of regular forecasts
to monitor and control its cash flow and working capital requirements.
Financial liabilities are settled in line with agreed payment terms and managed in accordance with cash
availability and inflow expectations. All financial liabilities except the Senior Secured Notes, the associated
interest and an amount due to a reinsurer within insurance and other payables are due within 12 months.
The assets backing the insurance contract and other short term liabilities held by the Group are considered
to be more liquid than the related liabilities, thus since the Group is in a net current asset position, liquidity
risk is not considered to be significant.
The servicing of the Senior Secured Notes issued by the Group in prior periods has been funded by
distributions from HIG and its subsidiaries. The Directors consider that there are sufficient future cash flows
in these subsidiaries to cover the debt servicing over the coming years.
The following table indicates the expected timing of net cash outflows resulting from insurance contract
liabilities and reinsurance assets:
Carrying amount 0-1 year 1-2 years Over 2 years
––––––––––––––– –––––––– –––––––– –––––––––––
(audited/IFRS)
(£ millions)
HIG Group as at 31 December 2012
Outstanding claims liabilities ...... 275.1 115.6 55.0 104.5
Unearned premiums reserve ........ 187.2 78.7 37.4 71.1
Less reinsurance assets ................ (231.5) (97.3) (46.3) (87.9)
––––––––––––––– –––––––– –––––––– –––––––––––
Net cash outflows ...................... 230.8 97.0 46.1 87.7

––––––––––––––– –––––––– –––––––– –––––––––––
––––––––––––––– –––––––– –––––––– –––––––––––
HIG(H) Group as at 31 December 2014

––––––––––––––– –––––––– –––––––– –––––––––––
––––––––––––––– –––––––– –––––––– –––––––––––
HIG(H) Group as at 30 June 2015

––––––––––––––– –––––––– –––––––– –––––––––––
––––––––––––––– –––––––– –––––––– –––––––––––
––––––––––––––– –––––––– –––––––– –––––––––––
144
The gross contractual undiscounted cash flows of the Senior Secured Notes, including interest payments,
assuming LIBOR stays constant, fall due as follows:
Within Over
1 year 1-2 years 2-5 years 5 years Total
–––––––– –––––––– –––––––– –––––––– ––––––––
(audited/IFRS)
(£ millions)
Senior Secured Notes ............................ 31.9 31.1 93.3 468.2 624.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Total........................................................ 31.9 31.1 93.3 468.2 624.5

–––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– ––––––––
Total........................................................ 31.2 31.2 243.2 287.3 592.9

–––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– ––––––––
Total........................................................ 31.2 31.1 238.3 276.7 577.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Actual cash flows of the 2019 Notes will vary to the extent that LIBOR increases and decreases in these time
periods.
The dividends due on the preference shares are only payable to the extent that there are distributable profits
available and sufficient monies have been received from subsidiary companies (and the preference shares
have not otherwise been redeemed). The gross contractual undiscounted cash flows on these dividends
therefore fall due as follows:
Within Over
–––––––– –––––––– –––––––– –––––––– ––––––––
(audited/IFRS)
(£ millions)
Preference shares .................................... – – – 319.3 319.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Total........................................................ – – – 319.3 319.3

–––––––– –––––––– –––––––– –––––––– ––––––––
Preference shares .................................... – – – 338.4 338.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Total........................................................ – – – 338.4 338.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Critical accounting estimates and judgements in applying accounting policies
For a description of the Group’s critical accounting estimates and judgements in applying accounting
policies, see Note 3 of Part 12 (Historical Financial Information).
145
PART 11
CAPITALISATION AND INDEBTEDNESS

The table below sets out the Group’s capitalisation as at 30 June 2015. The capitalisation information has (iii) 3.2
been extracted without material adjustment from the Hastings Insurance Group (Holdings) plc’s ESMA 127
consolidated financial information included in Part 12 (Historical Financial Information) as at 30 June 2015,
and as a result does not take into account the capital reorganisation as described below and the anticipated
debt redemption strategy associated with the Offering.
As at
30 June 2015
(£ millions)
–––––––––––––
Guaranteed ......................................................................................................................... –
Secured ............................................................................................................................... –
Unguaranteed/unsecured .................................................................................................... –
–––––––––––––
Total current debt............................................................................................................. –
Total non-current debt (excluding current portion of long-term debt)

–––––––––––––
Guaranteed –
Secured(1)(2)(3)....................................................................................................................... 404.6
Unguaranteed/unsecured(4) ................................................................................................. 338.4
–––––––––––––
Total non-current debt..................................................................................................... 743.0
Shareholders equity
–––––––––––––
Share capital ....................................................................................................................... 1.0
Other reserves..................................................................................................................... (0.9)
–––––––––––––
Total equity ....................................................................................................................... 0.1
Total capitalisation and indebtedness ............................................................................

–––––––––––––
743.1
–––––––––––––
Notes:
(1) Includes £259.4 million of 8 per cent. Senior Secured Fixed Rate Notes due 2020 and £145.2 million of Senior Secured Floating
Rate Notes due 2019.
(2) The fair value of the Senior Secured Notes as at 30 June 2015 was £431.1 million, comprising £150.0 million of Senior Secured
Floating Rate Notes and £281.2 million of Senior Secured Fixed Rate Notes. These are valued using level 1 inputs.
(3) As at 30 June 2015, the Group also had access to a £20.0 million Revolving Credit Facility which was agreed at the same time
as the Senior Secured Notes were issued. The Group has never drawn funds under this facility and currently has no intention of
utilising the facility.
(4) Includes £52.8 million of 16.0 per cent. preference shares issued by HIG(H), including accumulated dividends and interest
accrued thereon, and £285.6 million of 11.5 per cent. preference shares issued by HIG(I). The preference shares in both
companies were issued on 8 January 2014 and were redeemed on 12 August 2015 following the Reorganisation of the Group.
On 12 August 2015 the Reorganisation was carried out. As part of the Reorganisation, the shareholders
transferred their ordinary shares in the Company to the Principal Shareholder, a related party of the Group,
and consequently Principal Shareholder became the Company’s immediate parent company from this date.
The Reorganisation did not significantly change the ultimate ownership of the Group.
On the same date, and as part of this reorganisation, all preference shares, accumulated dividends and interest
accrued thereon totalling £343.0 million were converted into ordinary share capital held by Hastings Group
Holdings Limited in Hastings Insurance Group (Holdings) plc (£44.4 million) and by Hastings Insurance
Group (Holdings) plc in Hastings Insurance Group (Investment) plc (£298.6 million).
146
The Group also signed a facility agreement with a group of financial institutions on 12 August 2015 which
provides a five year term loan of £300.0 million, alongside a £20.0 million revolving credit facility.
The facility is at the Group’s option, contingent on the Group’s admission to the London Stock Exchange
within five months of entering into the agreement.
The following table sets out the net indebtedness of the HIG(H) Group as at 31 July 2015.
The indebtedness information has been sourced from the Group’s unaudited accounting records as at 31 July
2015.
As at
31 July 2015
(£ millions)
–––––––––––––
Cash and cash equivalents.................................................................................................. 56.0
Money market funds .......................................................................................................... 65.0
Short-term deposits ............................................................................................................ –
Trading securities ............................................................................................................... –
–––––––––––––
Total Liquidity .................................................................................................................. 121.0
Current bank debt...............................................................................................................

–––––––––––––
–
Current position of non-current debt ................................................................................. –
Other financial debt............................................................................................................ –
–––––––––––––
Current finance debt........................................................................................................... –
Net current Financial Indebtedness ...............................................................................

–––––––––––––
121.0
–––––––––––––
Non-current bank loans ...................................................................................................... –
Bond issued – Subordinated liabilities............................................................................... (404.8)
Preference shares................................................................................................................ (341.7)
–––––––––––––
Non-current Financial Indebtedness .............................................................................. (746.5)
Net Financial Indebtedness ................................................................................................

–––––––––––––
(625.5)
The carrying amount of cash and cash equivalents presented on the consolidated balance sheet is the same
–––––––––––––
as that used for the purposes of the consolidated statement of cash flows as there are no bank overdrafts used
which are repayable upon demand.
As at 31 July 2015, the £121.0 million of liquidity within the HIG(H) Group was comprised of restricted
cash and cash equivalents of £66.4 million and free cash (other than restricted cash) of £54.6 million. Cash
(other than restricted cash) is not a proxy for, nor indicative of, cash that is available for distribution pursuant
to regulatory requirements.
The Group has no indirect and contingent indebtedness.
147
PART 12
HISTORICAL FINANCIAL INFORMATION (i) 20.4.1

(i) 20.1
(i) 20.3
Section A: Accountant’s report on the Historical Financial Information (i) 20.5.1
(i) 20.4.3
The Directors
(i) 20.6.1
(i) 20.6.2
Conquest House
LR 6.1.3(1)(a)
Collington Avenue
LR 6.1.3(1)(b)
Bexhill-on-sea
LR 6.1.3(1)(c)
LR 6.1.3(1)(d)
12 October 2015 LR 6.1.3(1)(e)

LR 6.1.3(2)(a)
Gentlemen LR 6.1.3(2)(b)
LR 6.1.3B(1)
Hastings Group Holdings plc LR 6.1.3B(2)
We report on the financial information set out on pages 150 to 235 for (i) the HIG Group for the year ended
31 December 2012 and 31 December 2013 and the seven days ended 7 January 2014; and (ii) the HIG(H)
Group for the four months ended 31 December 2013, the year ended 31 December 2014 and the six months
ended 30 June 2015. This financial information has been prepared for inclusion in the prospectus dated
12 October 2015 of Hastings Group Holdings plc on the basis of the accounting policies set out in Note 3 of
Section B (Historical Financial Information). This report is required by paragraph 20.1 of Annex I of the
Prospectus Directive Regulation and is given for the purpose of complying with that paragraph and for no
other purpose. We have not audited or reviewed the financial information for the six months ended 30 June
2014 of the HIG(H) Group which has been included for comparative purposes only, and accordingly do not
express an opinion thereon.
Responsibilities
The Directors of Hastings Group Holdings plc are responsible for preparing the financial information on the
basis of preparation set out in note 1 of the Historical Financial Information and in accordance with
International Financial Reporting Standards as adopted by the EU.
It is our responsibility to form an opinion on the financial information and to report our opinion to you.
Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent
there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept
any liability to any other person for any loss suffered by any such other person as a result of, arising out of,
or in connection with this report or our statement, required by and given solely for the purposes of complying
with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the
prospectus.
Basis of opinion
We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the
amounts and disclosures in the financial information. It also included an assessment of the significant
estimates and judgments made by those responsible for the preparation of the financial information and
whether the accounting policies are appropriate to the entity’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our work so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
148
financial information is free from material misstatement whether caused by fraud or other irregularity or
error.
Opinion on financial information

In our opinion, the financial information gives, for the purposes of the prospectus dated 12 October 2015, a
true and fair view of the state of affairs of the HIG Group as at 31 December 2012 and 2013 and 7 January
2014 and of its profits or losses and other comprehensive income changes in equity and cash flows for the
years ended 31 December 2012 and 31 December 2013 and the 7 days ended 7 January 2014 in accordance
with the basis of preparation set out in note 1 of the Historical Financial Information and in accordance with
International Financial Reporting Standards as adopted by the EU as described in note 1 of the Historical
Financial Information.
In our opinion, the financial information gives, for the purposes of the prospectus dated 12 October 2015, a
true and fair view of the state of affairs of the HIG(H) Group as at 31 December 2013, 31 December 2014
and 30 June 2015 and of its profits or losses and other comprehensive income changes in equity and cash
flows for the 4 months ended 31 December 2013, the year ended 31 December 2014 and the six months
ended 30 June 2015 in accordance with the basis of preparation set out in note 1 of the Historical Financial
Information and in accordance with International Financial Reporting Standards as adopted by the EU as
described in note 1 of the Historical Financial Information.
Declaration
For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus
and declare that we have taken all reasonable care to ensure that the information contained in this report is,
to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import.
This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus
Directive Regulation.
Yours faithfully
149
Section B: Historical Financial Information of the Group
Consolidated Statement of Profit or Loss

Memo- Memo-
randum randum
aggregate HIG aggregate HIG(H) HIG(H)
HIG HIG HIG(H) HIG(H) Group HIG(H) HIG(H) Group Group
Group Group Group Group Seven Group Group Six Six
Year Year Four months Year days Year Year months months
ended 31 ended 31 ended 31 ended 31 ended 7 ended 31 ended 31 ended ended
December December December December January December December 30 June 30 June
2012 2013 2013 2013 2014 2014 2014 2014 2015
(unaudited) (unaudited) (unaudited)
Notes £m £m £m £m £m £m £m £m £m
––––– ––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Gross written premiums.............. 6 263.5 407.2 – 407.2 8.0 475.4 483.4 219.3 282.7
Gross earned premiums .............. 6 237.5 379.6 – 379.6 7.9 441.4 449.3 204.4 252.2
Earned premiums ceded
to reinsurers ................................ 6 (128.5) (214.6) – (214.6) (4.5) (242.3) (246.8) (114.2) (134.2)
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net earned premiums ............... 6 109.0 165.0 – 165.0 3.4 199.1 202.5 90.2 118.0
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Other revenue.............................. 7 121.3 173.2 – 173.2 3.9 180.2 184.1 82.6 101.6
Investment and interest income .. 8 3.7 4.2 – 4.2 0.1 3.7 3.8 1.8 3.0
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net revenue ................................ 234.0 342.4 – 342.4 7.4 383.0 390.4 174.6 222.6
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Claims incurred........................... 9 (179.4) (324.7) – (324.7) (6.0) (354.9) (360.9) (199.0) (204.8)
Reinsurers’ share of claims
incurred ....................................... 9 96.3 197.0 – 197.0 3.3 205.2 208.5 128.4 118.0
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net insurance claims................. 9 (83.1) (127.7) – (127.7) (2.7) (149.7) (152.4) (70.6) (86.8)
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Acquisition costs......................... (16.9) (31.3) – (31.3) (0.8) (25.7) (26.5) (8.4) (21.0)
Other operating expenses............ 10 (70.7) (117.9) – (117.9) (1.8) (140.4) (142.2) (72.7) (69.3)
Finance costs............................... 12 (7.4) (9.5) (6.5) (16.0) (0.2) (68.6) (68.8) (33.7) (36.2)
Total expenses............................ (95.0) (158.7) (6.5) (165.2) (2.8) (234.7) (237.5) (114.8) (126.5)
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Profit/(Loss) before tax............. 55.9 56.0 (6.5) 49.5 1.9 (1.4) 0.5 (10.8) 9.3
Taxation expense......................... 13
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
(16.4) (14.9) – (14.9) (0.4) (7.0) (7.4) (3.5) (4.5)
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total profit/(loss) attributable
to the equity holders of the
parent ......................................... 39.5 41.1 (6.5) 34.6 1.5 (8.4) (6.9) (14.3) 4.8
Earnings per share attributable

––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
to the owners of the parent
(expressed in pence per share)
Basic and diluted earnings/
(loss) per share .......................... 14 £357.41 £364.80 (£3,250,000.00) £13.06 (5.9)p (10.3)p 3.3p
––––––– ––––––– –––––––––––– ––––––– ––––––– ––––––– –––––––
As described in Note 1, the results presented for the years ended 31 December 2012, 31 December 2013 and
seven days ended 7 January 2014 comprise the consolidated results of Hastings Insurance Group Limited
and its subsidiaries (“HIG Group”). These results include the acquisition of AGH Group which took place
on 17 April 2012, see Note 34 for further details. Prior to 17 April 2012 the HIG Group did not underwrite
insurance.
The results presented for the four months ended 31 December 2013, year ended 31 December 2014,
six months ended 30 June 2014 and 30 June 2015 comprise the consolidated results of Hastings Insurance
Group (Holdings) plc and its subsidiaries (“HIG(H) Group”). The HIG(H) Group acquired the HIG Group
on 8 January 2014, see Note 34 for further details.
The memorandum aggregate HIG(H) Group results for the year ended 31 December 2013 and 31 December
2014 combine the results of HIG Group and HIG(H) Group within those respective periods, see Note 1 for
full details.
150
Consolidated Statement of Comprehensive income
Memo- Memo-
randum randum
HIG(H) aggregate HIG aggregate
HIG Group HIG(H) Group HIG(H) HIG(H) HIG(H) HIG(H)
HIG Group Four Group Seven Group Group Group Group
Group Year months Year days Year Year Six months Six months
ended 31 ended 31 ended 31 ended 31 ended 7 ended 31 ended 31 ended ended
December December December December January December December 30 June 30 June
2012 2013 2013 2013 2014 2014 2014 2014 2015
Notes £m £m £m £m £m £m £m £m £m
––––– –––––––– –––––––– ––––––– –––––––– ––––––– ––––––– –––––––– –––––––– ––––––––
Total profit/(loss) attributable
to the equity holders of
the parent...................................... 39.5 41.1 (6.5) 34.6 1.5 (8.4) (6.9) (14.3) 4.8
Other comprehensive income:
Items that may be subsequently
reclassified to profit or loss
Fair value loss on available for
sale investments ............................. 20 – – – – – – – – (0.9)
–––––––– –––––––– ––––––– –––––––– ––––––– ––––––– –––––––– –––––––– ––––––––
Total comprehensive income
attributable to the equity
holders of the parent.................... 39.5 41.1 (6.5) 34.6 1.5 (8.4) (6.9) (14.3) 3.9
–––––––– –––––––– ––––––– –––––––– ––––––– ––––––– –––––––– –––––––– ––––––––
and its subsidiaries (“HIG Group”). These results include the acquisition of AGH Group which took place
on 17 April 2012, see Note 34 for further details. Prior to 17 April 2012 the HIG Group did not underwrite
insurance.
The results presented for the four months ended 31 December 2013, year ended 31 December 2014,
six months ended 30 June 2014 and 30 June 2015 comprise the consolidated results of Hastings Insurance
Group (Holdings) plc and its subsidiaries (“HIG(H) Group”). The HIG(H) Group acquired the HIG Group
on 8 January 2014, see Note 34 for further details.
2014 combine the results of HIG Group and HIG(H) Group within those respective periods, see Note 1 for
full details.
151
Consolidated Balance Sheet
Memo-
randum
aggregate
HIG HIG HIG(H) HIG(H) HIG HIG(H) HIG(H)
Group 31 Group 31 Group 31 Group 31 Group 7 Group 31 Group 30
December December December December January December June
2012 2013 2013 2013 2014 2014 2015
(unaudited)
Notes £m £m £m £m £m £m £m
––––– ––––––– ––––––– ––––––– –––––––––– ––––––– ––––––– –––––––
ASSETS
Property and equipment............ 15 9.2 10.1 – 10.1 10.1 10.1 12.4
Intangible assets........................ 16 14.4 19.4 – 19.4 19.5 120.0 121.0
Goodwill ................................... 17 28.5 28.5 – 28.5 28.5 470.0 470.0
Investments in associates .......... 23 0.3 – – – – – –
Deferred income tax asset......... 18 2.5 2.2 – 2.2 2.2 5.6 2.9
Loans receivable ....................... 20 4.5 – – – – – –
Reinsurance assets .................... 19 231.5 343.5 – 343.5 344.4 426.5 471.2
Prepayments.............................. 0.9 1.0 – 1.0 2.2 1.2 5.4
Insurance and other
receivables................................. 20,26 145.8 190.4 – 190.4 191.9 212.6 234.0
Financial assets ......................... 20 140.0 172.1 – 172.1 171.5 224.9 264.1
Cash in escrow .......................... 21 – – 415.0 415.0 – – –
Cash and cash equivalents ........ 20,22 102.8 110.8 – 110.8 111.8 123.4 125.2
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
Total assets ............................... 680.4 878.0 415.0 1,293.0 882.1 1,594.3 1,706.2
EQUITY
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
Share capital.............................. 29 1.1 1.1 – 1.1 1.1 1.0 1.0
Share premium account ............ 29 0.1 0.1 – 0.1 0.1 – –
Treasury shares ......................... 29 (0.1) – – – – – –
Merger reserve .......................... 29 (1.0) (1.0) – (1.0) (1.0) – –
Other reserves ........................... 29 – – – – – – (0.9)
Retained earnings...................... 29 25.7 54.8 (6.5) 48.3 56.3 (14.9) (10.1)
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
Total equity .............................. 25.8 55.0 (6.5) 48.5 56.5 (13.9) (10.0)
LIABILITIES
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
Preference shares ...................... 25 – – – – – 319.3 338.4
Senior Secured Notes................ 24 – – 401.7 401.7 – 403.6 404.6
Loans and borrowings............... 20,24 82.5 83.8 – 83.8 83.8 – –
Insurance contract liabilities ..... 19 462.3 590.9 – 590.9 592.1 704.7 785.7
Insurance and other payables.... 20,27 94.9 137.1 19.8 156.9 138.2 146.9 160.3
Provisions.................................. 28 1.5 0.9 – 0.9 0.9 0.3 –
Deferred income tax liability.... 18 4.9 5.6 – 5.6 5.6 27.0 22.9
Current tax liabilities ................ 8.5 4.7 – 4.7 5.0 6.4 4.3
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
Total liabilities ......................... 654.6 823.0 421.5 1,244.5 825.6 1,608.2 1,716.2
Total equity and liabilities......

–––––––
680.4
–––––––
878.0
––––––– ––––––––– –––––––
415.0 1,293.0 882.1
––––––– –––––––
1,594.3 1,706.2
––––––– ––––––– ––––––– ––––––––– ––––––– ––––––– –––––––
As described in Note 1, the balance sheet as at 31 December 2012, 31 December 2013 and 7 January 2014
comprise the consolidated results of Hastings Insurance Group Limited and its subsidiaries (“HIG Group”).
The balance sheet as at 31 December 2013, 31 December 2014 and 30 June 2015 comprise the consolidated
results of Hastings Insurance Group (Holdings) plc and its subsidiaries (“HIG(H) Group”).
The memorandum aggregate HIG(H) Group results for the year ended 31 December 2013 combines the
position of HIG Group and HIG(H) at that date, see Note 1 for full details.
152
Consolidated Statement of Changes in Equity
Share Share Treasury Merger Other Retained Total
capital premium shares reserve reserve earnings equity
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG Group as at 1 January 2012 1.1 – – (1.0) – 11.2 11.3
Total comprehensive income for the year ............. –

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – 39.5 39.5
Issue of shares .......................................................
– 0.1 – – – – 0.1
Repurchase of treasury shares............................... – – (0.2) – – – (0.2)
Proceeds from resale of treasury shares................ – – 0.1 – – – 0.1
Dividends paid.......................................................– – – – – (25.0) (25.0)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total transactions with owners.............................. – 0.1 (0.1) – – (25.0) (25.0)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2012 ................. 1.1 0.1 (0.1) (1.0) – 25.7 25.8
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG Group as at 1 January 2013 ...................... 1.1 0.1 (0.1) (1.0) – 25.7 25.8

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – 41.1 41.1
Cancellation of treasury shares ............................. – – 0.1 – – – 0.1
Dividends paid.......................................................– – – – – (12.0) (12.0)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total transactions with owners.............................. – – 0.1 – – (12.0) (11.9)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2013 ................. 1.1 0.1 – (1.0) – 54.8 55.0
HIG(H) Group as at 29 August 2013.................

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – – – –
Total comprehensive loss for the year................... –

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – (6.5) (6.5)
Issue of shares .......................................................
– – – – – – –
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total transactions with owners.............................. – – – – – – –
HIG(H) Group as at 31 December 2013 ........... – – – – – (6.5) (6.5)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Memorandum aggregate HIG(H) Group as at
1 January 2013..................................................... 1.1 0.1 (0.1) (1.0) – 25.7 25.8

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – 34.6 34.6
Issue of shares ....................................................... – – – – – – –
Cancellation of treasury shares ............................. – – 0.1 – – – 0.1
Dividends paid....................................................... – – – – – (12.0) (12.0)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total transactions with owners.............................. – – 0.1 – – (12.0) (11.9)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Memorandum aggregate HIG(H) Group as at
31 December 2013 ............................................... 1.1 0.1 – (1.0) – 48.3 48.5
HIG Group as at 1 January 2014 ......................

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1.1 0.1 – (1.0) – 54.8 55.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total comprehensive income for the year ............. – – – – – 1.5 1.5
Issue of shares .......................................................
– – – – – – –
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG Group as at 7 January 2014 ...................... 1.1 0.1 – (1.0) – 56.3 56.5
HIG(H) Group as at 1 January 2014 ................

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – – – (6.5) (6.5)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total comprehensive loss for the year................... – – – – – (8.4) (8.4)
Issue of shares ....................................................... 1.0 – – – – – 1.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total transactions with owners.............................. 1.0 – – – – – 1.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 31 December 2014 ........... 1.0 – – – – (14.9) (13.9)
HIG(H) Group as at 1 January 2015 ................

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1.0 – – – – (14.9) (13.9)
Total comprehensive income for the period.......... –

–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
– – – (0.9) 4.8 3.9
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 30 June 2015 .................... 1.0 – – – (0.9) (10.1) (10.0)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
seven days ended 7 January 2014 comprise the consolidated financial position of Hastings Insurance Group
Limited and its subsidiaries (“HIG Group”).
153
The results presented for the four months ended 31 December 2013, the year ended 31 December 2014 and
for the six months ended 30 June 2015 comprise the consolidated results of Hastings Insurance Group
(Holdings) plc and its subsidiaries (“HIG(H) Group”).
The memorandum aggregate HIG(H) Group combines the position of HIG Group and HIG(H) for the year
ended 31 December 2013, see Note 1 for full details.
Consolidated Statement of Cash Flows
Memo- Memo-
randum randum
HIG(H) aggregate aggregate HIG(H)
HIG Group HIG(H) HIG HIG(H) HIG(H) HIG(H) Group
HIG Group Four Group Group Group Group Group Six
Group Year months Year Seven Year Year Six months months
ended 31 ended 31 ended 31 ended 31 days ended ended 31 ended 31 ended ended
December December December December 7 January December December 30 June 30 June
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
Profit/(loss) after tax........................... 39.5 41.1 (6.5) 34.6 1.5 (8.4) (6.9) (14.3) 4.8
Non–cash adjustments
Depreciation of property and
equipment ........................................... 1.8 2.0 – 2.0 0.1 1.4 1.5 0.8 1.2
Amortisation of intangible assets....... 0.6 1.3 – 1.3 – 26.5 26.5 13.5 12.6
Net fair value (gains)/losses on
investments ......................................... (2.5) (1.4) – (1.4) (1.6) (3.6) (5.2) (1.6) 1.1
Net unrealised (gains)/losses on
property and equipment...................... – 0.2 – 0.2 – – – – –
Interest receivable............................... (1.3) – – – – – – – –
Loss on derecognition of property
and equipment .................................... 0.2 – – – – – – – –
Loss on derecognition of intangible
assets................................................... 0.1 – – – – – – – –
Finance costs ...................................... 7.4 9.5 6.5 16.0 0.2 68.6 68.8 33.7 36.2
Taxation expense ................................ 16.4 14.9 – 14.9 2.2 7.0 9.2 3.5 4.5
receivables and prepayments.............. (23.4) (48.0) – (48.0) (1.9) (8.7) (10.6) 7.6 (25.7)
payables .............................................. 14.8 45.7 – 45.7 2.5 (9.5) (7.0) (19.2) 10.8
Change in reinsurance assets.............. (37.3) (112.0) – (112.0) (1.8) (83.8) (85.6) (70.5) (46.2)
Change in deferred acquisition costs . (10.8) (3.1) – (3.1) – (13.2) (13.2) (10.8) (2.6)
Write off of investments in
associates ............................................ – 0.3 – 0.3 – – – – –
Change in insurance contract
liabilities ............................................. 84.4 128.5 – 128.5 – 115.5 115.5 86.4 83.5
Change in loans receivable................. – 4.4 – 4.4 – – – – –
Change in provisions.......................... (0.6) (0.5) – (0.5) – (0.6) (0.6) (0.2) (0.3)
Taxation paid ...................................... (6.5) (17.7) – (17.7) – (9.0) (9.0) (4.9) (7.9)
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
activities ............................................. 82.8 65.2 – 65.2 1.2 82.2 83.4 24.0 72.0
Purchase of property and equipment..

–––––– –––––– –––––– ––––––––
(1.9) (3.1) – (3.1)
–––––– –––––– –––––––– –––––– ––––––
(0.1) (2.3) (2.4) (0.8) (2.5)
Acquisition of intangible assets ......... (1.5) (3.2) – (3.2) (0.1) (5.8) (5.9) (1.3) (10.7)
Interest received ................................. – 1.4 – 1.4 – – – – –
Receipt of cash in escrow................... – – – – – 415.0 415.0 415.0 –
Net outlay for acquisition of
subsidiary............................................ 4.8 – – – – (343.1) (343.1) (343.1) –
Outlays for investments acquired ....... (81.1) (89.0) – (89.0) – (98.6) (98.6) (4.5) (98.8)
Proceeds from disposal of
investments ......................................... 73.1 56.9 – 56.9 – 48.9 48.9 7.0 57.6
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
Net cash flows from investing
activities ............................................. (6.6) (37.0) – (37.0) (0.2) 14.1 13.9 72.3 (54.4)
Proceeds from issue of preference
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
shares .................................................. – – – – – 144.6 144.6 144.6 –
Proceeds from issue of ordinary
share capital........................................ – 0.1 – 0.1 – 1.0 1.0 1.0 –
Increase in loans payable ................... 25.0 1.2 – 1.2 – – – – –
Repayment of loans............................ – – – – – (83.8) (83.8) (83.8) –
Interest on loans and borrowings paid (6.8) (8.3) – (8.3) – (34.0) (34.0) (16.3) (15.6)
Other interest paid .............................. – (1.2) – (1.2) – (0.7) (0.7) – –
Performance fees paid ........................ (0.6) – – – – – – (0.3) (0.2)
Dividends paid.................................... (25.0) (12.0) – (12.0) – – – – –
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
activities ............................................. (7.4) (20.2) – (20.2) – 27.1 27.1 45.2 (15.8)
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
154
Memo- Memo-
randum randum
HIG(H) aggregate aggregate HIG(H)
HIG Group HIG(H) HIG HIG(H) HIG(H) HIG(H) Group
HIG Group Four Group Group Group Group Group Six
Group Year months Year Seven Year Year Six months months
ended 31 ended 31 ended 31 ended 31 days ended ended 31 ended 31 ended ended
December December December December 7 January December December 30 June 30 June
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
Net increase in cash and cash
equivalents......................................... 68.8 8.0 – 8.0 1.0 123.4 124.4 141.5 1.8
Cash and cash equivalents at

–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
beginning of year/period .................... 34.0 102.8 – 102.8 110.8 – 110.8 – 123.4
Cash and cash equivalents inflow
for the year/period .............................. 68.8 8.0 – 8.0 1.0 123.4 124.4 141.5 1.8
Cash acquired at acquisition .............. (111.8)
Cash and cash equivalents at end
of year/period ..................................... 102.8 110.8 – 110.8 111.8 123.4 123.4 141.5 125.2
–––––– –––––– –––––– –––––––– –––––– –––––– –––––––– –––––– ––––––
and its subsidiaries (“HIG Group”).
The results presented for the four months ended 31 December 2013, the year ended 31 December 2014 and
for the six months ended 30 June 2014 and 30 June 2015 comprise the consolidated results of Hastings
Insurance Group (Holdings) plc and its subsidiaries (“HIG(H) Group”).
2014 combine the results of HIG Group and HIG(H) Group, see Note 1 for full details.
155
Notes to the Historical Financial Information
1. Basis of preparation ...................................................................................................................... 157
2. Accounting policies ...................................................................................................................... 159
3. Critical accounting estimates and judgements in applying accounting policies .......................... 168
4. Insurance contracts risk management ........................................................................................... 170
5. Segmental reporting ...................................................................................................................... 172
6. Insurance premiums ...................................................................................................................... 186
7. Other revenue ................................................................................................................................ 187
8. Investment and interest income .................................................................................................... 188
9. Claims incurred ............................................................................................................................. 188
10. Other operating expenses.............................................................................................................. 189
11. Employee benefits......................................................................................................................... 190
12. Finance costs ................................................................................................................................. 191
13. Taxation......................................................................................................................................... 192
14. Earnings per share......................................................................................................................... 193
15. Property and equipment ................................................................................................................ 194
16. Intangible assets ............................................................................................................................ 196
17. Goodwill........................................................................................................................................ 197
18. Deferred income tax...................................................................................................................... 199
19. Reinsurance assets and insurance contract liabilities ................................................................... 201
20. Financial instruments, capital management and related disclosures ............................................ 208
21. Cash in escrow .............................................................................................................................. 216
22. Cash and cash equivalents ............................................................................................................ 216
23. Investments in associates .............................................................................................................. 216
24. Loans and borrowings................................................................................................................... 217
25. Preference shares .......................................................................................................................... 218
26. Insurance and other receivables .................................................................................................... 219
27. Insurance and other payables........................................................................................................ 220
28. Provisions...................................................................................................................................... 221
29. Share capital and reserves............................................................................................................. 222
30. Financial commitments ................................................................................................................. 226
31. Subsidiary companies ................................................................................................................... 227
32. Ultimate controlling party............................................................................................................. 227
33. Related party transactions ............................................................................................................. 227
34. Acquisition .................................................................................................................................... 230
35. Contingent liabilities ..................................................................................................................... 233
36. Dividends ...................................................................................................................................... 234
37. Subsequent events ......................................................................................................................... 235
156
1. Basis of preparation
Hastings Insurance Group (Holdings) plc (the “Company” or “HIG(H)”) is a public company incorporated
in Jersey on 29 August 2013 and prepared its first financial statements for the four month period ended
31 December 2013. Its registered office is at 47 Esplanade, St Helier, Jersey, JE1 0BD. HIG(H) and its
subsidiaries (Hastings Insurance Group (Investment) plc (“HIG(I)”), Hastings Insurance Group (Layer
Three) plc (“HIG(L3)”), Hastings Insurance Group (Layer Two) plc (“HIG(L2)”) and Hastings Insurance
Group (Finance) plc (“HIG(F)”)) were incorporated for the purposes of acquiring the share capital of
Hastings Insurance Group Limited (“HIG”). HIG at the time was the ultimate parent company of Advantage
Insurance Company Limited (“AICL”) and Hastings Insurance Services Limited (“HISL”), the principal
trading companies of HIG.
On 8 January 2014, HIG(H) acquired 100% of the issued share capital of HIG. This acquisition formed part
of a series of transactions (the “Transaction”) which saw the creation of an enlarged Group. HIG(H) is the
new parent entity within the corporate structure in which former shareholders of HIG acquired 50% of the
voting rights and a partnership related to The Goldman Sachs Group, Inc. acquired the remaining 50% of
voting rights. HIG(H) did not trade prior to the acquisition of HIG.
The Historical Financial Information presented in these financial statements as at and for the years ended
31 December 2012 and 31 December 2013, and as at and for the seven days ended 7 January 2014 comprises
the consolidated results and financial position of Hastings Insurance Group Limited (“HIG”) and its
subsidiaries (together referred to as the “HIG Group”). The Historical Financial Information presented in
these financial statements as at and for the four months ended 31 December 2013, as at and for the year
ended 31 December 2014 and for the six months ended 30 June 2014 and as at and for the six months ended
30 June 2015 comprises the consolidated results of HIG(H) and its subsidiaries (together referred to as the
“HIG(H) Group”).
The memorandum aggregated information as at and for the year ended 31 December 2013 represents the
results of HIG Group for the year ended 31 December 2013 combined with the results of HIG(H) Group for
the four months ended 31 December. These results are combined to provide additional information on the
results and no statutory consolidation adjustments have been included.
The memorandum aggregated information for the year ended 31 December 2014 represents the addition of
the 7 days financial information of the HIG Group for the seven days ended 7 January 2014 to the full year
financial information of the HIG(H) Group, which includes the trading results of HIG Group from 8 January
2014. These results are combined to provide additional information on the annualised trading results and no
statutory consolidation adjustments have been included. The HIG(H) Group profit and loss statements for
the year ended 31 December 2014 include the effects of acquisition accounting performed on the acquisition
of HIG by HIG(H) as described in Note 34.
Accordingly references to “Group” and “Company” in the Historical Financial Information refer to HIG(H)
Group and HIG(H) respectively for the four months ended 31 December 2013, six months ended 30 June
2014 and 30 June 2015 and for the year ended 31 December 2014. In relation to the years ended
31 December 2012 and 31 December 2013 and 7 days ended 7 January 2014, references to the “Group” and
“Company” refer to the HIG Group and HIG respectively.
The financial information has been prepared for the purposes of the Prospectus in accordance with the
requirements of the Listing Rules, the Prospectus Directive Regulation and this basis of preparation,
including the accounting policies set out below. The financial information have been prepared and approved
by the Directors in accordance with IFRS as adopted by the EU. IFRS comprise standards and interpretations
approved by the International Accounting Standards Board (“IASB”) and the International Financial
Reporting Interpretations Committee (“IFRIC”) as adopted in the EU that are in effect as at 30 June 2015.
Where necessary, adjustments have been made to the financial statements of the subsidiaries to bring the
accounting policies used into line with those used by the Group. The policies set out below have been applied
consistently throughout all the periods presented to items considered material to the consolidated financial
statements.
157
(a) Going concern
The financial position of the Group, its cash flows, liquidity position and borrowing facilities are set
out in the primary statements and the subsequent notes. For the six months ended 30 June 2015, the
Group reported a profit after tax of £4.8 million and as at 30 June 2015 had a net liability of
£10.0 million due to the accrual of preference share dividends of £52.8 million as at 30 June 2015.
On the 12 August 2015, as part of the reorganisation described in note 37, all preference shares,
accumulated dividends and interest accrued thereon totalling £343.0m were converted into ordinary
share capital. Following this conversion the Groups net assets were increased by £343.0m.
Having considered the foregoing items, the Groups cashflow forecasts for the next 12 months and
beyond, and, after making enquiries, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the Consolidated Financial Statements.
(b) Basis of measurement

The functional currency is sterling and the financial statements are presented in pounds sterling.
Amounts are rounded to the nearest million with one decimal place (i.e. £0.1m) except where
otherwise indicated.
The preparation of financial statements requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these estimates are based on
management’s best knowledge of the amounts, events and actions, actual results ultimately may differ
from those estimates. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in Note 3.
The financial statements are prepared on the historical and amortised cost bases, except financial
assets and property which are stated at their fair value or revalued amounts.
(c) Adoption of new IFRS

On 1 January 2015, the Group adopted the following IFRS which were issued and endorsed by the
EU:
IFRS/IAS EU effective date

––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––
Annual Improvements to IFRSs 2010–2012 Cycle (issued on Annual periods beginning on
12 December 2013) or after 1 February 2015
Annual Improvements to IFRSs 2011–2013 Cycle (issued on Annual periods beginning on
12 December 2013) or after 1 February 2015
IFRIC 21 Levies First annual period beginning on
or after 17 June 2014
There was no material financial impact on the financial statements on adoption of these new standards
and amendments.
There are no other relevant standards, which are expected to have a significant impact on the Group,
that have been issued and endorsed by the EU but are not yet effective.
(d) Presentation of financial statements in accordance with IAS 1

The Consolidated Financial Statements are prepared in accordance with IAS 1 Presentation of
Financial Statements. The Group has elected to present separate Consolidated Statement of Profit or
Loss and Other Comprehensive Income Statement.
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(e) Application of IFRS
The accounting policies below, developed in accordance with the standards effective under IFRS as
adopted by the EU for the six months ended 30 June 2015, have been applied consistently to all
periods presented in these financial statements. There have been no changes to accounting policies
during the year with the exception of the adoption of new standards now effective in the EU.
(f) Basis of consolidation

The HIG Group financial statements consolidate the financial statements of the Company and all of
its subsidiary undertakings for the years ended 31 December 2012 and 31 December 2013 and seven
days ended 7 January 2014.
The HIG(H) Group financial statements consolidate the financial statements of the Company and all
of its subsidiary undertakings for the four months ended 31 December 2013, year ended 31 December
2014 and six months ended 30 June 2014 and 30 June 2015.
The Consolidated Financial Statements are based on financial statements whose year ends are
coterminous with those of the Company and accounting policies have been consistently applied
throughout the Group.
Subsidiaries are investees controlled by the Group. The Group controls an investee if it is exposed to,
or has rights to, variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. The Group reassesses whether it has control if there
are changes to one or more of the elements of control. Subsidiaries are fully consolidated from the
date on which control commences until the date when control ceases.
Intra-Group balances and transactions are eliminated in preparing the Consolidated Financial
Statements.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date.
Acquisition related costs, referred to as transaction costs, are expensed as incurred.
2. Accounting policies
(a) Revenue recognition
Premiums and profit commission
Premiums related to insurance contracts are recognised as revenue proportionally over the period of
cover. Premiums on policies with an inception date before the period end but with unexpired risks
after the year end are held in the Consolidated Balance Sheet in unearned premiums reserve.
Premiums with an inception date after the end of the period are held in the Consolidated Balance
Sheet in deferred income. Outstanding collections from customers on such premiums are recognised
within customer receivables.
Premiums ceded to reinsurers and co-insurers are accounted for in the same accounting period as the
related direct insurance business.
Under certain reinsurance contracts under which motor premiums are ceded, profit commission may
be earned on a particular underwriting year. This is subject to over achievement against a particular
loss ratio threshold, and the amount of profit commission receivable is determined by the extent of
such over performance. The commission is dependent on the ultimate anticipated outcome of any
underwriting year with commission being recognised when it is probable that a loss ratio will be
achieved. Commissions on reinsurance contracts are recognised as profit or loss within other revenue.
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Revenue from insurance broking activities
This consists principally of brokerage and fees relating to the arrangement of insurance contracts.
Revenue is measured at the fair value of the income receivable and is recognised on completion of the
associated service. The fair value measurement makes allowance for expected future refunds to
customers in the event of cancellation before the expiry of the policy.
Interest on instalment sales

Interest earned on instalment sales is recognised over the term of the related agreement using the
effective interest method.
Investment and interest income

Investment income from financial assets comprises interest income and net gains and losses (both
realised and unrealised) on financial assets held at fair value through profit or loss. Interest income is
recognised on the effective interest basis. Dividends from investments in subsidiaries are eliminated
upon consolidation.
Discounts
Discounts on policies underwritten by parties external to the Group are deducted from brokerage and
fee income. Premium discounts for policies underwritten by the Group are deducted from gross
written premiums and are earned alongside the premiums to which they relate.
Other discounts on revenue are deducted from the revenue streams to which they relate.
(b) Insurance contracts and reinsurance assets

Unearned premiums reserve
The proportion of premiums receivable on in-force policies relating to unexpired risks is reported in
insurance contract liabilities and reinsurance assets as the unearned premiums reserve, with the gross
unearned premium reserve and the reinsurers share presented separately.
Claims
The outstanding claims liabilities are measured as the value of expected future payments relating to
claims incurred at the reporting date. The expected future payments include those in relation to claims
reported but not yet paid or not yet paid in full and claims incurred but not reported (“IBNR”). The
liabilities are not discounted to present value.
Reinsurance assets are measured consistently with the amounts associated with the reinsured
insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets
are not discounted to present value.
Both outstanding claims liabilities assumed and reinsurance assets acquired in a business combination
are discounted to present value on acquisition and these discounts are subsequently unwound over
their expected life.
While the Directors consider that the gross claims liabilities and the related reinsurance assets are
fairly stated on the basis of the information currently available to them, the ultimate liabilities will
vary as a result of subsequent information and events and may result in significant adjustments to the
amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in profit or
loss for the period in which the adjustments are made. The methods used, and the estimates made, are
reviewed regularly.
From time to time, Periodic Payment Orders (“PPOs”) are awarded as a result of claims made under
insurance contracts. Such awards are generally for a fixed instalment over an indeterminate time
period. Claims settled, or expected to be settled, by means of a PPO are recognised at the present value
of expected future cash flows of the award granted over the expected term of the payment order, and
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are recognised immediately when the award is considered probable. Reinsurance assets are recognised
alongside the related gross claims liabilities.
Reinsurance contracts
Contracts entered into by the Group with reinsurers under which the Group is compensated for losses
on one or more insurance contract issued by the Group are classified as reinsurance contracts held.
The benefits to which the Group is entitled under its reinsurance contracts held are recognised as
reinsurance assets. These assets consist of short-term balances due from reinsurers, as well as
longer-term receivables that are dependent on the expected claims and benefits arising under the
related reinsured insurance contracts.
Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised
when due. Amounts recoverable from or due to reinsurers are measured consistently with the amounts
associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance
contract.
The Group assesses its reinsurance assets for impairment on an annual basis. If there is objective
evidence that the reinsurance asset is impaired, the Group reduces the carrying amount of the
reinsurance asset to its recoverable amount and recognises that impairment loss in profit or loss.
Where obligations with reinsurers are commuted, the related reinsurance assets and liabilities are
settled in the period in which the agreement is signed, on the basis that the reinsurer is discharged
from all obligations relating to the contract. Any gain or loss is recognised in the profit or loss in the
same period.
Unexpired risks reserve

A review of the carrying amount of the unearned premiums reserve is conducted at each reporting
date. If current estimates of the present value of the expected future cash flows relating to future
claims arising from the rights and obligations under current insurance contracts exceed the unearned
premiums reserve less related costs including deferred acquisition costs (“DAC”), then the unearned
premiums reserve is deemed to be deficient.
The test is performed at the level of a portfolio of contracts that are subject to broadly similar risks
and that are managed together as a single portfolio. If any deficiency arises from the test, first an
impairment to the DAC asset is recognised in profit or loss, and then if necessary an unexpired risk
reserve is recognised in the Consolidated Balance Sheet, through profit or loss. Any movement on that
reserve is recognised in profit or loss.
Salvage and subrogation recoveries

Some insurance contracts permit the Group to pursue salvage recoveries through the sale of (usually
damaged) property acquired in settling a claim. The Group may also have the right to subrogation
recoveries, where third parties are pursued for payment of some or all costs.
Salvage and subrogation recoveries, gross of any amounts which fall under reinsurance contracts, are
included in insurance and other receivables and the corresponding reinsurance amounts arising out of
reinsurance operations are included in insurance and other payables. For salvage recoveries, the
amount recognised is the amount that can be reasonably recovered from the disposal of the property.
For subrogation reimbursements, the amount recognised is the amount that can be recovered from the
action against the liable third party.
Levies
The Group incur levies as a consequence of both broking insurance and underwriting. The Group is
charged levies by Motor Insurers’ Bureau, Financial Services Compensation Scheme and other
regulatory bodies in the UK. In line with IFRIC 21 these are accrued in full when the activity that
gives rise to the liability occurs and are recognised in profit or loss over a period equivalent to that
over which the underlying benefit is earned.
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The ‘Financial Services Compensation Scheme’ (‘FSCS’) was set up by the Financial Services
Authority, now the Financial Conduct Authority (‘FCA’), to collect and administer a fund that pays
policyholders claims in the event of the failure of an FCA regulated entity. The levy is included in the
period that the policy is written.
(c) Finance costs

The Group’s finance costs include interest due on: Shareholder loans and loan Notes, the Senior
Secured Notes (and amortisation of their directly attributable transaction costs and any discounts on
issue) and dividends incurred on preference shares. They are recognised under the effective interest
method.
Interest due on the Senior Secured Notes is recognised on an accruals basis from the date the bonds
were issued, based on the terms of the Senior Secured Notes. For the Senior Secured Fixed Rate
Notes, the interest expense is calculated as part of the calculation of amortisation of the directly
attributable transaction costs and discount on issue. For the Senior Secured Floating Rate Notes, the
interest due and amortisation are calculated separately.
(d) Intangible assets

Goodwill
Goodwill represents the difference between the fair value of the consideration transferred in a
business combination and the Group’s interest in the fair value of the identifiable assets and liabilities
of the business combinations at the date of the business combination. All business combinations
which have been entered into by the Group in historic periods have resulted in the Group obtaining
full ownership of the acquired entities. Any acquisition costs are expensed as incurred.
Goodwill acquired in a business combination is allocated to Groups of cash generating units

(“CGUs”) that are expected to benefit from the business combination.
Subsequently, goodwill has an indefinite life and is tested annually for impairment, with any
impairment being recognised immediately in profit or loss. An impairment exists where the estimated
value of the CGU is lower than the combined carrying amount of assets and goodwill allocated to the
CGU. The value of the CGU is the higher of the fair value of the allocated CGU less costs to sell and
the CGU’s value in use, which is determined by discounting forecast results.
Deferred Acquisition Costs

Costs that are directly related to the acquisition of new insurance contracts are deferred and
recognised as deferred acquisition cost (“DAC”) assets.
DAC is held at cost less accumulated amortisation and accumulated impairment losses. It is amortised
over the coverage period of the related insurance contract, in line with the premiums on the underlying
business.
DAC has an economic useful life of 12 months which is in line with the length of the underlying
insurance contracts. Amortisation for the year is charged to acquisition costs in profit or loss.
Software
Computer software is stated at cost less accumulated amortisation and accumulated impairment
losses.
Purchased computer software is initially recognised at cost, being the fair value of consideration
transferred plus directly attributable costs incurred in order to prepare the asset for its intended use.
Internally developed computer software is only recognised as an asset when the costs can be measured
reliably, completion is technically and financially feasible, future economic benefits are probable and
there is intention to use or sell the asset. Other research and development expenditure is recognised in
profit or loss.
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Software acquired through business combinations is recognised initially at fair value and is
subsequently amortised over its remaining useful economic life.
Amortisation is provided on all computer software, at rates calculated to write off the cost of the assets
less their estimated residual value over their expected useful lives. Amortisation is calculated using
the straight line method and is recognised in other operating expenses in profit or loss.
Expected useful economic lives and residual values are reviewed at each period end and, where
necessary, changes are accounted for prospectively. The expected useful economic lives are up to
6 years for all software.
Carrying amounts are reviewed at each year end to determine if there are indicators of impairment.
Where these exist the asset’s recoverable amount is estimated and compared to the carrying amount.
The recoverable amount is the higher of the fair value less costs to sell and the asset’s value in use.
Impairment losses are recognised in profit or loss.
Software is derecognised on disposal or when no future economic benefits are expected to arise from
the continued use of the asset. On derecognition any gain or loss arising is calculated as the difference
between the net disposal proceeds and the carrying amount of the item. This is recognised in profit or
loss in the period of derecognition.
Brands
The Group’s brands were acquired upon the Group’s acquisition of HIG on 8 January 2014. They
were initially recognised at fair value and are subsequently recognised using the historical cost
method (their fair value on acquisition less accumulated amortisation and accumulated impairment
losses).
Amortisation is provided on all brands, at rates calculated to write off the cost of the assets less their
estimated residual value over their expected useful lives. Amortisation is calculated using the straight
line method. Amortisation is recognised in other operating expenses in profit or loss.
The expected useful economic life and residual value are reviewed at each period end and, where
necessary, changes are accounted for prospectively. The expected useful economic life is 8 years for
the Group’s brands.
Customer relationships
The Group’s customer relationships were acquired upon the Group’s acquisition of HIG on 8 January
2014. They were initially recognised at fair value and are subsequently recognised using the historical
cost method (their fair value on acquisition less accumulated amortisation and accumulated
impairment losses).
Amortisation is provided on all customer relationships, at rates calculated to write off the cost of the
assets less their estimated residual value over their expected useful lives. Amortisation is calculated
using the straight line method. Amortisation is recognised in other operating expenses in profit or loss.
The expected useful economic life and residual value are reviewed at each period end and, where
necessary, changes are accounted for prospectively. The expected useful economic life is 5 years for
the Group’s customer relationships.
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Work in progress
Work in progress includes assets in production which are considered to fulfil the criteria for
recognition outlined in IAS 38 Intangible Assets but which have not yet reached the state where they
are ready for their intended use. As such no amortisation has yet been charged on these assets.
(e) Property and equipment

The Group has chosen to value property using the revaluation model. Properties are initially
recognised at cost and subsequent to initial recognition properties are carried at their revalued amount,
which is the fair value at the date of revaluation less subsequent depreciation and impairment losses.
Property acquired through business combinations is initially recognised at fair value, and
subsequently carried at its revalued amount as described above.
Revaluation surpluses are recognised as other comprehensive income. Upon disposal of a property,
any revaluation surplus is recognised directly in retained earnings and is not reclassified in profit or
loss.
Revaluations resulting in a reduction to fair value initially use any remaining revaluation surplus and
any excess is immediately recognised in profit or loss.
Equipment, consisting of fixtures, fittings, office equipment, computer equipment and leasehold
improvements, is stated at historical cost less depreciation and less any recognised impairment losses.
Cost is the fair value of consideration provided plus incidental costs incurred to bring an asset to the
condition and location necessary for its intended use. Equipment acquired through business
combinations is recognised initially at fair value and is subsequently depreciated over its remaining
useful economic life.
Subsequent costs incurred which relate to the initial production or improvement of an asset are added
to its cost and depreciated over the asset’s useful economic life. Costs incurred significantly later than
the initial production of the asset are treated as a separate asset if they meet the criteria of IAS 16
Property, Plant and Equipment or else are expensed as incurred.
Depreciation is provided on all property and equipment, at rates calculated to write off the cost of the
assets less their estimated residual value over their expected useful lives. Depreciation is calculated
using the straight line method. Depreciation is recognised in other operating expenses in profit or loss.
The expected useful economic lives of property and equipment are as follows:
• Property 50 years
• Fixtures, fittings and equipment 3-5 years
• Property and leasehold improvements 4-10 years
• Computer equipment 2-3 years
Expected useful economic lives and residual values are reviewed at each period end and, where
necessary, changes are accounted for prospectively.
Impairment losses are recognised immediately in profit or loss.
Property and equipment is derecognised on disposal or when no future economic benefits are expected
to arise from the continued use of the asset. On derecognition any gain or loss arising is calculated as
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the difference between the net disposal proceeds and the carrying amount of the item. This is
recognised in profit or loss in the period of derecognition.
Work in progress
Work in progress includes assets in production which are considered to fulfil the criteria for
recognition outlined in IAS 16 Property, Plant and Equipment but which have not yet reached the state
where they are ready for their intended use. As such no depreciation has yet been charged on these
assets.
(f) Leased assets

Payments made under operating leases are charged in profit or loss on a straight-line basis over the
lease term. Incentives provided by the lessor are credited to profit or loss on a straight-line basis over
the full lease term.
(g) Financial assets

The Group’s financial assets comprise investments, insurance and other receivables, cash and cash
equivalents and cash in escrow. For measurement purposes the Group classifies its financial assets into
the following categories: financial investments which are financial assets carried at fair value through
profit or loss, financial assets carried as available for sale, loans and receivables and cash and cash
equivalents.
Financial assets at fair value through profit or loss

A financial asset is classified at fair value through profit or loss if it is classified as held-for-trading
or is designated as such on initial recognition. Financial assets are held-for-trading or designated as
fair value through profit or loss if the Group manages such investments and makes purchase and sale
decisions based on their fair value in accordance with the Group’s documented risk management or
investment strategy. Financial assets at fair value through profit or loss which are held-for-trading are
initially measured at fair value (being the cost of acquisition excluding transaction costs) and are
subsequently re-measured to fair value at each reporting date.
Gains or losses arising from changes in the fair value of financial assets are recognised in profit or
loss in the period in which they arise.
Purchases and sales of financial assets classified at fair value through profit or loss are recognised on
a trade date basis, being the date on which a commitment is made to purchase or sell the asset.
Transaction costs for purchases and sales of financial assets classified as fair value through profit or
loss are expensed as incurred in profit or loss.
Financial assets classified at fair value through profit or loss are derecognised when the rights to
receive future cash flows from the assets have expired, or have been transferred, and substantially all
the risks and rewards of ownership have transferred. Upon derecognition any residual gains or losses
resulting from the sale or derecognition of the asset are recognised in profit or loss.
Available for sale

A financial asset is classified as available for sale when they consist of investments acquired in line
with the investment strategy neither with the intention to sell in the near term nor with the intention
to hold until maturity.
Financial assets treated as available for sale financial assets are measured at fair value at their initial
recognition and subsequently at fair value with unrealised gains or losses recognised directly in other
reserves. The Group recognises interest income as investment income through the profit and loss
according to the effective interest method.
When reductions in fair value are considered to be impairment losses, these are recognised by
reclassifying the losses accumulated in reserves to profit or loss. The amount reclassified is the
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difference between the value on initial recognition and the current fair value, less any impairment loss
previously recognised in profit or loss. If the fair value of an impaired available for sale financial asset
subsequently increases, then the loss is reversed through profit or loss to the extent that it offsets
impairment losses previously recognised; otherwise, it is reversed through other reserves.
When financial assets are sold, the Group reclassifies unrealised gains or losses recognised in other
reserves into the profit or loss under investment income.
Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in
an active market. Such assets are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised
cost using the effective interest method, less any impairment losses.
Cash in escrow and cash and cash equivalents are classified as loans and receivables for measurement
purposes. Cash and cash equivalents include cash in hand, deposits held at call with banks, other
short-term highly liquid investments and bank overdrafts.
Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Consolidated Balance
Sheet only when there is a current unconditional and legally enforceable right to offset the recognised
amounts in all circumstances (including the default by, insolvency or bankruptcy of the Group and all
counterparties), and there is an intention to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Impairment of financial assets

The Group assesses at each year end date whether there is objective evidence that a financial asset is
impaired. Loans and receivables and available for sale assets are subject to impairment reviews, with
any losses on assets held at fair value through profit or loss recognised through an adjustment to fair
value. A financial asset is impaired and impairment losses are incurred only if there is objective
evidence of impairment as a result of one or more events that have occurred after the initial
recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated
future cash flows of the financial asset that can be reliably estimated. Objective evidence that a
financial asset is impaired includes observable data that comes to the attention of the Group about the
following events:
• significant financial difficulty of the issuer or debtor;
• a breach of contract, such as a default or delinquency in payments; or
• it becoming probable that the issuer or debtor will enter bankruptcy or other financial
reorganisation.
If there is objective evidence that an impairment loss has occurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash
flows discounted at the financial asset’s original effective interest rate. The carrying amount of the
asset is reduced and the amount of the loss is recognised in profit or loss for the period.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as improved profitability
of the debtor), the previously recognised impairment loss is reversed and the amount of the reversal
is recognised in profit or loss for the period.
(h) Share capital

Shares are classified as equity when there is no obligation to transfer cash or other financial assets, or
to exchange financial assets or liabilities under potentially unfavourable conditions. Where such an
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obligation exists, the share capital is recognised as a liability notwithstanding the legal form.
Incremental costs directly attributable to the issue of equity instruments are recognised as a deduction
from share premium to the extent that there is sufficient share premium to do so, net of tax effects.
(i) Dividends paid

Dividends paid are recognised through the Consolidated Statement of Changes in Equity when paid.
(j) Investment return

Interest income and expenses for all interest-bearing financial instruments, including financial
instruments measured at fair value through profit or loss and available for sale, are recognised in profit
or loss within investment and interest income and finance costs respectively, using the effective
interest rate method.
Investment and interest income also includes all realised investment gains and losses on financial
instruments measured at fair value through profit or loss and available for sale as well as the
unrealised gains and losses on financial instruments measured at fair value through profit or loss.
(k) Employee benefits

The Group operates a defined contribution pension scheme. The amount charged in profit or loss in
respect of pension costs is the contributions payable in the year. Differences between contributions
payable in the year and contributions actually paid are shown as either accruals or prepayments in the
Consolidated Balance Sheet. The Group has no legal or constructive obligation to make any further
payments to the plans other than the contributions due.
(l) Taxation
Income tax on the result for the period comprises current and deferred tax. Income tax is recognised
in profit or loss except to the extent that it relates to a business combination, items recognised in other
comprehensive income or directly in equity.
Current tax expense is the expected tax payable on the taxable profit for the period, using tax rates
enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of
previous financial periods. Deferred income tax expense is the change in deferred income tax assets
and liabilities between the reporting periods.
Deferred income tax assets and liabilities are recognised using the balance sheet method for
temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. A deferred income tax liability is recognised for
all taxable temporary differences except when they arise from the initial recognition of goodwill.
Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates and tax laws that have been enacted or substantively
enacted by the Balance Sheet date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
(m) Financial liabilities

The Group’s financial liabilities include Senior Secured Notes, preference shares, insurance and other
payables and loans and borrowings. Preference shares are recognised as a liability when there is a
contractual obligation regarding dividend payments, defined repayment terms or a combination of
both that indicates they are a financial liability. Dividends on such preference shares are recognised
as a finance cost.
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On initial recognition, the Senior Secured Notes, preference shares, insurance and other payables and
loans and borrowings are measured at fair value less any directly attributable transaction costs, which
are capitalised and reduce the initial liability recognised. Fair value for the Senior Secured Notes
issued in 2013 and the preference shares issued on 8 January 2014 were measured to be the price at
which they were issued. For the Senior Secured Fixed Rate Notes this was the principal, for
preference shares this was the nominal value plus a premium, for the Senior Secured Floating Rate
Notes this was the principal value less a discount.
After initial recognition, the Senior Secured Notes, preference shares, insurance and other payables
and loans and borrowings are subsequently measured at amortised cost using the effective interest rate
method. The interest due on and amortisation of the Senior Secured Notes, comprising the directly
attributable transaction costs of the Senior Secured Fixed Rate Notes and the directly attributable
transaction costs and discount on the Senior Secured Floating Rate Notes, is recognised in profit or
loss for the period, as are preference share dividends.
(n) Insurance intermediary assets and liabilities

Debtors and creditors arising from insurance broking transactions are shown as assets and liabilities
in recognition of the fact that the insurance broker has contractual rights to economic inflows from
customers and obligations to third party insurers upon placement of insurance products with
customers. Debtor balances are recognised when the Group provides financing to customers for
instalment premiums payable to third party insurers. Creditor balances arise either where the Group
has an obligation to remit a recognised debtor balance or premiums received to third party insurers.
(o) Treasury Shares

Shares held by the Group in its parent company are classified as treasury shares. When treasury shares
are repurchased the amount of consideration paid is recognised as a deduction from equity. When
treasury shares are sold or reissued, the amount received is recognised as an increase in equity. Upon
cancellation of treasury shares, share capital relating to those shares is eliminated along with any share
premium which was recognised upon their initial issue.
(p) Share issue costs

Costs relating to the issue of new shares are expensed as incurred in the absence of any share
premium, otherwise such costs are deferred and deducted from share premium at the point at which
those shares are issued.
(q) Investments in associates

Where the Group has the power to participate in (but not control) the financial and operating policy
decisions of another entity, it is classified as an associate. Associates are initially recognised at cost.
The Group’s share of post-acquisition profits and losses is recognised in profit or loss, except that
losses in excess of the Group’s investment in the associate are not recognised unless there is an
obligation to make good those losses.
Any premiums paid for an associate above the fair value of the Group’s share of the identifiable assets,
liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the
associate. Where there is objective evidence that the investment in an associate has been impaired, the
carrying amount of the investment is tested for impairment in the same way as other non-financial
assets. Any impairments are recognised as operating expenses in profit or loss.
3. Critical accounting estimates and judgements in applying accounting policies

The preparation of financial statements in conformity with IFRS requires the Directors to make judgements
and assumptions that affect the reported amounts of assets and liabilities and the reported income and
expense during the reported periods as well as the content of any disclosures. Although these judgements and
assumptions are based on the Directors’ best knowledge of the amounts, events and actions, actual results
may differ from these judgements and assumptions.
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The judgements, apart from those involving estimations, that the Directors have made in applying the
Group’s accounting policies that have the most significant effect on the amount recognised in the financial
statements and the major sources of estimation uncertainty that have a significant risk of resulting in a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are as
follows:
(a) Claims liabilities

The estimation of the ultimate liability arising from claims made under insurance contracts is the
Group’s most critical accounting estimate. Estimates are informed by detailed actuarial analysis and
reflect a balanced assessment of risk and probability resulting in a sufficiently prudent liability to give
the Directors of the Group confidence that the Group is adequately provisioned to meet its future
liabilities.
In order to reduce the risk of underestimation of these liabilities, a margin is maintained over and
above the internal actuarial best estimate.
When PPOs are awarded as a result of claims made under insurance contracts, they are generally for
a fixed instalment over an indeterminate period. As such, reserving for PPOs granted inherently
involves estimation by management as to the period over which the orders will be fulfilled.
As at the period end, management may consider the award of certain PPOs to be probable and as such
these will be included in claims liabilities. The value of instalments, the period over which these
instalments will be payable and the likelihood of the PPO being granted are determined as a result of
detailed review of the circumstances of each claim by management with support of the Group’s
actuaries.
Sensitivity of the Group to a change in loss ratios is included in Note 19.
(b) Property and equipment and intangible assets

Management determines the estimated useful lives and residual values of property, equipment and
intangible assets. The estimated useful lives are reviewed annually and the depreciation and
amortisation charge is revised prospectively where useful lives or residual values are subsequently
found to be different from those previously estimated.
Where property and equipment and intangible assets are classified as work in progress as at the year
end, management have assessed that the criteria for recognition outlined in IAS 16 Property, plant and
equipment have been fulfilled.
(c) Provisions
The Group measures provisions at management’s best estimate of expenditure required to settle the
obligation at the Balance Sheet date. Estimates are made taking account of information available and
different possible outcomes. Provisions are recognised only when a liability is deemed to be probable;
determination of which requires judgement.
(d) Revenue from insurance broking activities

Revenue from insurance broking activities is measured at the fair value of the income receivable and
is recognised on completion of the associated service. The revenue recognised makes allowance for
anticipated cancellations of contracts by customers.
(e) Deferred income tax assets

Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that
taxable profit will be available against which losses can be utilised. Management judgement is
required to determine the amount of deferred income tax assets that can be recognised, based upon
the likely timing and level of future taxable profits together with future tax planning strategies. The
tax rates used are the rates currently anticipated to be effective at the date the taxable profits would
169
be recognised. These are subject to any changes in tax laws and rates effective at that date in the
jurisdiction the taxable profits are incurred.
(f) Fair values

Wherever possible fair values are obtained from quoted prices of identical assets in active markets or,
if not available, from other directly observable prices, or inputs that are indirectly derived from them.
Where it is necessary to estimate fair value, because there is no appropriate observable market data,
such as in the valuation of property, and where the item is material, the Group makes use of
professional external valuation experts to support management’s decision making.
The fair value of the Senior Secured Notes issued in the prior year and the preference shares issued
on the 8 January 2014 were estimated using their issue price. Subsequent fair values are based on
listed values where available, or estimated based on original issue price where not available.
The fair value of HIG’s Consolidated Balance Sheet as at the date of its acquisition on 8 January 2014
and consideration paid contained estimates around the timing and amount of future cash outflows on
claims liabilities and future cash inflows on reinsurance assets. These estimates were based on
actuarial projections. It also contained estimates of the fair value of certain intangible assets, some of
which were valued using an income based approach based on management’s forecasts.
(g) Impairment of assets

Changes in the circumstances or expectations of future performance of an individual asset may be an
indicator that the asset is impaired, requiring the book value to be written down to its recoverable
amount. Estimating the recoverable amount requires a high degree of judgement and may to a large
extent depend upon the selection of key assumptions about future events. In estimating impairment of
the Group’s assets, the fair value less costs to sell or value in use of an asset, or of its CGU where this
cannot be assessed for an individual asset, is assessed and where this is significantly below its carrying
amount, impairment is deemed to exist. Where a CGU requires an impairment, first the carrying
amount of any goodwill allocated to the CGU is impaired, before the other assets of the CGU are
impaired on a pro-rata basis of their carrying amount.
The determination of the recoverable amount of an asset requires judgement as does the assessment
of what is deemed to be significant.
(h) Impairment of goodwill

Goodwill generated on the acquisition of HIG is held on the Consolidated Balance sheet. Goodwill is
assessed annually for impairment by management through the use of estimates of future performance.
The calculations of future performance involve a variety of estimates such as future cash inflows and
outflows and choice of discount rate. This is discussed further in Note 17.
4. Insurance contracts risk management

A key risk from operating in the general insurance industry is the exposure to insurance risk arising from
underwriting general insurance contracts. The insurance contracts transfer risk to the insurer by
indemnifying the customers against adverse effects arising from the occurrence of specified uncertain future
events. The risk is that the actual amount of claims to be paid in relation to contracts will be different from
the amount estimated at the time a product was designed and priced. The Group is exposed to this risk
because the price for a contract must be set before the losses relating to the product are known. Hence the
insurance business involves inherent uncertainty.
A fundamental part of the overall risk management strategy is the effective governance and management of
the risks that impact the amount, timing and uncertainty of cash flows arising from insurance contracts.
170
(a) Risk management objectives and policies for mitigating insurance risk
The insurance activities primarily involve the underwriting of risks and the management of claims.
A disciplined approach to risk management is adopted in accordance with strict protocols. It is
believed that this approach provides the greatest long term likelihood of being able to meet the
objectives of all stakeholders; including customers, lenders and shareholders. The risk management
activities can be broadly separated into underwriting (acceptance and pricing of risk), reinsurance,
claims management and investment management. The objective of these risk management functions
is to enhance the longer term financial performance of the overall insurance operations.
(i) Acceptance of risk

The Board of Directors of the Group’s underwriting subsidiary, AICL, approves the
underwriting and pricing policy, and reviews and monitors the underwriting and pricing
standards and strategies. The Group’s underwriting strategy is focused on a sophisticated
data-driven approach to pricing and underwriting through:
• collating and analysing comprehensive data from customers;
• tight control over the pricing guidelines in order to target profitable business lines; and
• fast and flexible responsiveness to market trends.
The underwriting of large numbers of uncorrelated individual risks reduces the variability in
overall claims experience. Management information systems are maintained that provide
up-to-date, reliable data on the risks to which the business is exposed at any point in time.
Efforts are made, including the use of plain language policy terms, to ensure there is no
misalignment between what customers perceive will be paid when a policy is initially entered
and what is actually paid when a claim is made.
(ii) Pricing
Statistical models are used which combine historical and projected data to calculate premiums
and monitor claims patterns. The data used includes historical pricing and claims analysis as
well as current developments in the market.
All data used is subject to rigorous verification and reconciliation processes. The models
incorporate consideration of market conditions.
(iii) Reinsurance contracts

Reinsurance contracts are used both to limit exposure to claims pervasively across the business
and specifically to limit exposure to large single claims and accumulation of claims that arise
from the same event or the accumulation of similar events.
The Group uses excess of loss reinsurance arrangements and the effect of such arrangements
is that the Group should not suffer total insurance losses of more than a threshold amount gross
of quota share recoveries on any individual claim, including PPOs. For periods ended
31 December 2014 and prior, this threshold amount was £0.5 million. Effective from 1 January
2015, this amount was increased to £1.0 million. These arrangements have been in place for
policies incepted by the HIG Group since 1 January 2010 and for 2014 were subject to an
aggregate deductible of £5.0 million.
The Group also has a 50% quota share arrangement in place. This has been applicable on all
policies incepted by AICL since 1 July 2010.
As part of reinsurance contract risk management, reinsurers’ credit ratings are monitored to
control exposure to reinsurance counterparty default.
171
(iv) Claims management
Initial claim determination is managed by claims handlers with the requisite degree of
experience and competence with the assistance, where appropriate, of a loss adjuster or other
party with specialist knowledge.
It is the Group’s policy to respond to and settle claims quickly whenever possible and to pay
claims fairly, based on customers’ full entitlement in line with consumer and regulator
expectations.
When PPOs are awarded as a result of a claim under an insurance contract, there is a risk that
these may be of a high value and for a long term. As such management perform detailed
reviews of expected PPOs throughout the claims process to identify the expected ultimate value
of such claims as early as possible and reserve appropriately. PPOs are not discounted for
accounting purposes, as discounting is implicit within the reserving calculations for each
expected PPO.
(v) Investment management

Assets and liabilities are managed so as to effectively match the expected pattern of claims
payments with the assets that are held to back insurance liabilities. The investment mix of cash
and marketable securities is managed to ensure the Group has the ability to meet expected and
unexpected requirements for cash. This is discussed further in Note 20.
(b) Terms and conditions of insurance contracts

The terms and conditions attached to insurance contracts affect the level of insurance risk accepted.
The majority of direct insurance contracts written are entered into on a standard form basis. Insurance
contracts are entered into on an annual basis and at the time of entering into a contract certain terms
and conditions are negotiable or, in the case of renewals, renegotiable. There are no embedded
derivatives that are separately recognised from a host insurance contract.
(c) Concentrations of insurance risk

The exposure to concentrations of insurance risk is mitigated by a portfolio which is diversified across
many different individual customers living in different parts of the UK. Therefore, the Directors do
not believe there are significant concentrations of insurance risk.
(d) Credit risk

The management of credit risk arising out of insurance contracts is explained in Note 20.
5. Segmental reporting
(a) Segments
The Group has two reportable segments, as described below. These segments represent the principal
split of business that is regularly reported to the Group’s chief operating decision maker in line with
IFRS 8 Operating Segments.
Advantage
The “Advantage” segment comprises the underwriting business based in Gibraltar, which includes
AICL and its subsidiary Conquest House Limited. The principal activity of AICL is the underwriting
of general insurance, predominantly UK motor insurance. AICL also underwrote accident insurance
during the year ended 31 December 2013 and earlier. AICL ceased underwriting accident insurance
in 2013 and this class of business is now in run off with only immaterial premium, claims and
commission adjustments recorded in the year ended 31 December 2014. From 1 January 2015 AICL
also underwrote UK home policies under a co-insurance arrangement. Conquest House Limited owns
property which is utilised by the Group.
172
Hastings
The principal activity of the “Hastings” segment is the provision of insurance broking services to the
car, van, motorbike and home markets in the UK through the UK trading subsidiary HISL, much of
which is underwritten by the Group. Broking services are provided on behalf of a panel of insurers
including both Advantage and external third party insurers.
Corporate
The “Corporate” segment includes the results of various entities, whose primary activities are as
holding and finance companies.
Removal of trading for the period ended 16 April 2012

This adjustment removes the Advantage result for the period ending 16 April 2012, prior to its
acquisition by the HIG Group on 17 April 2012.
Removal of trading for the period ended 7 January 2014

This adjustment removes the HIG Group’s result for the first seven days of trading during 2014, prior
to its acquisition by the HIG(H) Group on 8 January 2014.
Consolidation adjustments
“Consolidation adjustments” includes the consolidation adjustments required to consolidate the
Group’s results under IFRS and therefore also include the elimination of intercompany revenue
between operating segments. Sales between segments are carried out at arm’s length.
Operating profit
Operating profit represents profit before taxation expense, interest expense, amortisation and
depreciation, revaluation of property, certain non-trading costs and the effects of accounting for
business combinations.
Operational depreciation and amortisation

Operational depreciation and amortisation refers to the charge based on the underlying internal cost
of the assets. It does not include amortisation of intangible assets identified and fair valued upon the
acquisitions as described in Note 34. This amortisation is included within the line item “accounting
for business combinations”.
173
(b) Segment reporting
The tables below present the Group’s results by reportable segment:
Removal of
trading for
Advantage Hastings the period Corporate
Year ended Year ended ending Year ended
HIG year ended 31 December 31 December 16 April 31 December Consolidation
31 December 2012 2012 2012 2012 2012 adjustments Group
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net earned premiums ......... 151.3 – (41.3) – (1.0) 109.0
Other revenue..................... 31.6 143.6 (5.9) – (48.0) 121.3
income................................ 4.4 0.4 (1.1) – – 3.7
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net revenue ........................ 187.3 144.0 (48.3) – (49.0) 234.0
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net insurance claims.......... (118.3) – 34.7 – 0.5 (83.1)
Operating expenses ............ (49.0) (100.6) 8.1 (0.5) 56.8 (85.2)
Amortisation and
depreciation........................ (2.6) (2.3) 0.4 – 2.1 (2.4)
Finance costs...................... (0.6) – 0.5 (5.4) (1.9) (7.4)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Segment profit/(loss)
before tax ........................... 16.8 41.1 (4.6) (5.9) 8.5 55.9
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Taxation expense................ (16.4)
–––––––
Group profit after tax ......... 39.5
Taxation expense................
–––––––
16.4
Interest expense/(income) .. 0.3 (0.4) 6.9
and amortisation................. 2.6 2.3 2.4
Revaluation of property ..... 1.5 – –
Accounting for business.....
combinations ...................... – – 5.1
––––––– ––––––– –––––––
Operating profit.................. 21.2 43.0 70.3
––––––– ––––––– –––––––
174
Advantage Hastings Corporate
Year ended Year ended Year ended
HIG year ended 31 December 31 December 31 December Consolidation
31 December 2013 2013 2013 2013 adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Net earned premiums 171.2 – – (6.2) 165.0
Other revenue ............ 38.7 173.4 – (38.9) 173.2
Investment and
interest income .......... 3.7 0.5 – – 4.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Net revenue................ 213.6 173.9 – (45.1) 342.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Net insurance claims . (128.5) – – 0.8 (127.7)
Operating expenses.... (59.1) (131.5) (8.8) 53.5 (145.9)
Amortisation and
depreciation ............... (0.1) (3.1) – (0.1) (3.3)
Finance costs ............. (1.1) – (7.6) (0.8) (9.5)
–––––––– –––––––– –––––––– –––––––– ––––––––
before tax ................... 24.8 39.3 (16.4) 8.3 56.0
–––––––– –––––––– –––––––– –––––––– ––––––––
Taxation expense ....... (14.9)
––––––––
Group profit after tax. 41.1
Taxation expense .......

––––––––
14.9
Interest expense/
(income)..................... 0.3 (0.4) 8.2
Operational
depreciation
and amortisation ........ 0.1 3.1 3.3
Non-trading costs ...... 8.2 9.8 22.6
–––––––– –––––––– ––––––––
Operating profit ......... 33.4 51.8 90.1
–––––––– –––––––– Corporate
––––––––
Four months
ended
31 December Consolidation
HIG(H) four months ended 31 December 2013 2013 adjustments Group
£m £m £m
–––––––– –––––––– ––––––––
Net earned premiums ................................................ – – –
Other revenue ............................................................ – – –
Investment and interest income ................................ – – –
–––––––– –––––––– ––––––––
Net revenue ............................................................... – – –
–––––––– –––––––– ––––––––
Net insurance claims ................................................. – – –
Operating expenses ................................................... – – –
Amortisation and depreciation.................................. – – –
Finance costs............................................................. (6.5) – (6.5)
–––––––– –––––––– ––––––––
Segment profit/(loss)................................................. (6.5) – (6.5)
–––––––– –––––––– ––––––––
Finance costs............................................................. 6.5
––––––––
Operating profit......................................................... –
––––––––
175
Memorandum Advantage Hastings Corporate
aggregate HIG(H) Year ended Year ended Year ended
year ended 31 December 31 December 31 December Consolidation
(unaudited) £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Net earned
premiums ................... 171.2 – – (6.2) 165.0
Other revenue ............ 38.7 173.4 – (38.9) 173.2
Investment and
interest income .......... 3.7 0.5 – – 4.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Net revenue................ 213.6 173.9 – (45.1) 342.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Net insurance
claims......................... (128.5) – – 0.8 (127.7)
Operating expenses.... (59.1) (131.5) (8.8) 53.5 (145.9)
Amortisation and
depreciation ............... (0.1) (3.1) – (0.1) (3.3)
Finance costs ............. (1.1) – (14.1) (0.8) (16.0)
–––––––– –––––––– –––––––– –––––––– ––––––––
before tax ................... 24.8 39.3 (22.9) 8.3 49.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Taxation expense ....... (14.9)
––––––––
Group profit after tax. 34.6
Taxation expense .......

––––––––
14.9
Interest expense/
(income)..................... 0.3 (0.4) 14.7
Operational
depreciation and
amortisation ............... 0.1 3.1 3.3
Non-trading costs ...... 8.2 9.8 22.6
–––––––– –––––––– ––––––––
Operating profit ......... 33.4 51.8 90.1
–––––––– –––––––– ––––––––
176
seven days seven days seven days
ended ended ended
HIG seven days ended 7 January 7 January 7 January Consolidation
7 January 2014 2014 2014 2014 adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Net earned premiums .................................. 3.6 – – (0.2) 3.4
Other revenue .............................................. 1.0 3.0 – (0.1) 3.9
Investment and interest income .................. 0.1
–––––––– –––––––– – –
–––––––– ––––––––– 0.1
––––––––
Net revenue ................................................ 4.7
–––––––– 3.0
–––––––– –
–––––––– (0.3)
–––––––– 7.4
––––––––
Net insurance claims .................................. (2.7) – – – (2.7)
Operating expenses .................................... (1.3) (2.5) 0.1 1.2 (2.5)
Amortisation and depreciation .................... – (0.1) – – (0.1)
Finance costs .............................................. ––––––––– ––––––––– (0.2)
–––––––– ––––––––– (0.2)
––––––––
Segment profit/(loss) before tax.................. –––––––– 0.7 0.4
–––––––– (0.1)
–––––––– 0.9
–––––––– 1.9
––––––––
Taxation expense ........................................ (0.4)
––––––––
Group profit after tax .................................. 1.5
Taxation expense ........................................

––––––––
0.4
Interest expense/(income) .......................... – – 0.2
Operational depreciation and amortisation ––––––––– 0.1
–––––––– 0.1
––––––––
Operating profit .......................................... 0.7 0.5 2.2
–––––––– –––––––– ––––––––
177
Removal
of trading
Advantage Hastings for the period Corporate
Year ended Year ended ending Year ended
HIG(H) year ended 31 December 31 December 7 January 31 December Consolidation
31 December 2014 2014 2014 2014 2014 adjustments Group
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net earned premiums ........... 212.7 – (3.4) – (10.2) 199.1
Other revenue ....................... 34.9 205.2 (3.9) – (56.0) 180.2
income .................................. 3.5 0.3 (0.1) – – 3.7
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net revenue........................... 251.1 205.5 (7.4) – (66.2) 383.0
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net insurance claims ............ (152.6) – 2.7 – 0.2 (149.7)
Operating expenses............... (60.5) (136.0) 2.5 (10.9) 66.7 (138.2)
Amortisation and
depreciation .......................... (0.1) (3.6) 0.1 – (24.3) (27.9)
Finance costs ........................ (0.7) – 0.2 (66.9) (1.2) (68.6)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
before tax .............................. 37.2 65.9 (1.9) (77.8) (24.8) (1.4)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Taxation expense .................. (7.0)
–––––––
Group (loss) after tax ........... (8.4)
Taxation expense ..................

–––––––
7.0
Interest expense/(income)..... 0.1 – 67.7
and amortisation ................... 0.1 3.6 3.8
Non-trading costs ................. – 0.4 9.7
Accounting for business
combinations......................... – – 25.9
––––––– ––––––– –––––––
Operating profit .................... 37.4 69.9 105.7
––––––– ––––––– –––––––
178
Memorandum Advantage Hastings Corporate
aggregate HIG(H) Year ended Year ended Year ended
year ended 31 December 31 December 31 December Consolidation
(unaudited) £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Net earned
premiums .................... 212.7 – – (10.2) 202.5
Other revenue.............. 34.9 205.2 – (56.0) 184.1
Investment and
interest income............ 3.5 0.3 – – 3.8
–––––––– –––––––– –––––––– –––––––– ––––––––
Net revenue................. 251.1 205.5 – (66.2) 390.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Net insurance
claims.......................... (152.6) – – 0.2 (152.4)
Operating expenses..... (60.5) (136.0) (10.9) 66.7 (140.7)
Amortisation and
depreciation ................ (0.1) (3.6) – (24.3) (28.0)
Finance costs .............. (0.7) – (66.9) (1.2) (68.8)
–––––––– –––––––– –––––––– –––––––– ––––––––
Segment profit/
(loss) before tax .......... 37.2 65.9 (77.8) (24.8) 0.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Taxation expense ........ (7.4)
––––––––
Group (loss) after tax.. (6.9)
Taxation expense ........

––––––––
7.4
Interest expense/
(income)...................... 0.1 – 67.9
Operational
depreciation and
amortisation ................ 0.1 3.6 3.9
Non-trading costs........ – 0.4 9.7
Accounting for
business
combinations............... – – 23.7
–––––––– –––––––– ––––––––
Operating profit .......... 37.4 69.9 105.7
–––––––– –––––––– ––––––––
179
Advantage Hastings Removal of Corporate
6 months 6 months trading for the 6 months
ended ended period ending ended
HIG(H) six months 30 June 30 June 7 January 30 June Consolidation
ended 30 June 2014 2014 2014 2014 2014 adjustments Group
(unaudited) £m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net earned premiums ........... 98.3 – (3.4) – (4.7) 90.2
Other revenue ....................... 18.4 101.9 (3.9) – (33.8) 82.6
income .................................. 1.6 0.1 (0.1) – 0.2 1.8
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net revenue........................... 118.3 102.0 (7.4) – (38.3) 174.6
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Net insurance claims ............ (73.4) – 2.7 – 0.1 (70.6)
Operating expenses............... (30.9) (66.3) 2.5 (10.1) 37.9 (66.9)
Amortisation and
depreciation .......................... – (1.6) 0.1 – (12.7) (14.2)
Finance costs ........................ (0.3) – 0.2 (33.0) (0.6) (33.7)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
before tax .............................. 13.7 34.1 (1.9) (43.1) (13.6) (10.8)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Taxation expense .................. (3.5)
–––––––
Group (loss) after tax ........... (14.3)
Taxation expense ..................

–––––––
3.5
Interest expense/(income)..... 0.1 (0.1) 33.4
and amortisation ................... – 1.6 1.7
Non-trading costs ................. – 0.4 9.7
Accounting for business
combinations......................... – – 15.8
––––––– ––––––– –––––––
Operating profit .................... 13.8 36.0 49.8
––––––– ––––––– –––––––
180
6 months 6 months 6 months
ended ended ended
HIG(H) six months 30 June 30 June 30 June Consolidation
ended 30 June 2015 2015 2015 2015 adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Net earned premiums.. 125.7 – – (7.7) 118.0
Other revenue.............. 12.4 114.9 – (25.7) 101.6
Investment and
interest income............ 2.9 0.1 – – 3.0
–––––––– –––––––– –––––––– –––––––– ––––––––
Net revenue................. 141.0 115.0 – (33.4) 222.6
–––––––– –––––––– –––––––– –––––––– ––––––––
Net insurance claims .. (86.8) – – – (86.8)
Other operating
expenses...................... (37.1) (74.4) (1.1) 36.1 (76.5)
Amortisation and
depreciation ................ – (2.3) – (11.5) (13.8)
Finance costs .............. (0.2) – (37.3) 1.3 (36.2)
–––––––– –––––––– –––––––– –––––––– ––––––––
Segment profit
before tax .................... 16.9 38.3 (38.4) (7.5) 9.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Taxation expense ........ (4.5)
––––––––
Group profit after tax.. 4.8
Taxation expense ........

––––––––
4.5
Interest expense/
(income)...................... – – 35.8
Operational
depreciation and
amortisation ................ – 2.3 2.4
Non-trading costs........ 0.1 – 0.3
Accounting for
business
combinations............... – – 11.4
–––––––– –––––––– ––––––––
Operating profit .......... 17.0 40.6 59.2
–––––––– –––––––– ––––––––
181
(c) Segment assets and liabilities
The identifiable segment assets and liabilities as at each period end date are presented in the tables
below:
Consolidation
HIG as at 31 December 2012 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
––––––– ––––––– ––––––– ––––––– –––––––
Property and equipment .................. 1.9 3.6 – 3.7 9.2
Investments(1) ................................... 3.7 – – (3.7) –
Intangible assets .............................. 10.5 3.5 – 0.4 14.4
Goodwill.......................................... – 1.9 – 26.6 28.5
Investments in associates and
subsidiaries...................................... – 4.0 82.5 (86.2) 0.3
Deferred income tax asset............... – 1.2 – 1.3 2.5
Loans receivable.............................. 4.4 – – 0.1 4.5
Reinsurance assets........................... 231.5 – – – 231.5
Prepayments .................................... – 0.9 – – 0.9
Insurance and other receivables ...... 159.7 134.3 2.2 (150.4) 145.8
Financial assets ............................... 140.0 – – – 140.0
Cash and cash equivalents............... 60.4 42.3 0.1 – 102.8
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment assets .............. 612.1 191.7 84.8 (208.2) 680.4
––––––– ––––––– ––––––– ––––––– –––––––
Loans and borrowings..................... – – 82.5 – 82.5
Insurance contract liabilities ........... 468.0 – – (5.7) 462.3
Insurance and other payables.......... 75.4 172.6 2.1 (155.2) 94.9
Provisions ........................................ – 1.5 – – 1.5
Deferred income tax liability .......... – – – 4.9 4.9
Current tax liabilities....................... – 8.5 – – 8.5
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment liabilities......... 543.4 182.6 84.6 (156.0) 654.6
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment net assets/
(liabilities) ....................................... 68.7 9.1 0.2 (52.2) 25.8
––––––– ––––––– ––––––– ––––––– –––––––
Group net assets .............................. 25.8
–––––––
Note:
(1) Advantage’s investments comprises the property Conquest House. This is classified as property and equipment by the
Group (see Note 15).
182
Consolidation
HIG as at 31 December 2013 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
––––––– ––––––– ––––––– ––––––– –––––––
Property and equipment ................... 1.7 4.8 – 3.6 10.1
Investments(1) .................................... 3.7 – – (3.7) –
Intangible assets ............................... 10.5 5.5 – 3.4 19.4
Goodwill........................................... – 1.9 – 26.6 28.5
Investments in subsidiaries............... – – 82.5 (82.5) –
Deferred income tax asset................ – 1.0 – 1.2 2.2
Reinsurance assets............................ 343.5 – – – 343.5
Prepayments ..................................... – 0.9 0.1 – 1.0
Insurance and other receivables ....... 219.1 171.8 0.8 (201.3) 190.4
Financial assets ................................ 172.1 – – – 172.1
Cash and cash equivalents................ 41.9 68.7 0.2 – 110.8
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment assets ............... 792.5 254.6 83.6 (252.7) 878.0
––––––– ––––––– ––––––– ––––––– –––––––
Loans and borrowings ...................... – – 83.8 – 83.8
Insurance contract liabilities ............ 598.4 – – (7.5) 590.9
Insurance and other payables ........... 101.0 233.3 9.2 (206.4) 137.1
Provisions ......................................... – 0.9 – – 0.9
Deferred income tax liability ........... – – – 5.6 5.6
Current tax liabilities........................ 2.9 1.8 – – 4.7
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment liabilities.......... 702.3 236.0 93.0 (208.3) 823.0
––––––– ––––––– ––––––– ––––––– –––––––
Reportable segment net assets/
(liabilities) ........................................ 90.2 18.6 (9.4) (44.4) 55.0
––––––– ––––––– ––––––– ––––––– –––––––
Group net assets ............................... 55.0
–––––––
Note:
Consolidation
HIG(H) as at 31 December 2013 Corporate adjustments Group
£m £m £m
––––––– ––––––– –––––––
Cash in escrow .......................................................... 415.0 – 415.0
––––––– ––––––– –––––––
Reportable segment assets ........................................ 415.0 – 415.0
––––––– ––––––– –––––––
Senior Secured Notes................................................ 401.7 – 401.7
Insurance and other payables.................................... 19.8 – 19.8
––––––– ––––––– –––––––
Reportable segment liabilities................................... 421.5 – 421.5
––––––– ––––––– –––––––
Reportable segment net assets/(liabilities)................ (6.5) – (6.5)
––––––– ––––––– –––––––
Group net assets ........................................................ (6.5)
–––––––
183
Memorandum aggregate
HIG(H) as at Consolidation
31 December 2013 (unaudited) Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Property and equipment ................ 1.7 4.8 – 3.6 10.1
Investments(1) ................................. 3.7 – – (3.7) –
Intangible assets ............................ 10.5 5.5 – 3.4 19.4
Goodwill ....................................... – 1.9 – 26.6 28.5
Investments in subsidiaries ........... – – 82.5 (82.5) –
Deferred income tax asset............. – 1.0 – 1.2 2.2
Reinsurance assets ........................ 343.5 – – – 343.5
Prepayments .................................. – 0.9 0.1 – 1.0
Insurance and other receivables .... 219.1 171.8 0.8 (201.3) 190.4
Financial assets ............................. 172.1 – – – 172.1
Cash in escrow .............................. – – 415.0 – 415.0
Cash and cash equivalents ............ 41.9 68.7 0.2 – 110.8
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment assets ............ 792.5 254.6 498.6 (252.7) 1,293.0
–––––––– –––––––– –––––––– –––––––– ––––––––
Senior Secured Notes.................... – – 401.7 – 401.7
Loans and borrowings................... – – 83.8 – 83.8
Insurance contract liabilities ......... 598.4 – – (7.5) 590.9
Insurance and other payables........ 101.0 233.3 29.0 (206.4) 156.9
Provisions...................................... – 0.9 – – 0.9
Deferred income tax liability ........ – – – 5.6 5.6
Current tax liabilities .................... 2.9 1.8 – – 4.7
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment liabilities....... 702.3 236.0 514.5 (208.3) 1,244.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment
net assets/(liabilities)..................... 90.2 18.6 (15.9) (44.4) 48.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Group net assets ............................ 48.5
––––––––
184
Consolidation
HIG as at 7 January 2014 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Property and equipment ......................... 1.7 4.8 – 3.6 10.1
Investments(1) .......................................... 3.7 – – (3.7) –
Intangible assets ..................................... 10.4 5.5 – 3.6 19.5
Goodwill................................................. – 1.9 – 26.6 28.5
Investments in subsidiaries .................... – – 82.5 (82.5) –
Deferred income tax asset...................... – 1.0 – 1.2 2.2
Reinsurance assets.................................. 344.4 – – – 344.4
Prepayments ........................................... 1.2 1.0 – – 2.2
Insurance and other receivables ............. 219.9 173.1 0.8 (201.9) 191.9
Financial assets ...................................... 171.5 – – – 171.5
Cash and cash equivalents...................... 42.5 68.4 0.9 – 111.8
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment assets ..................... 795.3 255.7 84.2 (253.1) 882.1
–––––––– –––––––– –––––––– –––––––– ––––––––
Consolidation
HIG as at 7 January 2014 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Loans and borrowings............................ – – 83.8 – 83.8
Insurance contract liabilities .................. 599.6 – – (7.5) 592.1
Insurance and other payables ................. 101.9 217.7 9.3 (190.7) 138.2
Provisions ............................................... – 0.9 – – 0.9
Deferred income tax liability ................. – – – 5.6 5.6
Current tax liabilities.............................. 2.9 2.1 – – 5.0
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment liabilities................ 704.4 220.7 93.1 (192.6) 825.6
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment
net assets/(liabilities).............................. 90.9 35.0 (8.9) (60.5) 56.5
–––––––– –––––––– –––––––– –––––––– ––––––––
Group net liabilities................................ 56.5
––––––––
Note:
Consolidation
HIG(H) as at 31 December 2014 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Property and equipment ......................... 1.7 5.3 – 3.1 10.1
Investments(1) .......................................... 3.7 – – (3.7) –
Intangible assets ..................................... 15.1 10.5 – 94.4 120.0
Goodwill................................................. – 1.9 – 468.1 470.0
Investments in subsidiaries .................... – – 1,601.7 (1,601.7) –
Deferred income tax asset...................... – 0.8 – 4.8 5.6
Reinsurance assets.................................. 428.1 – – (1.6) 426.5
Prepayments ........................................... – 1.1 0.1 – 1.2
Insurance and other receivables ............. 204.3 166.0 6.6 (164.3) 212.6
Financial assets at fair value
through profit or loss.............................. 224.8 – – 0.1 224.9
Cash and cash equivalents...................... 64.2 38.4 20.8 – 123.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment assets ..................... 941.9 224.0 1,629.2 (1,200.8) 1,594.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Preference shares.................................... – – 319.3 – 319.3
Senior Secured Notes............................. – – 403.6 – 403.6
Insurance contract liabilities .................. 717.1 – – (12.4) 704.7
Insurance and other payables ................. 113.6 197.5 5.8 (170.0) 146.9
Provisions ............................................... – 0.3 – – 0.3
Deferred income tax liability ................. – – – 27.0 27.0
Current tax liabilities.............................. 3.1 3.3 – – 6.4
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment liabilities................ 833.8 201.1 728.7 (155.4) 1,608.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment
net assets/(liabilities).............................. 108.1 22.9 900.5 (1,045.4) (13.9)
–––––––– –––––––– –––––––– –––––––– ––––––––
Group net liabilities................................ (13.9)
––––––––
Note:
185
Consolidation
HIG(H) as at 30 June 2015 Advantage Hastings Corporate adjustments Group
£m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– ––––––––
Property and equipment .............................. 1.7 7.6 – 3.1 12.4
Investments(1) .............................................. 3.7 – – (3.7) –
Intangible assets .......................................... 18.0 20.2 – 82.8 121.0
Goodwill...................................................... – 1.9 – 468.1 470.0
Investments in subsidiaries ........................ – – 1,605.1 (1,605.1) –
Deferred income tax asset .......................... – 0.9 – 2.0 2.9
Reinsurance assets ...................................... 472.4 – – (1.2) 471.2
Prepayments ................................................ 0.1 2.6 2.6 0.1 5.4
Insurance and other receivables .................. 221.1 186.1 15.2 (188.4) 234.0
Financial assets .......................................... 264.1 – – – 264.1
Cash and cash equivalents .......................... 48.8 53.1 23.3 – 125.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment assets .......................... 1,029.9 272.4 1,646.2 (1,242.3) 1,706.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Preference shares ........................................ – – 338.4 – 338.4
Senior Secured Notes .................................. – – 404.6 – 404.6
Insurance contract liabilities ...................... 799.6 – – (13.9) 785.7
Insurance and other payables ...................... 107.5 233.9 13.2 (194.3) 160.3
Deferred income tax liability ...................... – – – 22.9 22.9
Current tax liabilities .................................. – 4.4 – (0.1) 4.3
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment liabilities .................... 907.1 238.3 756.2 (185.4) 1,716.2
–––––––– –––––––– –––––––– –––––––– ––––––––
Reportable segment net assets/(liabilities).. 122.8 34.1 890.0 (1,056.9) (10.0)
–––––––– –––––––– –––––––– –––––––– ––––––––
Group net liabilities .................................... (10.0)
––––––––
Note:
6. Insurance premiums
HIG Group year ended
31 December 2012
Reinsurers’
Gross share Net
£m £m £m
–––––––– –––––––– ––––––––
Written premiums ............................................................................................. 263.5 (146.3) 117.2
Unearned premium brought forward ................................................................ – – –
Unearned premiums acquired ........................................................................... 161.2 (85.6) 75.6
Unearned premiums carried forward ................................................................ (187.2) 103.4 (83.8)
–––––––– –––––––– ––––––––
Change in the unearned premiums reserve ....................................................... (26.0) 17.8 (8.2)
–––––––– –––––––– ––––––––
Total earned premiums...................................................................................... 237.5 (128.5) 109.0
–––––––– –––––––– ––––––––
HIG(H) Group year
HIG Group year ended HIG(H) Group four months ended 31 December 2013
31 December 2013 ended 31 December 2013 (unaudited)
Reinsurers’ Reinsurers’ Reinsurers’
Gross share Net Gross share Net Gross share Net
£m £m £m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Written premiums ............................... 407.2 (232.7) 174.5 – – – 407.2 (232.7) 174.5
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Unearned premium brought forward .. 187.2 (103.4) 83.8 – – – 187.2 (103.4) 83.8
Unearned premiums carried forward.. (214.8) 121.5 (93.3) – – – (214.8) 121.5 (93.3)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Change in the unearned
premiums reserve................................ (27.6) 18.1 (9.5) – – – (27.6) 18.1 (9.5)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total earned premiums ....................... 379.6 (214.6) 165.0 – – – 379.6 (214.6) 165.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
186
HIG(H) Group year
HIG Group seven days ended HIG(H) Group year ended ended 31 December 2014
7 January 2014 31 December 2014 (unaudited)
£m £m £m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Written premiums ............................... 8.0 (4.5) 3.5 475.4 (254.1) 221.3 483.4 (258.6) 224.8
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Unearned premium brought forward .. 214.8 (121.5) 93.3 – – – – – –
Unearned premiums acquired ............. – – – 214.8 (121.5) 93.3 214.8 (121.5) 93.3
Unearned premiums carried forward.. (214.9) 121.5 (93.4) (248.8) 133.3 (115.5) (248.9) 133.3 (115.6)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Change in the unearned
premiums reserve................................ (0.1) – (0.1) (34.0) 11.8 (22.2) (34.1) 11.8 (22.3)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total earned premiums ....................... 7.9 (4.5) 3.4 441.4 (242.3) 199.1 449.3 (246.8) 202.5
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG(H) Group
six months ended HIG(H) Group six months
30 June 2014 (unaudited) ended 30 June 2015
Reinsurers’ Reinsurers’
Gross share Net Gross share Net
£m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Written premiums .................................................................................. 219.3 (117.2) 102.1 282.7 (148.6) 134.1
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Unearned premium brought forward ..................................................... – – – 248.8 (133.3) 115.5
Unearned premiums acquired ................................................................ 214.8 (121.5) 93.3 – – –
Unearned premiums carried forward..................................................... (229.7) 124.5 (105.2) (279.3) 147.7 (131.6)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Change in the unearned premiums reserve............................................ (14.9) 3.0 (11.9) (30.5) 14.4 (16.1)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total earned premiums .......................................................................... 204.4 (114.2) 90.2 252.2 (134.2) 118.0
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
7. Other revenue
Memorandum Memorandum
HIG(H) aggregate aggregate HIG(H) HIG(H)
Group HIG(H) HIG Group HIG(H) HIG(H) Group Group
HIG Group HIG Group Four months Group Seven days Group Group Six months Six months
Year ended Year ended ended Year ended ended Year ended Year ended ended ended
31 December 31 December 31 December 31 December 7 January 31 December 31 December 30 June 30 June
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
Fees and commission .......... 28.6 50.2 – 50.2 1.1 61.6 62.7 30.1 34.9
Ancillaries ........................... 29.5 33.7 – 33.7 0.7 37.4 38.1 17.4 21.6
Premium finance interest..... 35.3 41.4 – 41.4 0.9 48.5 49.4 22.6 28.1
Reinsurance commissions ... 11.0 37.3 – 37.3 1.0 23.0 24.0 7.8 12.3
Other income....................... 16.9 10.6 – 10.6 0.2 9.7 9.9 4.7 4.7
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
Total other revenue.............. 121.3 173.2 – 173.2 3.9 180.2 184.1 82.6 101.6
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
187
8. Investment and interest income
HIG(H) aggregate aggregate HIG(H) HIG(H)
Group HIG(H) HIG Group HIG(H) HIG(H) Group Group
HIG Group HIG Group Four months Group Seven days Group Group Six months Six months
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
Net fair value gains on
FVTPL financial assets ....... 2.5 2.8 – 2.8 0.1 2.2 2.3 1.6 1.0
Other interest receivable...... 1.2 1.4 – 1.4 – 1.5 1.5 0.2 2.0
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
Total investment and
interest income .................... 3.7 4.2 – 4.2 0.1 3.7 3.8 1.8 3.0
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– –––––––––– –––––––– ––––––––
9. Claims incurred
HIG Group year ended
31 December 2012
Reinsurers’
Gross share Net
£m £m £m
–––––––– –––––––– ––––––––
Claims paid.......................................................................................... (124.6) 62.7 (61.9)
Change in the provision for claims ..................................................... (55.2) 33.6 (21.6)
Salvage and subrogation reserve movement ....................................... 1.9 – 1.9
Other claims income............................................................................ (1.5) – (1.5)
–––––––– –––––––– ––––––––
Total claims incurred ........................................................................... (179.4) 96.3 (83.1)
Current period......................................................................................
––––––––
(167.0)
––––––––
83.2
––––––––
(83.8)
Prior periods ........................................................................................ (12.4) 13.1 0.7
–––––––– –––––––– ––––––––
Total claims incurred ........................................................................... (179.4) 96.3 (83.1)
–––––––– –––––––– ––––––––
HIG(H) Group year
HIG Group year ended HIG(H) Group four months ended 31 December 2013
31 December 2013 ended 31 December 2013 (unaudited)
£m £m £m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Claims paid................................ (228.3) 108.1 (120.2) – – – (228.3) 108.1 (120.2)
Change in the provision
for claims ................................... (105.5) 92.4 (13.1) – – – (105.5) 92.4 (13.1)
Salvage and subrogation
reserve movement...................... 4.8 (3.5) 1.3 – – – 4.8 (3.5) 1.3
Other claims income.................. 4.3 – 4.3 – – – 4.3 – 4.3
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................. (324.7) 197.0 (127.7) – – – (324.7) 197.0 (127.7)
Current period............................
––––––––
(305.6)
––––––––
169.9
––––––––
(135.7)
––––––––
–
––––––––
–
––––––––
–
––––––––
(305.6)
––––––––
169.9
––––––––
(135.7)
Prior periods .............................. (19.1) 27.1 8.0 – – – (19.1) 27.1 8.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................. (324.7) 197.0 (127.7)
––––––––– ––––––––– ––––––––– ––––––––
(324.7) 197.0 (127.7)
–––––––– –––––––– –––––––– –––––––– ––––––––
188
HIG(H) Group year
HIG Group seven days ended HIG(H) Group year ended ended 31 December 2014
7 January 2014 31 December 2014 (unaudited)
£m £m £m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Claims paid................................ (5.1) 2.4 (2.7) (286.7) 137.8 (148.9) (291.8) 140.2 (151.6)
Change in the provision
for claims ................................... (1.2) 2.0 0.8 (80.9) 70.9 (10.0) (82.1) 72.9 (9.2)
reserve movement...................... 0.2 (1.1) (0.9) 6.8 (3.5) 3.3 7.0 (4.6) 2.4
Other claims income.................. 0.1 – 0.1 5.9 – 5.9 6.0 – 6.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................. (6.0) 3.3 (2.7) (354.9) 205.2 (149.7) (360.9) 208.5 (152.4)
Current period............................
––––––––
(6.2)
––––––––
3.2
–––––––– ––––––––
(3.0) (362.4)
––––––––
202.1
–––––––– ––––––––
(160.3) (368.6)
––––––––
205.3
––––––––
(163.3)
Prior periods .............................. 0.2 0.1 0.3 7.5 3.1 10.6 7.7 3.2 10.9
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................. (6.0) 3.3 (2.7) (354.9) 205.2 (149.7) (360.9) 208.5 (152.4)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG(H) Group
six months ended HIG(H) Group six months
30 June 2014 (unaudited) ended 30 June 2015
£m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Claims paid................................................................................ (135.9) 64.7 (71.2) (159.6) 87.4 (72.2)
Change in the provision for claims ........................................... (70.0) 65.6 (4.4) (49.9) 29.9 (20.0)
Salvage and subrogation reserve movement ............................. 4.4 (1.9) 2.5 1.0 0.7 1.7
Other claims income ................................................................. 2.5 – 2.5 3.7 – 3.7
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................................................................. (199.0) 128.4 (70.6) (204.8) 118.0 (86.8)
Current period ...........................................................................

––––––––
(174.3)
––––––––
97.4
–––––––– –––––––– ––––––––
(76.9) (208.1) 113.8
––––––––
(94.3)
Prior periods .............................................................................. (24.7) 31.0 6.3 3.3 4.2 7.5
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total claims incurred ................................................................. (199.0) 128.4 (70.6) (204.8) 118.0 (86.8)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
10. Other operating expenses
HIG(H) aggregate HIG aggregate HIG(H) HIG(H)
HIG HIG Group HIG(H) Group HIG(H) HIG(H) Group Group
Group Group Four months Group Seven days Group Group Six months Six months
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Profit/(loss) before taxation
is stated after charging
Depreciation (Note 15)........ 1.8 2.0 – 2.0 0.1 1.4 1.5 0.7 1.2
Amortisation of intangible
assets (Note 16)................... 0.6 1.3 – 1.3 – 26.5 26.5 13.5 12.6
Buildings operating lease
rentals .................................. 0.5 0.5 – 0.5 – 0.9 0.9 0.5 0.8
Auditor’s remuneration
– Audit of the Group’s
consolidated accounts
and the Company’s
subsidiaries ...................... 0.2 0.2 – 0.2 – 0.4 0.4 0.2 0.1
– Other assurance services .. – 0.1 – 0.1 – – – – –
– Corporate finance services – 0.1 – 0.1 – – – – –
Employee benefits ............... 40.5 52.0 – 52.0 0.9 51.4 52.3 24.1 26.1
Restructuring and
transaction costs .................. 0.1 21.8 – 21.8 – 9.7 9.7 9.7 0.3
Other administration and
distribution costs ................. 27.0 39.9 – 39.9 0.8 50.1 50.9 24.0 28.2
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total other operating
expenses .............................. 70.7 117.9 – 117.9 1.8 140.4 142.2 72.7 69.3
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
189
11. Employee benefits
Included in operating expenses are the following:
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Salaries ................................ 36.2 46.9 – 46.9 0.7 46.1 46.8 21.5 23.5
Social security charges........ 3.7 4.3 – 4.3 0.1 4.3 4.4 2.1 2.1
Defined contribution
pension plan costs ............... 0.6 0.8 – 0.8 0.1 1.0 1.1 0.5 0.5
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total employee benefit
expense................................ 40.5 52.0 – 52.0 0.9 51.4 52.3 24.1 26.1
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Key management personnel compensation
Key management personnel compensation comprised the following:
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Short-term employee
benefits ................................ 2.4 3.6 – 3.6 0.1 5.4 5.5 2.4 2.0
Post-employment benefits ... 0.1 0.1 – 0.1 – 0.1 0.1 0.1 0.1
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total key management
personnel compensation.... 2.5 3.7 – 3.7 0.1 5.5 5.6 2.5 2.1
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Staff numbers (including Directors)
Average numbers of full-time equivalent staff during the period were as follows:
2012 2013 2013 2013 2014 2014 2014 2014 2015
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Customer facing staff .......... 962 1,138 – 1,138 1,214 1,230 1,230 1,223 1,327
Support staff ........................ 349 395 – 395 415 456 456 429 466
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total staff numbers ........... 1,311 1,533 – 1,533 1,629 1,686 1,686 1,652 1,793
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Retirement benefit obligations
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately
from those of the Group in an independently administered fund. The pension cost charge for the year
represents contributions payable by the Group to the fund.
190
Directors
The directors’ emoluments were as follows:
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Aggregate emoluments........ 1.0 2.2 – 2.2 – 0.2 0.2 0.1 0.1
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Highest paid director
The highest paid director’s emoluments were as follows:
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total amount of
emoluments ......................... 0.4 0.5 – 0.5 – 0.2 0.2 0.1 0.1
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
12. Finance costs
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Interest on Senior Secured
Notes.................................... – – 6.1 6.1 – 31.1 31.1 15.5 15.6
Non-cash amortisation of
Senior Secured Notes .......... – – 0.4 0.4 – 1.9 1.9 1.0 1.0
Preference share dividends
accrued ................................ – – – – – 33.7 33.7 16.3 19.1
Other interest expense ......... 7.4 9.5 – 9.5 0.2 1.9 2.1 0.9 0.5
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total finance costs ............. 7.4 9.5 6.5 16.0 0.2 68.6 68.8 33.7 36.2
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Non-cash amortisation of the Senior Secured Notes comprises amortisation of the Senior Secured Notes’
directly attributable transaction costs and the discount on issue of the Senior Secured Floating Rate Notes,
recognised under the effective interest method.
Details of the dividends incurred on the preference shares, recognised under the effective interest method,
are described in Note 25.
191
13. Taxation
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Current tax
Corporation tax on profits
for the year .......................... 10.0 14.0 – 14.0 0.4 10.1 10.5 4.9 5.9
Adjustments for prior years 1.4 (0.1) – (0.1) – 0.4 0.4 – –
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Current tax charge ............... 11.4 13.9 – 13.9 0.4 10.5 10.9 4.9 5.9
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Deferred tax
Deferred taxation movement
relating to temporary
differences ........................... 4.7 1.3 – 1.3 – (3.1) (3.1) (0.9) (1.6)
Impact of change in the
UK tax rate .......................... (0.2) (0.3) – (0.3) – (0.5) (0.5) (0.5) –
Adjustments for prior years 0.5 – – – – 0.1 0.1 – 0.2
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Deferred tax charge ............. 5.0 1.0 – 1.0 – (3.5) (3.5) (1.4) (1.4)
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total tax charge ................... 16.4 14.9 – 14.9 0.4 7.0 7.4 3.5 4.5
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Factors affecting total tax charge are:
2012 2013 2013 2013 2014 2014 2014 2014 2015
£m £m £m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Profit/(loss) before tax......... 55.9 56.0 (6.5) 49.5 1.9 (1.4) 0.5 (10.8) 9.3
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Applicable tax charge/
(credit) at the statutory
tax rate: .............................. – – – – – – – – –
Impact of different tax rates
in foreign jurisdictions ........ 14.3 11.7 (1.5) 10.2 0.4 0.4 0.8 0.4 1.0
Non-taxable income ............ (0.3) (0.5) – (0.5) – (0.3) (0.3) (0.2) (0.4)
Expenses and provisions not
deductible for tax purposes . 0.1 4.2 – 4.2 – 6.8 6.8 3.8 3.7
Impact of change in the UK
tax rate................................. (0.2) (0.4) – (0.4) – (0.5) (0.5) (0.5) –
Adjustment relating to
prior periods ........................ 1.9 (0.1) – (0.1) – 0.5 0.5 – 0.2
Other differences ................. – – – – – – – – –
Deferred income tax not
recognised............................ 0.6 – 1.5 1.5 – 0.1 0.1 – –
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
Total tax charge for the
period as follows ................. 16.4 14.9 – 14.9 0.4 7.0 7.4 3.5 4.5
––––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––– ––––––––– –––––––––
The Jersey Corporation tax rate applicable to the parent company was 0% for six months ended 30 June 2015
(31 December 2012: 0%, 31 December 2013: 0%, 7 January 2014: 0%, 31 December 2014: 0%, 30 June
2014: 0%).
Factors affecting future tax charges

The Finance Act 2013 enacted the reduction in UK corporation tax rate to 21% with effect from April 2014
and 20% from April 2015. It was announced in the July 2015 Budget that the expected future UK corporation
tax rate will be 19% with effect from April 2017 and 18% with effect from April 2018, although the
legislation is yet to be substantially enacted. The Gibraltarian rate of tax has remained at 10% and is expected
to remain constant for the foreseeable future. The Jersey rate of tax is expected to remain constant for the
foreseeable future.
192
Unrecognised deferred income tax assets
Deferred income tax assets of £nil have not been recognised by the Group as at 30 June 2015 in respect of
tax losses (31 December 2012: £0.1 million, 31 December 2013: £1.4 million, 7 January 2014: £1.4 million,
30 June 2014: £1.4 million, 31 December 2014: £1.4 million).
These tax losses do not expire under current tax legislation. Deferred income tax assets have not been
recognised because it is not probable that future taxable profit will be available against which the Group can
utilise the tax losses.
Unrecognised deferred income tax liabilities

At 30 June 2015 there were no deferred income tax liabilities that have not been recognised by the Group
(31 December 2012: £nil, 31 December 2013: £nil, 7 January 2014: £nil, 31 December 2014: £nil).
14. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by
the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased
by the Company and held as treasury shares.
Adjusted basic earnings per share is calculated by dividing the profit attributable to equity holders of the
Company adjusted for the impact of accounting for business combinations, the accrual of preference share
dividends treated as interest and certain non-trading costs by the weighted average number of ordinary shares
in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.
The directors believe this figure provides a better indication of operating performance.
There are no shares with dilutive potential and therefore the basic and adjusted earnings per share equals the
basic and adjusted diluted earnings per share respectively.
193
HIG(H) Group HIG Group HIG(H) Group HIG(H) Group
HIG Group HIG Group Four months Seven days HIG(H) Group Six months Six months
Year ended Year ended ended ended Year ended ended ended
31 December 31 December 31 December 7 January 31 December 30 June 30 June
2012 2013 2013 2014 2014 2014 2015
(unaudited)
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Profit/(loss) attributable to
owners of the parents in £m...... 39.5 41.1 (6.5) 1.5 (8.4) (14.3) 4.8
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total in £m ............................... 39.5 41.1 (6.5) 1.5 (8.4) (14.3) 4.8
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Basic weighted average number
of ordinary shares in issue ........ 110,516 112,665 2 111,977 142,187,733 138,534,203 145,093,404
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Basic and diluted earnings
per share .................................. £357.41 £364.80 (£3,250,000.00) £13.06 (5.9)p (10.3)p 3.3p
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Profit/(loss) attributable to
owners of the parents in £m...... 39.5 41.1 (6.5) 1.5 (8.4) (14.3) 4.8
Adjusted for
Non-trading costs...................... – 22.6 – – 9.7 9.7 0.3
Preference share dividends accrued – – – – 33.7 16.3 19.1
Shareholder loan and loan notes
interest accrued ......................... 5.4 7.4 – 0.2 – – –
Impact of accounting for business
combinations on finance costs .. 1.5 0.8 – – 0.9 0.6 0.1
Non-operational amortisation ... – – – – 23.8 12.6 11.4
Other effects of accounting for
business combinations .............. 5.1 – – – 2.1 3.2 –
Tax effect of the above
adjusting items .......................... 1.5 (0.6) – – (4.3) (1.9) (2.2)
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Total in £m ............................... 53.0 71.3 (6.5) 1.7 57.5 26.2 33.5
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Basic weighted average number
of ordinary shares in issue ........ 110,516 112,665 2 111,977 142,187,733 138,534,203 145,093,404
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Adjusted basic and diluted
earnings per share................... £479.57 £632.86 (£3,250,000.00) £14.85 40.4p 18.9p 23.1p
–––––––––– –––––––––– –––––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
15. Property and equipment
Property and Fixtures,
leasehold Computer fittings and Work in
Property improvements equipment equipment progress Total
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Cost or Valuation
HIG Group as at 1 January 2012 ...... – 3.5 9.3 3.4 0.7 16.9
Additions through business
combinations ..................................... 5.6 – – – 0.1 5.7
Other additions.................................. – 0.3 0.8 0.2 0.6 1.9
Transfers............................................ – 0.5 – 0.4 (0.9) –
Derecognitions .................................. – (2.3) (4.6) (2.8) (0.1) (9.8)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2012 5.6 2.0 5.5 1.2 0.4 14.7
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Depreciation
HIG Group as at 1 January 2012 ...... – 2.9 7.3 3.1 – 13.3
Charge for the year ........................... – 0.3 1.3 0.2 – 1.8
Derecognitions .................................. – (2.2) (4.6) (2.8) – (9.6)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2012 – 1.0 4.0 0.5 – 5.5
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group net book value at
31 December 2012 ........................... 5.6 1.0 1.5 0.7 0.4 9.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
194
Property and Fixtures,
leasehold Computer fittings and Work in
Property improvements equipment equipment progress Total
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Cost or Valuation
HIG Group as at 1 January 2013 ....... 5.6 2.0 5.5 1.2 0.4 14.7
Other additions ................................... – 0.1 2.3 0.1 0.6 3.1
Transfers ............................................. – – 0.3 – (0.3) –
Derecognitions.................................... – (0.1) – – – (0.1)
Revaluations ....................................... (0.2) – – – – (0.2)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2013 . 5.4 2.0 8.1 1.3 0.7 17.5
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Depreciation
HIG Group as at 1 January 2013 ....... – 1.0 4.0 0.5 – 5.5
Charge for the year............................. 0.1 0.3 1.4 0.2 – 2.0
Derecognitions.................................... – (0.1) – – – (0.1)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2013 . 0.1 1.2 5.4 0.7 – 7.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
31 December 2013 ............................ 5.3 0.8 2.7 0.6 0.7 10.1
Cost or Valuation
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Depreciation
HIG Group as at 1 January 2014 ....... 0.1 1.2 5.4 0.7 – 7.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at 7 January 2014 ....... 0.1 1.2 5.4 0.7 – 7.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
7 January 2014.................................. 5.3 0.8 2.7 0.6 0.7 10.1
Cost or Valuation
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 1 January 2014.. – – – – – –
combinations ...................................... 5.3 0.9 1.7 0.6 0.7 9.2
Other additions ................................... – 0.6 1.2 0.5 – 2.3
Transfers ............................................. – 0.6 – – (0.6) –
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 31 December
2014 .................................................... 5.3 2.1 2.9 1.1 0.1 11.5
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Depreciation
HIG(H) Group as at 1 January 2014 ... – – – – – –
Charge for the year............................. 0.1 0.2 0.8 0.3 – 1.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 31 December
2014 .................................................... 0.1 0.2 0.8 0.3 – 1.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group net book value at
31 December 2014 ............................ 5.2 1.9 2.1 0.8 0.1 10.1
Cost or Valuation
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 1 January 2015... 5.3 2.1 2.9 1.1 0.1 11.5
Additions ............................................ – 0.2 0.5 0.2 2.6 3.5
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 30 June 2015 ..... 5.3 2.3 3.4 1.3 2.7 15.0
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Depreciation
HIG(H) Group as at 1 January 2015.. 0.1 0.2 0.8 0.3 – 1.4
Charge for the year............................. – 0.2 0.9 0.1 – 1.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 30 June 2015 ..... 0.1 0.4 1.7 0.4 – 2.6
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
30 June 2015...................................... 5.2 1.9 1.7 0.9 2.7 12.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group had no property and equipment as at 31 December 2013.
Additions through business combinations comprise property and equipment acquired upon acquisition of
Advantage Global Holdings Limited (“AGH”) on 17 April 2012 and upon acquisition of HIG on 8 January
195
2014 as described in Note 34. These assets were recognised initially at their fair value upon acquisition and
will be depreciated over their remaining useful lives.
The Group’s property comprises the freehold buildings at The Old Bank, Cannon Lane, Gibraltar and
Conquest House, Bexhill-on-Sea, UK. Property is held at the revalued amount which is assessed annually.
Valuations were carried out by independent valuation experts during 2012 (Conquest House) and during
2013 (The Old Bank). Property is valued using level 3 inputs as per the definitions outlined in Note 20 during
periods when a valuation takes place as well as during periods when no independent external valuation takes
place. In the latest independent valuations, total property was valued at £5.4 million. It is not considered that
the current total value of property is materially different from this valuation. No change in value was
considered necessary during 2014 or in the six months ended 30 June 2015.
The Old Bank was revalued according to the market value that would be attributed to it if it were to be sold
to a willing buyer on an arms-length basis. No change in value was considered necessary during 2014 or in
the six months ended 30 June 2015.
Conquest House was revalued at market value, and given the lack of similar buildings within the local area
from which to determine a potential sale value was valued with reference to the value of leasing a building
of a similar size and with comparable facilities.
If carried at cost, property would be held at £5.2 million (31 December 2012: £5.6 million, 31 December
2013: £5.4 million, 31 December 2014: £5.2 million).
16. Intangible assets

Deferred
acquisition Work in Customer
costs Software progress Brands relationships Total
£m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1 January 2012 ........................................ – 2.1 0.6 – – 2.7
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
combinations (Note 34)........................... – – 0.1 – – 0.1
Additions ................................................. 16.3 0.9 0.6 – – 17.8
Transfers .................................................. – 1.0 (1.0) – – –
Derecognitions......................................... – (0.1) – – – (0.1)
Recognition of acquisition costs in
statement of profit or loss........................ (5.5) – – – – (5.5)
Amortisation for the year ........................ – (0.6) – – – (0.6)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
31 December 2012 ................................. 10.8 3.3 0.3 – – 14.4

–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1 January 2013 ........................................ 10.8 3.3 0.3 – – 14.4
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Additions ................................................. 29.7 1.3 1.9 – – 32.9
Transfers .................................................. – 0.3 (0.3) – – –
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
31 December 2013 ................................. 13.9 3.6 1.9 – – 19.4

–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1 January 2014 ........................................ 13.9 3.6 1.9 – – 19.4
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Additions ................................................. 0.2 0.2 – – – 0.4
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
7 January 2014....................................... 14.0 3.6 1.9 – – 19.5
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
196
Deferred
acquisition Work in Customer
costs Software progress Brands relationships Total
£m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1 January 2014 ........................................ – – – – – –
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Additions through business combinations
(Note 34) ................................................. 2.5 45.2 1.5 13.0 64.0 126.2
Additions ................................................. 32.7 1.8 5.3 – – 39.8
Transfers .................................................. – 0.2 (0.2) – – –
Amortisation for the year ........................ – (12.3) – (1.6) (12.6) (26.5)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
31 December 2014 ................................. 15.7 34.9 6.6 11.4 51.4 120.0
HIG(H) Group net book value a

–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
1 January 2015 ........................................ 15.7 34.9 6.6 11.4 51.4 120.0
Additions .................................................
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
20.0 0.3 10.7 – – 31.0
Transfers .................................................. – 0.5 (0.5) – – –
Amortisation for the year ........................ – (5.4) – (0.8) (6.4) (12.6)
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
30 June 2015........................................... 18.3 30.3 16.8 10.6 45.0 121.0
–––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
HIG(H) Group had no intangibles as at 31 December 2013.
Work in progress consists of software that is being produced for a specific purpose but is not yet able to
generate economic benefits.
The software intangible assets include internally generated assets which are carried at £1.5 million
(31 December 2012: £1.4 million, 31 December 2013: £2.2 million, 7 January 2014: £2.2 million,
Software held at 30 June 2015 has a remaining amortisation period of up to 6 years (31 December 2012: up
to 6 years, 31 December 2013: up to 6 years, 7 January 2014: up to 6 years, 31 December 2014: up to
4 years).
Additions through business combinations in the year comprise intangible assets acquired upon acquisition
of AGH on 17 April 2012 and upon acquisition of HIG on 8 January 2014. These assets are recognised
initially at their fair value upon acquisition and amortised over their remaining useful lives.
17. Goodwill
Goodwill at the period end was allocated as follows:
Cash Generating Unit (CGU) Total

Renew Hastings Advantage Goodwill
Cost £m £m £m £m
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 1 January 2012 ................. 1.9 – – 1.9
–––––––– –––––––– –––––––– ––––––––
Additions ...................................................... – 5.0 21.6 26.6
Reclassification ............................................ (1.9) 1.9 – –
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2012........ – 6.9 21.6 28.5
–––––––– –––––––– –––––––– ––––––––
197
Cash Generating Unit (CGU) Total
Renew Hastings Advantage Goodwill
Cost £m £m £m £m
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 1 January 2013 ................. – 6.9 21.6 28.5
–––––––– –––––––– –––––––– ––––––––
Additions ...................................................... – – – –
Reclassification ............................................ – – – –
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2013........ – 6.9 21.6 28.5
HIG Group as at 1 January 2014 .................

––––––––
–
––––––––
6.9
––––––––
21.6
––––––––
28.5
–––––––– –––––––– –––––––– ––––––––
Additions ...................................................... – – – –
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 7 January 2014 ............. – 6.9 21.6 28.5
HIG(H) Group as at 1 January 2014............

––––––––
–
–––––––––
––––––––
–
–––––––––
–––––––– –––––––– –––––––– ––––––––
Additions ...................................................... – 374.8 95.2 470.0
–––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 31 December 2014... – 374.8 95.2 470.0
HIG(H) Group as at 1 January 2015............

––––––––
–
––––––––
374.8
––––––––
95.2
––––––––
470.0
–––––––– –––––––– –––––––– ––––––––
Additions ...................................................... – – – –
–––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 30 June 2015 ........... – 374.8 95.2 470.0
–––––––– –––––––– –––––––– ––––––––
HIG(H) Group had no goodwill as at 31 December 2013.
Goodwill brought forward at 1 January 2012 relates to the acquisition of Renew Insurance Services Limited
“RISL”. On 31 July 2010 the entire trade assets RISL, a subsidiary of the Group were transferred into HISL
at net book value. As a result the goodwill previously recognised on the acquisition of RISL was reassigned
to the value of the Renew CGU within HISL.
Additional Goodwill of £26.6 million in the year ended 31 December 2012 arose from the acquisition of
AGH on 17 April 2012, the calculation of which is in Note 34. Goodwill from this acquisition was allocated
between the Hastings (which includes HISL) and Advantage (which includes AGH) cash generating units
(“CGUs”). The apportionment was conducted on the basis of expected benefits to be derived from the
acquisition.
The goodwill of £470.0 million in year ended 31 December 2014 arose from the acquisition of HIG by the
Group on 8 January 2014, the calculation of which is in Note 34.
Goodwill from this acquisition was allocated between the Group’s two CGUs, Hastings and Advantage. The
apportionment was conducted on the basis of expected benefits to be derived from the acquisition.
The recoverable amount of the two CGUs has been determined based on value-in-use calculations. These
calculations use pre-tax cash flow projections based on financial budgets approved by management covering
a three year period discounted to the Group’s weighted average cost of capital (9.41%). Management
determine financial budgets based on past performance and their expectations for market and business
development.
Cash flows beyond the three year period are extrapolated using the forecast long-term economic growth rate
of 2%. The growth rate does not exceed the long-term average past growth rate for the insurance business in
which the CGUs operate. As the recoverable amount of the CGUs are all higher than the cumulative total of
allocated goodwill and the carrying value of the CGUs assets, the allocated goodwill is not deemed to be
impaired.
198
The key assumptions used in the value in use calculations are those regarding growth rates and expected
changes in pricing and expenses incurred during the period. Management estimates growth rates and changes
in pricing based on past practices and expected future changes in the market. The headroom above the
goodwill carrying value is significant and as such no impairment was recognised in the period.
18. Deferred income tax

(a) Deferred income tax asset
Memorandum
aggregate
Group as at Group as at Group as at Group as at Group as at Group as at Group as at
31 December 31 December 31 December 31 December 7 January 31 December 30 June
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Brought forward at start
of period................................ 2.0 2.5 – 2.5 2.2 – 5.6
Fair value acquisition............ 3.0 – – – – 5.0 –
Movement in period.............. (2.5) (0.3) – (0.3) – 0.6 (2.7)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Carried forward at end
of period................................ 2.5 2.2 – 2.2 2.2 5.6 2.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Accelerated capital
allowances............................. 1.0 1.0 – 1.0 1.0 0.8 0.8
Insurance provisions ............. 0.3 0.2 – 0.2 0.2 0.5 0.3
Deferred acquisition costs .... 1.0 1.0 – 1.0 1.0 4.3 1.8
Tax losses carried forward.... 0.2 – – – – – –
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Deferred tax asset at end
of period................................ 2.5 2.2 – 2.2 2.2 5.6 2.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
(b) Deferred income tax liability
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Brought forward at start
of period................................ – 4.9 – 4.9 5.6 – 27.0
Fair value acquisition............ 2.4 – – – – 29.9 –
Movement in period.............. 2.5 0.7 – 0.7 – (2.9) (4.1)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Carried forward at end
of period................................ 4.9 5.6 – 5.6 5.6 27.0 22.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Intangibles ............................ – – – – – 17.6 15.4
Deferred acquisition costs .... 2.5 2.9 – 2.9 2.9 5.8 3.7
Insurance provisions ............. 2.4 2.7 – 2.7 2.7 3.6 3.8
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Deferred tax liability at end
of period................................ 4.9 5.6 – 5.6 5.6 27.0 22.9
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
199
(c) Movement in deferred income tax balances during the year
Balance as at Fair value Recognised Balance as at
1 January adjustments on in profit 31 December
HIG Group 2012 acquisition(1) or loss 2012
£m £m £m £m
––––––––––– ––––––––––– ––––––––––– –––––––––––
Deferred income tax asset
Accelerated capital allowances ...... 1.2 – (0.2) 1.0
Provisions.......................................
0.5 – (0.5) –
Insurance provisions ...................... – 0.4 (0.1) 0.3
Deferred acquisition costs.............. – 1.2 (0.2) 1.0
Tax losses carried forward ............. 0.3 1.4 (1.5) 0.2
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total deferred income tax asset ..... 2.0 3.0 (2.5) 2.5
Deferred income tax liability

––––––––––– ––––––––––– ––––––––––– –––––––––––
Revaluation of property ................. – 0.4 (0.4) –
Deferred acquisition costs.............. – – 2.5 2.5
Insurance provisions ...................... – 2.0 0.4 2.4
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total deferred income tax liability ... – 2.4 2.5 4.9
(1)
––––––––––– ––––––––––– ––––––––––– –––––––––––
These adjustments reflect the deferred tax effects of accounting for the acquisition of AGH on 17 April 2012 (Note 34).
Balance as at Recognised Balance as at

1 January in profit 31 December
HIG Group 2013 or loss 2013
£m £m £m
––––––––––– ––––––––––– –––––––––––
Accelerated capital allowances............................... 1.0 – 1.0
Insurance provisions ............................................... 0.3 (0.1) 0.2
Deferred acquisition costs....................................... 1.0 – 1.0
Tax losses carried forward ...................................... 0.2 (0.2) –
––––––––––– ––––––––––– –––––––––––
Total deferred income tax asset .............................. 2.5 (0.3) 2.2
––––––––––– ––––––––––– –––––––––––
Deferred acquisition costs....................................... 2.5 0.4 2.9
Insurance provisions ............................................... 2.4 0.3 2.7
––––––––––– ––––––––––– –––––––––––
Total deferred income tax liability.......................... 4.9 0.7 5.6
––––––––––– ––––––––––– –––––––––––
1 January in profit 7 January
HIG Group 2014 or loss 2014
£m £m £m
––––––––––– ––––––––––– –––––––––––
Insurance provisions ............................................... 0.2 – 0.2
Tax losses carried forward ...................................... – – –
––––––––––– ––––––––––– –––––––––––
Total deferred income tax asset .............................. 2.2 – 2.2
––––––––––– ––––––––––– –––––––––––
Insurance provisions ............................................... 2.7 – 2.7
––––––––––– ––––––––––– –––––––––––
Total deferred income tax liability.......................... 5.6 – 5.6
––––––––––– ––––––––––– –––––––––––
200
Balance as at Fair value Recognised Balance as at
1 January adjustments on in profit 31 December
HIG(H) Group 2014 acquisition(1) or loss 2014
£m £m £m £m
––––––––––– ––––––––––– ––––––––––– –––––––––––
Accelerated capital allowances ...... – 1.0 (0.2) 0.8
Insurance provisions ...................... – 0.5 – 0.5
Deferred acquisition costs.............. – 3.5 0.8 4.3
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total deferred income tax asset ..... – 5.0 0.6 5.6

––––––––––– ––––––––––– ––––––––––– –––––––––––
Intangibles...................................... – 22.6 (5.0) 17.6
Deferred acquisition costs.............. – 2.9 2.9 5.8
Insurance provisions ...................... – 4.4 (0.8) 3.6
––––––––––– ––––––––––– ––––––––––– –––––––––––
Total deferred income tax liability ... – 29.9 (2.9) 27.0
(1)
––––––––––– ––––––––––– ––––––––––– –––––––––––
These adjustments reflect the deferred tax effects of accounting for the acquisition of HIG on 8 January 2014 (Note 34).

1 January in profit 30 June
HIG(H) Group 2015 or loss 2015
£m £m £m
––––––––––– ––––––––––– –––––––––––
Insurance provisions ............................................... 0.5 (0.2) 0.3
Deferred acquisition costs....................................... 4.3 (2.5) 1.8
–––––––– –––––––– ––––––––
Total deferred income tax asset .............................. 5.6 (2.7) 2.9

–––––––– –––––––– ––––––––
Intangibles............................................................... 17.6 (2.2) 15.4
Deferred acquisition costs....................................... 5.8 (2.1) 3.7
Insurance provisions ............................................... 3.6 0.2 3.8
–––––––– –––––––– ––––––––
Total deferred income tax liability..........................
––––––––
27.0
––––––––
(4.1)
––––––––
22.9
19. Reinsurance assets and insurance contract liabilities

(a) Claims development
HIG Group HIG Group
as at 31 December 2012 as at 31 December 2013
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Claims reported and loss
adjustment expensed............................ 206.8 (97.7) 109.1 258.0 (143.8) 114.2
Claims incurred but not reported
(“IBNR”) ............................................. 68.4 (30.4) 38.0 118.2 (78.2) 40.0
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Outstanding claims liabilities .............. 275.2 (128.1) 147.1 376.2 (222.0) 154.2
Unearned premiums reserve................ 187.1 (103.4) 83.7 214.7 (121.5) 93.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total insurance contract liabilities....... 462.3 (231.5) 230.8 590.9 (343.5) 247.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
201
HIG(H) Group
HIG(H) Group as at as at 31 December
31 December 2013 2013 (unaudited)
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Claims reported and loss adjustment
expensed .............................................. – – – 258.0 (143.8) 114.2
(“IBNR”) ............................................. – – – 118.2 (78.2) 40.0
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Outstanding claims liabilities .............. – – – 376.2 (222.0) 154.2
Unearned premiums reserve................ – – – 214.7 (121.5) 93.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total insurance contract liabilities....... – – – 590.9 (343.5) 247.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group HIG(H) Group
as at 7 January 2014 as at 31 December 2014
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Claims reported and loss adjustment
expensed .............................................. 259.5 (144.5) 115.0 334.8 (204.8) 130.0
(“IBNR”) ............................................. 117.8 (78.3) 39.5 121.1 (88.4) 32.7
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Outstanding claims liabilities .............. 377.3 (222.8) 154.5 455.9 (293.2) 162.7
Unearned premiums reserve................ 214.8 (121.6) 93.2 248.8 (133.3) 115.5
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total insurance contract liabilities....... 592.1 (344.4) 247.7 704.7 (426.5) 278.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG(H) Group
as at 30 June 2015
Reinsurers’
Gross share Net
£m £m £m
––––––– ––––––– –––––––
Claims reported and loss adjustment expensed ................................... 381.4 (227.8) 153.6
Claims incurred but not reported (“IBNR”) ........................................ 125.0 (95.7) 29.3
––––––– ––––––– –––––––
Outstanding claims liabilities............................................................... 506.4 (323.5) 182.9
Unearned premiums reserve ................................................................ 279.3 (147.7) 131.6
––––––– ––––––– –––––––
Total insurance contract liabilities ....................................................... 785.7 (471.2) 314.5
––––––– ––––––– –––––––
Given the uncertainty in establishing the outstanding claims liabilities, it is likely that the final
outcome will be different from the original liability established. Claims development refers to the
financial adjustment in the current accounting period relating to claims incurred in previous
accounting periods because of new and more up to date information that has become available and to
reflect changes in inflation.
The net insurance contracts liabilities at 30 June 2015 include £219.3 million which is expected to be
settled after more than twelve months from the reporting date (31 December 2012: £133.8 million,
31 December 2013: £136.2 million, 7 January 2014: £136.3 million, 31 December 2014: £161.8
million) (see Note 20).
202
The following table shows the development of the estimated net outstanding claims liabilities relative
to the current estimates of ultimate claims costs for the most recent five accident periods to date and
all historic periods prior to these (i.e. including accident periods prior to the creation of the Group) as
estimated at each reporting date. The table also shows a reconciliation of the net outstanding claims
liabilities for the same period to the gross outstanding claims liabilities on the Consolidated Balance
Sheet.
12 months to 12 months to 12 months to 12 months to 6 months
December December December December to June
Prior periods 2011 2012 2013 2014 2015 Total
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Development
At end of current period......... 641.7 96.2 108.2 130.1 169.9 97.8 1,243.9
One period earlier .................. 640.9 96.9 111.4 135.1 169.3 – 1,153.6
Two periods earlier................. 637.8 99.4 117.2 140.7 – – 995.1
Three periods earlier .............. 642.3 100.4 119.7 – – – 862.4
Four periods earlier ................ 644.4 99.4 – – – – 743.8
Payments to date .................... (631.0) (90.2) (92.4) (102.5) (115.3) (35.1) (1,066.5)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Net outstanding claims
liabilities................................. 10.7 6.0 15.8 27.6 54.6 62.7 177.4
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Reconciliation
Anticipated salvage
recoveries ............................... 20.8
Reinsurers’ share of salvage... (12.4)
Fair value acquisition
adjustment .............................. (2.9)
Reinsurers’ recoveries............ 323.5
––––––––
Outstanding claims liabilities.. 506.4
––––––––
12 months to 12 months to 12 months to 12 months to
December December December December 6 months to
Prior periods 2011 2012 2013 2014 June 2015 Total
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Development
At end of current period......... 767.2 169.9 249.0 308.6 368.7 211.5 2,074.9
One period earlier .................. 762.8 170.4 250.2 308.8 374.4 – 1,866.6
Two periods earlier................. 753.4 179.1 256.6 310.7 – – 1,499.8
Three periods earlier .............. 750.6 176.3 242.9 – – – 1,169.8
Four periods earlier ................ 740.3 169.1 – – – – 909.4
Payments to date .................... (721.7) (151.9) (195.3) (215.4) (230.6) (70.2) (1,585.1)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Gross outstanding claims
liability ................................... 45.5 18.0 53.7 93.2 138.1 141.3 489.8
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Reconciliation
Anticipated salvage
recoveries ............................... 20.8
Fair value acquisition
adjustment .............................. (4.2)
––––––––
Gross outstanding claims
liability, after salvage &
subrogation recoveries ........... 506.4
––––––––
The 2015 accident period refers to the six month period ended 30 June 2015. The 2014, 2013, and
2012 and 2011 accident period refers to the 12 month period ended 31 December. The prior accident
periods refer to periods from incorporation of the Group’s underwriter (2002) to 31 December 2010.
Conditions and trends that have affected the development of the liabilities in the past may, or may not,
occur in the future, and accordingly, conclusions about future results may not necessarily be derived
from the information presented in the tables above.
Short-tail claims are normally reported soon after the incident and are generally settled within months
following the reported incident. Hence any development on short-tail claims is normally limited to the
period the incident occurred and the following period. For long-tail claims it can be more than a period
203
before a claim is reported and several periods before it is settled, hence the original estimation
involves greater uncertainty and so inherently there is more likely to be greater disparity between the
original and current estimates. It is for these long-tail claims that the development of the outstanding
claims liability generally occurs over a number of periods.
(b) Movements in insurance liabilities and reinsurance assets

HIG Group HIG Group
as at 31 December 2012 as at 31 December 2013
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Outstanding claims liabilities at start
of period ............................................... – – – 275.2 (128.1) 147.1
Acquired through business
combinations (Note 34) ........................ 216.3 (101.8) 114.5 – – –
Claims paid........................................... (126.1) 62.7 (63.4) (228.3) 108.1 (120.2)
Movement in liabilities......................... 185.0 (89.0) 96.0 329.3 (201.9) 127.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total outstanding claims liabilities at
end of period......................................... 275.2 (128.1) 147.1 376.2 (221.9) 154.3
Outstanding unearned premiums

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
reserve at start of period ....................... – – – 187.1 (103.4) 83.7
combinations (Note 34) ........................ 166.6 (91.0) 75.6 – – –
Deferral in period ................................. 263.5 (146.3) 117.2 407.2 (232.8) 174.4
Release in period .................................. (243.0) 133.9 (109.1) (379.6) 214.6 (165.0)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total unearned premiums reserve
at end of period..................................... 187.1 (103.4) 83.7 214.7 (121.6) 93.1
Total insurance contracts liabilities ......

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
462.3 (231.5) 230.8 590.9 (343.5) 247.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
204
HIG(H) Group as at
31 December 2013 (unaudited)
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
of period .............................................. – – – 275.2 (128.1) 147.1
combinations (Note 34)....................... – – – – – –
Claims paid.......................................... – – – (228.3) 108.1 (120.2)
Movement in liabilities........................ – – – 329.3 (201.9) 127.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
end of period........................................ – – – 376.2 (221.9) 154.3

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
reserve at start of period...................... – – – 187.1 (103.4) 83.7
combinations (Note 34)....................... – – – – – –
Deferral in period ................................ – – – 407.2 (232.8) 174.4
Release in period ................................. – – – (379.6) 214.6 (165.0)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total unearned premiums reserve at
end of period........................................ – – – 214.7 (121.6) 93.1
Total insurance contracts liabilities .....

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
– – – 590.9 (343.5) 247.4
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
HIG Group as at HIG(H) Group as at
7 January 2014 31 December 2014
£m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
of period .............................................. 376.2 (221.9) 154.3 – – –
combinations (Note 34)....................... – – – 371.9 (219.6) 152.3
Claims paid.......................................... (5.1) 2.4 (2.7) (286.7) 137.8 (148.9)
Movement in liabilities........................ 6.2 (3.3) 2.9 370.7 (211.4) 159.3
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
end of period........................................ 377.3 (222.8) 154.5 455.9 (293.2) 162.7

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
reserve at start of period...................... 214.7 (121.6) 93.1 – – –
combinations (Note 34)....................... – – – 214.8 (121.6) 93.2
Deferral in period ................................ 8.0 (4.5) 3.5 475.4 (254.0) 221.4
Release in period ................................. (7.9) 4.5 (3.4) (441.4) 242.3 (199.1)
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total unearned premiums reserve at
end of period........................................ 214.8 (121.6) 93.2 248.8 (133.3) 115.5
Total insurance contracts liabilities .....

––––––– ––––––– ––––––– ––––––– ––––––– –––––––
592.1 (344.4) 247.7 704.7 (426.5) 278.2
––––––– ––––––– ––––––– ––––––– ––––––– –––––––
205
HIG(H) Group
as at 30 June 2015
Reinsurers’
Gross share Net
£m £m £m
––––––– ––––––– –––––––
Outstanding claims liabilities at start of period................................... 455.9 (293.2) 162.7
Claims paid .......................................................................................... (159.6) 87.4 (72.2)
Movement in liabilities ........................................................................ 210.1 (117.7) 92.4
––––––– ––––––– –––––––
Total outstanding claims liabilities at end of period............................ 506.4 (323.5) 182.9
Outstanding unearned premiums reserve at start of period .................

––––––– ––––––– –––––––
248.8 (133.3) 115.5
Deferral in period................................................................................. 282.7 (148.6) 134.1
Release in period.................................................................................. (252.2) 134.2 (118.0)
––––––– ––––––– –––––––
Total unearned premiums reserve at end of period ............................. 279.3 (147.7) 131.6
Total insurance contracts liabilities......................................................

––––––– ––––––– –––––––
785.7 (471.2) 314.5
––––––– ––––––– –––––––
Outstanding claims and unearned premiums reserve acquired through business combinations in the
year comprise provisions acquired upon acquisition of AGH on 17 April 2012 and upon acquisition
of HIG on 8 January 2014.
Movement in liabilities comprises changes in prior year claims provisions and the expected cost of
current year claims.
All insurance contracts are annual policies. Therefore the unearned premiums reserve is released
within the next 12 months after the reporting date.
(c) Process for estimating ultimate claims liability

The estimation of claims IBNR is generally subject to a greater degree of uncertainty than the
estimation of the cost of settling claims already notified to the Group, where more information about
the claim event is available.
The estimated cost of claims includes expenses to be incurred in settling claims and a deduction for
the expected value of salvage and other recoveries. The Group takes all reasonable steps to ensure that
it has appropriate information regarding the claims exposures. However, given the uncertainty in
establishing claims provisions, it is likely that the final outcome will prove to be different from the
original liability established.
Claims provided for in the IBNR reserve may not be reported to the insurer until after the event giving
rise to the claim has happened. Classes of business where the IBNR proportion of the total reserve is
high will typically display greater variations between the initial estimates and the final outcomes
because of the greater degree of difficulty of estimating those reserves. Classes of business where
claims are typically reported relatively quickly after the claim event will tend to display lower levels
of volatility.
In calculating the estimated cost of unpaid claims the Group uses a variety of estimation techniques,
generally based upon statistical analysis of historic experience, which assumes that the development
pattern of the current claims will be consistent with past experience. Claims are estimated based upon
the best estimates of suitably qualified and experienced actuaries plus a prudent margin.
206
Allowance is made, however, for changes or uncertainties which may create distortions in the
underlying statistics or which might cause the cost of unsettled claims to increase or reduce when
compared with the cost of previously settled claims including:
• changes in processes which might accelerate the development and/or recording of paid or
incurred claims compared with the statistics from previous years;
• changes in the legal environment;
• the effect of inflation;
• changes in the mix of business;
• the impact of large losses; and
• movements in industry benchmarks.
A component of these estimation techniques is usually the estimation of the cost of notified but not
paid claims. In estimating the cost of these, the Group has regard to the claim circumstances as
reported, any information available from loss adjusters and information on the cost of settling claims
with similar characteristics in previous years.
Large claims, including PPOs, impacting each relevant business class are generally assessed
separately, being measured on a case by case basis or projected separately in order to allow for the
possible distortive effect of the development and incidence of these large claims.
Where possible the Group adopts multiple techniques to estimate the required level of claims
liabilities. This assists in giving greater understanding of the trends inherent in the data being
projected. The projections given by the various methodologies also assist in setting the range of
possible outcomes. The most appropriate estimation technique is selected taking into account the
characteristics of the business class and the extent of the development of each accident year.
(d) Sensitivity of recognised amounts to changes in assumptions

The following table sets out the adverse impact on profit after tax and total equity that would result
from a 1% worsening in the loss ratio net of reinsurance used for each underwriting year for which
material amounts remain outstanding.
2003 to
2010 2011 2012 2013 2014 H1 2015 Total
––––– ––––– ––––– ––––– ––––– ––––– –––––
Updated impact of 1% change (£m).... 7.2 1.2 1.4 1.6 1.9 1.1 14.4
–––––– –––––– –––––– –––––– –––––– –––––– ––––––
207
20. Financial instruments, capital management and related disclosures
(a) Financial assets and liabilities
The Group’s financial instruments can be analysed as follows:
(i) At amortised cost

The table below analyses financial instruments carried at amortised cost, by balance sheet
classification.
Memorandum
aggregate HIG HIG(H) HIG(H)
HIG HIG HIG(H) HIG(H) Group Group Group
Group as at Group as at Group as at Group as at as at as at as at
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– ––––––––––– –––––––– –––––––– ––––––––
Financial assets
Loan receivables........... 4.5 – – – – – –
Insurance and other
receivables .................... 145.8 190.4 – 190.4 191.9 212.6 234.0
Cash and cash
equivalents.................... 102.8 110.8 – 110.8 111.8 123.4 125.2
Cash in escrow ............. – – 415.0 415.0 – – –
–––––––– –––––––– –––––––– ––––––––––– –––––––– –––––––– ––––––––
Total financial assets
at amortised cost .......... 253.1 301.2 415.0 716.2 303.7 336.0 359.2
Financial liabilities
–––––––– –––––––– –––––––– ––––––––––– –––––––– –––––––– ––––––––
Senior Secured Notes ... – – 401.7 401.7 – 403.6 404.6
Preference shares.......... – – – – – 319.3 338.4
Loans and borrowings
current .......................... – 83.8 – 83.8 83.8 – –
Loans and borrowings
non-current ................... 82.5 – – – – – –
Insurance and other
payables........................ 94.9 137.1 19.8 156.9 138.2 146.9 160.3
–––––––– –––––––– –––––––– ––––––––––– –––––––– –––––––– ––––––––
Total financial
liabilities at
amortised cost .............. 177.4 220.9 421.5 642.4 222.0 869.8 903.3
–––––––– –––––––– –––––––– ––––––––––– –––––––– –––––––– ––––––––
The fair value of the Senior Secured Notes as at 30 June 2015 was £431.1 million, comprising
£150.0 million of Senior Secured Floating Rate Notes and £281.2 million of Senior Secured
Fixed Rate Notes (31 December 2013: total fair value £426.7 million, comprising
£150.4 million and £276.3 million respectively, 31 December 2014: total fair value
£425.8 million, comprising £149.1 million and £276.7 million respectively). These are valued
using level 1 inputs.
The carrying value of all other financial instruments carried at amortised cost is considered to
be an approximation of fair value.
208
(ii) At fair value
The table below analyses financial assets carried at fair value, by classification.
Memorandum
aggregate HIG
HIG HIG HIG(H) HIG(H) Group HIG(H) HIG(H)
Group as at Group as at Group as at Group as at as at Group as at Group as at
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
Fair value through
profit and loss............... 140.0 172.1 – 172.1 171.5 224.9 72.3
Available for sale.......... – – – – – – 191.8
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
Total financial assets .... 140.0 172.1 – 172.1 171.5 224.9 264.1
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
HIG(H) Group did not hold any financial assets during the four months ended 31 December
2013.
Fair value through profit and loss

The table below analyses financial instruments carried at fair value through profit or loss, by
valuation method. The different levels have been defined as follows:
• level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• level 2: inputs other than quoted prices included within level 1 that are observable for
the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices); and
• level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The level in which financial assets carried at fair value through profit or loss have been
classified in their entirety is determined on the basis of the lowest level input that is significant
to the fair value measurement in its entirety.
Level 1 Level 2 Level 3 Total

£m £m £m £m
––––––– ––––––– ––––––– –––––––
HIG Group as at 1 January 2012 ............... – – – –

––––––– ––––––– ––––––– –––––––
combinations (Note 34) ............................. 10.0 118.6 – 128.6
Increases to the fair value of assets held...... – 2.5 – 2.5
Additions/(disposals) to assets held........... – 8.9 – 8.9
––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2012 ......... 10.0 130.0 – 140.0
HIG Group as at 1 January 2013 ...............

––––––– ––––––– ––––––– –––––––
10.0 130.0 – 140.0
Increases to the fair value of assets held......

––––––– ––––––– ––––––– –––––––
– 2.8 – 2.8
––––––– ––––––– ––––––– –––––––
HIG Group as at 31 December 2013 ......... 10.0 162.1 – 172.1
HIG Group as at 1 January 2014 ...............

––––––– ––––––– ––––––– –––––––
10.0 162.1 – 172.1
Increases to the fair value of assets held ...

––––––– ––––––– ––––––– –––––––
– (0.6) – (0.6)
––––––– ––––––– ––––––– –––––––
HIG Group as at 7 January 2014 ............... 10.0 161.5 – 171.5
––––––– ––––––– ––––––– –––––––
209
£m £m £m £m
––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 1 January 2014 ......... – – – –

––––––– ––––––– ––––––– –––––––
combinations (Note 34) ............................. 10.0 161.5 – 171.5
Increases to the fair value of assets held .... – 2.7 – 2.7
Additions/(disposals) to assets held........... (10.0) 60.7 – 50.7
Transfers between levels............................ 2.9 (2.9) – –
––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 31 December 2014 ... 2.9 222.0 – 224.9
HIG(H) Group as at 1 January 2015 .........

––––––– ––––––– ––––––– –––––––
2.9 222.0 – 224.9
Transfer to available for sale .....................

––––––– ––––––– ––––––– –––––––
(2.9) (158.9) – (161.8)
Decreases to the fair value of assets held.... – (1.0) – (1.0)
––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 30 June 2015 ............ – 72.3 – 72.3
––––––– ––––––– ––––––– –––––––
Additions through business combinations comprise provisions acquired upon acquisition of
AGH on 17 April 2012 and upon acquisition of HIG on 8 January 2014 as described in Note 34.
The table below analyses the Group’s financial assets carried at fair value through profit or loss.
Memorandum
aggregate HIG
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
Debt securities.............. 61.7 68.1 – 68.1 67.6 161.7 –
Fixed income deposits .. 40.9 41.5 – 41.5 41.5 – –
Absolute return funds... 37.4 62.5 – 62.5 62.4 63.2 72.3
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
Total financial assets
at fair value through
profit or loss ................. 140.0 172.1 – 172.1 171.5 224.9 72.3
–––––– –––––– –––––– ––––––––– –––––– –––––– ––––––
Available for sale
On 1 January 2015 the Group reclassified financial assets with a fair value of £161.8 million
as available for sale financial assets due to a significant change in the Group’s investment
strategy and realignment of its investment portfolio.
The table below analyses financial instruments classified as available for sale, by valuation
method. The different levels have been defined as follows:
• level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• level 2: inputs other than quoted prices included within level 1 that are observable for
the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices); and
• level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
210
£m £m £m £m
––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 1 January 2015 ......... – – – –
Transfer from fair value through profit

––––––– ––––––– ––––––– –––––––
and loss ...................................................... 2.9 158.9 – 161.8
Decreases to the fair value of assets held... – (0.9) – (0.9)
Transfers between levels............................ (2.9) 2.9 – –
––––––– ––––––– ––––––– –––––––
HIG(H) Group as at 30 June 2015 ............ – 191.8 – 191.8
––––––– ––––––– ––––––– –––––––
The table below analyses the Group’s financial assets carried as available for sale.
Memorandum
aggregate
Group Group Group Group Group Group Group
as at 31 as at 31 as at 31 as at 31 as at 7 as at 31 as at
December December December December January December 30 June
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Debt securities.............. – – – – – – 191.8
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total financial assets at
available for sale .......... – – – – – – 191.8
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
On 1 January 2015 the expected future cash flows were expected to be £219.8 million with an
effective interest rate of 3.2%. At 30 June 2015 the fair value of these assets held was
£150.7 million. The Group recorded a loss of £0.9 million in the fair value of the financial
assets reclassified as available for sale during the six months ended 30 June 2015. This loss has
been recorded within other comprehensive income and represents the unrealised fair value
movement and not an impairment loss. Had these financial assets not been reclassified from
1 January 2015 then the amount that would have been recognised in profit and loss would have
been £0.1 million.
(b) Objectives, policies and procedures for managing financial risks

The Group is exposed to financial risk through its financial assets and liabilities. The key financial
risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from
liabilities as they fall due. The most important components of financial risk for the Group are credit
risk, market risk and liquidity risk.
Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The main
areas where the Group is exposed to credit risk are reinsurance assets, financial assets, loans
receivable and cash and cash equivalents holdings.
The Group manages its exposure to credit risk on high liquidity investments by establishing
investments only in money market funds with credit ratings of AA or above. The credit ratings of the
Group’s banks are monitored on a regular basis and where there is adverse movement appropriate
action would be determined by the Risk Committee.
Investment funds are assessed by management to ensure that the level of credit risk is acceptable,
ratings are sufficiently strong and that the investment is in line with the Group’s investment policy.
211
The Standard & Poor credit rating of the institutions with which the Group has significant credit risk
were as follows:
Memorandum
aggregate HIG
2012 2013 2013 2013 2014 2014 2015
(unaudited)
Rating £m £m £m £m £m £m £m
–––––– –––––– –––––– –––––– –––––––– –––––– –––––– ––––––
Money market funds...... AAA 30.9 65.3 – 65.3 34.4 74.5 84.2
Bank current .................. A or
account........................... above 71.9 45.5 415.0 460.5 77.4 48.9 41.0
Investment...................... BBB or
funds .............................. above 112.9 126.1 – 126.1 114.6 194.5 241.3
Investment funds............ B to BB 1.9 6.2 – 6.2 17.1 5.1 1.1
Investment funds............ Unrated 25.2 39.8 – 39.8 39.9 25.3 21.7
–––––– –––––– –––––– –––––––– –––––– –––––– ––––––
Total investments ........... 242.8 282.9 415.0 697.9 283.4 348.3 389.3
–––––– –––––– –––––– –––––––– –––––– –––––– ––––––
In addition, the Group has investment guidelines that restrict the amount of the investment portfolio
that can be placed with a single counterparty other than related companies.
Insurance receivables are monitored closely with a view to minimising the collection period of those
items.
The Group’s maximum exposure to credit risk at 30 June 2015 is £1,094.5 million (31 December
2012: £637.0 million, 31 December 2013: £834.0 million, 7 January 2014: £819.6 million,
31 December 2014: £987.4 million), being the carrying value of insurance and other receivables,
reinsurance assets, financial assets, cash in escrow and cash and cash equivalents. The exposure is not
hedged by the use of derivatives or similar instruments. Bad debt expense exposure relates to
policyholder debt charged to profit or loss and the value of past due financial assets, which has not
resulted in impairment in either the current or prior periods. There were no other impairments in either
the current or prior periods.
The Group’s policyholder receivables are an aggregation of small receivables and the Group uses
multiple reinsurance providers to ensure that there are no significant concentrations of reinsurance
risk. Since other assets such as cash and investments are sufficiently diversified the Directors believe
that the Group does not hold any significant concentrations of risk.
Reinsurance contracts are used to manage insurance risk. This does not, however, discharge the
Group’s liability as primary insurer. If a reinsurer fails to pay a claim, the Group remains liable for
the payment to the policyholder. The creditworthiness of reinsurers is considered on a quarterly basis
by reviewing their financial strength prior to finalisation of any contract. In addition, management
assesses the creditworthiness of all reinsurers and intermediaries by reviewing credit grades provided
by rating agencies and other publicly available financial information. The recent payment history of
reinsurers is also used to update the reinsurance purchasing strategy.
The credit ratings of the Group’s reinsurers are analysed below:

Memorandum
aggregate HIG
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
A- or above................................. 231.5 343.5 – 343.5 344.4 426.5 471.2
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Total reinsurance assets.............. 231.5 343.5 – 343.5 344.4 426.5 471.2
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
212
Market risk
The only significant market risk the Group is exposed to is interest rate risk.
Interest rate risk is defined by the Group as the impact of unfavourable movements in market interest
rates which consequently could produce adverse result on the values of financial assets and liabilities,
or the future cash flows from them. This is only applicable to cash and cash equivalents, financial
assets at fair value through profit or loss and the Senior Secured Floating Rate Notes issued by the
Group in the prior period.
Cash and cash equivalents balances are held in current accounts or in short term money market
instruments. These are generally less than 60 days in duration, considerably reducing sensitivity to
significant movements in interest rates compared to longer duration assets. The Directors consider that
the exposure to interest rate risk is immaterial for the purposes of sensitivity analysis.
The carrying value of the Group’s financial assets at fair value through profit or loss are more
susceptible to movements in interest rates. The Senior Secured Floating Rate Notes are also exposed
to movements in interest rates, incurring interest at a rate of LIBOR plus 6%.
For the six months ended 30 June 2015 a 1% increase in interest rates would have a positive impact
of £2.0 million on profit after tax and equity (31 December 2012: £0.9 million adverse impact,
31 December 2013: £0.3 million adverse impact, 31 December 2014: £0.7 million).
The Group does not use derivatives or similar instruments to mitigate exposure therefore a change in
interest rates at the end of the reporting period would not further affect profit or loss.
Liquidity risk
Liquidity risk is the risk that cash may not be available to meet obligations when they fall due.
The Group maintains significant holdings in liquid funds to mitigate this risk. The Group makes use
of regular forecasts to monitor and control its cash flow and working capital requirements.
Financial liabilities are settled in line with agreed payment terms and managed in accordance with
cash availability and inflow expectations. All financial liabilities except the Senior Secured Notes, the
associated interest and an amount due to a reinsurer within insurance and other payables (see Note 27)
are due within 12 months.
The assets backing the insurance contract and other short term liabilities held by the Group are
considered to be more liquid than the related liabilities, thus since the Group is in a net current asset
position, liquidity risk is not considered to be significant.
The servicing of the Senior Secured Notes issued by the Group in the prior period has been funded
by distributions from HIG and its subsidiaries. This will also be the case for future years.
The Directors consider that there are sufficient future cash flows in these subsidiaries to cover the debt
servicing over the coming years.
The Group’s 11.5% preference shares are mandatorily redeemable on the date falling 40 years after
the date of issue, while The Company’s 16.0% preference shares have no mandatory redemption date.
The dividends due on the preference shares are only payable to the extent that there are distributable
profits available and sufficient monies have been received from subsidiary companies, refer to
Note 25.
213
The following table indicates the expected timing of net cash outflows resulting from insurance
contract liabilities and reinsurance assets at the year end:
Carrying Over
amount 0-1 year 1-2 years 2 years
£m £m £m £m
––––––– ––––––– ––––––– –––––––
Outstanding claims liabilities ............... 275.1 115.6 55.0 104.5
Unearned premiums reserve................. 187.2 78.7 37.4 71.1
Less reinsurance assets......................... (231.5) (97.3) (46.3) (87.9)
––––––– ––––––– ––––––– –––––––
Net cash outflows ................................. 230.8 97.0 46.1 87.7

––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– –––––––
HIG Group as at 7 January 2014

––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– –––––––

––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– –––––––

––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– –––––––
––––––– –––––––
The gross contractual undiscounted cash flows of the Senior Secured Notes, including interest
––––––– –––––––
payments, assuming LIBOR stays constant, fall due as follows:
Within Over
£m £m £m £m £m
––––––– ––––––– ––––––– ––––––– –––––––
Senior Secured Notes .......................... 31.9 31.1 93.3 468.2 624.5
––––––– ––––––– ––––––– ––––––– –––––––
Total ..................................................... 31.9 31.1 93.3 468.2 624.5

––––––– ––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– ––––––– –––––––
Total ..................................................... 31.2 31.2 243.2 287.3 592.9

––––––– ––––––– ––––––– ––––––– –––––––
––––––– ––––––– ––––––– ––––––– –––––––
Total ..................................................... 31.2 31.1 238.3 276.7 577.3
––––––– ––––––– ––––––– ––––––– –––––––
214
Actual cash flows of the Senior Secured Floating Rate Notes will vary to the extent that LIBOR
increases and decreases in these time periods.
The dividends due on the Group’s preference shares are only payable to the extent that there are
distributable profits available and sufficient monies have been received from subsidiary companies,
refer to Note 25. The gross contractual undiscounted cash flows on these therefore fall due as follows:
Within Over
£m £m £m £m £m
––––––– ––––––– ––––––– ––––––– –––––––
Preference shares................................. – – – 319.3 319.3
––––––– ––––––– ––––––– ––––––– –––––––
Total ..................................................... – – – 319.3 319.3
––––––– ––––––– ––––––– ––––––– –––––––
Preference shares................................. – – – 338.4 338.4
––––––– ––––––– ––––––– ––––––– –––––––
Total ..................................................... – – – 338.4 338.4
––––––– ––––––– ––––––– ––––––– –––––––
(c) Objectives, policies and procedures for managing capital
The Group’s capital is primarily made up of share capital (see Note 29), the Senior Secured Notes
issued by the Group in October 2013 and the preference shares issued by the Group on 8 January
2014.
The Directors regularly review the amount of capital of the Group through monitoring of the financial
performance of its subsidiaries. Regular cash flow forecasts are produced to accurately predict when
liabilities will fall due and trends in these forecasts are used to aid the prediction of future cash flows.
The Group’s subsidiary AICL, as an insurance company, is subject to the provisions of the solvency
regulations set by the FSC in Gibraltar. It exceeded the minimum requirements for capital at all times
since AICL has been part of the Group.
The table below shows the minimum required capital for AICL and the regulatory capital held
against it.
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
Regulatory capital held
(‘Admissable Assets’)................. 73.4 104.2 – 104.2 104.4 107.9 122.6
Minimum regulatory capital
(‘Required Minimum Margin’) .. 37.4 37.2 – 37.2 37.9 40.2 47.3
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Excess......................................... 36.0 67.0 – 67.0 66.5 67.7 75.3
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
The Group’s subsidiary HISL, as an insurance intermediary in the UK, is also subject to a minimum
capital requirement under Financial Conduct Authority (“FCA”) rules; it exceeded that minimum
capital requirement at all times during the year.
215
21. Cash in escrow
The cash in escrow balance of £415 million held by HIG(H) as at 31 December 2013 is the cash received
from subscriptions of the Senior Secured Notes issued by the Group on 21 October 2013 which was held in
escrow at the year end.
The proceeds were held in escrow as per the terms of the Senior Secured Notes until the acquisition of HIG
and related transactions described in Note 34 were completed on 8 January 2014, upon which they were
released to the Group.
22. Cash and cash equivalents

Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Cash at bank and in hand .............. 71.9 45.5 – 45.5 77.4 48.9 41.0
Money market funds...................... 30.9 65.3 – 65.3 34.4 74.5 84.2
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total cash and cash equivalents .... 102.8 110.8 – 110.8 111.8
125.2 123.4
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
The carrying amount of cash and cash equivalents presented on the Consolidated Balance Sheet is the same
as that used for the purposes of the Consolidated Statement of Cash Flows as there are no bank overdrafts
used which are repayable upon demand.
Cash and cash equivalents include balances of £7.6 million (31 December 2012: £3.8 million, 31 December
2013: £3.5 million, 7 January 2014: £3.5 million, 31 December 2014: £5.5 million) relating to cash and cash
equivalents held on behalf of other insurers.
23. Investments in associates

Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Investment in associate.................. 0.3 – – – – – –
–––––––– –––––––– –––––––– ––––––––– –––––––– –––––––– ––––––––
Total investments in associates...... 0.3
–––––––– ––––––––– ––––––––– –––––––––– ––––––––– ––––––––– –––––––––
The investment is a software production company which creates mobile based software for use by insurers.
At 30 June 2015 the Group held 23.2% (31 December 2013: 23%, 7 January 2014: 23%, 31 December 2014:
19.2%) of the Company’s ordinary share capital, which had been diluted from 25% as at 31 December 2012.
Within financial statements of the holder of the investment, HISL, the investment in associate has been
accounted for at cost with subsequent impairment reviews carried out.
At 30 June 2013 an impairment review was carried out. This review showed the investment in associate to
have no value for the Group and as such this was impaired by £300,000 to £nil.
216
24. Loans and borrowings
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– ––––––––– –––––––– –––––––– ––––––––
8% Senior Secured Fixed Rate
Notes due 2020.............................. – – 257.9 257.9 – 258.9 259.4
LIBOR + 6% Senior Secured
Floating Rate Notes due 2019....... – – 143.8 143.8 – 144.7 145.2
parties ............................................ 46.9 46.9 – 46.9 46.9 – –
Other loan notes in issue ............... 10.6 10.6 – 10.6 10.6 – –
Loans payable................................ 25.0 26.3 – 26.3 26.3 – –
–––––––– –––––––– –––––––– ––––––––– –––––––– –––––––– ––––––––
Total loans and borrowings ........... 82.5 83.8 401.7 485.5 83.8
404.6 403.6
–––––––– –––––––– –––––––– ––––––––– –––––––– –––––––– ––––––––
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– ––––––––– –––––––– –––––––– ––––––––
Current........................................... – 83.8 – 83.8 83.8 – –
Non-current ................................... 82.5 – 401.7 401.7 – 403.6 404.6
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total loans and borrowings ........... 82.5 83.8 401.7 485.5 83.8
404.6 403.6
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
The Company’s board of directors in April 2012 created £57,500,000 fixed rate secured loan notes repayable
in 2017; issued as partial consideration for the purchase by the Company of the entire issued share capital of
Advantage Global Holdings Limited. The loan notes were subject to 11% interest payable twice yearly in
April and October, with the principle sum for the loan notes being repayable on sale of the Company or out
of funds not otherwise available for distribution.
The Company also sought a further shareholder loan for the sum of £25,000,000 as additional consideration
for the purchase by the Company of the entire issued share capital of Advantage Global Holdings Limited.
The loan was subject to 5% fixed rate interest accrued over the life of the loan and payable in full on 17 April
2017. Similarly this loan was repayable only out of funds not otherwise available for distribution or upon a
sale of the Company.
The transaction in January 2014 triggered all loans and borrowings including accumulated interest to be
repaid in full on 8 January 2014.
On 21 October 2013, the Group issued £266.5 million of Senior Secured Fixed Rate Notes at £266.5 million
and £150.0 million of Senior Secured Floating Rate Notes at £148.5 million in order to fund the acquisition
of HIG on 8 January 2014. Both were denominated in pounds sterling.
The Senior Secured Fixed Rate Notes incur interest at 8% per annum and the Senior Secured Floating Rate
Notes incur interest at LIBOR plus 6% per annum. Interest is accrued in the Consolidated Balance Sheet
using the effective interest method and is recognised in “insurance and other payables”, see Note 27.
On the same date the Group entered into a £20.0 million multi-currency Revolving Credit Facility (the
“Facility”) agreement available from the date of the acquisition of HIG. This was undrawn at 31 December
2013 and 31 December 2014. The Facility is due to expire on the earlier of 8 January 2019, and the date
falling six months prior to the scheduled maturity date of the Senior Secured Notes.
217
The amounts in the table reflect the fair value of the Senior Secured Notes on their issue less any directly
attributable transaction costs, plus subsequent amortisation of the transaction costs and any discount or
premiums calculated using the effective interest method.
25. Preference shares

Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
16.0% preference shares and
accrued dividends .......................... – – – – – 40.5 52.8
11.5% preference shares and
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total preference shares and
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Current........................................... – – – – – – –
Non-current ................................... – – – – – 319.3 338.4
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total preference shares and
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
As part of the Transaction on 8 January 2014, the Group authorised and issued:
• 35,000,000 cumulative redeemable £0.01 preference shares at £1.00 each (the “paid up amount”) with
a fixed dividend rate of 16.0% on the paid up amount, comprising the following:
– 17,228,311 A preference shares;
– 17,228,311 B preference shares; and
– 543,378 C preference shares.
The 16.0% preference shares have no mandatory redemption date, although mandatory redemption is
triggered by certain exit events.
• 250,641,360 cumulative redeemable £0.01 preference shares at £1.00 each, issued in one of the
Company’s subsidiaries, HIG(I), with a fixed dividend rate of 11.50% on the paid up amount,
comprising the following:
– 123,375,067 A preference shares;
– 123,375,067 B preference shares; and
– 3,891,226 C preference shares.
The 11.5% preference shares are mandatorily redeemable on the date falling 40 years after the date
of issue.
218
The preference share dividends are payable annually only when there are distributable profits available and
sufficient monies have been received from subsidiary companies, otherwise the preference dividends are
accrued and accumulate interest at the same rate as the fixed dividend rate on the unpaid dividends.
Redemption of the 16.0% preference shares and of the 11.5% preference shares prior to the mandatory
redemption date is at the option of the issuing company at any time after 6 months following the issue date
for the A and C preference shares, and at any time after 12 months for B preference shares. Upon redemption,
the holders of each preference share will receive the paid up amount and all dividends and late payment
interest due.
26. Insurance and other receivables

Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Insurance receivables .................... 114.6 143.0 – 143.0 159.2 164.8 183.0
recoveries....................................... 11.6 12.8 – 12.8 13.1 19.8 20.9
Reinsurance receivables ................ 12.7 26.6 – 26.6 17.9 16.9 14.8
Interest receivable.......................... 1.7 1.7 – 1.7 1.7 3.4 3.4
Other receivables ........................... 5.2 6.3 – 6.3 – 7.7 11.9
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total insurance and other
receivables ..................................... 145.8 190.4 – 190.4 191.9 212.6 234.0
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
The table below sets out the maturity of insurance receivables between current and overdue as well as an
analysis of any provisions held. The current portion comprises balances that are normally settled within
12 months. Overdue amounts comprise all amounts which remain uncollected after the date by which they
were contractually due to be paid in full. Refer to Note 2(g) for the Group’s accounting policy on impairing
insurance and other receivables.
Insurance
and other Provision for Net trade
receivables impairment receivables
£m £m £m
–––––––– –––––––– ––––––––
Current .................................................................................. 144.6 (0.8) 143.8
Overdue................................................................................. 6.6 (4.6) 2.0
–––––––– –––––––– ––––––––
Total...................................................................................... 151.2 (5.4) 145.8
–––––––– –––––––– ––––––––
Current .................................................................................. 190.0 (1.4) 188.6
Overdue................................................................................. 5.9 (4.1) 1.8
–––––––– –––––––– ––––––––
Total...................................................................................... 195.9 (5.5) 190.4
HIG Group as at 7 January 2014
–––––––– –––––––– ––––––––
Current .................................................................................. 191.5 (1.4) 190.1
Overdue................................................................................. 6.0 (4.2) 1.8
–––––––– –––––––– ––––––––
Total...................................................................................... 197.5 (5.6) 191.9
–––––––– –––––––– ––––––––
Current .................................................................................. 213.0 (0.4) 212.6
Overdue................................................................................. 3.3 (3.3) –
–––––––– –––––––– ––––––––
Total...................................................................................... 216.3 (3.7) 212.6
–––––––– –––––––– ––––––––
219
Insurance
and other Provision for Net trade
receivables impairment receivables
£m £m £m
–––––––– –––––––– ––––––––
Current .................................................................................. 234.1 (0.4) 233.7
Overdue................................................................................. 3.4 (3.1) 0.3
–––––––– –––––––– ––––––––
Total...................................................................................... 237.5 (3.5) 234.0
The HIG(H) group had no insurance and other receivables as at 31 December 2013.
–––––––– –––––––– ––––––––
Movements on the Group’s provision for impairment are as follows:
Memorandum
aggregate
as at 31 as at 31 as at 31 as at 31 as at as at 31 as at
December December December December 7 January December 30 June
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Outstanding provision at start of
period.................................................... 5.9 5.4 – 5.4 5.5 – 3.7
combinations ........................................ – – – – – 5.5 –
Utilised during the period .................... ( 6.1) (4.3) – (4.3) – (4.4) (1.3)
Movement in provision ........................ 5.6 4.4 – 4.4 0.1 2.6 1.1
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total outstanding provision at end of
period.................................................... 5.4 5.5 – 5.5 5.6 3.7 3.5
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Provisions acquired through business combinations in the year comprise provisions acquired upon
acquisition of HIG on 8 January 2014.
27. Insurance and other payables

Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Amounts owed to related parties
(note 34) ............................................... – – 0.8 0.8 – – –
Amounts owed to reinsurers ................ 50.5 68.6 – 68.6 68.7 70.2 70.3
Reinsurers' share of salvage and
subrogation recoveries.......................... 3.3 8.3 – 8.3 8.4 13.0 12.4
Insurance premium tax......................... 5.9 6.7 – 6.7 5.7 7.7 9.3
Accrued interest on Senior Secured
Notes.....................................................
– – 6.1 6.1 – 5.3 5.3
Accrued expenses.................................
14.8 27.5 9.3 36.8 27.6 23.0 27.9
Deferred income...................................
6.8 10.3 – 10.3 11.0 12.6 16.2
Other payables......................................
13.6 15.7 3.6 19.3 16.8 15.1 18.9
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total insurance and other payables ...... 94.9 137.1 19.8 156.9 138.2 146.9 160.3
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
220
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Current.................................................. 94.9 108.0 19.8 127.8 109.1 121.5 143.0
Non-current .......................................... – 29.1 – 29.1 29.1 25.4 17.3
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total insurance and other payables ...... 94.9 137.1 19.8 156.9 138.2 146.9 160.3
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Insurance and other payables are unsecured, non-interest-bearing and are normally settled within 12 months.
The balance has not been discounted because the effect of the time value of money is not material. The
carrying amount of payables is a reasonable approximation of the fair value of the liabilities because of the
short-term nature of the liabilities.
Non-current liabilities relate to the net amount due to the reinsurer Partner Reinsurance Europe Plc, which
is due to be settled within two years.
In May 2015 the Group received a £1.0 million grant from Leicester City Council to support the new office
and resulting jobs that were created in the city by the Group. This grant is being recognised over the three
year qualifying period as the conditional associated salary costs are incurred. At 30 June 2015 £1.0 million
was included within other payables as deferred revenue (31 December 2012: £nil, 31 December 2013: £nil,
31 December 2014: £nil).
28. Provisions
Lease Shareholder Total
commitments Dilapidations loans provisions
£m £m £m £m
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 1 January 2012............ 2.1 0.1 – 2.2
Recognised in the period ........................ – – – –
Utilised in the period .............................. (0.7) – – (0.7)
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2012...... 1.4 0.1 – 1.5
HIG Group as at 1 January 2013............

––––––––
1.4
––––––––
0.1
–––––––––
––––––––
1.5
Recognised in the period ........................ 0.1 – 7.9 8.0
Utilised in the period .............................. (0.7) – (7.9) (8.6)
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 31 December 2013...... 0.8 0.1 – 0.9
HIG Group as at 1 January 2014............

––––––––
0.8
––––––––
0.1
––––––––
–
––––––––
0.9
Utilised in the period .............................. – – – –
–––––––– –––––––– –––––––– ––––––––
HIG Group as at 7 January 2014............ 0.8 0.1 – 0.9
HIG(H) Group as at 1 January 2014 ......

–––––––––
–––––––––
––––––––
–
–––––––––
Acquired through business combinations 0.8 0.1 – 0.9
Utilised in the period .............................. (0.6) – – (0.6)
–––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 31 December 2014 0.2 0.1 – 0.3
HIG(H) Group as at 1 January 2015 ......

––––––––
0.2
––––––––
0.1
––––––––
–
––––––––
0.3
Utilised in the period .............................. (0.2) (0.1) – (0.3)
–––––––– –––––––– –––––––– ––––––––
HIG(H) Group as at 30 June 2015 ......... – – – –
–––––––– –––––––– –––––––– ––––––––
221
HIG(H) Group had no provisions at 31 December 2013.
Provisions acquired through business combinations in the year comprise provisions acquired upon
acquisition of HIG on 8 January 2014.
The above provision for lease commitments relates to a property lease in Manchester which became onerous
when one of the Group’s subsidiaries closed its call centre there. The provision relating to dilapidations was
established by a subsidiary to cover the costs relating to returning the Manchester offices to the condition
agreed with the landlord at the end of the lease.
During the six months ended 30 June 2015 the Manchester lease lapsed and the costs were paid in respect
of returning the Manchester offices to the condition agreed with the landlord at the end of the lease.
29. Share capital and reserves

Memorandum
aggregate
December December December December 7 Janaury December 30 June
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Share capital .................................. 1.1 1.1 – 1.1 1.1 1.0 1.0
Share premium .............................. 0.1 0.1 – 0.1 0.1 – –
Treasury shares.............................. (0.1) – – – – – –
Merger reserve............................... (1.0) (1.0) – (1.0) (1.0) – –
Other reserve ................................. – – – – – – (0.9)
Retained earnings .......................... 25.7 54.8 (6.5) 48.3 56.3 (14.9) (10.1)
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total equity.................................... 25.8 55.0 (6.5) 48.5 56.5
(10.0) (13.9)
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Merger reserve
The merger reserve arose as a result of the application of the principles of reverse acquisition accounting. It
represents the difference between the share capital of HIG and that of Hastings (Holdings) Limited (“HHL”)
which was acquired on 14 October 2011 by means of a share for share exchange.
Other reserve
On 1 January 2015 the Group reclassified the debt securities held from fair value through profit and loss to
available for sale, see Note 20. As a result, the unrealised fair value movements of the available for sales
financial assets are recorded through other comprehensive income and are included within the other reserve.
222
Share capital, share premium and Treasury shares
Share capital recognised as equity of HIG at 31 December 2012, 31 December 2013 and 7 January 2014
comprised shares authorised and issued and fully paid up as follows:
HIG Group HIG Group HIG Group

as at as at as at
31 December 31 December 7 January
2012 2013 2014
£’000s £’000s £’000s
–––––––– –––––––– ––––––––
Authorised ordinary share capital
Ordinary shares of £10 each–Ord A ..................................... 148 148 148
Ordinary shares of £10 each–Ord B ..................................... 250 250 250
Ordinary shares of £10 each–Ord C ..................................... 200 200 200
Ordinary shares of £10 each–Ord D..................................... 86 86 86
Ordinary shares of £10 each–Ord E ..................................... 335 335 335
Other ordinary shares of £10 each–Ord F, G, H, J, K, T ..... 115 149 149
–––––––– –––––––– ––––––––
Total...................................................................................... 1,134 1,168 1,168
––––––––
HIG Group
––––––––
HIG Group
––––––––
HIG Group
as at as at as at
2012 2013 2014
£’000s £’000s £’000s
–––––––– –––––––– ––––––––
Issued and fully paid up ordinary share capital
Ordinary shares of £10 each–Ord A ..................................... 148 146 146
Ordinary shares of £10 each–Ord B ..................................... 250 250 250
Ordinary shares of £10 each–Ord C ..................................... 200 200 200
Ordinary shares of £10 each–Ord D..................................... 86 86 86
Ordinary shares of £10 each–Ord E ..................................... 335 335 335
Other ordinary shares of £10 each–Ord F, H, J, K, T .......... 115 103 103
–––––––– –––––––– ––––––––
Total...................................................................................... 1,134 1,120 1,120
–––––––– –––––––– ––––––––
Rights in relation to shares
All classes of shares in issue have the same rights in relation to distributions, return of capital and voting
with the exception of:
• The A ordinary shares do not carry any voting rights.
• The B ordinary shares entitle holders to appoint a Director to the Board.
• The H, J and K ordinary shares do not carry any rights to voting or any rights to receive dividends and
are only eligible to share in the proceeds of a sale or listing above an prescribed level.
• The T ordinary shares do not carry a right to receive dividends, but do carry a right to vote and carry
an eligibility to share in the proceeds of a sale or listing above a prescribed level.
Shares in HIG have a par value of £10 per share.
During the year ending 31 December 2012, 3,400 ordinary K & T shares in the Company were issued. Of
these, 2,700 were issued to employees as part of the Group’s strategy of encouraging share ownership
amongst employees.
The details of the shares held in treasury are stated below (not in round thousands):
223
HIG Group HIG Group HIG Group
as at as at as at
2012 2013 2014
£ £ £
–––––––– –––––––– ––––––––
Shares held in treasury
Ordinary shares of £10 each–Ord A ..................................... 81,764 – –
Ordinary shares of £10 each–Ord H..................................... 2,550 – –
Ordinary shares of £10 each–Ord J ...................................... 27,265 – –
Ordinary shares of £10 each–Ord K..................................... 153 – –
–––––––– –––––––– ––––––––
111,732 – –
–––––––– –––––––– ––––––––
These treasury shares were purchased from employees when they ceased their employment with the Group.
These shares were held with the intention of being redistributed to employees at a later date.
There were no share issues in HIG during the year to 31 December 2013 or the seven days ended 7 January
2014. In October 2013 all repurchased treasury shares which had not been reissued were cancelled.
During the year ended 31 December 2013 a total of 1,373 shares were cancelled. This was made up of the
following types of share capital:
• 209 A ordinary shares
• 199 H ordinary shares
• 865 J ordinary shares
• 100 K ordinary shares
As at 7 January 2014 HIG group had 111,977 shares in issue (1 January 2012: 109,953, 31 December 2012:
113,352, 31 December 2013: 111,977).
Share capital recognised as equity of HIG(H) at 31 December 2013, 31 December 2014, 30 June 2015
comprised shares authorised and issued and fully paid up as follows:
HIG(H) HIG(H) HIG(H)

Group Group Group
as at as at as at
31 December 31 December 30 June
2013 2014 2015
£ £ £
–––––––– –––––––– ––––––––
Authorised ordinary share capital
45,778,084 A1 shares of 0.01 pence..................................... – 4,578 4,578
45,778,084 A2 shares of 0.99 pence..................................... – 453,203 453,203
45,778,084 B shares of 1 pence............................................ – 457,781 457,781
1,443,832 C1 shares of 1 pence............................................ – 14,438 14,438
3,500,000 C2 shares of 1 pence (time vesting) .................... – 35,000 35,000
3,500,000 C2 shares of 1 pence (performance).................... – 35,000 35,000
1,000,000 deferred shares of 1 pence ................................... – 10,000 10,000
10,000 ordinary shares of 1 pound ....................................... 10,000 – –
–––––––– –––––––– ––––––––
Total...................................................................................... 10,000 1,010,000 1,010,000
–––––––– –––––––– ––––––––
224
HIG(H) HIG(H) HIG(H)
Group Group Group
as at as at as at
31 December 31 December 30 June
2013 2014 2015
£ £ £
–––––––– –––––––– ––––––––
Issued and fully paid up ordinary share capital
45,778,084 A1 shares of 0.01 pence..................................... – 4,578 4,578
45,778,084 A2 shares of 0.99 pence..................................... – 453,203 453,203
45,778,084 B shares of 1 pence............................................ – 457,781 457,781
1,443,832 C1 shares of 1 pence............................................ – 14,438 14,438
3,500,000 (2013: 2,765,750) C2 shares of 1 pence
(time vesting) ........................................................................ – 27,658 35,000
3,500,000 (2013: 2,765,750) C2 shares of 1 pence
(performance)........................................................................ – 27,658 35,000
200 deferred shares of 1 pence ............................................. – 2 2
2 ordinary shares of 1 pound ................................................ 2 – –
–––––––– –––––––– ––––––––
Total...................................................................................... 2 985,318 1,000,002
–––––––– –––––––– ––––––––
On incorporation and as at 31 December 2013, the issued share capital of HIG(H) was £2, comprising two
ordinary shares with a par value of £1 each issued at par for cash. The authorised ordinary share capital at
the Balance Sheet date was £10,000.
On 8 January 2014, the two £1 shares in HIG(H) in issue at 31 December 2013 were converted to two
hundred £0.01 deferred shares with no rights attached. On the same day, the Company increased its
authorised share capital to £1.01 million as detailed above. The Company then issued share capital as follows
on the same day:
• 45,778,084 £0.0001p A1 shares, with one voting right per share and the right to attend general
meetings, but has no rights to receive dividends, distribution or equity; and
• 45,778,084 £0.0099p A2 shares, with no voting rights or right to attend general meetings, but has
rights to dividends, distribution and equity; and
• 45,778,084 £0.01p B ordinary shares, with one voting right per share, the right to attend general
meetings and rights to received dividends, distribution and equity; and
• 1,443,832 £0.01p C1 shares, with no voting rights or right to attend general meetings, but has rights
to receive dividends, distribution and equity; and
• 2,640,750 £0.01p C2 time vesting shares with no rights attached, but will have rights to dividends,
distribution and equity when the conditions set out in the Articles are met; and
• 2,640,750 £0.01p C2 performance shares with no rights attached, but will have rights to dividends,
distribution and equity when the conditions set out in the Articles are met.
In August and September 2014, a further 125,000 C2 time vesting shares and 125,000 C2 performance
shares, with the same rights as the C2 time vesting and C2 performance shares issued on 8 January 2014,
were issued as part of management incentive plan during the year.
All share issues were at par and were fully paid at the respective period end. Details on preference shares
issued and recognised as liabilities are included in Note 25.
On 12 January 2015 476,600 C2 time vesting and C2 performance shares were issued at par and were fully
paid. Further to this, on 30 April 2015 an additional 991,900 C2 time vesting and C2 performance shares
were issued at par and were fully paid.
225
As at 30 June 2015 HIG(H) group had 145,778,284 shares in issue (29 August 2013: 2, 31 December 2013:
2, 30 June 2014: 144,059,784, 31 December 2014: 144,309,784).
30. Financial commitments

The Group was committed to making the following payments for land and buildings under operating leases
in future years:
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Within one year .................................... 0.5 0.4 – 0.4 0.4 0.4 0.6
Within two to five years ....................... 0.4 0.1 – 0.1 0.1 0.4 2.5
Over five years ..................................... – 0.1 – 0.1 0.1 – 3.6
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total commitments............................... 0.9 0.6 – 0.6 0.6 0.8 6.7
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Operating lease payments largely represent rentals payable by the Group for its office properties.
£nil of the amounts due in the next year (31 December 2012: £0.4 million, 31 December 2013: £0.4 million,
31 December 2014: £0.2 million) relates to the property lease in Manchester. £nil of the amounts due in two
to five years relates to the property lease in Manchester (31 December 2012: £0.4 million, 31 December
2013: £0.2 million, 31 December 2014: £nil million). This commitment is considered onerous and thus has
been fully provided for in these financial statements (Note 28).
The Group had the following amounts committed under contracts in place as at 31 December 2014:
Memorandum
aggregate
2012 2013 2013 2013 2014 2014 2015
(unaudited)
£m £m £m £m £m £m £m
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
IT transaction and support
costs payable as follows:
Within one year .................................... 1.3 1.3 – 1.3 1.3 1.2 5.3
Within two to five years ....................... – – – – – 5.8 8.7
IT software development costs
payable as follows:
Within one year .................................... 1.5 1.1 – 1.1 1.1 2.0 2.3
Compute hardware acquisition costs
payable as follows:
Within one year .................................... – – – – – 2.2 0.1
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
Total capital commitments ................... 2.8 2.4 – 2.4 2.4 11.2 16.4
–––––––– –––––––– –––––––– –––––––––– –––––––– –––––––– ––––––––
226
31. Subsidiary companies
The Company’s active subsidiaries are as follows:
Country of Class of % Principal
Subsidiary incorporation shares held Ownership activity
––––––––––––––––––––––––––––––––––––– –––––––––––––– –––––––– –––––––– ––––––––
Hastings Insurance Group (Investment) plc (“HIG(I)”) Jersey Ordinary 100% Holding
Hastings Insurance Group (Layer Three) plc
(“HIG(L3)”)* Jersey Ordinary 100% Holding
Hastings Insurance Group (Layer Two) plc
(“HIG(L2)”)* Jersey Ordinary 100% Holding
Hastings Insurance Group (Finance) plc (“HIG(F)”)* Jersey Ordinary 100% Holding
Hastings Insurance Group Limited (“HIG”)* Jersey Ordinary 100% Holding
Advantage Global Holdings Limited (“AGH”)* British Virgin Islands Ordinary 100% Holding
Advantage Insurance Company Limited (“AICL”)* Gibraltar Ordinary 100% Underwriting
Conquest House Limited (“CQH”)* England and Wales Ordinary 100% Leasing of
property
Hastings (Holdings) Limited (“HHL”)* England and Wales Ordinary 100% Holding
Hastings (UK) Limited (“HUK”)* England and Wales Ordinary 100% Holding
Hastings Insurance Services Limited (“HISL”)* England and Wales Ordinary 100% Broking
*Held indirectly
The Company holds 100% of the voting rights for both its directly and indirectly owned subsidiaries.
32. Ultimate controlling party

As part of the Transaction on 8 January 2014, the Company issued ordinary shares to Hastings A L.P. and
other minority investors, such that Hastings A L.P. held 100% of the voting rights of the Company and the
holding companies that formed the Group as at that time.
On the same date, subsequent to the share issue described above, 100% of the issued share capital of HIG
was acquired by the Company’s subsidiary, HIG(F), for consideration of £596.0 million resulting in an
enlarged Group (the “new Group”) of which HIG(H) remains the parent entity within the corporate structure.
This purchase price included consideration in the form of ordinary and preference shares in the Company
and preference shares in HIG(I). This transaction had the effect of diluting the voting rights held by Hastings
A L.P. such that both the previous shareholders of HIG and Hastings A L.P. each held 50% of the voting
share capital of the resulting new Group, with Hastings A L.P. having the controlling interest.
As such, as at 30 June 2015 the Company’s immediate and ultimate controlling party is Hastings A L.P.
33. Related party transactions

The Group considers parties to be related where they or their close family members, either individually or
by virtue of their influence over another entity which does not form a part of the Group, exert significant
influence or control over the Group and where parties form a part of the key management personnel of the
Group.
During the year ending 31 December 2012 there were the following related party transactions with HIG
Group:
• Advantage Insurance Company Limited, and its subsidiary Conquest House Limited, were related
parties of the Group for the period to 17 April 2012 by virtue of the common ownership of their
ultimate parent undertaking Advantage Global Holdings Ltd (“AGH”) and the Company. Following
the acquisition of AGH on 17 April 2012 these transactions became intra-Group transactions and so
are eliminated upon consolidation in the Group financial statements. The following transactions
occurred before the AGH acquisition:
– Commission earned by the Group in the period in respect of policies sold that were
underwritten by Advantage Insurance Company Limited was £4,743,091.
227
– During a prior period, Advantage Insurance Company Limited provided a loan to Hastings
Insurance Services Limited on which interest is charged at 5% per annum. Interest in the period
was £8,047.
– Rent payable by the Group to Conquest House Limited during the period to 17 April 2012
amounted to £110,417.
– During a previous period Hastings Insurance Services Limited provided a loan facility to
Advantage Global Holdings Limited. Interest on the loan is charged at 1.5% over LIBOR
(London Interbank Offered Rate). Interest receivable recognised in the income statement on
this loan in the period was £75,227.
• During the year, a Director of the Group was a member of Larkins Farm LLP. Invoices received by
the Group in respect of strategic advisory services from this entity in the year totalled £32,764 of
which £24,792 remained outstanding at the end of the year.
• During the year a Director of Hastings Insurance Services Limited, a subsidiary of the Group was a
member of the key management personnel of Premier Occupational Healthcare Limited. Invoices
received by the Group in respect of strategic advisory services from this entity in the year totalled
£31,386. Amounts owing to the entity as at 31 December 2012 were £nil.
• On 17 April 2012 the Group issued £57,500,000 of fixed rate secured loan notes as part of the
consideration paid for the acquisition of AGH, as set out in Note 24 of these financial statements. Of
this balance £46,928,864 was issued to key management personnel of the Group with a corresponding
interest charge to the Income Statement of £3,663,023 for the period to 31 December 2012. As at
31 December 2012 £862,720 of interest to related parties remained unpaid.
• Lucky JV, one of the Group’s subsidiaries, had a £7,940,434 loan receivable from certain of the
Company’s directors and other related individuals at 31 December 2012.
During the year ending 31 December 2013 there were the following related party transactions with HIG
Group:
• During the year a Director of HISL, a subsidiary of the Group, was a member of the key management
personnel of Premier Occupational Healthcare Limited. Invoices received by the Group in respect of
strategic advisory services from this entity in the year totalled £29,424. Amounts owing to the entity
as at 31 December 2013 were £700;
• During the year a Director of the Company was a member of the key management personnel of Peel
Hunt Holdings Limited. Invoices received by the Company from this entity in the year totalled
£45,000 (2012: £nil) and accrued invoices totalled £1,445,000. In addition, AICL was repaid for the
£4,250,000 loan it had provided in a previous period to Peel Hunt Holdings Limited, along with
interest of £169,348 of which £15,090 was charged in the year;
• During the year a Director of the Company was a member of the key management personnel of
Hassans International Law Firm. Invoices received by the Group from this entity in the year totalled
£69,000 (2012: £nil). Amounts owing to the entity as at 31 December 2013 were £50,000 (2012: £nil);
• On 17 April 2012 the Company issued £57,500,000 of fixed rate secured loan notes as part of the
consideration paid for the acquisition of AGH, as set out in Note 34 of these financial statements. Of
this balance £46,928,864 was issued to key management personnel of the Group with a corresponding
interest charge to the Consolidated Statement of Profit or Loss and Other Comprehensive Income of
£5,162,175 for the period to 31 December 2013 (2012: £3,663,023). As at 31 December 2013
£862,720 of interest to related parties remained unpaid (2012: £862,720);
• During the year Lucky JV, one of the Group’s subsidiaries, wrote off its £7,940,434 balance of loans
receivable from Company’s directors and other related individuals (2012: £nil written off, £7,940,434
loans receivable balance);
228
• In the Balance Sheet the Company was owed a balance of £767,642 (2012: £nil) from related
company HIG(F) in respect of trade expenses paid on its behalf.
During the year ending 31 December 2013 there were the following related party transactions with HIG(H)
Group:
• Amounts payable by the Group to the related party HIG during the period amounted to £767,642. This
relates to transaction costs directly attributable to the issue of the Senior Secured Notes that were paid
on behalf of the Group. This remained outstanding at the period end and was repaid in full on
8 January 2014.
During the year ended 31 December 2014 there were the following related party transactions with HIG(H)
Group:
• At 31 December 2014 the Group held 19% of the share capital of a software production company E
Touch Solutions Limited (“E Touch”), which creates mobile based software for use by insurers. This
investment has nil fair value and as such no investment in associate is recognised in the Consolidated
Balance Sheet. On 26 June 2014, E Touch converted the Group’s option to purchase additional capital
in E Touch into an unsecured variable rate loan note of £0.3 million which has not been recognised
by the Group. The Group recognised expenses of £0.1 million in respect of development fees charged
by E Touch during 2014.
• The Group issued the following share capital and preference shares to key management personnel:
– 32,134,945 B ordinary shares
– 1,249,852 C1 ordinary shares
– 4,410,000 C2 ordinary shares
– 12,123,508 16.0% B preference shares
– 440,705 16.0% C preference shares
– 86,605,687 11.5% B preference shares
– 3,368,419 11.5% C preference shares
All were issued for consideration of £1.00 per share.
During the six months ended 30 June 2015 there were the following related party transactions with HIG(H)
Group:
• On 12 January 2015 476,600 C2 time vesting and C2 performance shares were issued to key
management personnel at par and were fully paid.
• On 30 April 2015 an additional 991,900 C2 time vesting and C2 performance shares were issued to
key management personnel at par and were fully paid.
• During the year the Group was charged an amount of £0.1 million in investment fees to Goldman
Sachs Asset Management. At 30 June 2015, the outstanding amount was £0.1 million. Goldman Sachs
Asset Management is a related party.
• During the year the Group was charged costs of £0.1 million by a software production company
E Touch Solutions Limited (“E Touch”), which creates mobile based software for use by insurers. The
total amount remained outstanding as at 30 June 2015.
Refer to Note 11 for key management personnel compensation.
229
34. Acquisition
On 17 April 2012, the HIG Group was formed by the acquisition of 100% of the share capital of AGH, whose
underlying Group (“AGH Group”) includes AICL, a Gibraltarian company which underwrites much of the
Group’s business.
The acquisition was effected by payment of £25 million in cash and the issue of interest bearing loan notes,
to the value of £57.5 million, by Hastings Insurance Group Limited in exchange for the entire ordinary share
capital of the acquired entity. The carrying amount of the consideration transferred is considered to be its fair
value.
The acquisition was partially funded by a loan of £25 million from a shareholder of Hastings Insurance
Group Limited. The carrying amount of this liability was equivalent to its fair value.
The Group incurred acquisition-related costs of £126,254 related to external professional and legal fees.
Acquisition-related costs are expensed as incurred and have been included in “Other operating costs” in the
consolidated statement of comprehensive income.
The acquisition of AGH contributed net revenue of £109.6m and a profit of £11.8m to the Group for the
period since acquisition. Had AGH been consolidated from 1 January 2012, the consolidated statement of
income would show pro forma net revenue of £290.1m and profit of £47.0m.
Goodwill consists of expected increased future profitability as a result of the acquisition, the securing of the
Group’s supply chain and the benefits expected to be achieved by making use of the increased synergies
between the Group and the acquired entity. Given that AGH is taxed in Gibraltar the amortisation of
Goodwill is not deductible for UK tax purposes.
The results of the AGH Group for the period ended 16 April 2012 were:
Period
1 January
2012 to
16 April
£m
––––––––
Gross written premiums ........................................................................................................... 87.3
Gross earned premiums ............................................................................................................ 90.0
Earned premiums ceded to reinsurers ...................................................................................... (48.7)
––––––––
Net earned premiums ............................................................................................................. 41.3
––––––––
Other revenue............................................................................................................................ 5.9
Investment and interest income ................................................................................................ 1.1
––––––––
Net revenue.............................................................................................................................. 48.3
––––––––
Claims incurred......................................................................................................................... (76.2)
Reinsurers’ share of claims incurred ........................................................................................ 41.5
––––––––
Net insurance claims............................................................................................................... (34.7)
––––––––
Acquisition costs....................................................................................................................... (7.2)
Other operating expenses.......................................................................................................... (1.3)
Finance costs............................................................................................................................. (0.5)
––––––––
Total expenses.......................................................................................................................... (9.0)
––––––––
Profit before tax ...................................................................................................................... 4.6
Taxation expense.......................................................................................................................
–––––––––
––––––––
Total profit and comprehensive income................................................................................ 4.6
––––––––
230
The fair value of assets and liabilities arising from the AGH acquisition on 17 April 2012 were as follows:
Fair value
as at
16 April
2012
£m
––––––––
ASSETS
Property and equipment............................................................................................................ 5.7
Intangible assets........................................................................................................................ 0.1
Deferred income tax asset ........................................................................................................ 3.0
Reinsurance assets .................................................................................................................... 192.8
Loans receivable ....................................................................................................................... 12.9
Accrued income and prepayments............................................................................................ 14.2
Insurance and other receivables................................................................................................ 123.8
Financial assets at fair value through profit or loss.................................................................. 128.6
Cash and cash equivalents ........................................................................................................ 29.8
––––––––
Total assets............................................................................................................................... 510.9
LIABILITIES
––––––––
Loans and borrowings .............................................................................................................. 10.7
Insurance contract liabilities..................................................................................................... 382.9
Insurance and other payables.................................................................................................... 51.6
Deferred income tax liability.................................................................................................... 2.4
Current tax liabilities ................................................................................................................ 3.4
––––––––
Total liabilities ......................................................................................................................... 451.0
Net assets .................................................................................................................................

––––––––
59.9
Non-controlling interest .........................................................................................................

––––––––
(4.0)
Consideration transferred .........................................................................................................

––––––––
82.5
––––––––
Goodwill................................................................................................................................... 26.6
At the acquisition date, the gross amounts of insurance and other receivables were £123.8 million and there
––––––––
was no significant difference between the contractual cash flows and the fair value.
On 8 January 2014, HIG(H) acquired 100% of the voting share capital of HIG, a related party of HIG(H) by
virtue of the significant influence certain individuals had over both HIG and the Group. HIG is a Jersey
registered company and parent of subsidiaries whose principal activities are that of the provision of insurance
and insurance broking services.
The acquisition was effected as part of the Transaction, whereby equity investment from Hastings A L.P.
resulted in them acquiring 50% of the voting share capital of the resulting new Group, whilst the remaining
50% continues to be held by previous shareholders of HIG.
The acquisition was effected for consideration totalling £596.0 million from HIG(F), one of the Company’s
subsidiaries, in exchange for the entire ordinary share capital of HIG, which was structured as an offer to all
the holders of HIG’s issued share capital (the “previous HIG shareholders”) on the acquisition date.
Following the offer, the consideration comprised £454.9 million in cash and a total of £141.1 million in
shares issued as detailed below on the date of the Transaction. This consideration was funded by the equity
investment and through the issue of the Senior Secured Notes by HIG(F) in October 2013.
On 8th January 2014, HIG(F) issued 141.1 million ordinary shares with a nominal value of £0.01 at £1 each
for a total of £141.1 million to the previous HIG shareholders, along with £454.9 million of cash, in
exchange for their shares in HIG.
231
HIG(L2), another of the Company’s subsidiaries, then purchased these shares from the previous HIG
shareholders in exchange for issuing the same number of ordinary shares of its own for a total of
£141.1 million, after which a similar share exchange took place between the previous HIG shareholders,
Hastings Insurance Group (Layer Three) plc (“HIG(L3)”), another of the Company’s subsidiaries, and
HIG(L2).
HIG(I), the Company’s direct subsidiary, then purchased the ordinary shares in HIG(L3) above in exchange
for issuing a mixture of ordinary shares and preference shares, followed by a share exchange with the
Company, which also issued a mixture of ordinary shares and preference shares. These transactions were
structured such that following completion of the Transaction, the previous HIG shareholders own 50% of the
voting share capital of HIG(H) whilst Hastings A L.P. own the remaining 50%. The previous HIG
shareholders’ ownership of the Group comprises £123.4 million of preference shares in HIG(I), and
£0.5 million of ordinary shares and £17.2 million of preference shares in the Company.
The carrying amount of the consideration transferred is considered to be its fair value.
The acquisition of HIG Group contributed net revenue of £393.5 million and a profit of £82.5 million to the
Group for the period from acquisition to 31 December 2014.
If the acquisition had taken place on 1 January 2014, the Consolidated Statement of Profit or Loss and Other
Comprehensive Income would have presented net revenue of £390.4 million and net loss of £7.3 million.
Goodwill primarily consists of intangible assets that do not qualify for separate recognition such as the value
of a workforce, internal know-how and processes acquired.
The Group incurred acquisition-related costs of £9.7 million in 2014 and £21.8m in 2013. These comprise
£7.9m relating to the forgiveness of shareholder loans, £14.5m of transactions costs and £9.1m of buy side
costs. Acquisition-related costs are expensed and have been included in “Other operating costs” in the
consolidated statement of comprehensive income.
The results of the HIG Group for the seven days ended 7 January 2014 were:
Seven days
ended
7 January
2014
£m
––––––––
Gross written premiums ........................................................................................................... 8.0
Gross earned premiums ............................................................................................................ 7.9
Earned premiums ceded to reinsurers ...................................................................................... (4.5)
––––––––
Net earned premiums ............................................................................................................. 3.4
––––––––
Other revenue............................................................................................................................ 3.9
Investment and interest income ................................................................................................ 0.1
––––––––
Net revenue.............................................................................................................................. 7.4
––––––––
Claims incurred......................................................................................................................... (6.0)
Reinsurers’ share of claims incurred ........................................................................................ 3.3
––––––––
Net insurance claims............................................................................................................... (2.7)
––––––––
Acquisition costs....................................................................................................................... (0.8)
Other operating expenses.......................................................................................................... (1.8)
Finance costs............................................................................................................................. (0.2)
––––––––
Total expenses.......................................................................................................................... (2.8)
––––––––
Profit before tax ...................................................................................................................... 1.9
Taxation expense.......................................................................................................................
––––––––
(0.4)
––––––––
Total profit and comprehensive income................................................................................ 1.5
––––––––
232
The assets and liabilities arising from the acquisition on 7 January 2014 were as follows:
Fair value
as at
7 January
2014
£m
––––––––
ASSETS
Property and equipment............................................................................................................ 9.2
Intangible assets........................................................................................................................ 126.2
Deferred income tax asset ........................................................................................................ 5.0
Reinsurance assets .................................................................................................................... 341.2
Prepayments.............................................................................................................................. 2.2
Insurance and other receivables................................................................................................ 203.3
Financial assets at fair value through profit or loss.................................................................. 171.5
Cash and cash equivalents ........................................................................................................ 111.8
––––––––
Total assets............................................................................................................................... 970.4
––––––––
Fair value
as at
7 January
2014
£m
––––––––
LIABILITIES
Loans and borrowings .............................................................................................................. 83.8
Insurance contract liabilities..................................................................................................... 586.7
Insurance and other payables.................................................................................................... 138.1
Provisions.................................................................................................................................. 0.9
Deferred income tax liability.................................................................................................... 29.9
Current tax liabilities ................................................................................................................ 5.0
––––––––
Total liabilities ......................................................................................................................... 844.4
Net assets .................................................................................................................................

––––––––
126.0
Consideration transferred .........................................................................................................

––––––––
596.0
––––––––
Goodwill................................................................................................................................... 470.0
At the acquisition date, the gross amounts of insurance and other receivables were £208.8 million and the
––––––––
best estimate of the contractual cash flows not expected to be collected was £5.5 million. This comprises
amounts due from customers who choose to pay by instalment which are not expected to be collected. This
results in the fair value of £203.3 million as presented above. For all other assets, the gross contractual
amount is equivalent to the fair value.
35. Contingent liabilities

Guarantees and security interests granted in favour of certain indebtedness
On 21 October 2013, HIG(H) issued Senior Secured Notes with an aggregate principal amount of
£416.5 million to fund the acquisition of the HIG, which took place on 8 January 2014, and to repay HIG’s
loan notes and other borrowings. On the same date HIG(H) also entered into the £20.0 million Facility.
On 8 January 2014, security interests were granted over the entire issued and outstanding share capital of
HIG in favour of the Senior Secured Notes and the Facility.
233
On 21 February 2014, security interests in favour of the Senior Secured Notes and the Facility were granted
over certain assets of the Company’s subsidiaries HIG(F), HIG, HHL, HUK, HISL and AGH. Also on
21 February 2014, HIG, HHL, HUK, HISL and AGH became guarantors of the Senior Secured Notes and
the Facility.
In the case of HISL, the security interests granted in relation to the Senior Secured Notes and the Facility
include a floating charge only over cash available to the Company which from time to time the Board of
Directors of HISL, acting reasonably and in good faith, determines may be paid to the noteholders without
causing HISL or any of its Directors to breach its or their obligations under all applicable laws and
regulations including Threshold Condition 2.4 of the FCA Handbook. Also excluded from any such security
are any net premiums receivable which are owed by customers of HISL and all monies owing by HISL to
insurers, including AICL.
As at 31 December 2013, the Senior Secured Notes and the Facility were not guaranteed by any company
other than HIG(F). As at this date, security interests were granted over the cash held in escrow in relation to
the Senior Secured Notes.
As at 30 June 2015 the total amount that would be repayable by the Group in relation to its Senior Secured
Notes, including accumulated interest and premium on early redemption, if settled at that date stood at
£456.6 million (31 December 2013: £489.3 million, 31 December 2014: £466.1 million). The Facility was
undrawn at 30 June 2015, 31 December 2014 and 31 December 2013.
36. Dividends
Dividends were paid as follows:
Total Dividend
dividends paid per share
£m £
––––––––– –––––––––
HIG Group year ended 31 December 2012
13 April 2012................................................................................................ 10.0 95.41
14 December 2012........................................................................................ 15.0 143.37
––––––––– –––––––––
Total dividend payments............................................................................... 25.0 –
HIG Group year ended 31 December 2013

––––––––– –––––––––
29 April 2013................................................................................................ 12.0 114.63
––––––––– –––––––––
Total dividend payments............................................................................... 12.0 –
HIG(H) Group four months ended 31 December 2013

––––––––– –––––––––
Total dividend payments............................................................................... – –
HIG Group seven days ended 7 January 2014

––––––––– –––––––––
HIG(H) Group year ended 31 December 2014

––––––––– –––––––––
HIG(H) Group six months ended 30 June 2014

––––––––– –––––––––
HIG(H) Group six months ended 30 June 2015

––––––––– –––––––––
––––––––– –––––––––
234
37. Subsequent events
On 12 August 2015 the shareholders of the company carried out a group reorganisation. As part of this
reorganisation the shareholders transferred their ordinary shares in the company to Hastings Group Holdings
Limited, a related party of the Group, and consequently Hastings Group Holdings Limited became the
company’s immediate parent company from this date. The reorganisation did not significantly change the
ultimate ownership of the group, and Hastings A. LP is still considered the ultimate controlling party.
On the same date, and as part of this reorganisation, all preference shares, accumulated dividends and interest
thereon totalling £343.0m were converted into ordinary share capital held by Hastings Group Holdings
Limited in Hastings Insurance Group (Holdings) plc (£44.4m) and by Hastings Insurance Group (Holdings)
plc in Hastings Insurance Group (Investment) plc (£298.6m).
The Group also approved a facility agreement with a group of financial institutions on 12 August 2015 which
provides a 5 year term loan of £300m, alongside a £20m revolving credit facility. The facility is at the
Group’s option, contingent on the Group’s admission to the London Stock Exchange occurring before
9 January 2016.
235
PART 13
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Section A: Unaudited pro forma financial information

The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effects of (i) 20.2
the Offer, the Reorganisation, the intended refinancing of the existing Senior Secured Notes and the (i) 20.4.3
combination of the HIG(H) Group and the Company on the net assets of the Company, as if those (ii) 1-6
transactions had taken place and been settled on 30 June 2015. The pro forma statement of net assets is based
on the audited historical financial information of the HIG(H) Group included in Part 12 (Historical Financial
Information) of this Prospectus and has been prepared in a manner consistent with the accounting policies
adopted in the preparation of this historical financial information and to be adopted by the Company for the
period ended 31 December 2015.
The unaudited pro forma statement of net assets has been prepared for illustrative purposes only, and by its
nature addresses a hypothetical situation and, therefore, does not reflect the Group’s actual financial position
or results. The unaudited pro forma statement of net assets is compiled on the basis set out in the notes below
and in accordance with the requirements of items 1 to 6 of Annex II to the Prospectus Rules. This pro forma
statement of net assets does not constitute financial statements within the meaning of section 434 of the
Companies Act 2006. No account has been taken of any results or other activity since 30 June 2015.
Adjustments (unaudited)
————————————————————————
HGH plc
HIG(H) consolidated
Group Conversion Refinancing Admission, pro forma
as reported of of Senior Offer and 30 June
30 June preference Proceeds of Secured refinancing 2015(6)
2015(1) shares(2) the Offer(3) Notes(4) costs(5) (unaudited)
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
(£ millions)
ASSETS
Intangible assets ....................... 121.0 – – – – 121.0
Goodwill................................... 470.0 – – – – 470.0
Reinsurance assets.................... 471.2 – – – – 471.2
Financial assets......................... 264.1 – – – – 264.1
Cash and cash equivalents........ 125.2 – 182.0 (116.5) (51.3) 139.4
Other assets .............................. 254.7 – – – – 254.7
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
Total assets .............................. 1,706.2 – 182.0 (116.5) (51.3) 1,720.4
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
LIABILITIES
Preference shares...................... 338.4 (338.4) – – – –
Senior Secured Notes ............... 404.6 – – (416.5) 11.9 –
Loans and borrowings .............. – – – 300.0 (4.5) 295.5
Insurance contract liabilities .... 785.7 – – – – 785.7
Other liabilities......................... 187.5 – – – – 187.5
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
Total liabilities ........................ 1,716.2 (338.4) – (116.5) 7.4 1,268.7
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
Net assets ................................. (10.0) 338.4 182.0 – (58.7) 451.7
——––—— ——––—— ——––—— ——––—— ——––—— ——––——
Notes:
(1) The financial information as at 30 June 2015 has been extracted without adjustment from the historical financial information set
out in Part 12 (Historical Financial Information) of this document.
(2) As part of the Reorganisation, which is described in Part 16 of this document, all preference shares and accumulated dividends
and interest accrued thereon in the HIG(H) Group were converted to ordinary share capital of the Company.
(3) The proceeds of the Offer receivable by the Company are calculated on the basis that the Company issues 107,058,823 New
Shares at the Offer Price of 170 pence to raise £182.0 million, gross of the expenses of the Offer.
(4) The refinancing of the Senior Secured Notes is based on the use of £116.5 million of the proceeds of the Offer and on drawing
down £300.0 million of the new term loan facility, as described in Part 15 of this document.
236
(5) The aggregate expenses of, or incidental to, Admission, the Offer and refinancing (including costs incidental to the early
repayment of the Senior Secured Notes) which are to be borne by the Company are approximately £51.3 million (inclusive of
amounts in respect of VAT), which the Company intends to pay out of cash resources including in part proceeds of the Offer.
(6) The combination of the HIG(H) Group and the Company has been accounted for as a common control transaction.
237
Section B: Accountant’s report on the unaudited pro forma financial information
The Directors
Hastings Group Holdings plc (i) 20.2
Conquest House (ii) 7
Collington Avenue
Bexhill-on-sea
12 October 2015
Gentlemen

We report on the pro forma financial information (the ‘Pro forma financial information’) set out in Part 13
of the prospectus dated 12 October 2015, which has been prepared on the basis described in Section A, for
illustrative purposes only, to provide information about how the offer of new shares of Hastings Group
Holdings plc might have affected the financial information presented on the basis of the accounting policies
adopted by Hastings Group Holdings plc in preparing the financial statements for the period ended 30 June
2015. This report is required by paragraph 7 of Annex II of the Prospectus Directive Regulation and is given
for the purpose of complying with that paragraph and for no other purpose.
Responsibilities
It is the responsibility of the directors of Hastings Group Holdings plc to prepare the Pro forma financial
information in accordance with Annex II of the Prospectus Directive Regulation.
It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of the Prospectus Directive
Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to
you.
In providing this opinion we are not updating or refreshing any reports or opinions previously made by us
on any financial information used in the compilation of the Pro forma financial information, nor do we accept
responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were
addressed by us at the dates of their issue.
any liability to any other person for any loss suffered by any such other person as a result of, arising out of,
or in connection with this report or our statement, required by and given solely for the purposes of complying
with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the
prospectus.
Basis of Opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. The work that we performed for the purpose of making this report,
which involved no independent examination of any of the underlying financial information, consisted
primarily of comparing the unadjusted financial information with the source documents, considering the
evidence supporting the adjustments and discussing the Pro forma financial information with the directors
of Hastings Group Holdings plc.
We planned and performed our work so as to obtain the information and explanations we considered
necessary in order to provide us with reasonable assurance that the Pro forma financial information has been
properly compiled on the basis stated and that such basis is consistent with the accounting policies to be
adopted by Hastings Group Holdings plc.
238
Our work has not been carried out in accordance with auditing or other standards and practices generally
accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as
if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion:
• the Pro forma financial information has been properly compiled on the basis stated; and
• such basis is consistent with the accounting policies to be adopted by Hastings Group Holdings plc.
Declaration
For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus
This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus
Yours faithfully
239
PART 14
INDEPENDENT EXTERNAL ACTUARIES’ STATEMENT

(iii) 10.2
Watson House
London Road
Reigate
Surrey RH2 9PQ UK
T +44 1737 241144
F +44 1737 241496
12 October 2015 towerswatson.com
The Directors

Conquest House
Collington Avenue
Bexhill-on-sea
To the Directors:
Independent External Actuaries’ Statement
Introduction
At your request, Towers Watson Limited trading as Towers Watson (“we” or “Towers Watson”) has
undertaken an independent actuarial review of the outstanding claims reserve, excluding allowance for
claims handling expense costs and reinsurance bad debts, and assessed whether there is a requirement for an
additional unexpired risk reserve (“AURR”) as at 30 June 2015 of Advantage Insurance Company Limited
(“AICL”). AICL is a subsidiary company of Hastings Group Holdings plc (the “Company”) and underwrites
all of the Company’s insurance risk. Our review has been undertaken in connection with the proposed
offering of ordinary shares of the Company and the admission to listing in the premium segment of the
Official List maintained by the FCA and to trading on the London Stock Exchange.
This report, which has been produced for inclusion in the Prospectus issued by the Company dated
12 October 2015, sets out the scope of the work we have undertaken and summarises the conclusions of our
work.
any liability to any person or entity other than the Company for any loss suffered by any such other person
or entity as a result of, arising out of, or in connection with this report or our statement, required by and given
solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Directive Regulation,
consenting to its inclusion in the Prospectus.
Our opinion based on this review is set out below.
Scope of Work
This opinion addresses AICL’s net of reinsurance outstanding claims reserve, excluding allowance for claims
handling expense costs and reinsurance bad debts, as at 30 June 2015. This reserve derives from unpaid
claims arising from all claim occurrences in respect of earned exposure for business written up to 30 June
2015. Our review excludes consideration of future profit commissions, reinstatement premiums for
reinsurance and the unearned premium reserve. However, our opinion also assesses whether there is a
requirement for an AURR in excess of the unearned premium reserve booked by AICL.
240
Our actuarial review is in respect of the Motor and Household classes of business and covers 100 per cent.
of AICL’s total booked net of reinsurance outstanding claims reserve, excluding allowance for claims
handling expense costs and reinsurance bad debts, as at 30 June 2015.
Our claims projections are calculated on an undiscounted basis with the exception of existing and projected
future periodical payment order claims which are included on a discounted capitalised basis.
Opinion
Based on the scope of work set out above, and subject to the reliances and limitations set out below, we report
our conclusions as follows:
AICL establishes an outstanding claims reserve for its insurance business that includes a margin over and
above its corresponding internal best estimate of the reserve. In our opinion, AICL’s internal best estimate of
its net of reinsurance outstanding claims reserve, excluding claims handling expense costs and reinsurance
bad debts, as at 30 June 2015 is reasonable in that it falls within a range that we regard as reasonable as a
best estimate.
We have compared our claims projections in respect of unexpired exposure to AICL’s booked unearned
premium reserve and concluded that it is reasonable for there to be no requirement for an AURR as at 30 June
2015. This is consistent with AICL’s booked reserve in respect of unexpired exposure which does not include
an AURR.
Reliances and Limitations

In our work, we have relied on audited and unaudited information and data supplied to us by the Company
and AICL, including information given orally and on information from a range of other sources. We relied
on the accuracy and completeness of this information without independent verification. In particular, reliance
was placed on, but not limited to the accuracy of data and supplementary information provided relating to
earned and unearned premiums, claim payments, case estimates on open claims and reinsurance
arrangements.
The results shown in this report are based on a series of assumptions regarding the future. It should be
recognised that actual future claim experience is likely to deviate, perhaps materially, from our estimates.
This is because the ultimate liability for claims will be affected by future external events; for example, the
likelihood of claimants bringing suit, the size of judicial awards, changes in standards of liability, and the
attitudes of claimants towards the settlement of their claims. We have employed appropriate techniques and
assumptions, and the conclusions presented in this opinion are reasonable, given the information currently
available.
We have not anticipated any extraordinary changes to the legal, social, inflationary or economic
environment, or to the interpretation of policy language, that might affect the cost, frequency, or future
reporting of claims. In addition, our estimates make no provision for potential future claims arising from
causes not substantially recognised in the historical data (such as new types of mass torts, latent injuries or
pandemic events), except in so far as claims of these types are included incidentally in the reported claims
and are implicitly developed.
We have not attempted to determine the quality of the current asset portfolio of AICL, and we have assumed
throughout our analysis that AICL’s outstanding claims reserve is backed by valid assets with suitably
scheduled maturities and/or adequate liquidity to meet cash flow requirements. To the extent that the assets
backing the outstanding claims reserve are not held in matching currencies, future changes in exchange rates
may lead to exchange gains or losses.
We have not reviewed the adequacy of the balance sheet provisions except as otherwise disclosed herein.
In accordance with our scope, our projections are on a basis that treats all of AICL’s reinsurance protection
as valid and collectible. We understand that there are no known disputes or uncollectable amounts from
outstanding reinsurance recoveries.
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The scope of our analysis does not include comment on capital requirements. In particular we have not
investigated the level of capital required to protect AICL from adverse claims experience.
The results shown in this report are not intended to represent an opinion of market value and should not be
interpreted in that manner. This report does not purport to encompass all of the many factors that may bear
upon a market value.
Our analysis of the liabilities was carried out based on data and documentation that was made available to
us as at 30 June 2015 and does not reflect subsequent data and information. Therefore, our results, opinions
and conclusions presented herein may be rendered inaccurate by developments or information after 30 June
2015.
Declaration
For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the Prospectus
This declaration is included in the Prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus
Yours faithfully
For and on behalf of Towers Watson Limited
Andy Staudt FIA

Fellow of the Institute and Faculty of Actuaries
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PART 15
DETAILS OF THE OFFER
Background
Pursuant to the Offer, the Company intends to issue 107,058,823 New Shares, raising net proceeds of (iii) 5.1.1
approximately £166.5 million, net of underwriting commissions and other estimated fees and expenses of (iii) 4.1
approximately £15.5 million. The New Shares will represent approximately 16.3 per cent. of the expected (iii) 5.1.2
issued ordinary share capital of the Company immediately following Admission. (iii) 8.1
The Selling Shareholders will sell 16,470,589 Existing Shares in aggregate in the Offer. In addition, up to a
further 12,352,941 Existing Shares are being made available by the Over-allotment Shareholders pursuant to
the Over-allotment Option described below.
In the Offer, Shares will be offered (i) to certain institutional investors in the United Kingdom and elsewhere (iii) 5.2.1
outside the United States and (ii) in the United States only to qualified institutional buyers in reliance on an
exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.
Certain restrictions that apply to the distribution of this Prospectus and the Shares being issued and sold
under the Offer in jurisdictions outside the United Kingdom are described below.
When admitted to trading, the Shares will be registered with ISIN number GB00BYRJH519 and SEDOL (iii) 4.1
(Stock Exchange Daily Official List) number BYRJH51 and trade under the symbol “HSTG”. (iii) 4.3
Immediately following Admission, it is expected that 29.9 per cent. of the Company’s issued ordinary share LR 6.1.19(1)
capital will be held in public hands (within the meaning of paragraph 6.1.19 of the Listing Rules) assuming
that no Over-allotment Shares are acquired pursuant to the Over-allotment Option (increasing to 31.8 per
cent. if the maximum number of Over-allotment Shares are acquired pursuant to the Over-allotment Option).
Reasons for the Offer and use of proceeds (iii) 3.4
The Directors believe that the Offer will:
• enable the Group to reduce its current leverage;
• provide a partial realisation of the investment in the Group by certain of the existing Shareholders;
• further increase the Group’s profile, brand recognition and credibility with its customers, suppliers
and employees;
• assist in recruiting, retaining and incentivising key management and employees;
• further strengthen Underwriting’s Solvency II capital adequacy position; and
• assist the Group with paying the early redemption charge incurred in connection with the refinancing
of the Group’s outstanding Senior Secured Notes.
date of Admission, the Company expects to use the entirety of the New Facilities (£300.0 million) towards
repayment of the remainder of the 2020 Notes (£159.9 million) and the entirety of the 2019 Notes
(£150.0 million). The Company expects the Group to pay an early redemption charge of approximately £25.0
million related to the 2020 Notes, £8.5 million of which will be paid immediately and approximately £16.5
million upon redemption of the remaining 2020 Notes. These amounts have been taken into account for the
purposes of the working capital statement included in this Prospectus. The Company expects the Group to
pay no early redemption charge related to the 2019 Notes.
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The Company also intends to apply approximately £50 million of the net proceeds from the Offer towards
Underwriting’s Solvency II capital adequacy requirements to further strengthen Underwriting’s capital base
in advance of the new Solvency II capital requirements.
Allocation
The rights attaching to the Shares will be uniform in all respects and they will form a single class for all LR 2.2.4(1)
purposes. The Shares allocated under the Offer have been underwritten, subject to certain conditions, by the
Banks as described in the paragraph headed “Underwriting arrangements” below and in paragraph 7 of
Part 16 (Additional Information). Allocations under the Offer will be determined jointly by the Company,
the Principal Shareholder and the Founder Representative in their absolute discretion following consultation
with the Joint Global Co-ordinators. All Shares sold pursuant to the Offer will be sold, payable in full, at the
Offer Price. Liability for UK stamp duty and stamp duty reserve tax is described in paragraph 11 of Part 16
(Additional Information).
Dealing arrangements
The Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement, which (iii) 5.2.1
are typical for an agreement of this nature. Certain conditions are related to events which are outside the
control of the Company, the Directors, the Selling Shareholders and the Banks. Further details of the
Underwriting Agreement are described in paragraph 7.1 of Part 16 (Additional Information).
It is expected that Admission will become effective, and that unconditional dealings in the Shares will (iii) 4.7
commence on the London Stock Exchange at 8.00 a.m. (London time) on 15 October 2015. Settlement of
dealings from that date will be on a two-day rolling basis. Prior to Admission, conditional dealings in the (iii) 5.1.3
Shares are expected to commence on the London Stock Exchange on 12 October 2015. Dealings on the (iii) 5.1.9
London Stock Exchange before Admission will only be settled if Admission takes place. The earliest date (iii) 6.1
for such settlement of such dealings will be 15 October 2015. All dealings before the commencement of (iii) 5.1.8
unconditional dealings will be of no effect if Admission does not take place and such dealings will be (iii) 5.2.4
at the sole risk of the parties concerned. These dates and times may be changed without further notice.
Each investor will be required to undertake to pay the Offer Price for the Shares issued or sold to such
investor in such manner as shall be directed by the Joint Global Co-ordinators.
It is expected that Shares allocated to investors in the Offer will be delivered in uncertificated form and
settlement will take place through CREST on Admission. No temporary documents of title will be issued.
Dealings in advance of crediting of the relevant CREST stock account shall be at the risk of the person
concerned.
Over-allotment and stabilisation

In connection with the Offer, Credit Suisse, as Stabilising Manager, or any of its agents, may (but will be (iii) 6.5.1
under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other stabilising (iii) 6.5.2
transactions with a view to supporting the market price of the Shares at a higher level than that which might (iii) 6.5.3
otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions (iii) 6.5.4
and such transactions may be effected on any securities market, over-the-counter market, stock exchange or
otherwise and may be undertaken at any time during the period commencing on the date of the
commencement of conditional dealings in the Shares on the London Stock Exchange and ending no later (iii) 5.2.5(a)
than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of (iii) 5.2.5(b) (iii)
its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be 5.2.5(c)
undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no
event will measure be taken to stabilise the market price of the Shares above the Offer Price. Except as
required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the
extent of any over-allotments made and/or stabilising transactions conducted in relation to the Offer.
In connection with the Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up
to a maximum of 10 per cent. of the total number of Shares comprised in the Offer. For the purposes of
244
allowing the Stabilising Manager to cover short positions resulting from any such overallotments and/or
from sales of Shares effected by it during the stabilising period, the Over-allotment Shareholders will have
granted to the Stabilising Manager the Over-allotment Option, pursuant to which the Stabilising Manager
may purchase or procure purchasers for additional Shares at the Offer Price, which represents up to an
additional 10 per cent. of the Offer Size. The Over-allotment Option will be exercisable in whole or in part,
upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the
commencement of conditional dealings in the Shares on the London Stock Exchange. Any Over-allotment
Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the
Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be
purchased on the same terms and conditions as the Shares being issued or sold in the Offer and will form a
single class for all purposes with the other Shares.
For a discussion of certain stock lending arrangements entered into in connection with the Over-allotment
Option, see paragraph 7.1 of Part 16 (Additional Information – Underwriting arrangements).
CREST
CREST is a paperless settlement system allowing securities to be transferred from one person’s CREST (iii) 4.3
account to another’s without the need to use share certificates or written instruments of transfer. With effect LR 6.1.23
from Admission, the Articles will permit the holding of Shares in the CREST system.
Application has been made for the Shares to be admitted to CREST with effect from Admission.
Accordingly, settlement of transactions in the Shares following Admission may take place within the CREST
system if any shareholder so wishes. CREST is a voluntary system and holders of Shares who wish to receive
and retain share certificates will be able to do so.
Underwriting arrangements
The Banks have entered into commitments under the Underwriting Agreement pursuant to which they have (iii) 5.4.3
agreed, subject to certain conditions, to procure subscribers for the New Shares to be issued by the Company (iii) 5.4.4
and purchasers for the Existing Shares to be sold by the Selling Shareholders in the Offer, or, failing which, (iii) 5.1.1
themselves to subscribe for such Shares, at the Offer Price. The Underwriting Agreement contains provisions
entitling the Banks to terminate the Offer (and the arrangements associated with it) at any time prior to
Admission in certain circumstances. If this right is exercised, the Offer and these arrangements will lapse
and any moneys received in respect of the Offer will be returned to applicants without interest. The
Underwriting Agreement provides for the Banks to be paid commission in respect of the New Shares issued,
the Existing Shares sold and any Over-allotment Shares sold following exercise of the Over-allotment
Option. Any commissions received by the Banks may be retained, and any Shares acquired by them may be
retained or dealt in, by them, for their own benefit.
Further details of the terms of the Underwriting Agreement are set out in paragraph 7.1 of Part 13 (Additional
Information – Underwriting arrangements). Certain selling and transfer restrictions are set out below.
Lock-up arrangements
10,559,313 of the Shares held through Hastings Nominees G Limited are held by Gary Hoffman, Pierre (iii) 7.3
Lefèvre, certain of the Senior Managers and certain other managers of the Group who received proceeds
from the sale of instruments they held prior to the 2014 Reorganisation (such certain other managers being
referred to as the “Lock-up Shareholders”).
Pursuant to the Underwriting Agreement, the Company has agreed that, subject to certain exceptions, during
the period of 180 days from the date of Admission, it will not, without the prior written consent of the Joint
Global Co-ordinators (such consent not to be unreasonably withheld or delayed), issue, offer, lend, sell or
contract to sell, grant any option, right or warrant to subscribe or purchase or allow any encumbrance to be
created over or otherwise dispose of, directly or indirectly, any Shares (or any interest therein or in respect
thereof) or enter into any transaction with the same economic effect as any of the foregoing, or announce any
offer of Shares or other intention to do the foregoing.
245
Pursuant to the Underwriting Agreement and related agreements, 526,085,523 of the Shares (or 513,732,582
Shares if the Over-allotment Option is exercised in full) (excluding those Shares acquired in the Offer by
Thomas Duggan and David Saville) are subject to lock-up arrangements. Pursuant to these arrangements,
Directors, Senior Managers, the Principal Shareholder, those Founder Shareholders who are beneficial
owners of Shares, other Nominees F Shareholders and the Lock-up Shareholders have agreed that, subject
to certain exceptions, during the periods stated below, they will not, without the prior written consent of the
Joint Global Co-ordinators (such consent not to be unreasonably withheld or delayed), offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, any Shares (or any interest therein in respect thereof)
or enter into any transaction with the same economic effect as any of the foregoing or announce any intention
to do the foregoing. The Directors (other than Richard Brewster and Edward Fitzmaurice) and Senior
Managers have agreed to a lock-up period of 365 days from the date of Admission and the Principal
Shareholder, the relevant Founder Shareholders, the other Nominees F Shareholders, Richard Brewster,
Edward Fitzmaurice and the Lock-up Shareholders have agreed to a lock-up period of 180 days from the date
of Admission. The Joint Global Co-ordinators have agreed to exclude the 11,764,704 Shares, in aggregate,
acquired by Thomas Duggan and David Saville in the Offer from the lock-up arrangements.
The net proceeds of any sale of Shares by the Principal Shareholder will benefit holders of the Preference
Shares. The Principal Shareholder and Holdco will distribute the net proceeds received by the Principal
Shareholder from its sale of Shares in the Offer by way of the redemption of Preference Shares. The total
amount of the Preference Shares to be redeemed, and the proportions in which the Preference Shares shall
be redeemed, will be determined at the discretion of the board of directors of the Principal Shareholder and
(as the case may be) Holdco. The redemption of Preference Shares will not be subject to the lock-up
provisions described above.
Further details of these arrangements are set out in paragraph 7.1 of Part 13 (Additional Information –
Underwriting arrangements).
Selling restrictions
The distribution of this Prospectus and the offer of Shares in certain jurisdictions may be restricted by law (iii) 5.1.1
and therefore persons into whose possession this Prospectus comes should inform themselves about and
observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with
these restrictions may constitute a violation of the securities laws of any such jurisdiction.
No action has been or will be taken in any jurisdiction that would permit a public offering of the Shares, or
possession or distribution of this Prospectus or any other offering material in any country or jurisdiction
where action for that purpose is required. Accordingly, the Shares may not be offered or sold, directly or
indirectly, and neither this Prospectus nor any other offering material or advertisement in connection with
the Shares may be distributed or published in or from any country or jurisdiction except in circumstances
that will result in compliance with any and all applicable rules and regulations of any such country or
jurisdiction. Persons into whose possession this Prospectus comes should inform themselves about and
observe any restrictions on the distribution of this Prospectus and the offer of Shares contained in this
Prospectus. Any failure to comply with these restrictions may constitute a violation of the securities laws of
any such jurisdiction. This Prospectus does not constitute an offer to subscribe for any of the Shares to any
person in any jurisdiction to whom it is unlawful to make such offer of solicitation in such jurisdiction.
European Economic Area

In relation to each member state of the EEA which has implemented the Prospectus Directive (each,
a “Relevant Member State”) no Shares have been offered or will be offered pursuant to the Offer to the public
in that Relevant Member State prior to the publication of a prospectus in relation to the Shares which has
been approved by the competent authority in that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent authority in that Relevant Member State, all
in accordance with the Prospectus Directive, except that offers of Shares may be made to the public in that
246
Relevant Member State at any time under the following exemptions under the Prospectus Directive, if they
are implemented in that Relevant Member State:
(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;
(b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provision of the
2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined
in the Prospectus Directive) subject to obtaining the prior consent of the Joint Global Co-ordinators
for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Shares shall result in a requirement for the publication of a prospectus pursuant
to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant
Member State.
For the purposes of this provision, the expression an “offer to the public” in relation to any Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information
on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any
Shares, as the same may be varied in that member state by any measure implementing the Prospectus
Directive in that member state. The expression “Prospectus Directive” means Directive 2003/71/EC (and
amendments thereto, including the 2010 PD Amending Directive), and includes any relevant implementing
measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive
2010/73/EU.
In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the
Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged
and agreed that the Shares acquired by it in the Offer have not been acquired on a non-discretionary basis on
behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which
may give rise to an offer of any Shares to the public other than their offer or resale in a Relevant Member
State to qualified investors as so defined or in circumstances in which the prior consent of the Joint Global
Co-ordinators has been obtained to each such proposed offer or resale. The Company, the Selling
Shareholders, the Banks and their affiliates, and others will rely upon the truth and accuracy of the foregoing
representation, acknowledgement and agreement. Notwithstanding the above, a person who is not a qualified
investor and who has notified the Banks of such fact in writing may, with the prior consent of the Joint Global
Co-ordinators, be permitted to acquire Shares in the Offer.
United States
The Shares have not been and will not be registered under the US Securities Act or under any applicable
securities laws or regulations of any state of the United States and, subject to certain exceptions, may not be
offered or sold within the United States except to persons reasonably believed to be QIBs in reliance on Rule
144A or another exemption from, or in a transaction not subject to, the registration requirements of the US
Securities Act. The Shares are being offered and sold outside the United States in offshore transactions in
reliance on Regulation S.
In addition, until 40 days after the commencement of the Offer of the Shares an offer or sale of Shares within
the United States by any dealer (whether or not participating in the Offer) may violate the registration
requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with Rule
144A or another exemption from, or transaction not subject to, the registration requirements of the US
Securities Act.
The Underwriting Agreement provides that the Banks may directly or through their respective United States
broker-dealer affiliates arrange for the offer and resale of Shares within the United States only to QIBs in
reliance on Rule 144A or another exemption from, or transaction not subject to, the registration requirements
of the US Securities Act.
247
Each acquirer of Shares within the United States, by accepting delivery of this Prospectus, will be deemed
to have represented, agreed and acknowledged that it has received a copy of this Prospectus and such other
information as it deems necessary to make an investment decision and that:
(a) it is (a) a QIB within the meaning of Rule 144A, (b) acquiring the Shares for its own account or for
the account of one or more QIBs with respect to whom it has the authority to make, and does make,
the representations and warranties set forth herein, (c) acquiring the Shares for investment purposes,
and not with a view to further distribution of such Shares, and (d) aware, and each beneficial owner
of the Shares has been advised, that the sale of the Shares to it is being made in reliance on Rule 144A
or in reliance on another exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act.
(b) it understands that the Shares are being offered and sold in the United States only in a transaction not
involving any public offering within the meaning of the US Securities Act and that the Shares have
not been and will not be registered under the US Securities Act or with any securities regulatory
authority of any state or other jurisdiction of the United States and may not be offered, sold, pledged
or otherwise transferred except (a) to a person that it and any person acting on its behalf reasonably
believe is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting
the requirements of Rule 144A, or another exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act, (b) in an offshore transaction in accordance with
Rule 903 or Rule 904 of Regulation S, (c) pursuant to an exemption from registration under the
US Securities Act provided by Rule 144 thereunder (if available) or (d) pursuant to an effective
registration statement under the US Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States. It further (a) understands that the Shares may not be
deposited into any unrestricted depositary receipt facility in respect of the Shares established or
maintained by a depositary bank, (b) acknowledges that the Shares (whether in physical certificated
form or in uncertificated form held in CREST) are “restricted securities” within the meaning of Rule
144(a)(3) under the US Securities Act and that no representation is made as to the availability of the
exemption provided by Rule 144 for resales of the Shares and (c) understands that the Company may
not recognise any offer, sale, resale, pledge or other transfer of the Shares made other than in
compliance with the above-stated restrictions.
(c) it understands that the Shares (to the extent they are in certificated form), unless otherwise determined
by the Company in accordance with applicable law, will bear a legend substantially to the following
effect:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “US
SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A
PERSON THAT THE SELLER AND ANY PERSON ACTING ON ITS BEHALF
REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE US SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER,
(2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904
OF REGULATION S UNDER THE US SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE US SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF
THE EXEMPTION PROVIDED BY RULE 144 UNDER THE US SECURITIES ACT FOR
RESALES OF THE ORDINARY SHARES. NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THE FOREGOING, THE SHARES REPRESENTED HEREBY MAY NOT
BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN
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RESPECT OF THE SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITARY
BANK. EACH HOLDER, BY ITS ACCEPTANCE OF SHARES, REPRESENTS THAT IT
UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS; and
(d) it represents that if, in the future, it offers, resells, pledges or otherwise transfers such Shares while
they remain “restricted securities” within the meaning of Rule 144, it shall notify such subsequent
transferee of the restrictions set out above.
The Company, the Banks and their affiliates and others will rely on the truth and accuracy of the foregoing
acknowledgements, representations and agreements.
Australia
This Prospectus (a) does not constitute a prospectus or a product disclosure statement under the Corporations
Act 2001 of the Commonwealth of Australia (“Corporations Act”); (b) does not purport to include the
information required of a prospectus under Part 6D.2 of the Corporations Act or a product disclosure
statement under Part 7.9 of the Corporations Act; has not been, nor will it be, lodged as a disclosure
document with the Australian Securities and Investments Commission (“ASIC”), the Australian Securities
Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (c) may not be
provided in Australia other than to select investors (“Exempt Investors”) who are able to demonstrate that
they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to
whom an offer may be made without disclosure under Part 6D.2 of the Corporations Act and (ii) are
“wholesale clients” for the purpose of section 761G of the Corporations Act.
The Shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations
to subscribe for, or buy, the Shares may be issued, and no draft or definitive offering memorandum,
advertisement or other offering material relating to any Shares may be distributed, received or published in
Australia, except where disclosure to investors is not required under Chapters 6D and 7 of the Corporations
Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an
application for the Shares, each purchaser or subscriber of Shares represents and warrants to the Company,
the Selling Shareholders, the Banks and their affiliates that such purchaser or subscriber is an Exempt
Investor.
As any offer of Shares under this Prospectus, any supplement or the accompanying prospectus or other
document will be made without disclosure in Australia under Parts 6D.2 and 7.9 of the Corporations Act, the
offer of those Shares for resale in Australia within 12 months may, under the Corporations Act, require
disclosure to investors if none of the exemptions in the Corporations Act applies to that resale. By applying
for the Shares each purchaser or subscriber of Shares undertakes to the Company, the Selling Shareholders,
the Banks that such purchaser or subscriber will not, for a period of 12 months from the date of issue or
purchase of the Shares, offer, transfer, assign or otherwise alienate those Shares to investors in Australia
except in circumstances where disclosure to investors is not required under the Corporations Act or where a
compliant disclosure document is prepared and lodged with ASIC.
Canada
The Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are
accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1)
of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Shares must
be made in accordance with an exemption from, or in a transaction not subject to, the prospectus
requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for
rescission or damages if this Prospectus (including any amendment thereto) contains a misrepresentation,
provided that the remedies for rescission or damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to
249
any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars
of these rights or consult with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-
Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (“NI 33-105”),
the Banks are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter
conflicts of interest in connection with this offering
Japan
The Shares have not been, and will not be, registered under the Financial Instruments and Exchange Law of
Japan (Law No. 25 of 1948 as amended, the “FIEL”) and disclosure under the FIEL has not been, and will
not be, made with respect to the Shares. Neither the Shares nor any interest therein may be offered, sold,
resold, or otherwise transferred, except pursuant to an exemption from the registration requirements of, and
otherwise in compliance with, the FIEL and all other applicable laws, regulations and guidelines
promulgated by the relevant Japanese governmental and regulatory authorities. As used in this paragraph, a
resident of Japan is any person that is resident in Japan, including any corporation or other entity organised
under the laws of Japan.
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PART 16
ADDITIONAL INFORMATION
1. Incorporation and share capital LR 2.2.1(1)
LR 2.2.1(2)
1.1 The Company was incorporated and registered in England and Wales on 11 June 2015 as a private
LR 2.2.2(1)
company limited by shares under the Act with the name Hastings Group 123 Limited and with the
LR 2.2.2(2)
registered number 09635183.
LR 2.2.2(3)
1.2 On 17 July 2015, the Company changed its name to Hastings Group Holdings Limited and on (i) 5.1.1
23 September 2015 the Company was re-registered as a public company limited by shares with the (i) 5.1.2
name Hastings Group Holdings plc. (i) 5.1.3
(i) 5.1.4
1.3 The Company’s registered office and principal place of business is at Conquest House, Collington
Avenue, Bexhill-on-sea TN39 3LW, United Kingdom and its telephone number is +44 142 4735 735.
1.4 The principal laws and legislation under which the Company operates and the ordinary shares have (iii) 4.2
been issued and allotted are the Act and regulations made thereunder.
1.5 The share capital history of the Company is as follows: (i) 21.1.7
1.5.1 on incorporation, the share capital of the Company was £1 divided into one ordinary share of
nominal value £1. The share was issued to the initial subscriber for cash consideration at par
and credited as fully paid;
1.5.2 on 3 August 2015, a written resolution of the sole shareholder of the Company, being the initial
subscriber, was passed approving the subdivision of the one ordinary share of nominal value
£1 in the capital of the Company into 50 Shares of nominal value two pence each having the
same rights and subject to the same restrictions as the one ordinary share in the capital of the
Company as at 3 August 2015;
1.5.3 on 7 August 2015, the initial subscriber transferred its 50 Shares of nominal value two pence
each to the Principal Shareholder at par, and the register of members of the Company was
updated to reflect the Principal Shareholder as the registered holder of the entire issued share
capital of the Company; and
1.5.4 on 12 August 2015, pursuant to the Reorganisation, the Company allotted and issued
549,999,946 additional Shares of two pence each, at a premium of £1.98 per Share, each
credited as fully paid and ranking pari passu with the existing 50 Shares of two pence each as
at that date. These additional Shares were allotted pursuant to the authority granted by section
550 of the Act, which grants directors of a private limited company with only one class of
shares power to allot additional shares of that class without any further shareholder approval
(unless prohibited by the articles of association of the company).
1.6 On 9 October 2015, by resolutions passed in a general meeting: (iii) 4.6
1.6.1 in substitution for any prior authority conferred upon the Board, the authority conferred on the
Board by Article 12 of the Articles was conferred for a period expiring (unless previously
renewed, varied or revoked by the Company in general meeting) at the end of the annual
general meeting of the Company to be held in 2016 (or, if earlier, at the close of business on
the date falling 15 months after the resolution conferring it was passed) and for that period the
section 561 amount shall comprise, conditional on Admission:
(a) the aggregate nominal value of the New Shares to be issued on Admission by the
Company pursuant to the Offer, the allocation of New Shares to the Non-executive
Directors and the subscription for Shares by Non-executive Directors; and
251
(b) in substitution for any unused authority under paragraph 1.6.1(a) on the day of
Admission, (i) up to an aggregate nominal amount equal to one third of the aggregate
nominal value of the share capital of the Company on the day following Admission and
(ii) in connection with an offer by way of a rights issue only to holders of Shares in
proportion (as nearly as practicable) to their existing holdings and to people who are
holders of other equity securities if this is required by the rights of those equity
securities, or if the Directors consider it necessary, as permitted by the rights of those
equity securities, up to an aggregate nominal value of the share capital of the Company
on the day following Admission;
1.6.2 in substitution for any prior authority conferred upon the Board, the power conferred on the
Board by Article 13 of the Articles was conferred for a period expiring (unless previously
renewed, varied or revoked by the Company in general meeting) at the end of the annual
general meeting of the Company to be held in 2016 (or, if earlier, at the close of business on
the date falling 15 months after the resolution conferring it was passed), and for that period the
section 561 amount shall comprise, conditional on Admission:
(a) the equivalent amount to that determined pursuant to paragraph 1.6.1(a) above; and
(b) in substitution for any unused power conferred under paragraph 1.6.2(a) on the day
following Admission, up to an aggregate nominal amount equal to 5 per cent. of the
aggregate nominal value of the share capital of the Company on the day following
Admission;
1.6.3 the Company was generally and unconditionally authorised to make market purchases (within
the meaning of section 693(4) of the Companies Act 2006) of Shares each subject to the
following conditions:
(a) maximum aggregate number of Shares authorised to be purchased will represent 10 per
cent. of the Company’s issued ordinary share capital immediately following Admission;
(b) the minimum price (excluding expenses) which may be paid for each Share is two pence
(being the nominal value of a Share);
(c) the maximum price (excluding expenses) which may be paid for each Share is the higher
of: (i) 105 per cent. of the average of the middle market quotations for the Shares as
derived from the London Stock Exchange Daily Official List for the five business days
immediately preceding the day on which the share is contracted to be purchased; and (ii)
an amount equal to the higher of the price of the last independent trade of a Share and
the highest current independent bid for a Share as derived from the London Stock
Exchange Trading System; and
(d) the authority shall expire on the date falling 18 months after the resolution conferring it
is passed or, if earlier, at the end of the annual general meeting of the Company to be
held in 2016 so that the Company may, before the expiry of the authority enter into a
contract to purchase Shares which will or may be executed wholly or partly after the
expiry of such authority;
1.6.4 the Company was authorised in accordance with the Articles, until the Company’s next annual
general meeting, to call general meetings on 14 clear days’ notice; and
1.6.5 the Company and all companies that are its subsidiaries at any time up to the end of the annual
general meeting of the Company to be held in 2016, were authorised, in aggregate, to:
(a) make political donations to political parties and/or independent election candidates not
exceeding £100,000 in total;
(b) make political donations to political organisations other than political parties not
exceeding £100,000 in total; and
252
(c) incur political expenditure not exceeding £100,000 in total.
For the purposes of this authority the terms “political donation”, “political parties”,
“independent election candidates”, “political organisation” and “political expenditure”
have the meanings given by sections 363 to 365 of the Act.
The Company notes that it is not its policy to make political donations and that it has no
intention of using the authority for that purpose.
1.7 The Company has not traded since incorporation and lacks distributable reserves. This could restrict
the Company’s ability to pay future dividends. Therefore, the Company proposes to undertake a court-
approved capital reduction in accordance with the Act and the Company (Reduction of Share Capital)
Order 2008 following Admission in order to provide it with the distributable reserves required to
support its dividend policy. The proposed capital reduction will reduce the Company’s share premium
account by £1,089,000,000. The capital reduction has been approved (conditional on Admission) by
a special resolution of the current shareholders of the Company and will require the approval of the
Companies Court.
1.8 Immediately prior to the publication of this Prospectus, the issued share capital of the Company was (i) 21.1.1
£10,999,999.92, comprising 549,999,996 Shares of two pence each, (all of which were fully paid or (i) 21.1.3
credited as fully paid). Immediately following Admission, the issued share capital of the Company is (i) 21.1.2
expected to be £13,144,353 comprising 657,217,641 Shares of two pence each (all of which will be (i) 21.1.4
fully paid or credited as fully paid). (i) 21.1.5

LR 2.2.4(2)
1.9 Save as disclosed above and in paragraphs 5 and 7 below:
1.9.1 no share or loan capital of the Company has, within three years of the date of this Prospectus,
been issued or agreed to be issued, or is now proposed to be issued (other than pursuant to the
Reorganisation and the Offer), fully or partly paid, either for cash or for a consideration other
than cash, to any person;
1.9.2 no commissions, discounts, brokerages or other special terms have been granted by the
Company in connection with the issue or sale of any share or loan capital of any such company;
and
1.9.3 no share or loan capital of the Company is under option or agreed conditionally or
unconditionally to be put under option.
1.10 The Company will be subject to the continuing obligations of the FCA with regard to the issue of
shares for cash. The provisions of section 561(1) of the Act (which confer on shareholders rights of
pre-emption in respect of the allotment of equity securities which are, or are to be, paid up in cash
other than by way of allotment to employees under an employees’ share scheme as defined in section
1166 of the Act) apply to the issue of shares in the capital of the Company except to the extent such
provisions have been disapplied as referred to in paragraph 1.6.2 above.
1.11 The City Code on Takeovers and Mergers (the “City Code”) is issued and administered by the Panel.
The Company is subject to the City Code and therefore its Shareholders are entitled to the protections
afforded by the City Code. Under Rule 9 of the City Code (“Rule 9”) when (i) a person acquires an
interest in shares which (taken together with shares he and persons acting in concert with him are
interested) carry 30 per cent. or more of the voting rights of a company subject to the City Code, or
(ii) any person who, together with persons acting in concert with him, is interested in shares which in
the aggregate carry not less than 30 per cent. of the voting rights of a company, but does not hold
shares carrying more than 50 per cent. of the voting rights of the company subject to the City Code,
and such person, or any persons acting in concert with him, acquires an interest in any other shares
which increases the percentage of the shares carrying voting rights in which he is interested, then, in
either case, that person, together with the person acting in concert with him, is normally required to
extend offers in cash, at the highest price paid by him (or any persons acting in concert with him) for
shares in the company within the preceding 12 months, to the holders of any class of equity share
capital whether voting or non-voting and also to the holders of any other class of transferable
securities carrying voting rights.
253
1.12 The Company understands that the Principal Shareholder, Hastings A, L.P., Hastings B, L.P.,
Goldman, Sachs & Co. and the Founder Shareholders (the “Concert Party”) are currently regarded by
the Panel as acting in concert with each other in relation to the Company. Immediately prior to
Admission, the Concert Party will be interested (directly or indirectly) in 84.6 per cent. of the voting
rights of the Company. Consequently were such a concert party to be in existence at the relevant time,
members of the concert party would be able to increase their aggregate shareholding without incurring
any obligation under Rule 9 to make a general offer, although, individual members of the concert
party or any sub-group of such concert party may not, without the consent of the Panel, be able to
increase their interests in Shares through a Rule 9 threshold (i.e., to or through 30 per cent. of the
voting rights or any increase between (and including) 30 per cent. but no more than 50 per cent. of
the voting rights) without incurring an obligation under Rule 9 to make a general offer for all of the
outstanding shares in the Company.
1.13 The City Code provides that when a company redeems or purchases its own voting shares, any
resulting increase in the percentage of shares carrying voting rights in which a person or group of
persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 of the
City Code. Rule 37 of the City Code provides that, subject to prior consultation, the Panel will
normally waive any resulting obligation to make a general offer if there is a vote of independent
shareholders and a procedure along the lines of that set out in Appendix 1 to the City Code is followed.
Appendix 1 to the City Code sets out the procedure which is to be followed in order to obtain the
consent of such independent shareholders.
1.14 Under Note 1 on Rule 37 of the City Code, a person who comes to exceed the thresholds in Rule 9.1
in consequence of a company’s purchase of its own shares will not normally incur an obligation to
make a mandatory offer unless that person is a director, or the relationship of the person with any one
or more of the directors is such that the person is, or is presumed to be, acting in concert with any of
the directors. However, there is no presumption that all the directors (or any two or more directors)
are acting in concert solely by reason of a proposed purchase by a company of its own shares or the
decision to seek shareholders’ authority for any such purchase.
1.15 The Panel must be consulted in advance in any case where Rule 9 of the City Code might be relevant.
This will include any case where a person or group of persons acting in concert is interested in shares
carrying 30 per cent. or more but does not hold shares carrying more than 50 per cent. of the voting
rights of a company, or may become interested in 30 per cent. or more on full implementation of the
proposed purchase of own shares. In addition, the Panel should always be consulted if the aggregate
interests in shares of the directors and any other persons acting in concert, or presumed to be acting
in concert, with any of the directors amount to 30 per cent or more, or may be increased to 30 per cent
or more on full implementation of the proposed purchase of own shares.
1.16 In the present case, the exercise by the Company of its authority to purchase its own Shares referred
to in paragraph 1.6.3 above will not give rise to an obligation under Rule 9 in relation to the Concert
Party for so long as the Concert Party holds more than 50 per cent. of the voting rights of the
Company. However, if following a sell-down of Shares, the aggregate holding of the Concert Party
falls below 50 per cent. and subsequently the Company exercises the authority to purchase its own
Shares referred to in paragraph 1.6.3 above, such as to result in an increase in the percentage of the
Shares owned or controlled by the Concert Party through a Rule 9 threshold, then the effect of
Rule 37.1 of the City Code is that unless agreed otherwise by the Panel, a mandatory offer under
Rule 9 would be required. However, notwithstanding Rule 37.1 of the City Code the Panel has
confirmed to the Company on an ex parte basis, that it would not require the Concert Party to make a
mandatory offer under Rule 9 on the grounds only that following a sell-down of Shares its interest in
Shares has increased by reason of the purchase by the Company of its Shares pursuant to the authority
referred to in paragraph 1.6.3 above. The Panel’s ex parte confirmation has been provided on the basis
that the consequences of such sell-down of Shares by the Concert Party and such exercise by the
Company of its authority to purchase its own Shares have been fully disclosed in this Prospectus.
254
2. Articles of Association
The Articles of Association of the Company (the “Articles”) include provisions to the following effect: (i) 21.2.2
LR 6.1.28
2.1 Share rights

Subject to the provisions of the Act, and without prejudice to any rights attached to any existing shares (i) 21.2.3
or class of shares: (i) any share may be issued with such rights or restrictions as the Company may by (iii) 4.5
ordinary resolution determine or, subject to and in default of such determination, as the Board shall (i) 21.2.8
determine; and (ii) shares may be issued which are to be redeemed or are liable to be redeemed at the
option of the Company or the holder and the Board may determine the terms, conditions and manner
of redemption of such shares provided that it does so prior to the allotment of those shares.
2.2 Voting rights

Subject to any rights or restrictions attached to any shares, on a show of hands every member who is (iii) 4.5
present in person shall have one vote and on a poll every member present in person or by proxy shall
have one vote for every share of which he is the holder.
No member shall be entitled to vote at any general meeting in respect of a share unless all moneys
presently payable by him in respect of that share have been paid.
If at any time the Board is satisfied that any member, or any other person appearing to be interested
in shares held by such member, has been duly served with a notice under section 793 of the Act and
is in default for the prescribed period in supplying to the Company the information thereby required,
or, in purported compliance with such a notice, has made a statement which is false or inadequate in
a material particular, then the Board may, in its absolute discretion at any time thereafter by notice to
such member direct that, in respect of the shares in relation to which the default occurred, the member
shall not be entitled to attend or vote either personally or by proxy at a general meeting or at a separate
meeting of the holders of that class of shares or on a poll.
2.3 Dividends and other distributions (i) 20.7

(iii) 4.5
Subject to the provisions of the Act, the Company may by ordinary resolution declare dividends in
accordance with the respective rights of the members, but no dividend shall exceed the amount
recommended by the Board. Except as otherwise provided by the rights and restrictions attached to
shares, all dividends shall be declared and paid according to the amounts paid up on the shares on
which the dividend is paid, but no amount paid on a share in advance of the date on which a call is
payable shall be treated for these purposes as paid on the share.
Subject to the provisions of the Act, the Board may pay interim dividends if it appears to the Board
that they are justified by the profits of the Company available for distribution.
If the share capital is divided into different classes, the Board may also pay (i) interim dividends on
shares which confer deferred or non-preferred rights with regard to dividends as well as on shares
which confer preferential rights with regard to dividends, but no interim dividend shall be paid on
shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is
in arrear; and (ii), at intervals settled by it, any dividend payable at a fixed rate if it appears to the Board
that the profits available for distribution justify the payment. If the Board acts in good faith it shall not
incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by
the lawful payment of an interim dividend on any shares having deferred or non-preferred rights.
No dividend or other moneys payable in respect of a share shall bear interest against the Company
unless otherwise provided by the rights attached to the share.
Except as otherwise provided by the rights and restrictions attached to any class of shares, all
dividends will be declared and paid according to the amounts paid up on the shares on which the
dividend is paid.
255
The Board may, if authorised by an ordinary resolution of the Company, offer any holder of shares the
right to elect to receive shares, credited as fully paid, by way of scrip dividend instead of cash in
respect of the whole (or some part, to be determined by the Board) of all or any dividend.
Any dividend which has remained unclaimed for 12 years from the date when it became due for
payment shall, if the Board so resolves, be forfeited and cease to remain owing by the Company.
Except as provided by the rights and restrictions attached to any class of shares, the holders of the
Company’s shares will under general law be entitled to participate in any surplus assets in a winding
up in proportion to their shareholdings. A liquidator may, with the sanction of a special resolution and
any other sanction required by the Insolvency Act 1986, divide among the members in specie the whole
or any part of the assets of the Company and may, for that purpose, value any assets and determine how
the division shall be carried out as between the members or different classes of members.
2.4 Variation of rights

Rights attached to any class of shares may be varied or abrogated with the written consent of the (i) 21.2.4
holders of three quarters in nominal value of the issued shares of the class, or the sanction of a special
resolution passed at a separate general meeting of the holders of the shares of the class.
2.5 Lien and forfeiture

The Company shall have a first and paramount lien on every share (not being a fully paid share) for
all moneys payable to the Company (whether presently or not) in respect of that share. The Company
may sell, in such manner as the Board determines, any share on which the Company has a lien if a
sum in respect of which the lien exists is presently payable and is not paid within 14 clear days after
notice has been sent to the holder of the share demanding payment and stating that if the notice is not
complied with the share may be sold.
The Board may from time to time make calls on the members in respect of any moneys unpaid on
their shares. Each member shall (subject to receiving at least 14 clear days’ notice) pay to the
Company the amount called on his shares. If a call or any instalment of a call remains unpaid in whole
or in part after it has become due and payable, the Board may give the person from whom it is due
not less than 14 clear days’ notice requiring payment of the amount unpaid together with any interest
which may have accrued and any costs, charges and expenses incurred by the Company by reason of
such non-payment. The notice shall name the place where payment is to be made and shall state that
if the notice is not complied with the shares in respect of which the call was made will be liable to be
forfeited.
2.6 Transfer of shares

A member may transfer all or any of his certificated shares by an instrument of transfer in any usual (iii) 4.8
form or in any other form which the Board may approve. An instrument of transfer shall be signed by (iii) 4.3
or on behalf of the transferor and, unless the share is fully paid, by or on behalf of the transferee. An
instrument of transfer need not be under seal.
The Board may, in its absolute discretion, refuse to register the transfer of a certificated share which
is not a fully paid share, provided that the refusal does not prevent dealings in shares in the Company
from taking place on an open and proper basis. The Board may also refuse to register the transfer of
a certificated share unless the instrument of transfer:
2.6.1 is lodged, duly stamped (if stampable), at the office or at another place appointed by the Board
accompanied by the certificate for the share to which it relates and such other evidence as the
Board may reasonably require to show the right of the transferor to make the transfer;
2.6.2 is in respect of one class of share only; and
2.6.3 is in favour of not more than four transferees.
256
If the Board refuses to register a transfer of a share in certificated form, it shall send the transferee
notice of its refusal within two months after the date on which the instrument of transfer was lodged
with the Company.
No fee shall be charged for the registration of any instrument of transfer or other document relating
to or affecting the title to a share.
Subject to the provisions of the Regulations, the Board may permit the holding of shares in any class
of shares in uncertificated form and the transfer of title to shares in that class by means of a relevant
system and may determine that any class of shares shall cease to be a participating security.
2.7 Alteration of share capital

The Articles do not restrict the Company’s ability to increase, consolidate or sub-divide its share (i) 21.2.8
capital. Therefore, subject to the Act, the Company may by ordinary resolution increase, consolidate
or sub-divide its share capital.
2.8 Purchase of own shares

The Articles do not restrict the Company’s ability to purchase its own shares. Therefore, subject to the
Act and without prejudice to any relevant special rights attached to any class of shares, the Company
may purchase any of its own shares of any class in any way and at any price (whether at par or above
or below par).
2.9 General meetings

The Board shall convene and the Company shall hold general meetings as annual general meetings in (i) 21.2.5
accordance with the requirements of the Act. The Board may call general meetings whenever and at
such times and places as it shall determine. The Articles permit the Board to take advantage of section
360A of the Act to hold general meetings by electronic means.
2.10 Directors (i) 21.2.2
2.10.1 Appointment of Directors

Unless otherwise determined by ordinary resolution, the number of Directors shall be not less
than two but shall not be subject to any maximum in number. Directors may be appointed by
ordinary resolution of Shareholders or by the Board.
2.10.2 No share qualification

A Director shall not be required to hold any shares in the capital of the Company by way of
qualification.
2.10.3 Retirement of Directors

At every annual general meeting all the Directors at the date of notice convening the annual
general meeting shall retire from office. A retiring Director shall be eligible for appointment.
2.10.4 Remuneration of Directors

The emoluments of any Director holding executive office for his services as such shall be
determined by the Board, and may be of any description.
The ordinary remuneration of the Directors who do not hold executive office for their services
(excluding amounts payable under any other provision of the Articles) shall not exceed in
aggregate £1,500,000 per annum or such higher amount as the Company may from time to time
by ordinary resolution determine. Subject thereto, each such Director shall be paid a fee for that
service (which shall be deemed to accrue from day to day) at such rate as may from time to
time be determined by the Board.
In addition to any remuneration to which the Directors are entitled under the Articles, they may
be paid all travelling, hotel and other expenses properly incurred by them in connection with
257
their attendance at meetings of the Board or Committees of the Board, general meetings or
separate meetings of the holders of any class of shares or of debentures of the Company or
otherwise in connection with the discharge of their duties.
The Board may provide benefits, whether by the payment of gratuities or pensions or by
insurance or otherwise, for any past or present Director or employee of the Company or any of
its subsidiary undertakings or any body corporate associated with, or any business acquired by,
any of them, and for any member of his family or any person who is or was dependent on him.
2.10.5 Permitted interests of Directors

Subject to the provisions of the Act, and provided that he has disclosed to the Board the nature
and extent of his interest (unless the circumstances referred to in section 177(5) or
section 177(6) of the Act apply, in which case no such disclosure is required), a Director
notwithstanding his office:
2.10.5.1 may be a party to, or otherwise interested in, any transaction or arrangement with the
Company or in which the Company is otherwise (directly or indirectly) interested;
2.10.5.2 may act by himself or for his firm in a professional capacity for the Company
(otherwise than as auditor), and he or his firm shall be entitled to remuneration for
professional services as if he were not a Director;
2.10.5.3 may be a director or other officer of, or employed by, or a party to any transaction or
arrangement with, or otherwise interested in, any body corporate in which the
Company is (directly or indirectly) interested as a shareholder or otherwise or with
which he has such relationship at the request or direction of the Company; and
2.10.5.4 shall not, by reason of his office, be accountable to the Company for any
remuneration or other benefit which he derives from any such office or employment
or from any such transaction or arrangement or from any interest in any such body
corporate the acceptance, entry into or existence of which has been approved by the
Board pursuant to Article 146 of the Articles or which he is permitted to hold or enter
into by virtue of paragraph 2.10.5.1, 2.10.5.2 or 2.10.5.3.
2.10.6 Restrictions on voting

A Director shall not vote on any resolution of the Board concerning a matter in which he has
an interest which can reasonably be regarded as likely to give rise to a conflict with the interests
of the Company, unless his interest arises only because the resolution concerns one or more of
the following matters:
2.10.6.1 the giving of a guarantee, security or indemnity in respect of money lent or

obligations incurred by him or any other person at the request of, or for the benefit
of, the Company or any of its subsidiary undertakings;
2.10.6.2 the giving of a guarantee, security or indemnity in respect of a debt or obligation of

the Company or any of its subsidiary undertakings for which the Director has
assumed responsibility (in whole or part and whether alone or jointly with others)
under a guarantee or indemnity or by the giving of security;
2.10.6.3 a contract, arrangement, transaction or proposal concerning an offer of shares,

debentures or other securities of the Company or any of its subsidiary undertakings
for subscription or purchase, in which offer he is or may be entitled to participate as
a holder of securities or in the underwriting or sub-underwriting of which he is to
participate;
2.10.6.4 a contract, arrangement, transaction or proposal concerning any other body corporate
in which he or any person connected with him is interested, directly or indirectly, and
whether as an officer, shareholder, creditor or otherwise, if he and any persons
258
connected with him do not to his knowledge hold an interest (as that term is used in
sections 820 to 825 of the Act) representing one per cent. or more of either any class
of the equity share capital (excluding any shares of that class held as treasury shares)
of such body corporate (or any other body corporate through which his interest is
derived) or of the voting rights available to members of the relevant body corporate
(any such interest being deemed for the purpose of this Article to be likely to give
rise to a conflict with the interests of the Company in all circumstances):
2.10.6.5 a contract, arrangement, transaction or proposal for the benefit of employees of the
Company or of any of its subsidiary undertakings which does not award him any
privilege or benefit not generally accorded to the employees to whom the
arrangement relates; and
2.10.6.6 a contract, arrangement, transaction or proposal concerning any insurance which the
Company is empowered to purchase or maintain for, or for the benefit of, any
Directors or for persons who include Directors.
2.10.7 Indemnity of officers

Subject to the provisions of the Act, but without prejudice to any indemnity to which the person
concerned may otherwise be entitled, every Director or other officer of the Company (other
than any person (whether an officer or not) engaged by the Company as auditor) shall be
indemnified out of the assets of the Company against any liability incurred by him for
negligence, default, breach of duty or breach of trust in relation to the affairs of the Company,
provided that this Article shall be deemed not to provide for, or entitle any such person to,
indemnification to the extent that it would cause this Article, or any element of it, to be treated
as void under the Act.
3. Directors’ and Senior Managers’ interests

3.1 The interests in the share capital of the Company of the Directors and Senior Managers (all of whom,
unless otherwise stated, are beneficial or are interests of a person connected with a Director or a
Senior Manager) immediately prior to Admission will be, and immediately following Admission are
expected to be:
Number of Immediately (i) 18.1
Immediately prior to Shares to be sold following (i) 17.2
Admission in the Offer Admission(1) (iii) 3.3
––––––––––––––––––––– –––––––––––––––––––– –––––––––––––––––––
Percentage Percentage Percentage (i) 14.2
Director/Senior Number of of issued Number of of issued Number of of issued
Manager Shares share capital Shares share capital Shares share capital
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Michael Fairey(2) – – – – 29,411 0.0%
Gary Hoffman(3) 2,869,725 0.5% 91,995 0.1% 2,777,730 0.4%
Richard Brewster(4) 19,809,292 3.6% 635,029 0.7% 19,174,263 2.9%
Thomas Colraine(2) – – – – 76,470 0.0%
Ian Cormack(2) – – – – 35,294 0.0%
Edward Fitzmaurice(5) – – – – – –
259
Number of Immediately
Immediately prior to Shares to be sold following
Admission in the Offer Admission(1)
––––––––––––––––––––– –––––––––––––––––––– –––––––––––––––––––
Percentage Percentage Percentage
Director/Senior Number of of issued Number of of issued Number of of issued
Manager Shares share capital Shares share capital Shares share capital
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Pierre Lefèvre(3) 85,072 0.0% 2,727 0.0% 82,345 0.0%
Malcolm Le May(2)(3) – – – – 17,647 0.0%
Michael Lee(3) 1,132,243 0.2% 36,296 0.0% 1,095,947 0.2%
Anthony Leppard(3) 1,051,229 0.2% 33,699 0.0% 1,017,530 0.2%
Tobias van der Meer(3) 1,415,308 0.3% 45,370 0.0% 1,369,938 0.2%
Notes:
the Offer.
(2) The Company has agreed to issue Shares to the four Independent Non-executive Directors with a value (net of tax) at the
Offer Price of £50,000 in the case of Michael Fairey and £30,000 each in the case of Thomas Colraine, Ian Cormack and
Malcolm Le May. Gross of tax and national insurance contributions, the value of these awards is £62,500, £56,604,
£54,545, and £48,908 to Michael Fairey, Thomas Colraine, Ian Cormack and Malcolm Le May, respectively. In addition,
Thomas Colraine and Ian Cormack will invest £100,000 and £30,000, respectively, in Shares at the Offer Price at
Admission.
(3) Shares are held by Hastings Nominees G Limited as nominee for the relevant individual.
(4) Shares are held by Hastings Nominees F Limited as nominee for the relevant individual.
(5) Edward Fitzmaurice has no direct interest in the share capital of the Company. He is the settlor of a Jersey discretionary
trust which is the 100 per cent. owner of Ted Limited, a company incorporated and managed in Jersey, which is one of
the Founder Shareholders and which has an indirect interest in Shares through its interest in the Principal Shareholder.
Ted Limited has no direct interest in the share capital of the Company.
3.2 In so far as is known to the Directors, the following are the interests (within the meaning of Part VI (iii) 7.1
of the Act) which represent, or will represent, directly or indirectly, three per cent. or more of the (iii) 7.2
issued share capital of the Company, assuming no exercise of the Over-allotment Option: (i) 18.1
Number of
Immediately prior to Shares to be sold in the Immediately following (i) 19
Admission Offer Admission(1) (iii) 7.1
––––––––––––––––––––– –––––––––––––––––––– –––––––––––––––––––
Percentage of Percentage of Percentage of (iii) 7.2
Number of issued share Number of issued share Number of issued share (i) 18.1
Shareholders Shares capital Shares capital Shares capital (i) 18.3
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– (i) 18.4
Principal Shareholder(2) 393,759,451 71.6% 12,622,812 1.9% 381,136,639 58.0%
(i) 18.2
Hastings Nominees F
Limited(3) 137,707,289 25.0% 2,994,088 0.5% 146,477,905 (7) 22.3%
Neil Utley(4)(5) 51,432,178 9.4% 1,648,768 0.3% 49,783,410 7.6%
Ian Donald(4)(5) 22,157,045 4.0% 710,291 0.1% 21,446,754 3.3%
Thomas Duggan(4)(5) 22,154,387 4.0% – – 28,036,739(7) 4.3%
David Saville(4) 22,154,387 4.0% – – 28,036,739(7) 4.3%
Richard Brewster(4) 19,809,292 3.6% 635,029 0.1% 19,174,263 2.9%
Hastings Nominees G
Limited(6) 18,226,606 3.3% 547,039 0.1% 17,679,567 2.7%
Notes:
the Offer.
(2) The Principal Shareholder’s business address is 47 Esplanade, St Helier, Jersey JE1 0BD.
(3) Hastings Nominees F Limited holds Shares on behalf of certain of the Founder Shareholders (Neil Utley (and certain
members of his immediate family) and Richard Brewster), Thomas Duggan (and certain members of his family), Ian
Donald (and certain members of his immediate family) and David Saville. Those Founder Shareholders who do not have
a direct interest in Shares have an indirect interest through their interest in the Principal Shareholder. The Founder
Shareholders’ business address is Conquest House, Collington Avenue, Bexhill-on-sea TN39 3LW.
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(4) Shares held by Hastings Nominees F Limited as nominee for the relevant individual.
(5) Includes Shares transferred to family members of the relevant shareholder prior to Admission.
(6) Hastings Nominees G Limited holds Shares on behalf of certain of the Executive Directors, Senior Managers, other
employees and former employees of the Group and other investors. The business address of such Selling Shareholder is
Conquest House, Collington Avenue, Bexhill-on-sea, East Sussex TN39 3LW.
(7) Including 11,764,704 Shares in aggregate acquired by Thomas Duggan and David Saville in the Offer.
3.3 Save as disclosed in paragraph 3.2 above, in so far as is known to the Directors, there is no other
person who is or will be immediately following Admission, directly or indirectly, interested in
three per cent. or more of the issued share capital of the Company, or of any other person who can,
will or could, directly or indirectly, jointly or severally, exercise control over the Company. The
Directors have no knowledge of any arrangements the operation of which may at a subsequent date
result in a change of control of the Company. None of the Company’s major shareholders have or will
have different voting rights attached to the shares they hold in the Company.
3.4 In so far as is known to the Directors, and in addition to Thomas Duggan and David Saville referred
to above, the following intend to subscribe for Shares representing more than five per cent. of the
Offer:
Immediately following Admission

–––––––––––––––––––––––––––––
Percentage of
Number of issued share
Shareholders Shares capital
————————————————————————— ––––––––––– –––––––––––
Adelphi Capital Limited ............................................................ 19,000,000 2.9%
Marshall Wace Asset Management UK ..................................... 14,000,000 2.1%
Hound Partners LLC .................................................................. 13,500,000 2.1%
Toscafund Asset Management LLP ........................................... 12,500,000 1.9%
Henderson Global Investors....................................................... 8,000,000 1.2%
Pelham Capital Management LLP............................................. 8,000,000 1.2%
3.5 No Director has or has had any interest in any transactions which are or were unusual in their nature
or conditions or are or were significant to the business of the Group or any of its subsidiary
undertakings and which were effected by the Group or any of its subsidiaries during the current or
immediately preceding financial year or during an earlier financial year and which remain in any
respect outstanding or unperformed.
3.6 There are no outstanding loans or guarantees granted or provided by any member of the Group to or
for the benefit of any of the Directors.
4. Directors’ terms of employment

4.1 The Directors and their functions are set out in Part 8 (Directors, Senior Managers and Corporate (i) 16.1
Governance). On 8 October 2015 each of the Executive Directors entered into a new service (i) 16.2
agreement with the Company and each of the Non-executive Directors have entered into letters of
engagement with the Company.
4.2 Executive Directors

4.2.1 The Company has undertaken a review of remuneration for senior management in preparation (i) 15.1
for Admission. The objective of the remuneration review was to provide a reward structure for (i) 15.2
management and employees that enables the Group to recruit, motivate, retain and reward
employees to support its business goals. Underpinning this objective are the following
principles:
• Minimal change to current structures;
261
• Aligning the interests of management with that of current and future Shareholders;
• An appropriate balance between short-term reward and recognition and also
incentivising a long-term view;
• Retention of senior management and the wider workforce;
• Reward structures, performance conditions and targets that are easily understood; and
• A non-hierarchical approach supporting the Company’s “one team” culture.
4.2.2 As a result of the review, salaries were adjusted where necessary to reflect the scope of the role
in a plc environment. A Long Term Incentive Plan (“LTIP”) will be introduced for selected key
individuals with a three year performance cycle. It is anticipated that performance conditions
for the first awards will comprise earnings per share (“EPS”) and total shareholder return
(“TSR”), although this may be varied and/or other conditions may be introduced for future
awards. Target bonus levels have not been changed for any employees as part of the review,
although a normal maximum level of 100 per cent. of salary has been introduced for Executive
Directors and senior executives. A portion of bonus awards from 2016 onwards will, for
Executive Directors and selected senior management, normally be deferred into shares for a
period of three years. The initial percentage deferred will be 25 per cent. of any bonus award
although this figure may be amended in future years. No change was made to pension
arrangements, which are considerably less generous than typical practice, or any other benefits.
4.2.3 Executive Directors will be expected to build and hold shares in the Company of at least twice
their annual salary to align with the long term interests of shareholders, with other senior
executives expected to hold the equivalent of at least one times their annual salary.
4.2.4 Recognising the importance of keeping key individuals within the Group, the Company
proposes to make conditional share awards to a small number of individuals, including the
Executive Directors, upon Admission (“Admission Awards”). The awards will be expressed in
cash terms and delivered in Shares at the end of 2017 and 2018 based on the market price of
Shares at that time. The award for Mr. Hoffman will be £750,000 payable at the end of 2017
and £750,000 payable at the end of 2018. The award for Mr. Hoskins will be £500,000 payable
in 2017 and £500,000 payable in 2018. In the event that the Board determines that the market
price of Shares has fallen materially since the grant of the Admission Awards, the Board may
reduce the value of the Admission Awards at the time they become payable.
4.2.5 The Executive Directors, Gary Hoffman and Richard Hoskins, are each employed under a
contract of employment dated 28 September 2015. Under the terms of these contracts,
Mr. Hoffman receives a salary of £475,000 and Mr. Hoskins a salary of £315,000 with effect
from Admission. Base salaries will be reviewed annually but there is no guarantee that salaries
will be increased as a result of the review. Salaries are assessed taking into account the scope
and requirements of the role and the total remuneration package. Account will also be taken of
remuneration arrangements in peer companies and the wider Company workforce.
4.2.6 Each Executive Director is eligible to participate in the Company’s bonus plan under which the
target bonus is 50 per cent. of salary and the maximum award, payable if stretching personal
and corporate targets are met, is 100 per cent. of salary. From the end of 2016, Executive
Directors will be eligible to participate in the company’s LTIP, described in paragraph 5.1
below. It is anticipated that the annual awards will be 225 per cent. of salary for both
Mr. Hoffman and Mr. Hoskins. The maximum employer pension contribution is 10 per cent. of
salary which may be taken in cash in lieu of pension if the Executive Director so chooses.
Private medical insurance is provided for each Executive Director, his spouse and dependent
children, along with life assurance and a car, or car allowance paid as cash, to the value of
£8,000 per annum.
4.2.7 Executive Director contracts provide for 25 paid days holiday each year and six months’ notice
of termination from either side. The Executive’s employment may also be terminated
262
immediately under certain circumstances, or after a period of sickness absence exceeding six
months. The contracts provide for mitigation of any payment in lieu of notice to the extent that
the Executive secures alternative employment during what would have been the full notice
period. All reasonable expenses incurred in connection with the appointment are reimbursed by
the Company. Each of the Executive Directors is subject to a confidentiality undertaking
without limitation in time and to non-competition, non-solicitation, non-dealing and non-hiring
restrictive covenants for a period of 12 months after the termination of their respective
employments arrangements (and, in the case of Mr. Hoskins, six months from the date of
termination if Mr. Hoskins’ employment has been terminated by the Company). The Company
has agreed to mitigate Mr Hoskins’ exposure to income tax liability on shares acquired under
the management incentive plan (the “MIP”) in the event that he is unable to realise the benefit
of those shares by reason of termination of his employment or non-vesting of the shares for any
other reason.
4.2.8 The Executive Directors will have the benefit of a qualifying third-party indemnity from the
Company (the terms of which are in accordance with the Act) and appropriate directors’ and
officers’ liability insurance.
4.3 Non-executive Directors

4.3.1 The appointments of each of Michael Fairey, Thomas Colraine, Ian Cormack, Pierre Lefèvre (i) 15.1
and Malcolm Le May are for a fixed term of three years, commencing on the date of (i) 15.2
Admission. The appointments of each of the Non-executive Directors are subject to re-election
when appropriate by the Company in general meeting.
4.3.2 Within two years of Admission, Independent Non-executive Directors will each be expected to
acquire and hold Shares in the Company of an amount at least equivalent to their total fees in
the first twelve months of their appointments to align with the long-term interests of
Shareholders.
4.3.3 Michael Fairey is entitled to receive an annual fee of £150,000 for his role as Chairman.
Michael Fairey is entitled to an additional fee of £10,000 per annum for his duties as chairman
of the Nomination Committee.
4.3.4 Each of Thomas Colraine, Malcolm Le May and Ian Cormack is each entitled to receive an
annual fee of £50,000. Thomas Colraine is entitled to an additional fee of £15,000 per annum
for his duties as Senior Independent Director and £15,000 per annum for his duties as chairman
of the Audit Committee. Malcolm Le May is entitled to an additional fee of £15,000 per annum
for his duties as chairman of the Remuneration Committee. Pierre Lefèvre is entitled to receive
a total annual fee of £80,000, comprising £45,000 for his duties as non-executive director, and
chairman of the Risk Committee, of AICL and £35,000 for his role as Independent
Non-executive Director of the Company. He is also entitled to an additional fee of
£10,000 per annum for his duties as chairman of the Risk Committee.
4.3.5 The Company has agreed to issue Shares to the four independent Non-executive Directors with
a value (net of tax) at the Offer Price of £50,000 in the case of Michael Fairey and £30,000 each
in the case of Thomas Colraine, Ian Cormack and Malcolm Le May. Gross of tax and national
insurance contributions, the value of these awards is £62,500, £56,604, £54,545, and £48,908
to Michael Fairey, Thomas Colraine, Ian Cormack and Malcolm Le May, respectively. In
addition, Thomas Colraine and Ian Cormack will invest £100,000 and £30,000, respectively, in
Shares at the Offer Price at Admission. Any disposal of Shares by any Director will be subject
to the lock-up restrictions set out in Part 15 (Details of the Offer) and the share retention
requirements in their respective letters of appointment.
4.3.6 The Chairman and Non-executive Directors are not entitled to receive any compensation on
termination of their appointments and are not entitled to participate in the Company’s share,
bonus or pension schemes. Their appointments may be terminated at any time upon three
263
months’ prior written notice in accordance with the Articles or the Act or upon their otherwise
ceasing to be a Director.
4.3.7 Each Non-executive Director is also entitled to reimbursement of reasonably and properly
incurred expenses.
4.3.8 Pursuant to section 79 to 82 of the Enterprise and Regulatory Reform Act, the Chairman’s and
Non-executive Directors’ remuneration will be subject to shareholder approval. In the event
that such approval is not obtained when required, the appointment letters provide that they will
have no entitlement to compensation or damages in respect of loss suffered as a consequence.
4.3.9 The Chairman and Non-executive Directors are subject to confidentiality undertakings without
limitation in time. Michael Fairey, Thomas Colraine, Ian Cormack, Pierre Lefèvre and
Malcolm Le May are also subject to non-compete restrictive covenants for the duration of their
appointments and for 12 months after the termination of their appointments. The other Non-
executive Directors are subject to non-compete restrictive covenants for the duration of their
appointments and for three months after the termination of their appointments.
4.3.10 The Chairman and Non-executive Directors will have the benefit of a qualifying third-party
indemnity from the Company (the terms of which are in accordance with the Act) and
appropriate directors’ and officers’ liability insurance.
4.4 Save as set out in paragraphs 4.2 and 4.3 above, there are no existing or proposed service agreements
or letters of appointment between the Directors and any member of the Group.
4.5 Directors’ and Senior Managers’ Remuneration (i) 15.1
Under the terms of their service contracts, letters of appointment and applicable incentive plans, in the
year ended 31 December 2014, the aggregate remuneration and benefits to the Senior Managers who
served the Group during the year ended 31 December 2014, consisting of seven individuals, was £1.9
million.
The Directors who were remunerated by the Group in the year ended 31 December 2014 were Gary
Hoffman, Richard Brewster and Edward Fitzmaurice. Under the terms of their service contracts,
letters of appointment and applicable incentive plans, in the year ended 31 December 2014, they were
remunerated as follows:
Annual
Salary/Fees/ Other Date of
Bonus Benefits Joining the
Name Position (£) (£) Group
––––––––––––––––––––– –––––––––––––––––––– –––––––– –––––––– ––––––––––––––
Gary Hoffman ................. Chief Executive Officer £458,739 £66,326 November 2012
Richard Brewster ............ Non-executive Director £149,109 – February 2009
Edward Fitzmaurice ........ Non-executive Director £139,830 £5,710 February 2009
4.6 Richard Brewster, Edward Fitzmaurice, Sumit Rajpal and Michele Titi-Cappelli have waived their
annual fees for their roles as Non-executive Directors. There is no other arrangement under which any
Director has waived or agreed to waive future emoluments nor has there been any waiver of
emoluments during the financial year immediately preceding the date of this Prospectus.
(i) 14.1
(i) 14.2
264
4.7 Directors’ and Senior Managers’ current and past directorships and partnerships
Set out below are the directorships (unless otherwise stated) and partnerships held by the Directors
and Senior Managers (other than, where applicable, directorships held in the Company and its
subsidiaries and the subsidiaries of the companies listed below), in the five years prior to the date of
this Prospectus:
Name Current directorships/partnerships Past directorships/partnerships
–––––––––––––––– –––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––
Michael Fairey....... Energy Saving Trust APR Energy plc
LTSB Pension Funds (formerly Horizon
MGM Advantage Ltd Acquisition PLC)
OneSavings Bank plc Danske Bank plc
Legal & General plc
Northern Rock (Good
Bank)
Vertex Group Ltd
Gary Hoffman ....... The Football Foundation NBNK Investments plc

Visa Europe Limited Northern Rock plc
Visa Europe Services Inc. Trinity Mirror plc
Richard Hoskins .... N/A AIG Assurance Company

AIG Canada Holdings Inc.
AIG Insurance Company of Canada
AIG Property Casualty Company
AIG Property Casualty U.S., Inc.
AIG Specialty Insurance Company
AIU Insurance Company
American Home Assurance Company
Chartis Latin America Investments,
LLC
Commerce and Industry Insurance
Company
Eaglestone Reinsurance Company
Granite State Insurance Company
Illinois National Insurance Co.
Lexington Insurance Company
National Union Fire Insurance
Company of Pittsburgh, Pa.
New Hampshire Insurance Company
The Insurance Company of the State
of Pennsylvania
Aviva Canada Inc.
Aviva Life and Annuity Company of
New York
Aviva USA Corporation
Aviva Insurance Company of Canada
Aviva International Holdings Limited
Aviva Life and Annuity Company
Elite Insurance Company
Pilot Insurance Company
Scottish & York Insurance Co.
Limited
S&Y Insurance Company
Traders General Insurance Company
265
–––––––––––––––– –––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––
Richard Brewster... 3 Pond Road Residents Management Columba Systems Ltd
Co Ltd Peel Hunt Holdings Limited (and
Kern Ventures Limited subsidiaries)
Macsco 22 Limited UBIM LLP
Thomas Colraine ... Schroder & Co Limited AIG Global Reinsurance Operations
Compre Group AIG Cyprus Limited
AIG Europe Limited
Ascot Corporate Name Limited
AIG Europe Holdings Limited
Travel Guard EMEA Limited
Ian Cormack .......... Maven Income & Growth VCT4 plc Arria NLG Ltd
National Angels Ltd., UK Aspen Insurance Holdings Ltd
Partnership plc Bloomsbury Publishing plc
Phoenix Life Holdings plc (and CTP
subsidiaries) Qatar Financial Centre Authority
Temporis Capital LLP
Xchanging plc
Edward Cheval House Limited Kern Ventures Limited

Fitzmaurice ........ Gayton Place Residents Association
Limited
Pierre Lefèvre........ Vivat NV (Netherlands) Amaline Assurances (Amaguiz)

Anbang Holding Belgium NV GAN Patrimoine
Groupama Assigurari
Groupama Assicurazioni
Groupama Emeklilik
Groupama Garancia BIztosito
Groupama Insurances
Groupama Phoenix Asfalistiki
Groupama Seguros
Groupama Sigorta
Groupama UK Services
Groupama-AVIC Property Insurance
Company
Groupama-GAN Vie
Mediobanca (Italy)
OTP Bank (Hungary)
Rampart Insurance Company
STAR
Malcolm Le May... Upham Brush Company Limited Matrix Securities Limited
IG Group Holdings plc Pendragon plc
Juno Capital LLP RSA plc
Moneybarn No. 1 Limited Three Delta (Trade Finance) Limited
Opus Corporate Finance
Preventative Healthcare Company
Limited
Provident Financial plc
266
–––––––––––––––– –––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––
Sumit Rajpal.......... Enstar Group Limited Alliance Films Holdings Inc.
Ipreo Parent Holdco LLC CSI Entertainment
ProSight Specialty Insurance Dollar General Corporation
Safe-Guard Products International, HealthMarkets, Inc. (formerly UICI)
LLC USI Holdings Corporation
SKBHC Holdings LLC (formerly Validus Holdings, Ltd.
First National Bank of Starbuck)
TransUnion
Michele 1 Cranley Gardens (Freehold) Athen PikCo Lux Sarl
Titi-Cappelli ....... Limited ONV Topco NV
GSCP V Prysmian (Lux) Sarl
Sigla S.A. Prysmian (Lux) II Sarl
Edward Biemer...... N/A Allstate New Jersey (and
subsidiaries)
Encompass New Jersey
(and subsidiaries)
Ian Godfrey ........... N/A N/A
Michael Lee........... N/A Eldon Insurance Services
Southern Rock Holding Limited (and
subsidiaries)
Anthony Leppard.... Harper Samuels Limited N/A
Carole Jones .......... Eclipse Resources Ltd. N/A
Timothy Money..... N/A Autobahn Tank & Rast Holding
GmbH
Lake Woods Holding Pty Ltd
Odeon & UCI Cinemas Holdings
Ltd
Odeon Property Group LLP
Tobias van Brendagate Limited N/A

der Meer .............
David Walker......... N/A N/A
4.8 In September 2013, Michael Lee entered into a settlement agreement with the FSC in respect of the (i) 14.1
FSC’s investigation into Southern Rock Insurance Company Ltd, a Gibraltar-based insurance
company licensed by the FSC, in his role as a former director of that company. The investigation
related to the corporate governance of such other insurance company, particularly with respect to the
determination of such insurance company’s reserving policy by its board. In connection with the
settlement of such investigation, Mr. Lee has agreed not to hold any position with an FSC-regulated
entity that requires FSC approval or notification for a period of three years. Should Mr. Lee wish to
make a subsequent application or notification to hold such a position, he would be required to provide
the FSC with up-to-date evidence that at the time he makes such application he holds appropriate
corporate governance skills, which might be obtained by experience or qualification. Mr. Lee also
agreed to provide all regulators in jurisdictions where he is an approved person, as well as any
professional bodies of which he is a member, with a copy of the settlement, and to continue to
cooperate fully and openly with the FSC in this and any other investigation. In reaching this settlement
with the FSC, Mr. Lee did not admit any liability in relation to the FSC’s opinion and conclusion. In
addition, Mr. Lee’s settlement agreement with the FSC specifically acknowledged that the settlement
does not affect any relationship Mr. Lee has or might have with AICL as part of his role as a director
of HISL, and that the FSC has not concluded that Mr. Lee is not a fit and proper person. The FSC has
confirmed that the element of the investigation related to Mr. Lee is now closed.
267
Save as described in paragraph 4.8 above, within the period of five years preceding the date of this
Prospectus, none of the Directors or Senior Managers:
(a) has had any convictions in relation to fraudulent offences;
(b) has been a member of the administrative, management or supervisory bodies or director or
senior manager (who is relevant in establishing that a company has the appropriate expertise
and experience for management of that company) of any company at the time of any
bankruptcy, receivership or liquidation of such company; or
(c) has received any official public incrimination and/or sanction by any statutory or regulatory
authorities (including designated professional bodies) or has ever been disqualified by a court
from acting as a member of the administrative, management or supervisory bodies of a
company or from acting in the management or conduct of affairs of a company.
5. Employee share plans (i) 17.2

(i) 17.3
Following Admission, the Company intends to operate an executive share plan, the Hastings LTIP (“LTIP”).
The Company has also established the Hastings 2015 Share Incentive Plan (“SIP”), which meets the
requirements for an HMRC advantaged all-employee share plan, and a bonus deferral plan under which a
portion of annual bonuses may be deferred into Shares, the Hastings 2015 Bonus Deferral Plan (“BDP”).
The main features of the plans are set out below.
5.1 The LTIP

The LTIP was adopted by the Board on 28 September 2015, conditional on Admission.
5.1.1 Status
The LTIP is a discretionary executive share plan. Under the LTIP, the Board may, within certain
limits and subject to any applicable performance conditions, grant to eligible employees
conditional awards of Shares or nil-cost options over Shares (“LTIP Awards”). LTIP Awards
will be granted over a specified number of Shares, except in the case of Admission
Awards (described in 5.1.18 below) which will be granted over a fixed value of Shares. LTIP
Awards may also be structured as rights to acquire a cash amount which relates to the value of
a certain number of notional Shares. No payment is required for the grant of an LTIP Award.
5.1.2 Eligibility
All employees (including Executive Directors) of the Company are eligible for selection to
participate in the LTIP at the discretion of the Board.
5.1.3 Grant of LTIP Awards

The Board may normally grant LTIP Awards over Shares to eligible employees with a
maximum total market value in respect of any financial year of up to 225 per cent. of the
relevant individual’s annual base salary. The LTIP rules however contain provisions for LTIP
Awards of up to 300 per cent. of salary in respect of a financial year in exceptional
circumstances and also to grant the Admission Awards (described in 5.1.18 below). LTIP
Awards may be granted during the 42 days beginning on: (i) the day after the announcement of
the Company’s results for any period; (ii) any day on which the Board determines that
exceptional circumstances exist which justify the making of an LTIP Award at that time;
(iii) the day on which any dealing restrictions are lifted; or (iv) Admission. However, no LTIP
Awards may be granted more than ten years from Admission.
5.1.4 Performance and other conditions

Unless the Board determines otherwise, LTIP Awards will be subject to performance
conditions. LTIP Awards granted to Executive Directors will always be subject to performance
conditions, with the exception of Admission Awards (described in 5.1.18 below). The proposed
268
performance conditions for the first grant of LTIP Awards are expected to be earnings per share
(“EPS”) and total shareholder return (“TSR”) and will be finalised by the Board prior to the
LTIP Awards being made. Any performance conditions applying to LTIP Awards may be
amended or substituted if the Board considers it appropriate, provided the Board considers that
the new performance conditions are not materially less difficult to satisfy. The Board may also
impose other conditions on the vesting of LTIP Awards.
5.1.5 Vesting, exercise and release

LTIP Awards to Executive Directors will normally be assessed over at least a three year
performance cycle. LTIP Awards subject to performance conditions will normally vest as soon
as reasonably practicable after the end of the relevant performance period or such later date that
the Board determines, to the extent that the performance conditions have been met. LTIP
Awards that are not subject to performance conditions will normally vest on the third
anniversary of grant the date or such other date that the Board determines.
The Board may determine that an LTIP Award is also subject to an additional holding period
following vesting, during which Shares subject to the LTIP Award cannot be delivered to
participants and at the end of which the LTIP Awards will be “released”. Nil-cost options will
normally be exercisable from vesting, or where relevant, release, until the tenth anniversary of
the grant date.
5.1.6 Malus and clawback

The Board may decide, at any time prior to the vesting of LTIP Awards (or where LTIP Awards
are subject to a holding period, release), to impose further conditions on the LTIP Awards or
reduce the number or value of Shares under LTIP Awards (including to nil) (“malus”). The
circumstances in which the Board may consider operating malus include, but are not limited
to, the following:
(a) a material misstatement of the audited financial results of the Company or any Group
company;
(b) the assessment of any performance condition applicable to an LTIP Award being based
on an error or inaccurate or misleading information or assumptions;
(c) there has been action or conduct of a participant or participants which amounts to gross
misconduct; or
(d) events or the behaviour of a participant or participants have had a significant detrimental
impact on the reputation of any Group company provided that the Board is satisfied that
the relevant participant or participants were responsible or directly accountable for the
reputational damage
occurring during the period commencing on the grant date (or, where an LTIP Award is subject
to a performance condition, the start of the performance period) or such earlier date as the
Board determine and ending on the sixth anniversary of the grant date.
Similarly, in certain circumstances the Board may recover value from the participant following
the vesting (or where LTIP Awards are subject to a holding period, release) of an LTIP Award
(“clawback”). The clawback provision may be implemented at any time prior to the sixth
anniversary of the grant date by a reduction in (i) the vesting of any subsisting Share awards or
(ii) the number or value of Shares under any vested but unexercised nil-cost option and/or the
participant being required to return some or all of the cash or Shares delivered under the LTIP
Award to the Company or to make a cash payment in respect of that cash or those Shares.
The circumstances in which the Board may consider operating clawback are:
company;
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(b) the assessment of any performance condition applicable to an LTIP Award was based on
an error, or inaccurate or misleading information or assumptions; or
misconduct
occurring during the period commencing on the grant date (or, where an LTIP Award is subject
to a performance condition, the start of the performance period) or such earlier date as the
Board may determine and ending on the sixth anniversary of the grant date.
The Board will retain the discretion to calculate the amount subject to recovery, including
whether or not to claw back gross or net of any tax or social security contributions applicable
to the LTIP Award.
5.1.7 Cessation of employment

Except in certain circumstances set out below, an unvested LTIP Award will lapse immediately
upon a participant ceasing to be employed by or holding office with the Company. However, if
a participant so ceases because of his ill-health, injury, disability, retirement as determined by
and with the agreement of the Board, the participant being employed by a company which
ceases to be a Group company or being employed in an undertaking which is transferred to a
person who is not a Group company or in other circumstances at the discretion of the Board
(except where he is summarily dismissed), his LTIP Award will ordinarily continue to vest (and
be released) on the date when it would have vested (and been released) if he had not so ceased
to be a Company employee or director, taking into account the satisfaction of any applicable
performance conditions measured over the original performance period.
However the Board retains discretion to allow the LTIP Award to vest (and be released)
following the individual’s cessation of office or employment, taking into account the
performance conditions measured up to that point.
Unless the Board decides otherwise, vesting will also take into account the proportion of the
performance period (or, in the event that no performance condition applies, the vesting period)
which has elapsed on the participant’s cessation of office or employment.
If a participant dies, a proportion of his LTIP Award will vest (and be released) on the date of
his death on the basis set out other “good leavers” above.
If a participant ceases to be an officer or employee of the Company during a holding period,

his LTIP Award will normally be released at the end of the holding period, unless the Board
determines that it should be released following cessation of employment or office. However, if
the participant is summarily dismissed, any outstanding LTIP Awards he holds will
immediately lapse.
5.1.8 Corporate events

In the event of a takeover of the Company, LTIP Awards will vest and be released early. The
proportion of the LTIP Awards which vest will be determined by the Board taking into account,
the extent to which any applicable performance conditions have been satisfied at that time and,
unless the Board determines otherwise, the proportion of the performance period (or, in the
event that no performance condition applies, the vesting period) which has elapsed.
Alternatively, the Board may permit LTIP Awards to be exchanged for awards of shares in the
acquiring company. If the transaction is an internal reorganisation of the Group or if the Board
so decides, participants will be required to exchange their LTIP Awards.
If other corporate events occurs such as a winding-up of the Company, demerger, delisting,
special dividend or other event which, in the Board’s opinion, may affect the current or future
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value of Shares, the Board may determine that LTIP Awards will vest and be released on the
same basis as for a takeover.
5.1.9 Awards not transferable

LTIP Awards are not transferable other than to the participant’s personal representatives in the
event of his death.
5.1.10 Limits
The LTIP may operate over new issue Shares, Treasury Shares or Shares purchased in the
market. The rules of the LTIP provide that, in any 10 year rolling period, not more than
10 per cent. of the Company’s issued ordinary share capital may be issued under the LTIP and
under any other employees’ share scheme adopted by the Company. In addition, the rules of
the LTIP provide that, in any 10 year rolling period, not more than five per cent. of the
Company’s issued ordinary share capital may be issued under the LTIP and any other
discretionary share plan adopted by the Company. Shares transferred out of treasury under the
LTIP will count towards these limits for so long as this is required under institutional
shareholder guidelines. Shares issued or to be issued pursuant to awards granted before
Admission or in relation to the Admission Awards (described in 5.1.18 below) will not count
towards these limits. In addition, LTIP Awards which are renounced or lapse will be
disregarded for the purposes of these limits.
5.1.11 Variation of capital

If there is a variation of share capital of the Company or in the event of a demerger, delisting,
special dividend or other event which in the Board’s opinion may affect the current or future
value of Shares, the Board may make such adjustments to the number of Shares subject to, or
the performance condition applicable to, LTIP Awards as it considers appropriate.
5.1.12 Dividend equivalents

In respect of LTIP Awards, the Board may decide that participants will receive a payment (in
cash and/or additional Shares) equal in value to any dividends that would have been paid on the
Shares which vest under that award by reference to the period between the time when the
relevant LTIP Award was granted and the time when the relevant LTIP Award vested (or where
relevant was released). This amount may assume the reinvestment of dividends and exclude or
include special dividends.
5.1.13 Cash settlement

At its discretion, the Board may decide to satisfy LTIP Awards with a cash payment equal to
any gain that a participant would have made had the relevant LTIP Award been satisfied with
Shares.
5.1.14 Rights attaching to Shares

Shares issued and/or transferred under the LTIP will not confer any rights on any participant
until the relevant LTIP Award has been released (or, in the case of a nil-cost option, has been
exercised) and the participant in question has received the underlying Shares. Any Shares
allotted when an LTIP Award has been released (or, in the case of a nil-cost option, is exercised)
will rank equally with Shares then in issue (except for rights arising by reference to a record
date prior to their issue).
5.1.15 Amendments
The Board may, at any time, amend the provisions of the LTIP in any respect. The prior
approval of Shareholders at a general meeting of the Company must be obtained in the case of
any amendment to the advantage of participants which is made to the provisions relating to
eligibility, individual or overall limits, the basis for determining the entitlement to, and the
271
terms of, LTIP Awards, the adjustments that may be made in the event of any variation to the
share capital of the Company and/or the rule relating to such prior approval, save that there are
exceptions for any minor amendment to benefit the administration of the LTIP, to take account
of the provisions of any legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for participants, the Company and/or its other Group companies.
Amendments may not adversely affect the existing rights of participants except where
participants are notified of such amendment and the majority of participants who respond
approve such amendment.
5.1.16 Overseas plans

The Board may, at any time, establish further plans based on the LTIP for overseas territories.
Any such plan will be similar to the LTIP but may be modified to take account of local tax,
exchange control or securities laws. Any Shares made available under such further overseas
plans must be treated as counting against the limits on individual and overall participation
under the LTIP.
5.1.17 Benefits not pensionable

The benefits received under the LTIP are not pensionable.
5.1.18 Admission Awards

The Admission Awards will be granted under the LTIP and will vest under the LTIP at the end
of the 2017 and 2018 financial years.
5.2 The SIP

The SIP was adopted by the Board on 28 September 2015, conditional on Admission. The Company
anticipates operating a SIP for the first time in 2016.
5.2.1 Status
The SIP is an all-employee share ownership plan which has been designed to meet HMRC
requirements so that Shares can be provided to UK employees under the SIP in a tax-efficient
manner. Under the SIP, eligible employees may be: (i) awarded up to the maximum HMRC
allowable amount of free Shares (“Free Shares”) each year; (ii) offered the opportunity to buy
Shares with a value of up to the maximum HMRC allowable limits of the employee’s pre-tax
salary each year (“Partnership Shares”); (iii) given up to two free Shares (“Matching Shares”)
for each Partnership Share bought; and/or (iv) allowed or required to purchase Shares using any
dividends received on Shares held in the SIP (“Dividend Shares”). The Board may determine
that different limits will apply in the future should the relevant legislation change in this
respect. The Company intends to operate the SIP to facilitate Partnership Shares only and not
make Free Shares or Matching Shares. Depending on the future financial position of the
Company, Free Shares and/or Matching Shares may be awarded at some point.
5.2.2 SIP Trust

The SIP operates through a UK-resident trust (the “SIP Trust”). The trustee of the SIP Trust
purchases or subscribes for Shares that are awarded to or purchased on behalf of participants
in the SIP. A participant will be the beneficial owner of any Shares held on his behalf by the
trustee of the SIP Trust. Any Shares held in the SIP Trust will rank equally with Shares then in
issue. If a participant ceases to be in relevant employment, he will be required to withdraw his
Free Shares, Partnership Shares, Matching Shares and Dividend Shares from the SIP Trust (or
the Free Shares and Matching Shares may be forfeited as described below).
5.2.3 Eligibility
Each time that the Board decides to operate the SIP, all UK resident tax-paying employees of
the Company and its subsidiaries participating in the SIP must be offered the opportunity to
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participate. Other employees may be permitted to participate. Employees who are invited to
participate must have completed a minimum qualifying period of employment before they can
participate, as determined by the Board in relation to any award of Shares under the SIP which
may be different for each type of award from time to time. In the case of Free Shares (and, in
certain circumstances, Partnership and Matching Shares) that period must not exceed
18 months or, in certain other circumstances and only in the case of Partnership Shares or
Matching Shares, six months.
5.2.4 Limits
The SIP may operate over new issue Shares, treasury Shares or Shares purchased in the market.
The rules of the SIP provide that, in any 10 year rolling period, not more than 10 per cent. of
the Company’s issued ordinary share capital may be issued under the SIP and under any other
employees’ share scheme adopted by the Company. Shares transferred out of treasury for the
SIP will count towards this limit for so long as this is required under institutional shareholder
guidelines. Shares issued or to be issued pursuant to awards granted before Admission or in
relation to the Admission Awards (described in 5.1.18 above) will not count towards this limit.
In addition, awards which are renounced or lapse will be disregarded for the purposes of this
limit.
5.2.5 Free Shares

Up to the maximum as may be provided by statute worth of Free Shares may be awarded to
each employee in a tax year. Free Shares must be awarded on the same terms to each employee,
but the number of Free Shares awarded can be determined by reference to the employee’s
remuneration, length of service, number of hours worked and, if the Company so chooses, the
satisfaction of performance targets based on business results or other objective criteria. There
is a holding period of between three and five years (the precise duration to be determined by
the Board) during which the participant cannot withdraw the Free Shares from the SIP Trust
(or otherwise dispose of the Free Shares) unless the participant leaves relevant employment.
The Board, at its discretion, may provide that the Free Shares will be forfeited if the participant
leaves relevant employment other than in the circumstances of injury, disability, redundancy,
retirement, by reason of a relevant transfer within the meaning of the Transfer of Undertakings
(Protection of Employment) Regulations 2006 or if the relevant employment is employment by
an associated company by reason of a change of control or other circumstances ending that
company’s status as an associated company (each a “SIP Good Leaver Reason”) or on death.
The Company does not intend to award Free Shares in the immediate future.
5.2.6 Partnership Shares

The Board may allow an employee to use pre-tax salary to buy Partnership Shares. The
maximum limit is the maximum HMRC allowable limit of pre-tax salary in any tax year (or
such other maximum as may be provided by statute). The minimum salary deduction permitted,
as determined by the Board, must be no greater than £10 on any occasion (or such other limit
required by statute). The salary deductions allocated to Partnership Shares can be accumulated
for a period of up to 12 months (the “Accumulation Period”) or Partnership Shares can be
purchased out of deductions from the participant’s pre-tax salary when those deductions are
made. A participant and the Company may agree to vary the amount of salary deductions and
the intervals of those deductions. If there is an Accumulation Period, the number of Shares
purchased will be determined by dividing the participant’s aggregate pay deducted during the
Accumulation Period by (1) the market value of the Partnership Shares at the start of the
Accumulation Period, (2) the market value of the Partnership Shares at the time of acquisition
or (3) the lower of the values described in (1) or (2). Once acquired, Partnership Shares may
be withdrawn from the SIP by the participant at any time.
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5.2.7 Matching Shares
The Board may, at its discretion, offer Matching Shares free to an employee who has purchased
Partnership Shares. If awarded, Matching Shares must be awarded on the same basis to all
participants up to a maximum of two Matching Shares for every Partnership Share purchased
(or such other maximum as may be provided by statute). There is a holding period of between
three and five years (the precise duration to be determined by the Board) during which the
participant cannot withdraw the Matching Shares from the SIP Trust unless the participant
leaves relevant employment. The Board, at its discretion, may provide that the Matching Shares
will be forfeited if the participant leaves relevant employment other than for a SIP Good Leaver
Reason, on death, or if he withdraws the related Partnership Shares. The Company does not
intend to award Matching Shares in the immediate future.
5.2.8 Re-investment of dividends

The Board may allow or require a participant to re-invest the whole or part of any dividends
paid on Shares held in the SIP. Dividend Shares must be held in the SIP Trust for no less than
three years.

In the event of a general offer being made to Shareholders (or a similar takeover event taking
place) participants will be able to direct the trustee of the SIP Trust as to how to act in relation
to their Shares held in the SIP. In the event of a corporate re-organisation, any Shares held by
participants may be replaced by equivalent shares in a new holding company.

Shares acquired on a variation of share capital of the Company will usually be treated in the
same way as the Shares acquired or awarded under the SIP, in respect of which the rights were
conferred and as if they were acquired or awarded at the same time.

Any Shares allotted under the SIP will rank equally with Shares then in issue (except for rights
arising by reference to a record date prior to their allotment).
5.2.12 Amendments
The Board may at any time amend the rules of the SIP with the consent of the SIP trustee. The
prior approval of Shareholders at a general meeting of the Company must be obtained in the
case of any amendment to the advantage of participants which is made to the provisions
relating to eligibility individual or overall limits, the basis for determining a participant’s
entitlement to and the terms of Shares provided under the SIP, and/or the adjustments that may
be made in the event of any variation to the share capital of the Company and the rule relating
to such approval; save that there are exceptions for any minor amendment to benefit the
administration of the SIP, to take account of any change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for participants, the Company and/or
its associated companies.

The benefits received under the SIP are not pensionable.

The Board may, at any time, establish further plans for overseas territories, any such plan to be
similar to the SIP but modified to take account of local tax, exchange control or securities laws.
Any Shares made available under such further overseas plans must be treated as counting
against the limits on individual and overall participation in the SIP.
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5.3 Bonus deferral plan (“BDP”)
The BDP was adopted by the Board on 28 September 2015, conditional on Admission.
5.3.1 Status
The BDP is a discretionary executive share plan implemented so that a portion of a participant’s
bonus is deferred into a conditional award of Shares or a nil-cost option over Shares (“BDP
Awards”). No payment is required for the grant of a BDP Award.
5.3.2 Eligibility
All employees (including Executive Directors) of the Company are eligible for selection to
participate in the BDP at the discretion of the Board.
5.3.3 Grant of BDP Awards

BDP Awards may be granted during the 42 days beginning on: (i) the day after the
announcement of the Company’s results for any period; (ii) any day on which the Board
determines that exceptional circumstances exist which justify the making of the LTIP Award at
that time; or (iii) the day any dealing restrictions are lifted. However, no BDP Awards may be
granted more than ten years from Admission.
5.3.4 Vesting and exercise

BDP Awards will normally vest on the third anniversary of the date the bonus in respect of
which the BDP Award is granted was determined or such other date as the Board may
determine. Nil-cost options will normally be exercisable from vesting until the tenth
anniversary of the grant date.
5.3.5 Malus and clawback

The Board may decide, at any time prior to the vesting of BDP Awards, to impose further
conditions on the BDP Awards or reduce the number of Shares under the BDP Award
(including to nil) (“malus”). The circumstances in which the Board may consider operating
malus include, but are not limited to, the following:
company;
(b) the assessment of any metric applicable to the calculation of the relevant bonus was
based on an error, or inaccurate or misleading information or assumptions;
misconduct; or
(d) events or the behaviour of a participant or participants have a significant detrimental

impact on the reputation of any Group company provided that the Board is satisfied that
the relevant participant or participants were responsible or directly accountable for the
reputational damage
occurring during the period commencing on the first date of the relevant bonus year, or such
earlier date as the Board may determine and ending on the third anniversary of the relevant
bonus determination date.
Similarly, in certain circumstances the Board may recover value from the participant following
the vesting of a BDP Award (“clawback”). The clawback provision may be implemented at any
time prior to the third anniversary of the relevant bonus determination date by a reduction in
(i) the vesting of any subsisting Share awards or (ii) the number of Shares under any vested but
unexercised nil-cost option and/or the participant being required to return the cash or Shares
275
delivered under the BDP Award to the Company or to make a cash payment in respect of that
cash or those Shares.
The circumstances in which the Board may consider operating clawback are:
company;
(b) the assessment of any metric applicable to the calculation of the relevant bonus was
based on an error, or inaccurate or misleading information or assumptions; or
misconduct
occurring during the period commencing on the first date of the relevant bonus year, or such
earlier date as the Board may determine and ending on the third anniversary of the relevant
bonus determination date.
The Board will retain the discretion to calculate the amount subject to recovery, including
whether or not to claw back gross or net of any tax or social security contributions applicable
to the BDP Award.
5.3.6 Cessation of employment

If a participant ceases to be employed by or hold office with the Company for any reason other
than where he has breached a term of his employment or service contract or has been
summarily dismissed, any unvested BDP Award will ordinarily vest on the date when it would
have vested if he had not so ceased to be a Company employee or director. However the Board
retains discretion to allow the BDP Award to vest following the individual’s cessation of office
or employment. If a participant dies, his BDP Award will vest on the date of his death. In any
other circumstances, any unvested BDP Awards will lapse on the participant’s cessation of
office or employment.

In the event of a takeover of the Company, the BDP Awards will vest early.
Alternatively, the Board may permit BDP Awards to be exchanged for awards of shares in the
acquiring company. If the transaction is an internal reorganisation of the Group or the Board so
decides, participants will be required to exchange their BDP Awards.
If other corporate events occurs such as a winding-up of the Company, demerger, delisting,
special dividend or other event which, in the Board’s opinion may affect the current or future
value of Shares, the Board may determine that BDP Awards will vest on the same basis as for
a takeover.
5.3.8 BDP Awards not transferable

Awards granted under the BDP are not transferable other than to the participant’s personal
representatives in the event of his death.
5.3.9 Limits
The BDP may operate over new issue Shares, treasury Shares or Shares purchased in the
market. The rules of the BDP provide that, in any 10 year rolling period, not more than
10 per cent. of the Company’s issued ordinary share capital may be issued under the BDP and
under any other employees’ share scheme adopted by the Company. In addition, the rules of
the BDP provide that, in any 10 year rolling period, not more than five per cent. of the
Company’s issued ordinary share capital may be issued under the BDP and any other
discretionary share plan adopted by the Company. Shares transferred out of treasury under the
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BDP will count towards these limits for so long as this is required under institutional
shareholder guidelines. Shares issued or to be issued pursuant to awards granted before
Admission or in relation to the Admission Awards (described in 5.1.18 above) will not count
towards these limits. In addition, awards which are renounced or lapse will be disregarded for
the purposes of these limits.

If there is a variation of share capital of the Company or in the event of a demerger, delisting,
special dividend or distribution, or other event which in the Board’s opinion may affect the
current or future value of Shares, the Board may make such adjustments to the number of
Shares subject to BDP Awards as it considers appropriate.
5.3.11 Dividend equivalents

In respect of any BDP Awards, the Board may decide that participants will receive a payment
(in cash and/or additional Shares) equal in value to any dividends that would have been paid on
the Shares which vest under that BDP Award by reference to the period between the time when
the relevant BDP Award was granted and the time when the relevant BDP Award vested. This
amount may assume the reinvestment of dividends and exclude or include special dividends.
5.3.12 Cash settlement

At its discretion, the Board may decide to satisfy BDP Awards with a cash payment equal to
any gain that a participant would have made had the BDP Award been satisfied with Shares.

Shares issued and/or transferred under the BDP will not confer any rights on any participant
until the relevant BDP Award has vested (or, in the case of a nil-cost option, has been exercised)
and the participant in question has received the underlying Shares. Any Shares allotted when a
BDP Award vests (or, in the case of a nil-cost option, is exercised) will rank equally with Shares
then in issue (except for rights arising by reference to a record date prior to their issue).
5.3.14 Amendments
The Board may, at any time, amend the provisions of the BDP in any respect. The prior
approval of Shareholders at a general meeting of the Company must be obtained in the case of
any amendment to the advantage of participants which is made to the provisions relating to
eligibility, individual or overall limits, the basis for determining the entitlement to, and the
terms of, BDP Awards, the adjustments that may be made in the event of any variation to the
share capital of the Company and/or the rule relating to such prior approval, save that there are
exceptions for any minor amendment to benefit the administration of the BDP, to take account
of the provisions of any legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for participants, the Company and/or its other Group companies.
Amendments may not adversely affect the rights of participants except where participants are
notified of such amendment and the majority of participants who respond approve such
amendment.

The Board may, at any time, establish further plans based on the BDP for overseas territories.
Any such plan will be similar to the BDP but may be modified to take account of local tax,
exchange control or securities laws. Any Shares made available under such further overseas
plans must be treated as counting against the limits on individual and overall participation
under the BDP.
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The benefits received under the BDP are not pensionable.
5.4 The Company’s employee benefit trust

The Group operates an employee benefit trust (the “EBT”). This was established by a trust deed
entered into between HISL and Elian Employee Benefit Trustee Limited. HISL has the power to
appoint and remove the trustee. The EBT can be used to benefit employees and former employees of
the Group and certain members of their families. The trustee of the EBT has the power to acquire
Shares. Any Shares acquired may be used for the purposes of the share plans described above or other
employee share plans established by the Group from time to time. The Group may fund the EBT by
loan or gift to acquire Shares either by market purchase or by subscription. Any awards to subscribe
for Shares granted to the EBT or Shares issued to the EBT will be treated as counting against the
dilution limits that apply to the relevant plan. The EBT will not make an acquisition of Shares if that
acquisition would mean that (after deducting any Shares held as nominee for beneficiaries under the
EBT) it held more than five per cent. of the Company’s ordinary share capital, without prior
shareholder approval.
5.5 Management Incentive Plan (“MIP”)

As part of the 2014 Reorganisation, Gary Hoffman, certain of the Senior Managers, and other
managers of the Group acquired equity interests as part of the MIP. Gary Hoffman, certain of the
Senior Managers, and certain other managers of the Group who received proceeds from the sale of
instruments they held prior to the 2014 Reorganisation were required to re-invest a proportion of those
proceeds into new instruments carrying equivalent economic rights to the instruments acquired by
Hastings A, L.P., Hastings B, L.P. and Goldman, Sachs & Co., and the Founder Shareholders. These
comprised preference shares and non-voting ordinary shares.
Additionally, Gary Hoffman, certain Senior Managers, and certain other managers of the Group
(including a number who did not hold instruments prior to the 2014 Reorganisation and therefore did
not receive sale proceeds in the 2014 Reorganisation) acquired further shares carrying equity, but not
voting, rights which were subject to vesting conditions as to time and performance, described as
“sweet equity” shares. All of the shares issued under the terms of the MIP were subject to additional
provisions in the event that the holder were to leave the Group’s employ before the economic rights
crystallised on a future corporate transaction or event, such as a sale or listing.
Further issues of sweet equity were made to individuals who were recruited subsequently, including
Richard Hoskins, certain of the Senior Managers, and certain other managers of the Group. Elian
Employee Benefit Trustee Limited (as trustee of the Hastings Direct Employee Benefit Trust)
acquired a number of equity interests, including sweet equity, from individuals who had left the
Group’s employ in accordance with the leaver provisions of the MIP.
All of the equity interests under the MIP were converted to equivalent instruments in Holdco and the
Principal Shareholder under the Reorganisation, carrying substantially the same rights, restrictions
and obligations as the original instruments. The sweet equity shares have vesting conditions as to
either time or performance. The time vesting shares vest as to 20 per cent. on the anniversary of the
date of original issue and then pro-rata over the subsequent four years (or until all preference shares
have been redeemed, at which point they fully vest). The performance shares may vest in whole or in
part after the earlier of (a) the combined equity interest of Hastings A, L.P., Hastings B, L.P. and
Goldman, Sachs & Co., and the Founder Shareholders (on a look through basis) in the Company
falling below 35 per cent. or (b) 8 July 2018, with the performance vesting being subject to the Shares
having met certain valuation and investment return targets at any time thereafter (based on the Share
price over a 30 consecutive trading day period). In the event of a takeover offer for the Company, the
vesting of the performance shares will be measured using the offer price on the date such takeover
offer becomes wholly unconditional.
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The economic interests of instruments held under the MIP will be satisfied by Holdco and the
Principal Shareholder from any proceeds of the Principal Shareholder’s holding of Shares.
6. Pensions (i) 15.2
The Company operates various defined contribution group personal pension schemes for employees
employed in the United Kingdom and in Gibraltar to which the relevant employer makes matching
contributions based on the employee’s level of contributions. The Company does not operate any defined
benefit pension schemes.
7. Underwriting arrangements
7.1 Underwriting Agreement (i) 22
(iii) 5.1.1
On 9 October 2015, the Company, the Directors, the Selling Shareholders (with Hastings Nominees
(iii) 5.4.3
F Limited and Hastings Nominees G Limited acting on behalf of certain individual selling
shareholders) and the Banks entered into the Underwriting Agreement. Pursuant to the Underwriting
Agreement:
7.1.1 the Company has agreed, subject to certain conditions, to allot and issue, at the Offer Price, the
New Shares to be issued in connection with the Offer;
7.1.2 the Selling Shareholders (with Hastings Nominees F Limited and Hastings Nominees G
Limited acting on behalf of certain individual selling shareholders) have agreed, subject to
certain conditions, to sell up to 16,470,589 Shares in the Offer at the Offer Price;
7.1.3 the Banks have severally agreed, subject to certain conditions, to procure subscribers or, failing
which, themselves to subscribe the New Shares (in such proportions as will be set out in the
Underwriting Agreement) and to procure purchasers for or, failing which, themselves to
purchase the New Shares pursuant to the Offer;
7.1.4 the Banks will deduct from the proceeds of the Offer to the Company a commission of
two per cent. of the product of the Offer Price and the number of New Shares allotted pursuant
to the Offer and from the proceeds of the Offer to the Selling Shareholders a commission of
two per cent. of the product of the Offer Price and the number of Existing Shares sold in the
Offer (including following any exercise of the Over-allotment Option);
7.1.5 in addition, in the event that the Offer is completed, the Company may, at its sole and absolute
discretion pay an additional commission of up to one per cent. of the product of the Offer Price
and the number of New Shares and the Selling Shareholders shall, in their sole and absolute
discretion, pay an additional commission of up to one per cent. of the product of the Offer Price
and the number of Existing Shares sold in the Offer (including following any exercise of the
Overallotment Option);
7.1.6 the obligations of the Banks to procure subscribers and/or purchasers for or, failing which,
themselves to subscribe for or purchase Shares on the terms of the Underwriting Agreement are
subject to certain conditions. These conditions include the absence of any breach of
representation or warranty under the Underwriting Agreement and Admission occurring on or
before 29 October 2015 (or such later time and/or date as the Joint Global Co-ordinators and
the Company may agree in writing). In addition, the Joint Global Co-ordinators have the right
to terminate the Underwriting Agreement, exercisable in certain circumstances, prior to
Admission;
7.1.7 Credit Suisse, as Stabilising Manager, has been granted the Over-allotment Option by the
Over-allotment Shareholders pursuant to which it may purchase or procure purchasers for up
to 12,352,941 Over-allotment Shares at the Offer Price for the purposes of covering short
positions arising from over-allocations, if any, in connection with the Offer and/or from sales
of Shares, if any, effected during the stabilising period. Except as required by law or regulation,
neither the Stabilising Manager, nor any of its agents, intends to disclose the extent of any over-
allotments and/or stabilising transactions conducted in relation to the Offer. The number of
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Over-allotment Shares to be transferred pursuant to the Over-allotment Option, if any, will be
determined not later than 11 November 2015. Settlement of any purchase of Over-allotment
Shares will take place shortly after such determination (or if acquired on Admission, at
Admission). If any Over-allotment Shares are acquired pursuant to the Overallotment Option,
Credit Suisse will be committed to pay to the Over-allotment Shareholders, or procure that
payment is made to it of, an amount equal to the Offer Price multiplied by the number of Over-
allotment Shares purchased from such Over-allotment Shareholder, less commissions and
expenses;
7.1.8 the Selling Shareholders have agreed to pay any stamp duty and/or stamp duty reserve tax (up
to 0.5 per cent.) arising on the sale of Shares pursuant to the Offer;
7.1.9 the Company has agreed to pay the costs, charges, fees and expenses of the Offer (together with
any related value added tax);
7.1.10 the Company has agreed that, subject to certain exceptions, during the period of 180 days from
the date of Admission, it will not, without the prior written consent of the Joint Global
Co-ordinators (such consent not to be unreasonably withheld or delayed), issue, offer, lend, sell
or contract to sell, grant any option, right or warrant to subscribe or purchase or allow any
encumbrance to be created over or otherwise dispose of, directly or indirectly, any Shares (or
any interest therein or in respect thereof) or enter into any transaction with the same economic
effect as any of the foregoing, or announce any offer of Shares or other intention to do the
foregoing;
7.1.11 526,085,523 of the Shares (or 513,732,582 Shares if the Over-allotment Option is exercised in
full) (excluding those Shares acquired in the Offer by Thomas Duggan and David Saville) are
subject to lock-up arrangements. Pursuant to these arrangements, Directors, Senior Managers,
the Principal Shareholder, those Founder Shareholders who are beneficial owners of Shares,
other Nominees F Shareholders and the Lock-up Shareholders have agreed that, subject to
certain exceptions, during the periods stated below they will not, without the prior written
consent of the Joint Global Co-ordinators (such consent not to be unreasonably withheld or
delayed), offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, any Shares
(or any interest therein in respect thereof) or enter into any transaction with the same economic
effect as any of the foregoing or announce any intention to do the foregoing. The Directors
(other than Richard Brewster and Edward Fitzmaurice) and Senior Managers have agreed to a
lock-up period of 365 days from the date of Admission and the Principal Shareholder, the
relevant Founder Shareholders, the other Nominees F Shareholders, Richard Brewster, Edward
Fitzmaurice and the Lock-up Shareholders have agreed to a lock-up period of 180 days from
the date of Admission. The Joint Global Co-ordinators have agreed to exclude the 11,764,704
Shares, in aggregate, acquired by Thomas Duggan and David Saville in the Offer from the lock-
up arrangements;
7.1.12 the net proceeds of any sale of Shares by the Principal Shareholder will benefit holders of the
Preference Shares. The Principal Shareholder and Holdco will distribute the net proceeds
received by the Principal Shareholder from its sale of Shares in the Offer by way of the
redemption of Preference Shares. The total amount of the Preference Shares to be redeemed,
and the proportions in which the Preference Shares shall be redeemed, will be determined at
the discretion of the board of directors of the Principal Shareholder and (as the case may be)
Holdco. The redemption of Preference Shares will not be subject to the lock-up provisions
described in paragraph 7.1.11;
7.1.13 each of the Company, the Directors and the Selling Shareholders have given certain
representations, warranties and undertakings, subject to certain limits, to the Banks;
7.1.14 the Company has given an indemnity to the Banks on customary terms; and
7.1.15 the parties to the Underwriting Agreement have given certain covenants to each other regarding
compliance with laws and regulations affecting the making of the Offer in relevant
jurisdictions.
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7.2 Stock lending agreement
In connection with settlement and stabilisation, Credit Suisse, as Stabilising Manager, has entered into
a stock lending agreement with the Over-allotment Shareholders. Pursuant to this agreement, the
Stabilising Manager will be able to borrow up to a maximum of 10 per cent. of the total number of
Shares comprised in the Offer (excluding the Shares subject to the Over-allotment Option) on
Admission for the purposes, amongst other things, of allowing the Stabilising Manager to settle, on
Admission, over-allotments, if any, made in connection with the Offer. If the Stabilising Manager
borrows any Shares pursuant to the stock lending agreement, it will be required to return equivalent
securities to the relevant Over-allotment Shareholders by no later than the third business day after the
date that is the 30th day after the commencement of conditional dealings of the Shares on the London
Stock Exchange.
8. Subsidiaries, investments and principal establishments

The Company is the principal operating and holding company of the Group. The principal subsidiaries and (i) 25
subsidiary undertakings of the Company are as follows: (i) 7.1

(i) 7.2
8.1 Subsidiaries and subsidiary undertakings

Class and
Country of percentage of
incorporation ownership
and registered interest and
Name office voting power Field of activity
––––––––––––––––––––––––––––––––––– ––––––––––––– –––––––––––– ––––––––––––––
Hastings Insurance Group (Holdings) plc ............ Jersey 100% Holding
Hastings Insurance Group (Investment) plc.......... Jersey 100% Holding
Hastings Insurance Group (Layer Three) plc ....... Jersey 100% Holding
Hastings Insurance Group (Layer Two) plc.......... Jersey 100% Holding
Hastings Insurance Group (Finance) plc .............. Jersey 100% Financing
Hastings Insurance Group Limited ....................... Jersey 100% Holding
Hastings (Holdings) Limited................................. England & Wales 100% Holding
Hastings (UK) Limited.......................................... England & Wales 100% Holding
Hastings Insurance Services Limited.................... England & Wales 100% Insurance services
Conquest House Limited....................................... England & Wales 100% Leasing of property
Advantage Global Holdings Limited .................... British Virgin Islands 100% Holding
Advantage Insurance Company Limited............... Gibraltar 100% Insurance
underwriting
8.2 Principal establishments

The Group has freehold interests in the Group’s offices and call centre located at Conquest House, (i) 8.1
Bexhill-on-Sea, UK through Conquest House Limited, a subsidiary of AICL, and The Old Bank,
Cannon Lane, Gibraltar through AICL.
The Group currently leases or has license to occupy the following properties in the UK:
Name and location Type of facility
––––––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––
Rosalind Franklin House and Hyperion....................................... Satellite office and call
House, Fordham Road, Newmarket centre
Becket House, 36 Old Jewry, London.......................................... Management hot desk and
meeting facility
Eastbourne House and Berkley House,........................................ Temporary satellite office
Gildredge Road, Eastbourne
First Floor, 1 St. Georges Way, Leicester (1)................................. Satellite office and call
centre
Notes:
(1) This lease is due to begin in January 2016. An interim office is located at First Floor, Equinox, 99 Burleys Way, Leicester.
All the Group’s leases are short term.
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9. Statutory auditors (i) 2.1
KPMG LLP have prepared the accountant’s report in Part 12 which reports on the financial information for
(i) the HIG Group for the year ended 31 December 2012 and 31 December 2013 and the seven days ended
7 January 2014; and (ii) the HIG(H) Group for the four months ended 31 December 2013, the year ended
31 December 2014 and the six months ended 30 June 2015.
10. Material contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been (i) 22
entered into by the Company or another member of the Group: (a) within the two years immediately
preceding the date of this Prospectus which are, or may be, material to the Company or any member of the
Group, and (b) at any time and contain provisions under which the Company or any member of the Group
has an obligation or entitlement which is, or may be, material to the Company or any member of the Group
as at the date of this Prospectus:
10.1 Underwriting Agreement

The Underwriting Agreement is described in paragraph 7.1 of this Part 16 (Additional Information).
10.2 Relationship Agreement

The Relationship Agreement is described in Part 8 (Directors, Senior Managers and Corporate
Governance).
10.3 Investment and Reorganisation Deed

The investment and reorganisation deed between (among others) the Company, HIG, HIG(H), HIG(I),
HIG(F), the Principal Shareholder, Holdco and Elian Employee Benefit Trustee Limited (the
“Investment and Reorganisation Deed”) was entered into on 3 August 2015. Pursuant to the
Investment and Reorganisation Deed, the Company replaced HIG as the holding company of the
Group.
10.4 2019 Notes and 2020 Notes

The Group’s 2019 Notes and 2020 Notes are described in Part 10 (Operating and Financial Review).
10.5 2013 Revolving Credit Facility LR 6.1.4

LR 6.1.4B(1)
The Group’s existing banking facilities are described in Part 10 (Operating and Financial Review).
LR 6.1.4B(2)
LR 6.1.4D(1)
10.6 2015 Banking Facilities
LR 6.1.4D(2)
The Group’s new banking facilities are described in Part 10 (Operating and Financial Review). LR 6.1.4D(3)
11. UK Taxation
The following statements are intended only as a general guide to certain UK tax considerations and do not (iii) 4.11
purport to be a complete analysis of all potential UK tax consequences of acquiring, holding or disposing of
Shares. They are based on current or announced UK legislation and what is understood to be the current
practice of HMRC as at the date of this Prospectus, both of which may change, possibly with retroactive
effect. They apply only to Shareholders who are resident and, in the case of individuals domiciled, for tax
purposes in (and only in) the UK (except insofar as express reference is made to the treatment of non-UK
residents), who hold their Shares as an investment (other than in an individual savings account) and who are
the absolute beneficial owner of both the Shares and any dividends paid on them. The tax position of certain
categories of Shareholders who are subject to special rules (such as persons acquiring their Shares in
connection with employment, dealers in securities, insurance companies and collective investment schemes)
is not considered.
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The statements summarise the current position and are intended as a general guide only. Prospective
investors who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction
other than the UK are strongly recommended to consult their own professional advisers.
11.1 Taxation of dividends

The Company is not required to withhold tax at source when paying a dividend. Liability to tax on
dividends will depend upon the individual circumstances of a Shareholder.
11.1.1 UK resident individual Shareholders

An individual Shareholder who is resident for tax purposes in the UK and who receives a
dividend from the Company will generally be entitled to a tax credit equal to one-ninth of the
amount of the dividend received, which is equivalent to 10 per cent. of the aggregate of the
dividend received and the tax credit (the “gross dividend”), and will be subject to income tax
on the gross dividend. An individual UK resident Shareholder who is subject to income tax at
a rate or rates not exceeding the basic rate will be liable to tax on the gross dividend at the rate
of ten per cent., so that the tax credit will satisfy the income tax liability of such a Shareholder
in full. Where the tax credit exceeds the Shareholder’s tax liability the Shareholder cannot
claim repayment of the tax credit from HMRC.
An individual UK resident Shareholder who is subject to income tax at the higher rate or the
additional rate will be liable to income tax on the gross dividend at the rate of 32.5 per cent. or
37.5 per cent. respectively to the extent that such sum, when treated as the top slice of that
Shareholder’s income, falls above the threshold for higher rate or additional rate income tax.
After taking into account the 10 per cent. tax credit, a higher rate taxpayer will therefore be
liable to additional income tax of 22.5 per cent. of the gross dividend, equal to 25 per cent. of
the cash dividend, and an additional rate taxpayer will be liable to additional income tax of
27.5 per cent. of the gross dividend, equal to approximately 30.6 per cent. of the cash dividend.
It was announced at the Budget on 8 July 2015 that the UK government proposes to abolish the
dividend tax credit from April 2016 and introduce a new dividend tax allowance of £5,000 a
year instead. It is proposed that the new rates of tax on dividend income above the allowance
will be 7.5 per cent. for basic rate taxpayers, 32.5 per cent. for higher rate taxpayers and
38.1 per cent. for additional rate taxpayers.
11.1.2 UK resident corporate Shareholders

It is likely that most dividends paid on the Shares to UK resident corporate shareholders would
fall within one or more of the classes of dividend qualifying for exemption from corporation
tax. However, it should be noted that the exemptions are not comprehensive and are also subject
to anti-avoidance rules. If the conditions for exemption are not met or cease to be satisfied, or
such a corporate Shareholder elects an otherwise exempt dividend to be taxable, the
Shareholder will be subject to UK corporation tax on dividends received from the Company.
11.1.3 UK resident exempt Shareholders

UK resident Shareholders who are not liable to UK tax on dividends, including pension funds
and charities, are not entitled to claim repayment of the tax credit.
11.1.4 Non-UK resident Shareholders

Shareholders who are resident outside the UK for tax purposes will not generally be able to
claim repayment of any part of the tax credit attaching to dividends received from the
Company, although this will depend on the existence and terms of any double taxation
convention between the UK and the country in which such Shareholder is resident.
A Shareholder resident outside the UK may also be subject to non-UK taxation on dividend
income under local law. A Shareholder who is resident outside the UK for tax purposes should
consult his own tax adviser concerning his tax position on dividends received from the
Company.
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11.2 Taxation of disposals
A disposal or deemed disposal of Shares by a Shareholder who is resident in the UK for tax purposes
may, depending upon the Shareholder’s circumstances and subject to any available exemption or relief
(such as the annual exempt amount for individuals and indexation for corporate shareholders), give
rise to a chargeable gain or an allowable loss for the purposes of UK taxation of capital gains.
Shareholders who are not resident in the UK will not generally be subject to UK taxation of capital
gains on the disposal or deemed disposal of Shares unless they are carrying on a trade, profession or
vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent
establishment) in connection with which the Shares are used, held or acquired. Non-UK tax resident
Shareholders may be subject to non-UK taxation on any gain under local law.
An individual Shareholder who has been resident for tax purposes in the UK but who ceases to be so
resident or becomes treated as resident outside the UK for the purposes of a double tax treaty (“Treaty
non-resident”) for a period of five years or less (or, for departures before 6 April 2013, ceases to be
resident or ordinarily resident or becomes Treaty non-resident for a period of less than five tax years)
and who disposes of all or part of his Shares during that period may be liable to capital gains tax on
his return to the UK, subject to any available exemptions or reliefs.
11.3 Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)

11.3.1 The Offer
The stamp duty and SDRT treatment of the subscription or purchase of Shares under the Offer
will be as follows:
(a) The issue of Shares direct to persons acquiring Shares pursuant to the Offer will not
generally give rise to stamp duty or SDRT.
(b) The transfer of, or agreement to transfer, Shares sold by the Selling Shareholders under
the Offer will generally give rise to a liability to stamp duty and/or SDRT at a rate of
0.5 per cent. of the Offer Price (in the case of stamp duty, rounded up to the nearest
multiple of £5). The Selling Shareholders have agreed to meet such liability. An
exemption from stamp duty is available on an instrument transferring Shares where the
amount or value of the consideration is £1,000 or less, and it is certified on the
instrument that the transaction effected by the instrument does not form part of a larger
transaction or series of transactions for which the aggregate consideration exceeds
£1,000.
The above arrangements to meet liabilities will not apply to any charge to stamp duty or SDRT
under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (which broadly apply where the
transferee is, or is a nominee or agent for, either a person whose business is or includes the
issuing of depositary receipts or a person whose business is or includes the provision of
clearance services for the purchase and sale of chargeable securities to the extent that such
stamp duty and/or SDRT is charged at a rate exceeding 0.5 per cent. of the Offer Price).
11.3.2 Subsequent transfers
Stamp duty at the rate of 0.5 per cent. (rounded up to the next multiple of £5) of the amount or
value of the consideration given is generally payable on an instrument transferring Shares. As
noted above an exemption from stamp duty is available on an instrument transferring Shares
where the amount or value of the consideration is £1,000 or less, and it is certified on the
instrument that the transaction effected by the instrument does not form part of a larger
transaction or series of transactions for which the aggregate consideration exceeds £1,000.
A charge to SDRT will also arise on an unconditional agreement to transfer Shares (at the rate
of 0.5 per cent. of the amount or value of the consideration payable). However, if within six
years of the date of the agreement becoming unconditional an instrument of transfer is executed
pursuant to the agreement, and stamp duty is paid on that instrument, any SDRT already paid
will be refunded (generally, but not necessarily, with interest) provided that a claim for
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repayment is made, and any outstanding liability to SDRT will be cancelled. The liability to
pay stamp duty or SDRT is generally satisfied by the purchaser or transferee.
11.3.3 Shares transferred through paperless means including CREST

Paperless transfers of Shares, such as those occurring within CREST, are generally liable to
SDRT rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the
consideration. CREST is obliged to collect SDRT on relevant transactions settled within the
system. The charge is generally borne by the purchaser. Under the CREST system, no stamp
duty or SDRT will arise on a transfer of Shares into the system unless such a transfer is made
for a consideration in money or money’s worth, in which case a liability to SDRT (usually at a
rate of 0.5 per cent.) will arise.
11.3.4 Shares held through Clearance Systems or Depositary Receipt Arrangements

Special rules apply where Shares are issued or transferred to, or to a nominee or agent for,
either a person whose business is or includes issuing depositary receipts within Section 67 or
Section 93 of the Finance Act 1986 or a person providing a clearance service within Section 70
or Section 96 of the Finance Act 1986, under which SDRT or stamp duty may be charged at a
rate of 1.5 per cent. Following litigation HMRC has confirmed that they will no longer seek to
apply the 1.5 per cent. SDRT charge on an issue of shares into a clearance service or depositary
receipt arrangement on the basis that the charge is not compatible with EU law. HMRC’s view
is that the 1.5 per cent. SDRT or stamp duty charge will continue to apply to transfers of shares
into a clearance service or depositary receipt arrangement unless they are an integral part of an
issue of share capital. This view is currently being challenged in further litigation.
Accordingly, specific professional advice should be sought before incurring a 1.5 per cent.
stamp duty or stamp duty reserve tax charge in any circumstances.
The statements in this paragraph (11.3.4) apply to any holders of Shares irrespective of
their residence, summarise the current position and are intended as a general guide only.
Special rules apply to agreements made by, amongst others, intermediaries.
11.4 Inheritance Tax

The Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift of such
assets by, or the death of, an individual holder of such assets may (subject to certain exemptions and
reliefs) give rise to a liability to UK inheritance tax even if the holder is neither domiciled in the UK
nor deemed to be domiciled there under certain rules relating to long residence or previous domicile.
For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift
and particular rules apply to gifts where the donor reserves or retains some benefit.
Special rules also apply to close companies and to trustees of settlements who hold Shares, bringing
them within the charge to inheritance tax. Shareholders should consult an appropriate tax adviser if
they make a gift or transfer at less than market value or intend to hold any Shares through trust
arrangements.
12. US Federal Income Taxation

The following discussion is a general summary based on present law of certain US federal income tax
considerations relevant to the acquisition, ownership and disposition of Shares. This discussion is not a
complete description of all tax considerations that may be relevant. It addresses only US Holders (as defined
below) that purchase Shares in the Offer, will hold Shares as capital assets and use the US dollar as their
functional currency. The discussion is a general summary; it is not a substitute for tax advice. This discussion
does not address the tax treatment of persons subject to special rules, such as banks or other financial
institutions, insurance companies, regulated investment companies, real estate investment trusts, dealers,
traders in securities that elect to mark-to-market, tax-exempt entities, persons owning directly, indirectly or
constructively 10 per cent. or more of the Company’s share capital, US expatriates, investors liable for
alternative minimum tax, persons holding Shares as part of a hedge, straddle, conversion, constructive sale
285
or other integrated financial transaction or persons holding Shares in connection with a permanent
establishment or fixed base outside the United States. It also does not address US federal taxes other than
income tax (e.g., estate and gift taxes), US state and local, or non-US tax considerations.
As used in this section, “US Holder” means a beneficial owner of Shares that is, for US federal income tax
purposes (i) a citizen or individual resident of the United States, (ii) a corporation created or organised under
the laws of the United States or its political subdivisions, (iii) a trust subject to the control of one or more
US persons and the primary supervision of a US court or (iv) an estate the income of which is subject to US
federal income tax without regard to its source.
The US federal income tax treatment of a partner in an entity treated as a partnership for US federal income
tax purposes that holds Shares generally will depend on the status of the partner and the activities of
the partnership. Prospective purchasers that are partnerships should consult their own tax advisors regarding
the specific US federal income tax consequences to their partners of the partnership’s acquisition, ownership
and disposition of Shares.
12.1 Dividends
Subject to the discussion below under “Passive Foreign Investment Company Rules”, distributions on
the Shares should be included in a US Holder’s gross income as ordinary dividend income from
foreign sources upon receipt. Dividends will not be eligible for the dividends-received deduction
generally available to US corporations. If the Company qualifies for benefits under the United
States-United Kingdom tax treaty (the “Treaty”) and is not a passive foreign investment company, or
PFIC, in the year of distribution or in the preceding year, dividends on the Shares will qualify for the
reduced rates applicable to qualified dividend income of certain eligible non-corporate US Holders
that satisfy a minimum holding period and other generally applicable requirements. The Company
believes it will qualify for benefits under the Treaty, provided that the Company’s ordinary shares are
treated as regularly traded on the London Stock Exchange.
Dividends paid in a currency other than US dollars will be includable in income in a US dollar amount
based on the exchange rate in effect on the date of receipt whether or not the currency is converted
into US dollars or otherwise disposed of at that time. A US Holder’s tax basis in the non-US currency
will equal the US dollar amount included in income. Any gain or loss realised on a subsequent
disposition or conversion of the non-US currency for a different US dollar amount generally will be
US source ordinary income or loss.
12.2 Dispositions
Subject to the discussion below under “Passive Foreign Investment Company”, a US Holder generally
will recognise capital gain or loss on the sale or other disposition of Shares in an amount equal to the
difference between the US Holder’s adjusted tax basis in the Shares and the US dollar value of the
amount realised from the sale or other disposition.
A US Holder’s adjusted tax basis in the Shares generally will be the US dollar value of the purchase
price paid in the Offer. Any gain or loss generally will be treated as arising from US sources and will
be long-term capital gain or loss if the US Holder’s holding period exceeds one year. Deductions for
capital loss are subject to limitations. A loss may nonetheless be a long-term capital loss regardless of
a US Holder’s actual holding period to the extent the US Holder has received qualified
dividends eligible for reduced rates of tax prior to a sale or other disposition of its Shares that
exceeded 10 per cent. of such US Holder’s basis in the Shares.
A US Holder that receives a currency other than US dollars on the sale or other disposition of Shares
will realise an amount equal to the US dollar value of the currency received at the spot rate on the date
of sale or other disposition (or, in the case of cash basis and electing accrual basis US Holders, the
settlement date). An accrual basis US Holder that does not elect to determine the amount realised
using the spot rate on the settlement date will recognise foreign currency gain or loss equal to the
difference between the US dollar value of the amount received based on the spot exchange rates in
effect on the date of sale or other disposition and the settlement date. A US Holder will have a tax
286
basis in the currency received equal to the US dollar value of the currency received at the spot rate on
the settlement date. Any gain or loss realised on a subsequent disposition or conversion of the non-US
currency for a different US dollar amount generally will be US source ordinary income or loss.
12.3 Passive Foreign Investment Company Rules

The Company believes that it was not classified as a passive foreign investment company, or PFIC,
for US federal income tax purposes for its most recent taxable year ended 31 December 2014 and,
based on the composition of Company’s current gross assets and income (including the income and
assets of the Group) and the manner in which the Company expects the Group to operate its business
in future years, the Company believes that it should not be classified as a PFIC for US federal income
tax purposes for the Company’s current taxable year or in the foreseeable future. In general, a non-US
corporation is a PFIC for any taxable year in which, taking into account a pro rata portion of the
income and assets of 25 per cent. or more owned subsidiaries, either (i) at least 75 per cent. of its gross
income is passive income or (ii) at least 50 per cent. of the average value of its assets is attributable
to assets that produce or are held to produce passive income. For this purpose, passive income
generally includes, among other things, interest, dividends, rents, royalties and gains from the
disposition of investment assets (subject to various exceptions) and property that produces passive
income. An exemption exists to ensure that income derived by a bona fide insurance company is not
treated as passive income, except to the extent such income is attributable to financial reserves in
excess of the reasonable needs of the insurance business. The Company expects for purposes of the
PFIC rules, that it is unlikely to have financial reserves in excess of the reasonable needs of its
insurance business in each year of operations, however, no guarantee can be made that this will be the
case. Whether the Company is a PFIC is a factual determination made annually, and the Company’s
status could change depending among other things upon changes in the composition and relative value
of its gross receipts and assets. Because the application of the PFIC provisions to an insurance
company are uncertain, there can be no assurance that the Company will not be a PFIC in the current
or any future taxable year.
If the Company were a PFIC for any taxable year in which a US Holder holds Shares, such US Holder
will be subject to additional taxes on any excess distributions and any gain realised from the sale or
other taxable disposition of the Shares (including certain pledges) regardless of whether the Company
continues to be a PFIC. A US Holder will have an excess distribution to the extent that distributions
on Shares during a taxable year exceed 125 per cent. of the average amount received during the three
preceding taxable years (or, if shorter, the US Holder’s holding period). To compute the tax on excess
distributions or any gain, (i) the excess distribution or gain is allocated ratably over the US Holder’s
holding period, (ii) the amount allocated to the current taxable year and any year before the Company
became a PFIC is taxed as ordinary income in the current year and (iii) the amount allocated to other
taxable years is taxed at the highest applicable marginal rate in effect for each year and an interest
charge is imposed to recover the deemed benefit from the deferred payment of the tax attributable to
each year.
A US Holder may be able to avoid some of the adverse impacts of the PFIC rules described above by
electing to mark the Shares to market annually. The election is available only if the Shares are
considered “marketable stock,” which generally includes stock that is regularly traded in more than
de minimis quantities on a qualifying exchange. The Company believes the London Stock Exchange
is a qualifying exchange for this purpose. If a US Holder makes the mark-to-market election, any gain
from marking the Shares to market or from disposing of them would be ordinary income. Any loss
from marking the Shares to market would be recognised only to the extent of unreversed gains
previously included in income. Loss from marking the Shares to market would be ordinary, but loss
on disposing of them would be capital loss except to the extent of mark-to-market gains previously
included in income. No assurance can be given that the Shares will be traded in sufficient frequency
and quantity to be considered “marketable stock” or whether the London Stock Exchange will
continue to be considered a qualifying exchange for purposes of the PFIC mark-to-market election.
A valid mark-to-market election cannot be revoked without the consent of the US Internal Revenue
Service (“IRS”) unless the Shares cease to be marketable stock.
287
Each US Holder is encouraged to consult its own tax advisor as to the Company’s status as a PFIC
and whether a mark to market election is available or desirable in their particular circumstances.
12.4 Medicare Tax on Net Investment Income

Certain non-corporate US Holders whose income exceeds certain thresholds generally will be subject
to a 3.8 per cent. surtax tax on their “net investment income” (which generally includes, among other
things, dividends on, and capital gain from the sale or other disposition of Shares). Non-corporate US
Holders should consult their own tax advisors regarding the possible effect of such tax on their
ownership and disposition of Shares.
12.5 Reporting and Backup Withholding

Dividends on the Shares and proceeds from the sale or other disposition of Shares may be reported to
the IRS unless the holder is a corporation or otherwise establishes a basis for exemption. Backup
withholding may apply to reportable payments unless the holder makes the required certification,
including providing its taxpayer identification number or otherwise establishes a basis for exemption.
Any amount withheld may be credited against a US Holder’s US federal income tax liability or
refunded to the extent it exceeds the holder’s liability, provided the required information is timely
furnished to the IRS.
Certain US Holders are required to report information with respect to Shares not held through an
account with a financial institution to the IRS. Investors who fail to report required information could
become subject to substantial penalties. Potential investors are encouraged to consult with their own
tax advisors about these and any other reporting obligations arising from their investment in Shares.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX
MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH
PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT
THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE SHARES IN LIGHT OF
THE INVESTOR’S OWN CIRCUMSTANCES.
13. Enforcement and civil liabilities under US federal securities laws

The Company is a public limited company incorporated under English law. Many of the Directors are
citizens of the United Kingdom (or other non-US jurisdictions), and a portion of the Company’s assets are
located outside the United States. As a result, it may not be possible for investors to effect service of process
within the United States upon the Directors or to enforce against them in the US courts judgments obtained
in US courts predicated upon the civil liability provisions of the US federal securities laws. There is doubt
as to the enforceability in England, in original actions or in actions for enforcement of judgments of the US
courts, of civil liabilities predicated upon US federal securities laws.
14. Litigation
There are no governmental, legal or arbitration proceedings (including such proceedings which are pending (i) 20.8
or threatened of which the Company is aware) during the 12 months preceding the date of this Prospectus,
which may have, or have had, a significant effect on the Company’s and/or the Group’s financial position or
profitability.
15. Related party transactions

Save as described in the Group’s audited consolidated financial information set out in Part 12 (Historical (i) 19
Financial Information) and the Relationship Agreement set out in Part 8 (Directors, Senior Managers and
Corporate Governance), there are no related party transactions between the Company or members of the
Group and related parties.
288
16. Working capital (i) 10.1
(iii) 3.1
In the opinion of the Company, taking into account the net proceeds receivable by the Company from the
LR 6.1.16
subscription for New Shares in the Offer, the Group has sufficient working capital for its present
requirements, that is for at least the next 12 months following the date of this Prospectus.
17. No significant change

There has been no significant change in the financial or trading position of the Group since 30 June 2015, (i) 20.9
the date to which the last audited consolidated accounts of Hastings Insurance Group (Holdings) plc were
prepared.
18. Consents (i) 23.1

(i) 2.1 (iii) 10.3
18.1 KPMG LLP is a member firm of the Institute of Chartered Accountants in England and Wales and has
given and has not withdrawn its written consent to the inclusion of the report in Part 12 (Historical
Financial Information) and the report in Part 13 (Unaudited Pro forma Financial Information), in the
form and context in which they appear and has authorised the contents of those parts of this
Prospectus which comprise its reports for the purposes of Rule 5.5.3R(2)(f) of the Prospectus Rules.
18.2 Towers Watson Limited has given and has not withdrawn its written consent to the inclusion of its
report in Part 14 (Independent External Actuaries’ Statement) in the form and context in which they
appear and has authorised the contents of those parts of this Prospectus which comprise its reports for
the purposes of Rule 5.5.3R(2)(f) of the Prospectus Rules.
19. General
19.1 The fees and expenses to be borne by the Company in connection with Admission, including the (iii) 8.1
Banks’ commission, the FCA’s fees, professional fees and expenses and the costs of printing and
distribution of documents are estimated to amount to approximately £15.5 million (including VAT).
In addition the Selling Shareholders have agreed to pay their expenses in connection with the sale of
Shares including underwriting commissions of up to approximately £1.0 million (assuming that no
Over-allotment Shares are acquired pursuant to the Over-allotment option).
19.2 The financial information contained in this Prospectus does not amount to statutory accounts within (i) 20.4.1
the meaning of section 434(3) of the Act. Full audited accounts have been delivered to the Registrar
of Companies for the Group for the years ended 31 December 2012, 2013 and 2014.
19.3 Each New Share is expected to be issued at a premium of 168 pence to its nominal value of two pence. (i) 5.3.1
20. Documents available for inspection (i) 24
Copies of the following documents will be available for inspection during usual business hours on any
weekday (Saturdays, Sundays and public holidays excepted) for a period of 12 months following the date of
this Prospectus at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS:
(a) the Articles of Association of the Company; (i) 21.2.1
(b) the historical financial information in respect of the three financial years ended 31 December 2012,
2013 and 2014 and six months ended 30 June 2015, together with the related accountant’s report from
KPMG LLP, which is set out in Section A of Part 12 (Historical Financial Information);
(c) the report from KPMG LLP on the pro forma financial information, which is set out in Section B of
Part 13 (Unaudited Pro Forma Financial Information)”;
(d) the consent letters referred to in “Consents” in paragraph 18 above; and
(e) this Prospectus.
Dated: 12 October 2015
289
PART 17
DEFINITIONS
The following definitions apply throughout this Prospectus unless the context requires otherwise:
“2010 PD Amending Directive”.......... Directive (2010/73/EU)
“2014 Reorganisation” ........................ the transactions whereby a wholly owned subsidiary of HIG(H)
acquired 100 per cent. of the issued share capital of the HIG Group,
to form an enlarged group with HIG(H) as the new parent entity
within the corporate structure
“2019 Notes” ...................................... the Senior Secured Floating Rate Notes due 21 October 2019 issued
by HIG(F)
“2020 Notes” ...................................... the Senior Secured Fixed Rate Notes due 21 October 2020 issued
by HIG(F)
“ABI” ................................................... the Association of British Insurers
“Act” .................................................... the Companies Act 2006, as amended
“Admission” ........................................ the admission of the Shares to the premium listing segment of the
Official List and to trading on the London Stock Exchange’s main
market for listed securities
“AICL” ................................................ Advantage Insurance Company Limited
“Articles” ............................................. the Articles of Association of the Company to be adopted upon

Admission
“Banks”................................................ Credit Suisse International, Credit Suisse, Goldman Sachs,

Barclays, HSBC, Keefe, Bruyette & Woods and Peel Hunt
“Barclays”............................................ Barclays Bank PLC
“Board”................................................ the Board of Directors of the Company
“Company” .......................................... Hastings Group Holdings plc
“Committees” ...................................... the committees established by the Board, comprising an Audit

Committee, a Nomination Committee, a Remuneration Committee
and a Risk Committee
“Concert Party” ................................... the Principal Shareholder, Hastings A, L.P., Hastings B, L.P.,
Goldman, Sachs & Co. and the Founder Shareholders
“Credit Suisse” .................................... Credit Suisse Securities (Europe) Limited
“CREST” ............................................. the UK based system for the paperless settlement of trades in listed
securities, of which Euroclear UK and Ireland Limited is the
operator
“Directors”........................................... the Executive Directors and the Non-executive Directors of the

Company
“DPA”.................................................. the Data Protection Act 1998
“EEA”.................................................. the European Economic Area
290
“EU” .................................................... the European Union
“Executive Directors”.......................... the executive Directors of the Company
“Existing Shares” ................................ 16,470,589 Shares to be sold as part of the Offer by the Selling
Shareholders (excluding, for the avoidance of doubt, the Over-
allotment Shares)
“FCA”.................................................. the Financial Conduct Authority
“Founder Representative”.................... Neil Utley, as representative of the Founder Shareholders
“Founder Shareholders” ...................... Neil Utley (and certain members of his immediate family), Ted
Limited, Keith Charlton, Richard Brewster and Narmali Utley
“FOS” .................................................. the Financial Ombudsman Service
“FSMA”............................................... the Financial Services and Markets Act 2000, as amended
“FSC” .................................................. the Gibraltar Financial Services Commission
“Goldman Sachs” ................................ Goldman Sachs International
“Goldman, Sachs & Co” ..................... Goldman, Sachs & Co. (acting through the Goldman Sachs
Merchant Banking Division) in its capacity as investment adviser to
certain managed accounts
“Governance Code”............................. the UK Corporate Governance Code issued by the Financial

Reporting Council, as amended from time to time
“Group” or “Hastings” ........................ the Company and its consolidated subsidiaries and subsidiary
undertakings
“HISL”................................................. Hastings Insurance Services Limited
“Hastings A, L.P.”................................ a limited partnership under the control of the Goldman Sachs
Merchant Banking Division
“Hastings B, L.P.”................................ a limited partnership under the control of the Goldman Sachs
Merchant Banking Division
“HIG” .................................................. Hastings Insurance Group Limited
“HIG(F) ............................................... Hastings Insurance Group (Finance) plc
“HIG(H)”............................................. Hastings Insurance Group (Holdings) plc
“HIG(I)” .............................................. Hastings Insurance Group (Investment) plc
“Holdco”.............................................. Hastings Holdco Limited
“HMRC”.............................................. HM Revenue and Customs
“HSBC” ............................................... HSBC Bank plc
“IFRS” ................................................. International Financial Reporting Standards, as adopted by the EU
“Joint Bookrunners” ............................ Credit Suisse, Goldman Sachs, Barclays and HSBC
“Joint Global Co-ordinators” .............. Credit Suisse and Goldman Sachs
“Keefe, Bruyette & Woods” ................ Stifel Nicolaus Europe Limited (trading as Keefe, Bruyette &
Woods)
291
“Lead Manager” .................................. Peel Hunt
“Listing Rules” .................................... the listing rules of the FCA made under section 74(4) of the FSMA
“Lock-up Shareholders” ...................... certain managers of the Group who received proceeds from the sale
of instruments they held prior to the 2014 Reorganisation
“London Stock Exchange” .................. London Stock Exchange plc
“LTIP” ................................................. the Long Term Incentive Plan
“MIP” .................................................. the Management Incentive Plan
“New Shares” ...................................... new Shares in the Company to be allotted and issued as part of the
Offer
“Nominees F Shareholders” ................ Neil Utley (and certain members of his immediate family), Richard
Brewster, Thomas Duggan (and certain members of his family), Ian
Donald (and certain members of his immediate family) and David
Saville
“Non-executive Directors” .................. the non-executive Directors of the Company
“Offer” ................................................. the issue of New Shares by the Company and the sale of Existing
Shares by the Selling Shareholders described in Part 15 (Details of
the Offer)
“Offer Price”........................................ the price at which each Share is to be issued and sold pursuant to
the Offer
“Official List” ...................................... the Official List of the FCA
“ORSA”............................................... Own Risk and Self-Assessment
“Over-allotment Option” ..................... the option granted to the Stabilising Manager by the Over-allotment
Shareholders to purchase, or procure purchasers for, up to 10 per
cent. of the total number of Shares comprised in the Offer as more
particularly described in Part 15 (Details of the Offer)
“Over-allotment Shareholders” ........... Principal Shareholder, Neil Utley (and certain members of his
immediate family), Richard Brewster, Pierre Lefèvre, Anthony
Leppard, Gary Hoffman, Tobias van der Meer and Michael Lee
“Over-allotment Shares” ..................... the existing Shares the subject of the Over-allotment Option
“PCAOB” ............................................ the Public Company Accounting Oversight Board (United States)
“Peel Hunt”.......................................... Peel Hunt LLP
“Preference Shares”............................. preference shares held by Hastings A, L.P., Hastings B, L.P. and
Goldman, Sachs & Co., the Founder Shareholders (other than Neil
Utley (and certain members of his immediate family) and Richard
Brewster), Gary Hoffman, certain of the Senior Managers, other
managers of the Group, and Elian Employee Benefit Trustee
Limited (as trustee of the Hastings Direct Employee Benefit Trust)
in the Principal Shareholder and Holdco
“Principal Shareholder”....................... Hastings Investco Limited, a Jersey incorporated holding company

whose ordinary share capital is all directly owned by Holdco, which
in turn is indirectly owned by Hastings A, L.P., Hastings B, L.P. and
292
Goldman, Sachs & Co., Ted Limited, Keith Charlton and Narmali
Utley
“Prospectus” ........................................ the final prospectus approved by the FCA as a prospectus prepared
in accordance with the Prospectus Rules made under section 73A of
the FSMA
“Prospectus Directive” ........................ Directive 2003/71/EC and amendments thereto, including the 2010
PD Amending Directive and any relevant implementing measure in
each Relevant Member State
“qualified institutional buyers” ........... has the meaning given by Rule 144A
or “QIBs”
“Qualified Investors” ........................... persons who are “qualified investors” within the meaning of Article
2(1)(e) of the Prospectus Directive
“Registrars” ......................................... Capita Asset Services, a trading name of Capita Registrars Limited
“Regulation S”..................................... Regulation S under the US Securities Act
“Relationship Agreement”................... the relationship agreement entered into between the Company,
Holdco, Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co.,
the Founder Shareholders and the Principal Shareholder as
described in Part 8 (Directors, Senior Managers and Corporate
Governance)
“Reorganisation” ................................. the reorganisation of the Group as described in Part 16 (Additional
Information – Incorporation and share capital)
“Retail” ................................................ the Group’s retail business
“Rule 144A” ........................................ Rule 144A under the US Securities Act
“SDRT”................................................ stamp duty reserve tax
“Selling Shareholders” ........................ Shareholders who sell Shares as part of the Offer, consisting of the
Principal Shareholder, Hastings Nominees F Limited, Hastings
Nominees G Limited and Elian Employee Benefit Trustee Limited
(as trustee of the Hastings Direct Employee Benefit Trust)
“Senior Lead Manager”....................... Keefe, Bruyette & Woods
“Senior Managers” .............................. those individuals identified as such in Part 8 (Directors, Senior
Managers and Corporate Governance)
“Shareholders”..................................... the holders of Shares in the capital of the Company
“Shares”............................................... the ordinary shares of the Company, having the rights set out in the
Articles
“Sponsor” ............................................ Credit Suisse International
“Stabilising Manager” ......................... Credit Suisse
“UK”.................................................... the United Kingdom of Great Britain and Northern Ireland
“Ultimate Shareholders”...................... Hastings A, L.P., Hastings B, L.P., Goldman, Sachs & Co. and the
Founder Shareholders
“Underwriting” .................................... the Group’s underwriting business
“Underwriting Agreement” ................. the underwriting agreement entered into between the Company, the
Directors, the Selling Shareholders (with Hastings Nominees F
293
Limited and Hastings Nominees G Limited acting on behalf of
certain individual selling shareholders) and the Banks described in
paragraph 7.1 of Part 16 (Additional Information – Underwriting
arrangements)
“United States” or “US”...................... the United States of America, its territories and possessions, any
State of the United States of America, and the District of Columbia
“US Exchange Act”............................. United States Securities Exchange Act of 1934, as amended
“US GAAP” ........................................ accounting principles generally accepted in the United States
“US GAAS” ........................................ auditing standards generally accepted in the United States
“US Securities Act”............................. United States Securities Act of 1933, as amended
294
PART 18
GLOSSARY
The following technical terms (or variations thereof) apply throughout this Prospectus unless the context
requires otherwise:
“burn cost”........................................... estimated cost of claims incurred per exposure
“CAGR”............................................... compound annual growth rate
“GEP” .................................................. Gross earned premiums
“GWP”................................................. gross written premiums
“Jackson Review”................................ the package of reforms advised by Lord Justice Jackson which were
substantially implemented in April 2013, including through the
LASPO Act
“LASPO Act” ...................................... the Legal Aid, Sentencing and Punishment of Offenders Act (2012)
“MIB” .................................................. the Motor Insurers’ Bureau
“NWP”................................................. net written premiums
“PCW”................................................. price comparison website
“PPI”.................................................... payment protection insurance
“PPO” .................................................. periodical payment order
“RMM”................................................ required minimum margin
“Road Traffic Act”............................... the 1988 Road Traffic Act
“RTA Portal” ....................................... Road Traffic Act Portal
“TPFT” ................................................ third-party fire and theft insurance
295
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ELECTRONIC TRANSMISSION DISCLAIMER

STRICTLY NOT TO BE FORWARDED TO ANY OTHER PERSONS

Hastings Group Holdings plc

Offer of 123,529,412 Shares

Credit Suisse Goldman Sachs International

Senior Lead Manager Lead Manager

ORDINARY SHARE CAPITAL IMMEDIATELY FOLLOWING ADMISSION

Part 1 Risk Factors........................................................................................................................ 19

Part 2 Presentation of Financial and Other Information .............................................................. 42

Part 4 Expected Timetable of Principal Events and Offer Statistics ............................................ 57

Part 5 Industry Overview.............................................................................................................. 58

Part 6 Business Description.......................................................................................................... 68

Part 7 Regulation .......................................................................................................................... 91

Part 8 Directors, Senior Managers and Corporate Governance ................................................... 96

Part 9 Selected Financial Information .......................................................................................... 103

Part 10 Operating and Financial Review ........................................................................................ 107

Part 11 Capitalisation and Indebtedness......................................................................................... 146

Part 12 Historical Financial Information ........................................................................................ 148

Part 13 Unaudited Pro Forma Financial Information..................................................................... 236

Part 14 Independent External Actuaries’ Statement....................................................................... 240

Part 15 Details of the Offer ............................................................................................................ 243

Part 16 Additional Information....................................................................................................... 251

Part 17 Definitions .......................................................................................................................... 290

Part 18 Glossary.............................................................................................................................. 295

Section A—Introduction and Warnings

B.1 Legal and commercial name

B.2 Domicile and legal form

B.3 Current operations and principal activities

Detail on operating segments

Key Performance Indicators (“KPIs”)

B.7 Historical financial information

On 8 January 2014, as part of a series of transactions (collectively, the “2014 Reorganisation”), a

Profit/(loss) before tax ............................

Taxation expense ......................................

Reconciliation of Group total profit/

Taxation expense ......................................

Reconciliation of Group total profit/

Finance costs on Senior Secured Notes

Consolidated balance sheet

Consolidated statement of cash flows

B.10 Qualifications in the audit report on the historical financial information

B.11 Insufficient working capital

C.1 Type and class of securities

C.3 Issued Share Capital

C.4 Rights attaching to the Shares

C.5 Restrictions on transfer

C.7 Dividend policy

D.3 Key information on the key risks specific to the Shares

E.1 Net proceeds and costs of the Offer

E.2a Reasons for the Offer and use of proceeds

• enable the Group to reduce its current leverage;

E.3 Terms and conditions of the Offer

E.4 Material interests

E.5 Selling Shareholders and lock-up

E.7 Expenses charged to the investor

Risks relating to the Group’s business and industry (i) 4

• uncertainty about the extent of policy coverage and limits applicable;

• uncertainty over the level of claims expenses to be incurred.

• the availability of and ability to use sufficiently reliable data;

• correct analysis of available data;

• uncertainties inherent in estimates and assumptions generally;

• unanticipated or inconsistent court decisions, legislation or regulatory action;

• changes in frequency or severity of claims; and