Profile: Kevin Chidwick, FD of Admiral Group

Cobwebs. Lots of them. Everywhere. FTSE 100 group Admiral’s call centre is
covered in them ­ you literally have to duck to walk about the 22nd floor of its
Capital Towers head office in central Cardiff. They’re not real, but part of its
decorations to celebrate Halloween, and certainly liberally spread enough to
send most facilities managers into a quivering wreck.

“They do sometimes get a bit concerned,” says FD Kevin Chidwick. Then again,
it’s no ordinary company.

Admiral was formed in 1993 by Henry Engelhart, and has flourished into a car
insurer and comparison website owner ­ heard of It is only the
second ever Welsh FTSE 100 business and has been placed in the Times’ best
companies to work for list since it was compiled. It also has a “Ministry of

The ministry is a moniker given to a different department every month, which
then has to come up with games and activities for the rest of the business
during that period, Chidwick explains., the price comparison site that already represents £66m of
Admiral’s near £1bn a year revenues, and which Chidwick effectively serves as
“executive chair”, is in charge of the ministry this month.

“We organise competitions: pin the tail, air guitar, quizzes… Then there’s
egg roulette.”

Egg roulette is a lot simpler than it sounds. You pick an egg up and smash it
against your head. If it’s boiled, there’s no mess. If raw then you’ll need a

As Chidwick says understatedly, almost with a glint in his eye: “I’m 46 years
old, worked in several insurance and banking businesses [over the past 20 years]
and Admiral is exceptional, a very unusual company. The atmosphere is very team
orientated ­ relaxed in the sense that people feel comfortable here, right
through. They’ve bought into it: it sounds cliched but is unusual, with little
evidence of silos or politics ­ we don’t take ourselves too seriously but know
what we want to achieve.”

There is little bureaucracy, says Chidwick, a credit to the founder and how
he leads from the front. “It’s the example he sets to the whole organisation. We
give a lot of authority into the organisation, don’t tie it in red tape, and
distract us from the simple things of flogging car insurance, provide a good
service and make money.”
But an insurance business, devolved?

“There are risks with any kind of delegation. It’s about making the rules
clear, so they understand what they can and can’t do ­ but within that framework
the people closest to customers can make decisions. It would be ridiculous for
me or the other directors to think we know better about customer service than
the guys who talk to them individually 50 or 60 times a day. As long as we’re
clear about barriers around control, then you should be led by those who know
what customer service means.”

Chidwick spent a year as deputy FD before taking over the board role in
October 2006 from Andy Probert, who had served in the company since its
formation and cheekily wished ­ within Chidwick’s appointment statement to the
stock exchange ­ the company well “as I still hold a bushel basket full of

“It was tricky for me [when I joined], as I’d been taught for 20 years about
how to behave in corporations, an FD of other companies, and the Admiral model
is very different. One of our disadvantages is there isn’t a clear delineation
between roles ­ [but] this teamwork thing is extremely positive and as an FD I
have free rein to get involved in parts of the business where it might be
segmented in other companies.

When I joined I thought ‘what’s going on around here?’ But I think it’s true
that the people who’d enjoy this environment tend to get recruited in.”

Another hurdle for Chidwick was stepping down to deputy after ten years as an
FD even though succession was all planned, which makes him smile wryly.

“These things probably have a natural process to them. I was very happy to
come in as deputy to Andrew with the understanding that the progression would
happen in the fullness of time, and was relaxed about that. But, inevitably,
when you have your best friends and family to stay around for a long time, you
naturally reach a point where you think ‘come on let’s sort this out’. The
timing was fine for both of us.”

Chidwick inherited a small team running the then UK-only business, and it has
changed in recent years, because of its international expansion, but is still

It now offers car insurance across Spain, Germany, Italy and most recently
ventured into the US, with its Virginia-based Elephant car insurance.

“The team is surprisingly small. A dozen people. That’s testimony to how good
the team is and how well structured the processes are. As we’ve grown as a
business we’ve expanded and developed it. So we had to manage pulling in
reporting, controls and budgets from autonomous units. The FCs here have that

Instilling Admiral’s “fun” culture abroad is just part of the battle for the
group. It is in the FTSE 100 through strong business strategy focused on cost
control and data analysis.

As Chidwick explains, car insurance is a compulsory purchase that people
“want to get as cheap as they can”.

To gain a lead on the market requires keeping costs to a minimum. “You need
to be the lowest cost provider to have a strategic advantage over competitors ­
our expense ratio is around 17%, the market runs at nearer 30%. Replicating that
low cost mentality and disciplined approach to spend is an important attribute
we’ve tried to implement abroad.”

Analysis of customer data is crucial to understand at what price you can set
premiums. Too high and they will choose competitors. Too low, and you lose out
in the future when claims start to roll in.

“An important part of the culture is that we’re not led by brand or sales
targets, instead just maximising the profitability of the business. That means
you have to be very data-led. If the data tells you something about the car or
pricing, you do it ­ that’s not necessarily an obvious thing but needs to be
instilled into each of the companies that we’re launching.”

The expansion is cautious, deliberate ­ and organic, also in line with the
company’s strategy. If it works, it works, if not then fewer fingers have been
burnt. In turn, Admiral carries no debt on its books. But to fund its main
business of car insurance and underwriting, it reinsures huge swathes of its
insurance. The reinsurers then receive a cut of the take on those premiums.

“We are leveraged in a different way. As an underwriter of car insurance we
share that with a number of reinsurers. We put in place profit-sharing
arrangements with them, then get back the majority of profits made, but don’t
have to provide the capital behind the proportions that they take. We only
retain on our balance sheet about a quarter of the risks we write, the rest goes
on the resinsurers’ balance sheet. So we’ve grown the business quite fast but
not consumed capital as we go, and been able to pay out quite healthy dividend

The model sounds too good to be true. What could change it?

“If the reinsurance contracts offered to us weren’t as attractive as they
currently are, then we might be persuaded to take more onto our own balance
sheet then we might raise debt and leverage in a more traditional insurer way.
We’ve locked in contracts until 2012, and for some longer. We’re quite happy
where we are.”

Chidwick’s senior role at Confused, and his efforts in setting up Admiral’s
Virginia office, could be construed as classic ‘FD lining up a CEO role in the
future’ tactics. But Chidwick will have none of it.

For starters he points out that with three executive directors in the
business work is “divvied out” between them.

He is not a great fan of the FD-to-CEO route, on the whole. “I’m enjoying
what I’m doing. I had a grand plan when I was young that disappeared when I was
30, and never had a plan since.

“I’m not a great fan of FDs becoming chief execs, [there’s] a lot of it going
on at the moment but I think there’s a danger there. FDs come to businesses with
a very valuable mindset ­ a crucial role and their relationship with the chief
is a very important one. “Unless you’ve got the right kind of FD and he or she
makes the transition into more sales and operational business-running
capabilities, it’s a different skillset to that of an FD. Not to say there
aren’t plenty who have made very successful chief execs, but personally I’m not
sure it’s a great trend to see too many [make the move].”

Despite his reticence for number-crunchers to step up, he believes they are
more important than ever. And the profession should be more in demand than ever
following the focus on costs, risks and writeoffs. “I plead for them to be given
more important roles in their organisations.”

The interview over, Chidwick makes his way through the cobwebs to prepare
himself for his photoshoot, not before stopping to say hello to one call centre
“When I joined I worked on the call centre for five weeks, she started on the
desk at the same time as me.”


Admiral Group employs 3,000 people in Wales ­ either Cardiff’s Capital
Towers, Swansea or its new office in Newport.

Boasting dozens of top employer awards,which are displayed across its office
from reception onwards, the company has made a massive investment in the region.

So could it possibly even contemplate following other big companies to move
head office for tax purposes?

FD Kevin Chidwick picks his words carefully. “Unlikely, but never say never…
We have a responsibility to our shareholders to think about these issues. We
have looked at them and will do again in the future. But it’s very unlikely.”

That doesn’t mean that Admiral won’t recruit staff from across the border in
the future.

“The driver for us is probably going to be more if we run out of people we
can employ here. We currently hold 7% of market share in the UK car insurance
market. We’re still growing quite fast, but we will get to a point eventually
where there aren’t enough people to recruit, hopefully a few years away.”


As fun as life may be at Admiral, FD Kevin Chidwick isn’t tied to his office.
A keen sports follower, he holds a season ticket at Portsmouth, and more
controversially at Cardiff as well, which was well noted during the 2009 FA Cup
final between the two teams (see Taking Stock on page 24).

He has also undertaken triathlons and marathons, but is unlikely to do so
again as “I’m old and knackered”.

Married for 23 years to his childhood sweetheart and with two teenage
daughters, his career has taken him around the country, although pointedly not
to London ­ the hustle and bustle not conducive to relaxing away from work. “I
have a tremendous lifestyle. Here is a capital city with its facilities, then in
ten minutes you’re in the middle of nowhere.”

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