The UK workforce

is changing,

so are we

Personal Group Holdings Plc

Annual Report and Accounts 2022

Supporting the UK

workforce through

our broad offering of

employee wellbeing and

engagement services

Contents

08

09

OUR PURPOSE IN ACTION

BARCHESTER

OUR PURPOSE IN ACTION

THE CARAVAN

CLUB

OUR PURPOSE IN ACTION

NRG

RIVERSIDE

07

GROUP CHIEF

EXECUTIVE’S STATEMENT

13

OUR BUSINESS MODEL

16

ENVIRONMENTAL, SOCIAL

AND GOVERNANCE

32

Overview

02

2022 Highlights

03

Why Invest in Personal Group?

04

Our Purpose & What We Do

06

Market Overview

07

Our Purpose in Action

10

Chairman’s Statement

13

Group Chief Executive's Statement

Strategic Report

16

Our Business Model

17

Our Strategy

19

Strategic Progress

22

Key Performance Indicators

24

Acquisition of Quintige Consulting

Group (QCG)

25

Chief Financial Officer’s Statement

30

Risk Management

32

Environmental, Social and Governance

40

Section 172 Statement

Governance

42

Board Activity in 2022

44

Corporate Governance

46

Board of Directors

48

Senior Leadership Team

49

Risk and Compliance Committee Report

51

Audit Committee Report

54

Remuneration Committee Report

58

Nominations Committee Report

60

Directors’ Report

61

Statement of Directors’ Responsibilities

Financial Statements

62

Independent Auditor’s Report

70

Consolidated Income Statement

71

Consolidated Balance Sheet

73

Company Balance Sheet

74

Consolidated Statement of Changes

in Equity

75

Company Statement of Changes

in Equity

76

Consolidated Cash Flow Statement

78

Company Cash Flow Statement

79

Notes to the Financial Statements

111

Company Information

Personal Group Holdings Plc |

2022 Highlights

Operational

Financial

Non-financial

GROUP REVENUE

£

86.7

m

(2021 : £74.5m)

ADJUSTED EBITDA

£

6.0

m

(2021 : £6.1m)

DIVIDEND PER SHARE

10.6

p

(2021 : 10.6p)

CASH & DEPOSITS

£

18.7

m

(2021 : £22.9m)

UNIQUE CLIENT NUMBER

502

(2021 : 387)

NO. OF INSURANCE PAYERS

94,877

(2021 : 93,147)

(LOSS) / PROFIT BEFORE TAX

(

£

6.8

m

)

(2021 : £4.3m)

BASIC EPS

(23.2

p

)

(2021 : 11.5p)

Read more in our Strategic progress |

Page 19

Significant new

contracts secured

Face-to-face

insurance product

sales grew

LC Goodwill

High client

retention rate

Offering to the

SME sector

Acquisition

of Quintige

Consulting Group

(QCG)

Digitally-led model,

with proprietary

software at the centre

Strong financial

position

Large growth

opportunity

The right offering for

today’s world

Why Invest in Personal Group?

A progressive, profitable business addressing

a rapidly growing market.

The world of work is changing and our offerings

are needed now more than ever. Employers are

more aware and more determined to support the

wellbeing of their employees, to help retain and

incentivise their workforce. Meanwhile,

the ongoing effects of long-COVID and NHS

wait lists have highlighted to many the potential

impact of poor health on their ability to maintain

their income and support their families.

Intrinsic in our DNA is our drive to provide the best

value for our clients and customers – services

and products that are premium quality but

affordable – and in today’s challenging economic

environment this is proving highly attractive.

The investments we have made in expanding

our offerings, sales team and partnerships mean

we have emerged from the pandemic a stronger

business, with an increased growth opportunity.

Our addressable market is now the majority of

the UK workforce, either addressed directly or

through our partners, such as Sage.

These investments have driven growth across

our customer base and improvements in our

operational KPIs.

Our financial strength also makes us an attractive

home for other smaller businesses, which will be

beneficial as we look to augment organic growth

with select M&A activity.

We have proven our ability to remain financially

robust during difficult times. We are profitable,

cash generative, debt free with a strong balance

sheet and dividend paying.

We have seen recurring revenue streams grow

in 2022 by 20% to over £33.5m. This high level of

revenue visibility means we can be confident in

our continued growth.

While EBITDA has been reduced in 2021 and

2022, as a result of the impact of the pandemic

on our face-to-face insurance sales and the

investments in our teams, we are now back on

track towards profit expansion, delivering half-

on-half EBITDA growth in H2 2022.

A digital solution that allows employees to

access a wealth of financial, physical, mental and

social benefits through an easy to use platform

and app.

Easy for new offerings and business lines to be

integrated into the platform. Annual Recurring

Revenue (ARR) across the Group’s digital

platforms now stands at £5.5m.

2023 will see the launch of Hapi 2.0, our first major

re-development of the platform since its launch in

2016. The new platform is updated with improved

look and feel, better management information

(MI), improved functionality and greater ability to

integrate other third-party suppliers.

See what we do |

 Page 04

See our CFO statement |

 Page 25

See our market overview |

 Page 06

See our markets |

 Page 05

HAPI PLATFORM RETENTION

95%

2021: 93%

YEAR ON YEAR INSURANCE RETENTION

81.0%

2021: 80.7%

UNIQUE CLIENT NUMBERS

30%

to 502, 2021: 387

SME CUSTOMERS VIA SEB

91%

to over 2,800, 2021: 1,469

CASH & DEPOSITS OF

£18.7m

2021: £22.9m

DIVIDEND PER SHARE

10.6p

2021: 10.6p

ACTIVATED USERS ON HAPI AND

SAGE EMPLOYEE BENEFITS

582,733

2021: 539,051

ARR FOR SAAS LICENCES

£5.6m

2021: £3.6m

Personal Group Holdings Plc |

PAY &

REWARD

Consultancy and

software solutions

Innecto & QCG

– offer strategic

consultancy on pay and reward through

their experts and a suite of cloud-based

SaaS solutions and surveys.

Clients can tailor their solution with our

experts to help them define and implement

fair, consistent reward programmes that align

to their business strategy and workforce.

Hapi

– is our technology platform that

powers growth through enhanced

connectivity, engagement, health

and wellbeing.

Sage Employee Benefits

– our tailored

engagement product designed for the

SME market.

Insurance

– hospital plan, convalescence

plan, and death benefit policies,

underwritten by Group subsidiaries.

Our easy to understand, affordable plans

are secured for the lifetime of the policy,

providing peace of mind for diverse

workforces from across society.

Let’s Connect

– delivers a benefit scheme

that allows employers to give their

employees affordable access to the latest

consumer technology and a variety of high-

end products from leading manufacturers.

Employees can spread the cost either by

salary sacrifice or net pay arrangements.

Read about the acquisition of QCG |

 Page 24

Read about NRG Riverside |

 Page 09

Read about driving insurance |

 Page 19

Read about our business model |

 Page 16

BENEFITS

PLATFORM

Delivered to employers directly

and through channel partners

AFFORDABLE

INSURANCE

On weekly or monthly

rolling contracts

OTHER OWNED

BENEFITS

Access to consumer

technology

Our Vision

A winning team building a brighter future for the UK workforce,

supporting over 1.5m employees by 2025.

Our Purpose

We connect the unconnected and

protect the unprotected.

Helping employees thrive in work and in life

Personal Group provides consultancy, benefits and technology services focused

on improving employee health, wellbeing and engagement. Our mission is to

build great working environments where people flourish and shine.

What We Do

What We Do

continued

Driving insurance sales through new

and existing channels

Accelerating our SME offer

Transforming reward and benefits

Our Strategy

Our growth strategy is based on three key areas focused on widening our footprint across a broader range of industry sectors.

Our markets

We offer a uniquely holistic market proposition, spanning insurance, employee benefits, and reward consultancy,

allowing us to cater to every sector of UK business and offer relevant, timely and price-appropriate services that help

companies address these key themes.

Product offering by vertical

SMEs

eg: Any enterprise with

<250 employees

Talent-Driven

eg: Skyscanner,

Refinitiv

Public Sector

eg: Sandwell & West

Birmingham NHS Trust

Enterprise

eg: Royal Mail Group,

Cranswick

Digital benefits platform

(Hapi white-labelled as ‘Sage

Employee Benefits’ (SEB) )

Fair-deal health and life insurance

products

Our digital benefits platform – Hapi

Other owned benefits

(Let’s Connect)

Our digital benefits platform – Hapi

(our flex option 'Hapiflex' is likely to

be the most relevant)

Pay and reward consultancy

(Innecto)

Our digital benefits platform – Hapi

(our flex option 'Hapiflex' is likely to

be the most relevant)

See 'How we will deliver' |

See Caravan Club case study |

See NRG Riverside case study |

See Barchester case study |

of clients are currently

served by two or

more segments

ENHANCE

EMPLOYEE VALUE

Our consultants design competitive and

fair employer value proposition, aligning

all aspects of reward and benefits

to deliver ESG goals and attract and

win talent

ELEVATE ENGAGEMENT AND

HEALTH FOR ALL

We power growth and productivity by

educating and supporting employees

holistically; recognition, wellbeing,

salary sacrifice and protection products

that help people thrive in life and work

INTEGRATED PROPOSITION

Work as a strategic partner leveraging

our combined capabilities to build

resilient healthy workforces. Aligning

all aspects of the people strategy to the

organisation's purpose and objectives

CONNECTIVITY

Our benefit platforms deliver seamless

digitally enabled experiences that

connect diverse workforces with the

benefits, discounts and wellbeing

support they need

Market Overview

DECLINE

OF STATE

FINANCIAL

SUPPORT

HIGHER

LABOUR

STANDARDS

TALENT-LED

MARKETPLACE AND

LOW UNEMPLOYMENT

DE&I

DEMAND FOR

BUSINESS

RESILIENCE

HYBRID

WORKING

CONSTANT

CONTACT WITH

WORK

THREAT TO

WORK-LIFE

BALANCE

TRUST IN

GOVERNMENT

SUPPORT IN

DECLINE

COST OF

LIVING CRISIS

AND PRICING

PRESSURE

MACRO TRENDS

•

PACE OF GROWTH IN

TECHNOLOGY

• ECONOMIC INSTABILITY

•

CLIMATE CHANGE

•

CHANGES TO WORKERS’

RIGHTS

•

CHANGING WORKING

PRACTICES

>

Emergence of the talent-led marketplace –

competitive pay is no longer enough

>

Increasing regulatory and legal scrutiny on firms

that rely on gig economy workers, self-employed

and zero hour contracts

>

Fair and competitive pay struggling to keep up

with inflation

>

Increased competition drives constant need to

evaluate and define a competitive employee

value proposition to attract and retain talent

>

Desire to attract diverse talent as a source

of competitive advantage

>

Importance of creating an inclusive and

collaborative working environment

>

Increased pace of work, competition, cost

pressure places more importance and need

for social recognition

>

Role of the employer has widened, employee

expectation rising

>

Employees expect help and support to combat

the cost of living crisis

>

Demand for pay increases, 1 in 8 businesses

affected by industrial action

>

Need to build resilient workforces through holistic

wellbeing support – physical, financial and mental

>

Increased connectivity and constant contact with

work threatens employee work-life balance and

increases exposure to stress-related illness

>

Hybrid working challenges employer's ability

to build a connected engaged workforce

>

Demand for greater transparency,

clearly communicated and monitored goals

and objectives

Economic and societal trends

Challenges for clients

Our growth drivers

Annual Report and Accounts 2022

Posed by model

Our Purpose in Action

Sector:

Nursing and care homes

Employees:

17,000

Challenge:

Workforce connectivity, retention and engagement

The healthcare sector relies heavily on attracting talent to provide

quality care for their residents and patients. With a large workforce

spread out across the UK, Barchester faces challenges connecting

carers with the business. As an employer who is committed to

ensuring all their team members are given a voice, the business

wanted to engage with its workers better, to hear and harness their

views, support them in their work and daily lives and enable them

to feel better connected with the business. In doing so, it hoped to

expand their benefits offering, improve job satisfaction, their overall

wellbeing and reduce staff attrition and turnover.

We worked with Barchester to enhance their support systems for

their workers’ emotional, social, financial and physical wellbeing,

and make them accessible to everyone 24/7. By enabling easier

access to counselling, legal advice, wellbeing advice and health

protection products, all employees felt added peace of mind.

Working with the business to create the new ‘Speak Up’ programme,

also gives frontline carers a voice into management on all aspects

of their working life: operational policy, ways of working, learning

and development. All enabled through the Hapi App, they now have

another consistent channel to raise concerns, provide feedback and

pose important questions.

By enabling access to greater support and improving genuine two-

way communication across the entire workforce, we have helped

foster a positive working culture where employees feel they have a

voice, and their opinions are valued. Staff also use the Hapi App to

engage with a new rewards programme and the business has driven

engagement with the platform through quizzes, cash incentives and

targeted content such as updates from the Chief Executive Officer.

BARCHESTER

Read more online |

https://www.hapi.co.uk/content-hub/case-studies

Personal Group worked

in partnership with us to

identify key opportunities

for the business. Their

guidance and technical

solutions have helped

us create a happier and

healthier workforce that

feels more protected and

better connected.

Genevieve Glover

Our Purpose in Action

continued

Sector:

Leisure, not-for-profit

Employees:

1,200

Challenge:

Pay and reward, employee engagement

and connectivity in an evolving market

As a result of the pandemic many more people have opted for

UK-based holidays. As the Caravan and Motorhome Club’s

membership and demand for new services increased, it was

important to maintain and improve employee engagement.

A significant proportion of its loyal and established workforce

traditionally mirrored the mature caravan enthusiast, however,

this has slowly started to evolve to a younger demographic and

they needed to infuse their engagement approach to reflect the

new glamping generation.

With each site based in a unique and remote location, employees

have always been crucial in overcoming challenges and creating

a positive experience for the customer. Those workers need to

be engaged and motivated and yet often their detachment from

HQ was leaving them isolated from the business and feeling

unappreciated – a concern for retention and for attracting new

talent in a competitive market.

We identified that by evaluating roles and benchmarking its pay,

the Caravan and Motorhome Club could create greater flexibility

in its reward structures and take a more strategic view of its

Total Employee Value Proposition, including the creation of a new

Recognition scheme to engage workers across the Club.

By applying our knowledge and interpreting the data, we helped

them build a transparent fair pay strategy that formed the basis of

a clear job architecture, and enabled them to build a competitive

and fair framework.

To help motivate and engage employees our expert Reward

consultants also advised on a new 'Cheers for your Peers'

recognition scheme enabling colleagues and managers to thank

fellow workers for a job well done, complemented with a quarterly

prize draw and an Annual Club Stars award scheme. With all of this

delivered through the Hapi app, staff are encouraged to engage

with their rewards and benefits through their smart phones,

meaning they are also better connected with the business,

every day. Since the introduction of Hapi, employee engagement

levels have increased, which in turn is reflected in increased

member satisfaction and retention.

THE CARAVAN

CLUB

Innecto consultants

understood our challenges

and saw them as

opportunities to help

us compete and grow.

By combining their expertise

and technology they have

helped us connect with our

workforce in a refreshingly

transparent way. The Hapi

app is like a magic toolbox

that brings all the pieces

together on a daily basis.

The Caravan Club

Posed by model

Read more online |

Our Purpose in Action

continued

NRG

RIVERSIDE

The On Demand GP service

is hugely popular and it has

felt great being able to offer

counselling and support to

those in need. We are now

looking forward to rolling

out our new Recognition

Scheme. This partnership has

transformed our business.

JENNY COOK,

People Services Director,

NRG Riverside

Sector:

Specialist Fleet Management

Employees:

226

Challenge:

Employee retention and recruitment in a specialist market

NRG Riverside is one of the UK’s largest specialist fleet management

companies, offering short and long-term truck rental, contract hire,

fleet repair and maintenance services across nine sites nationwide.

Operating in a specialist environment, the company’s success relies

heavily on attracting strong candidates and retaining staff who have

received a high degree of training and regular re-accreditation.

By previously offering only a basic package of salary plus pension

the company was limiting its appeal in a tough recruitment market,

but that situation has been reversed with the launch of a

comprehensive new Reward and Benefits Strategy.

Since launching in February 2022, Sage Employee Benefits has

been used by an impressive 80% of workers and has supported

the reduction of staff attrition rate by 12%. In particular,

the counselling and On Demand GP services have proved

popular, with sick employees now calling On Demand

GP that day for a consultation as part of the company’s

Absence Policy. The diverse package of enhanced benefits

has also become a key driver for attracting new talent.

Working in partnership with our expert consultants,

NRG Riverside is set to launch the next phase of their

benefits package – a new company-wide Award and

Recognition scheme. With quarterly nominations and an

annual winner across eight categories, this will enable

employees to come together and recognise colleagues

across multiple sites and help drive engagement with

the scheme even higher.

Posed by model

I am pleased

to report on a year of

strategic progress,

in which the team have

again delivered on

our strategic and

financial objectives.

Chairman’s Statement

Martin Bennett

Non-Executive Chairman

Personal Group Holdings Plc |

Annual Report and Accounts 2022

10

Overview

Governance

Strategic

Report

Financial

Statements

Chairman’s Statement

continued

I am pleased to report on a year of strategic progress, in which

the team have again delivered on our strategic and financial

objectives. The strength of trading in the second half of the

year underpins our confidence that we are now firmly back on

a growth trajectory, set to benefit from the investments we

have made in our offering and team.

It is evident to me that the team takes great pride in our role

in supporting people's physical, mental, social and financial

wellbeing, working together to achieve our vision: to create

a brighter future for the UK workforce. This clear sense of

purpose, with a passion for clients, partners and the people

within the business, has stood Personal Group in good stead

through the economic challenges of recent years, and we

have emerged a stronger and more diversified business as a

result. I would like to thank the team for their continued hard

work and embodiment of the Company’s values.

Achieving growth

We have successfully delivered growth across a number of

our KPIs, increasing our total client numbers and reporting

double digit growth in key areas of our recurring revenue.

Of particular note in the year was the reinvigoration of the

insurance sales model which had been so affected by the

pandemic. Recruiting the right people, training, and getting

them back in to see clients was by no means a simple task

and has been achieved exceptionally well, exemplified by

the consecutive record new insurance sales achieved in

November and December. Whilst this investment in the

field sales team impacts our profits in the short term the

benefits of the resultant growth in the insurance book will

be seen in future years.

Across the benefits platform we won new customers and

secured valuable new partners, including the signing of a

multi-year extension to our engagement with Sage to power

the Sage Employee Benefits platform, which is reflective

of the success of our partnership to date. Following its

establishment several years ago, momentum accelerated

in 2022, resulting in an increased gross Annual Recurring

Revenue of £3.0m (2021: £1.6m) with c50,000 paying

employees on the platform at the end of the year and we

are confident that this will continue to be a growth engine

for the business.

The acquisition of Quintige Consulting Group Limited ("QCG")

in July has enhanced the Group's overall pay and reward

offering and consolidated the Group's position as a leading

provider of employee services in the UK. Integration of the

QCG team into our organisation is progressing well, and we

are already benefiting from shared knowledge and activities.

We are of course not immune to the disruption taking place

across the UK, whether that be strikes or ongoing supply chain

issues. As described in our trading update issued in January

2023, our consumer technology business, Let’s Connect,

had a challenging second half of the year, as a result of the

industrial action taking place at its major client, Royal Mail

Group. This continued action has had implications as we have

moved into the start of 2023 and as a result, the current

salary sacrifice technology scheme we run with them is no

longer appropriate for them in its current format. Whilst not

reflective of our overall offering, taken alongside continued

uncertainties around supply chain and ongoing margin

pressures, in undertaking our annual impairment review of the

goodwill held from the acquisition of Lets Connect in 2014,

we have made the prudent decision to fully impair the

£10.6m of goodwill created on acquisition in 2014. Whilst this

has impacted our statutory profit before tax for the year it

is a non cash item and does not affect the financial strength

of the business. For more details please see note 14.

We are all cognisant of operating within an inflationary

environment and the management team have negotiated

this well, through the careful management of resources and

considered investment. With inflation set to remain high

throughout 2023, we will continue to carefully balance the

investment in the business with profitable growth.

A strengthened team

Personal Group places the success and happiness of

people at its heart, demonstrated by the very nature of

our offering. Internally, this ethos has seen the business

maintain our high staff retention rates, whilst also

supporting the hiring of additional talented senior managers

to strengthen the team as well as the introduction of the

QCG team in July. In May, we welcomed Ciaran Astin to the

Board as Non-Executive Director. Ciaran brings with him a

wealth of sales, digital and marketing experience.

ESG

As a Board, we are committed to high standards of ESG and

made good progress against our stated objectives during

the year, building on our existing foundation of responsible

business practice. We have made progress in reducing

our carbon footprint, fostering an inclusive, progressive

and diverse working environment and ensuring a robust

corporate governance framework, all enhancing our wider

Environmental, Social and Governance (ESG) strategy.

UNIQUE CLIENT NUMBER

502

(2021: 387)

ANNUALISED PREMIUM INCOME

28.0

m

(2021: 24.4m)

DIVIDEND PER SHARE

10.6

p

(2021: 11.5p)

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Chairman’s Statement

continued

It is in the area of societal good that we believe we can have

the most positive impact, both through our own actions

and providing the tools for our customers to similarly effect

change. You can read more on these efforts within the ESG

section of our Annual Report.

A growing market

The need for organisations to look after their people has

never been more important. Caring for health, wellbeing, and

building a sense of community is crucial to modern companies

and represents the ongoing opportunity for Personal Group.

In this current macroeconomic environment, there are few,

if any, markets about which one can be so optimistic and we

look forward to capitalising on the opportunity.

Dividend

I am pleased to announce that the Board has recommended

a final ordinary dividend of 5.3 pence per share which

will be paid to shareholders on 18 May 2023. This makes a

total ordinary dividend for 2022 of 10.6 pence per share.

The Board has considered the level of dividend in the

context of the non-cash impairment of goodwill, alongside

the underlying growth seen during the year and continued

confidence in the Group's business model and prospects.

Outlook

With the impact of the pandemic now largely behind us,

and with the growth we have seen in our key areas of

recurring revenue, our focus is now on taking Personal

Group onto the next stage of growth and we have entered

2023 on the front foot, benefiting from the strong end to

FY22. The growth in our insurance book, investments in

our Hapi platform and expansion of our Pay and Reward

offering all provide confidence in another successful year.

FURTHER INFORMATION

OUR STRATEGY

Read more |

 Page 17

CFO STATEMENT

From Personal Group

CFO Sarah Mace.

Read more |

 Page 25

ESG

Read our progress against our ESG targets.

Read more |

 Page 32

The right team in place – experienced and engaged

Our Board and senior leadership have a deep

understanding of the business and industry, and a proven

track record in scaling-up businesses and extensive

commercial experience. They are committed to ensuring

Personal Group couples innovation with strong financial

stewardship and delivers on its purpose to the benefit

of all stakeholders, whether they be customers,

employees, our communities or shareholders.

We are proud of the diversity of our business,

from Board level through to our teams, and we will

continue to be driven by our social purpose.

Read more online |

https://www.personalgroup.com/about-us/our-leadership-team

See our Social section of ESG |

 Page 35

While cognisant of the ongoing economic

challenges, we look to the future with a strong

sense of optimism and remain committed to

the continued execution of our strategy.

Non-Executive Chairman

27 March 2023

Group Chief Executive’s Statement

I have a

great deal of

satisfaction on

looking back

on a pivotal

year for Personal

Group.

Deborah Frost

Group Chief Executive

Personal Group Holdings Plc |

Annual Report and Accounts 2022

13

Overview

Governance

Strategic

Report

Financial

Statements

Group Chief Executive’s Statement

continued

Dear Investor,

I have a great deal of satisfaction on looking back on a

pivotal year for Personal Group. In 2022, we came out of

the pandemic and built on 2021’s work in the restarting of

the engine of the business. We have delivered a strong

year of new business development, insurance book

growth and expansion in our key market focus of Small

and Medium Business.

In a year when many businesses have issued profit warnings,

political turbulence has spilled over into financial markets,

and inflation has deeply affected many people in the UK,

I am very proud of how my team have been rebuilding the

business with double digit growth in many key areas of our

book of recurring revenue. Annualised Premium Income

ends the year 15% ahead of last year’s close, new client

numbers are up 17% and we have hit our Sage channel target

of 50,000 paying employees from 2,800 companies.

Sales and operational review

Affordable insurance

2022 was always going to be a year of lower profit,

primarily because our historical normal investment in

our field sales insurance team has been set against lower

premium values, as a result of the pandemic. Slightly higher

claims ratios this year were expected against previous

years of low NHS activity but have remained stable.

However, this has been a year of bests: best annual

individual performance ever by a field sales colleague,

best ever month in November 2022, and best ever

December 2022. Our new insurance sales of £9.5m were

up 158% on 2021 and at the highest level seen since 2018.

These achievements are set against a backdrop of industrial

action and staff shortages in our clients, which means our

site visits have to be professional and credible in building

employee engagement for our clients, as well as offering

key insurances for our policyholders. Over 50% of client

employees that we present our insurance policies to

chose to buy our insurances on the day we meet them

which emphasises the value perceived in our products.

The majority of our policyholders elect to pay through their

payroll on a weekly or monthly basis, these policies typically

have a lifetime value of around five years – so business

written in 2022 builds momentum for the future.

Benefits platform

Our new business and account management teams

for Enterprise clients have also had success this year.

Our overall client retention rate remains extremely high

for the benefits business where, we retained 164 clients

in year (95% retention), and added 22 new ones.

The five-year deal signed with Sage in February highlights

the value that both partners place on the relationship,

with us hitting our target of 50,000 paying employees by

the end of 2022. This shows growth of +87% from £1.6m

ARR end 2021 to £3.0m ARR end 2022. We are now actively

seeking other external partners, to widen our reach,

and build further ARR streams.

Pay and reward

Since the acquisition of QCG in July 2022, the Pay and

Reward division has continued to develop, with cross

selling of Innecto Digital and Hapi platforms, and the

bringing on of new clients. The division now serves 174

active clients, although as is the nature of consultancy,

these clients cyclically move on, as projects are completed.

We have been pleased with the retention of Innecto Digital

products, covering Job Evaluation, Pay Benchmarking

and Pay Review software. Our blended retention rate is

87% against a target of 75%, with 12 new clients added.

Other owned benefits: Let’s Connect

Let’s Connect has experienced a challenging year:

the backdrop of industrial unrest in their biggest client,

Royal Mail Group affected our marketing campaigns as well

as the ability of striking workers to afford new technology

items. We have recognised that this will impact this area of

the business going forwards and accordingly determined

to take a prudent approach and fully impaired the value of

goodwill associated with it as a result. Notwithstanding

this, other Let's Connect clients have performed well,

emphasising the cost-of-living benefit for employees

in being able to spread the cost of technology purchases

without the direct interest charges and credit checks

that they face on the High Street. Some stock shortages

have affected sales in the year, but this has significantly

improved in comparison to the last couple of years.

NEW CLIENT WINS ACROSS THE GROUP

101

(2021: 86)

ANNUALISED NEW BUSINESS PREMIUM

£

9.5

m

(2021: £3.7m)

SEB ANNUALLY RECURRING REVENUE

£

3.0

m

(2021: £1.7m)

Personal Group Holdings Plc |

Future outlook

Our business is now significantly stronger and more

diversified than 2019, our last year of trading pre-

pandemic. Previously the business mainly operated in

our heartlands of lower wage, hourly-paid employees;

food production, transport, care homes, warehousing

and distribution. Whilst our core business plays a

very important role in our future, as we set out in our

strategic roadmap in 2019, we have expanded our reach

to different sectors of the economy – SMEs, the public

and ex-public sectors, and salaried employees in the

private sector. This widens the Group's platform and

market opportunity for growth in the future, and our

investment in sales and marketing and technology is

now bearing fruit in the number of new clients we are

engaging with and delivering for. Underlying organic

growth in 2022 will lead to increased EBITDA in 2023

and beyond, as our business model is mainly based on

recurring contracts, whether with SMEs, insurance

policyholders or our major Enterprise clients.

We also continue to search for acquisitive growth that

will increase shareholder value. Alongside the small

acquisition made in-year, we have continued to review

selected acquisition opportunities against a clearly

defined criteria of identifying businesses that would be

capable of adding complementary, earnings-accretive

non-organic growth.

Whilst we have planned for 2023 to be another difficult

year for the economy, trading in 2023 has started

positively and we are confident our offer resonates with

our target markets, and we will continue to see growth

over the forthcoming years.

Deborah Frost

Group Chief Executive

27 March 2023

Read more online |

https://www.personalgroup.com/about-us/our-story

Whilst some of this investment impacts

our in-year profits, we recognise its

importance to enable us to deliver on

our growth strategy.

Deborah Frost

Investing in the future

Group Chief Executive’s Statement

Improving the lives of the UK workforce.

Our Business Model

We provide a broad range of employee engagement and wellbeing offerings to all sectors of the UK workforce. Our full service solutions, encompassing employee benefits

and employee insurance products, enable organisations to stand out as an employer of choice, helping their employees thrive in work and in life.

AFFORDABLE

INSURANCE

OTHER OWNED

BENEFITS

BENEFITS

PLATFORM

PAY &

REWARD

HOW

WE MAKE

MONEY

Innecto Digital subscriptions – employers pay an annual subscription for digital analysis

and predictive SaaS tools for use in making pay decisions.

Innecto & QCG consultancy income – employers pay for a full reward service – from pay

benchmarking and surveys to the development of job evaluation and bonus schemes.

Hapi subscriptions – employers pay monthly or annual subscriptions per

employee for use of the Hapi platform and app.

Can be white-labelled through a corporate partner, eg. Sage Employee Benefits.

Commission on third party transactions – we earn a margin on some of the

discounted vouchers available to employees through Hapi and commission on

any third-party financing arranged or employer purchases of partner solutions.

Employee-paid insurance plans – access to our insurance products

is made available through an individual’s wider employee benefits

offering. Premiums are paid by the employee via a weekly or monthly

payroll deduction.

Employer-paid home technology salary sacrifice sales – employers pay up front

for their employees’ technology and other purchases with employees making

subsequent monthly salary sacrifice payments back to their employers.

A significant proportion of revenue

(c.43%) is pass through voucher resale

on Hapi and therefore has minimal

impact on earnings.

ADJUSTED EBITDA

CONTRIBUTION

26

%

OF CLIENTS ARE

SERVED BY TWO OR

MORE SEGMENTS

Affordable insurance

Benefits platform

Pay and Reward

Other owned benefits

16

High performing

customer, sales, and

client service teams

Leading-edge

technology

End to end

processes that

work every time

Supplying products

and services people

need to help them

thrive in life

Purpose-driven Board

and SLT with great

supporting teams

Effective

governance

Over 80% employee

engagement

great place to work

Over 75% customer

approval rating

great to work with

Serving >1.5m

employees

making a difference

Drive in-year

premium income

over £35m

protecting the

unprotected

Unlocking

EBITDA growth

We are building on our success with a clear

three year strategy.

Our Strategy

We continue to focus on building a business with room to grow in the medium and long-term and have laid out what our business will need to be to meet our aspirations.

Our medium-term

aspirations

Our Capabilities

Personal Group Holdings Plc

A winning team building a brighter future for the UK workforce, supporting over 1.5m

employees by 2025

How we win

Where we play

TIER 1

SMEs (10-250 employees)

TIER 2

Talent Driven

TIER 3

Enterprise/Public Sector

We make it easy for our clients and prospects to choose us, by creating a market-leading offer,

meeting all Reward and Benefits requirements

Our proposition, onboarding, and lifetime service for B2B clients is industrial-strength and scalable

Our satisfyingly simple insurance products are backed by outstanding claims and service experience

We make it easy to do business with us through any channel

How we will deliver.

We are focused on building a business with room to grow in the medium and long-term and have laid out what our business will need to look like to meet our aspirations.

Our Strategy

continued

1.

DRIVING INSURANCE SALES THROUGH

NEW AND EXISTING CHANNELS

2.

TRANSFORMING REWARD

AND BENEFITS

3.

ACCELERATING OUR

SME OFFER

Our unique sales approach helps employers

communicate their key messages about employee

wellbeing and the key benefits they offer through

a face-to-face conduct with their employees,

both introducing them to their benefits package

on Hapi, and offering the chance to buy insurance

there and then.

Our insurance products provide peace of mind and

security for employee groups who don’t receive death

in service or sick pay from their employers. Our simple

products, which don’t require a medical or premium

underwriting, are paid through payroll deduction.

The premiums and payouts are relatively low value but

fill an important gap for the communities we serve.

Our clients often first come to us for consulting help

with pay, recognition or bonus issues which we are

able to address through our Pay & Reward division,

comprising Innecto and QCG. We are then able to deepen

the relationship; offering our range of products,

including the Innecto Digital suite, Hapi benefits

platform, Let’s Connect and insurance products.

Our employee benefits app-first solution, Hapi, is a market-

leading employee engagement platform, which for larger

clients is fully customised and white-labelled with their

own bespoke mix of benefits and branding, with Hapiflex

aimed at more sophisticated client users who want to be

able to offer flexible benefits to their employees.

Our SME version of Hapi enables us to target small

businesses with a standardised product. We currently

deliver to this traditionally hard to access market through

our partnership with Sage with our proposition of ‘Sage

Employee Benefits (SEB)’.

SEB is pre-populated with key benefits for employers

to access such as discount offers, online GP and an

Employee Assistance Programme and offered to Sage’s

client base with an initial free trial.

For more information |

For more information |

For more information |

1.

DRIVING INSURANCE

SALES THROUGH NEW AND

EXISTING CHANNELS

2022 Progress

>

Close examination of our policyholder journey with key

customer decision points assessed, and interventions

made. We’ve seen first 12 month retention increase over

two years from <50% to c.58% with more changes to effect

change still being developed and trialled.

>

Return to a strong and fully functioning face-to-face field

sales team, which delivered the highest levels of new

business seen since 2018, with records broken for best

month and best individual full year performance.

>

Delivery and productivity of face-to-face team enhanced

through revised organisational design, improved planning

approach and more focused performance management

infrastructure.

>

Launched digital insurance offer to 34 additional clients.

>

Introduction of Net Promoter Score (NPS) for both

the Customer Relations Team and Customer Loyalty

Team to enable feedback and continuous improvement

opportunities relating to our customer experience.

>

Prepared for the implementation of the FCA Consumer

Duty, ensuring that our insurance products continue to

provide value to policyholders which will in turn mean that

we retain our loyal customer base as well as attract new

customers. Workstreams have been in place to ensure that

our customer communications and supporting customer

service are of the quality expected by the Duty.

Strategic Progress

2023 Plans

>

Continuous improvement of

productivity of face-to-face sales

team through introduction of ‘New

Ways of Working’ which encompass

enhanced leadership capability

and improved planning and client

engagement, through to sales

team wellbeing.

>

Further improvement of penetration

with existing clients through

optimisation of the digital vs face-to-

face channels using other activities

such as webinars and roadshows with

employer support.

>

Progress opportunities to partner with

third-party insurance providers to

offer alternative products suitable

for the widening client base.

>

Further work on retention journey

from initial point of sale through

the first year of the policy, with

particular focus on retention during

the first 14 day early cancellation

and the opportunity to switch to

an alternative payment method at

the point a policyholder leaves their

employer and their payroll payment.

>

Testing and monitoring of consumer

outcomes to enable the continued

assessment of whether customers are

receiving good outcomes from their

relationship with us. This process of

continuous improvement will mean we

can evidence compliance with the FCA

Consumer Duty as well as continuing

to improve customer retention and the

attractiveness of our products.

Strategic Progress

continued

2.

TRANSFORMING REWARD

AND BENEFITS

2022 Progress

>

2022 has been challenging for HR teams, as we have seen

high a level of wage demands, industrial unrest, recruitment

difficulties and talent shortages. It is unsurprising that

clients are reaching out for advice and support as they

guide their companies through this new landscape and we

have seen an uplift in consultant work as we help clients

through changes.

>

The division grew 82% in consultancy income.

>

101 new clients.

>

47 clients on Innecto Digital products with retention rate

of 87% and 17 holding more than one product.

>

Annual recurring revenue on surveys and Innecto Digital

products of £0.66m (£0.43m Dec 21).

>

Hapi has also seen double digit growth as benefits platform

ARR has grown from £1.55m to £2.00m. We are seeing new

clients on-boarding, as well as existing clients deepening

their relationship with us by widening the benefits they

provide through us to their employees. We’ve seen an uplift

in underlying commissions for third party providers, such

as Cycle to Work schemes, grow by 158% in 2022 with these

schemes continuing into 2023 and beyond. Dame Kelly

Holmes, who joined as our Chief Wellbeing Ambassador for

2022, has introduced her wellbeing solution, Transform,

for our clients expanding our unique benefits offer.

2023 Plans

>

>

>

Strategic Progress

continued

3.

ACCELERATING OUR

SME OFFER

2022 Progress

>

Following the initial years of

development with our Sage

partnership we have been delighted

at the growth in new customers and

the steady reduction in our blended

churn number. All SaaS businesses

require both, and with the

introduction of a new look and feel

to the product in July the division

is growing very satisfactorily.

>

We have introduced new SLAs

with our sales colleagues in Sage,

so our lead quality has improved,

and pipeline is staying steady.

>

We have started discussions with

other prospective partners in

different markets that we hope

to see come to fruition in 2023.

>

Voucher sales topped £5m for SEB

customers, showing the high level

of engagement and value that

employees place on the platform.

2023 Plans

>

>

>

Key Performance Indicators

The Group meticulously reviews its performance,

measured across a number of KPIs.

Lead Indicators

As part of our strategy for delivering long-term sustainable growth, we identified a number of lead indicators, the improvement of which will enable us to grow both our revenue and profits

and build future value for the business.

Lead Indicator

Why we chose it

31 December

2022

31 December

2021

Unique client number

Winning new clients and retaining existing ones will be key to us being able to grow our business.

502

387

Number of clients served by two

or more lines of business

Encouraging cross-selling across the Group will enable us to achieve increased penetration across our

existing clients as well as making us an important part of clients’ employee wellbeing proposition.

128

132

Total number of employees to

whom one or more of our services

are made available

Increasing the number of employees we provide services to will be fundamental to us achieving our growth

aspirations as well as helping us achieve our vision of being a winning team creating a brighter future for the

UK workforce.

1,432,670

1,210,980

Activated users on Hapi and Sage

Employee Benefits

Increasing the number of activated users on Hapi and Sage Employee Benefits will help us drive greater

return on the Group’s SaaS digitally enabled products.

582,733

539,051

Number of insurance payers

Re-invigorating growth in insurance payers, together with a consistent focus on retention, will help us increase

the size of our insurance business. We have chosen to use payers instead of our historic measure of policies to

reflect that the majority of our premiums are collected through payroll deduction and our retention rates are

largely determined by the actions of the individual payer.

94,877

93,147

UNIQUE CLIENT NUMBER

NUMBER OF INSURANCE PAYERS

ACTIVATED USERS ON HAPI

AND SAGE EMPLOYEE BENEFITS

Strategic

Report

2022

£28.0m

2021

£24.4m

2020

£27.1m

2019

£30.3m

2022

£9.5m

2021

£3.7m

2020

£2.4m

2019

£9.0m

2022

27.7%

2022

£5.6m

2021

£3.6m

2020

2019

2021

24.5%

2020

24.4%

2019

22.1%

2022

83.1%

2021

80.7%

2020

80.5%

2019

76.6%

2022

34,297

2021

33,155

2020

27,320

2019

31,319

1.

Annualised premium income refers to the annualised premium value of policies in force at the end of the financial year net of IPT.

2.

Annualised new business premiums are a key performance indicator as, whilst no direct reconciliation to earned premiums for the year can be carried out, they are a primary driver of earned premiums in future years and, as such,

are a key measure for the Group. For a weekly premium, the measure is calculated as the value of the premium (net of IPT) x 52; for a monthly premium, the value of the net premium (net of IPT) x 12.

3. The SaaS license total includes HAPI, SEB and Innecto Digital recurring revenue.

Key Performance Indicators

continued

Other KPIs

In addition to our lead indicators we continue to measure against a variety of additional KPIs both across the Group and within the various business segments.

ANNUALISED PREMIUM INCOME

1

£

m

YEAR ON YEAR

INSURANCE RETENTION

%

ANNUALISED NEW BUSINESS PREMIUM

2

£

m

ANNUALISED RECURRING REVENUE

FOR SAAS LICENCES

3

£

m

CLAIMS RATIO

LC ORDERS

£1.8m

£1.7m

Acquisition of Quintige Consulting Group (QCG)

On 1st July Personal Group

purchased Quintige Consulting

Group (“QCG”) a leading

employee experience and

reward consultancy, for a cash

consideration of £1m.

QCG was founded in 2000

and has become a leading

HR consultancy business

supporting a wide range of

public and private sector

organisations. It provides

consultancy supporting

employee experience, reward

and recognition and has a

strong pay benchmarking

survey practice.

We were delighted to acquire QCG in

July – adding substantial knowhow

and a new client base to our reward

consulting division. The business

has a similar fingerprint to Innecto,

but operates in different markets

– specifically Rail, Construction,

Governance organisations

(Information Commissioner Office,

Bar Standards Council) and Museum

and Leisure sectors. The team,

led by Juan Novoa, has a strong

reputation in building long-term

relationships and providing advice

on reward strategy, pay structures,

pay benchmarking and actually run

specialist pay surveys, with over 90

companies participating in 2022.

Our goals for the division include

widening opportunities for the

Innecto Digital products into our new

client base, sharing knowledge and

evolving our benefits provision to

meet the needs of the new clients

we’ve acquired.

Read more about

Our Strategy |

 Page 17

24

Overview

Governance

Strategic

Report

Financial

Statements

Chief Financial Officer’s Statement

The Group

continues to benefit

from an increasing

proportion of

recurring revenues,

providing high

levels of visibility

for 2023.

Sarah Mace

Chief Financial Officer

25

Overview

Governance

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Strategic

Report

Chief Financial Officer’s Statement

continued

Group revenue

Group revenue for the year increased 16% to £86.7m (2021:

£74.5m) reflecting growth across all areas of the business,

with the exception of the Other Owned Benefits division

(Let’s Connect).

With COVID-19 lockdowns, which impacted our ability to

carry out our traditional face-to-face selling of insurance,

firmly behind us, our insurance segment returned to

growth as anticipated and as at 31 December 2022 we have

an insurance book of £28.0m Annualised Premium Income

(API) (31 December 2021 £24.4m), the majority of which is

renewable on weekly or monthly rolling contracts.

External income from our internally developed Benefits

Platform increased by over 45% year on year, following on

from the 40% growth seen in the previous year. This growth

is a result of our continued expansion into the SME sector

through our partnership with Sage and growth in our own

HAPI platform sales. Growth in our pay and reward segment

reflected the acquisition of Quintige Consulting Group (QCG)

at the start of the second half of the year but also growth

in consultancy income and digital subscription income in

Innecto. Annual Recurring Revenue (ARR) across all the

Group’s digital platforms now stands at £5.6m (2021: £3.6m).

Sales of technology and other products to employers

as part of their employee benefit provision through the

Group’s subsidiary, Let’s Connect, fell short of 2021,

primarily as a result of industrial action in its key client

impacting its peak trading period in Q4.

Income from voucher resale through the benefits

platform also grew significantly in the year and, whilst this

predominantly represents pass-through revenue, it does

continue to demonstrate the value that our Benefits Platform

provision can bring to our clients and their employees.

Adjusted EBITDA

*

Adjusted EBITDA* for the year was £6.0m (2021: £6.1m).

Adjusted EBITDA remained in line with last year but reflected a

changing mix in contribution from the various business areas.

As anticipated, we saw a reduced contribution from

the insurance business, as we invested heavily in the

acquisition costs of the field sales team as it re-established

itself to pre-COVID levels. Offsetting this we saw increased

contribution from both our Pay & Reward and Benefits

Platform businesses in line with their increased revenues,

with the contribution from Other Owned Benefits

remaining broadly flat year on year. Outside of the core

segments, group administration and central costs reduced

in line with a return to more normalised levels of sales and

marketing spend.

We believe adjusted EBITDA* remains the most appropriate

measure of performance for our business, reflecting the

underlying profitability of the business and removing the

impact of one-off items arising from past acquisitions

on the Group’s reported profit before tax. The definition

remains unchanged from previous years.

Group results

2022

£’000

2021

£’000

Revenue

86,653

74,513

Adjusted EBITDA*

6,094

Operating profit

3,835

4,374

(Loss) / Profit before tax

4,342

Tax

(493)

(745)

(Loss) / Profit for the year

3,597

2022

£’000

2021

£’000

Profit before tax

4,342

Finance costs

32

Corporate acquisition costs**

47

Depreciation

966

Amortisation of acquired

intangibles

205

Amortisation (other)

548

380

Goodwill impairment***

Share-based payment expense

169

Adjusted EBITDA*

6,094

GROUP REVENUE

ADJUSTED EBITDA

EARNINGS PER SHARE

Strategic

Report

Alternative performance measure

Adjusted EBITDA, which is referenced

throughout this document, is an alternative

(non-Generally Accepted Accounting Practice

(non-GAAP)) financial measure used by

the Group when reviewing performance,

evidenced by executive management bonus

performance targets. As such, this measure

is important and should be considered

alongside the IFRS measures.

Adjusted EBITDA takes into account

adjustments, in addition to the standard

IFRS measure, which are considered to be

non-underlying to trading activities and

which are significant in size. For example,

goodwill impairment is a non-cash item

relevant to historic acquisitions; share-based

payment expenses are a non-cash item

which have historically been significant in

size but can fluctuate based on judgmental

assumptions made about share price and

have no impact on total equity; corporate

acquisition costs and reorganisation costs

are both one-off items which are not

incurred in the regular course of business.

Our strong balance sheet means we remain

well positioned for future growth.

Sarah Mace

Chief Financial Officer

FURTHER INFORMATION

ACQUISITION OF QCG

.

Read more |

 Page 24

CE STATEMENT

From Personal Group

CE Deborah Frost.

Read more |

 Page 13

KPIs

Read more |

 Page 22

Chief Financial Officer’s Statement

Strategic

Report

Chief Financial Officer’s Statement

continued

Segmental results

The Group reports across four core segments as detailed in the table above.

For each of the segments, the adjusted EBITDA* contribution comprises the gross profit of that segment together with

any costs associated directly with the operation of that segment. Sales and marketing costs and other central costs that

are not directly attributable to a segment, such as Finance, HR, depreciation, amortisation and Group Board expenses are

not allocated to a segment and are shown separately as ‘Group Admin & Central Costs’.

We believe this presentation provides transparency to enable the impact of top line growth on adjusted EBITDA*

contribution for each area of the business to be better understood.

The Group continues to see an increasing contribution from

its non insurance activities.

Segment

Description

Income Streams

Pay &

Reward

Provision of a full reward service to employers

through the Group’s pay and reward subsidiaries,

Innecto and QCG

Consultancy, industry surveys and digital platform

subscriptions

Benefits

Platform

Provision of a benefits platform to employers both

directly and through channel partners, currently

Sage for our SME solution

Digital platform subscriptions, commissions from

third party benefits which sit on the platform

Affordable

Insurance

A directly owned benefit, provision of simple insurance

products underwritten by Group subsidiaries

Premium income

Other Owned

Benefits

Other directly owned benefits: sale of technology

and other products to employers as part of their

employee benefit provision through the Group’s

subsidiary, Let’s Connect

Retail sales directly to employers, commission

received from the introduction of third party finance

Revenue

Dec-22

£’000

Dec-21

£’000

Pay and Reward

2,008

Benefits Platform

4,819

Affordable Insurance

25,257

Other Owned Benefits

16,800

Other

382

Revenue pre voucher sales

49,264

Voucher resale

37,389

Total Revenue

86,655

Adj EBITDA Contribution

Dec-22

£’000

Dec-21

£’000

Pay & Reward

495

Benefits Platform

2,866

Affordable Insurance

9,032

Other Owned Benefits

664

Group Admin & Central Costs

(7,107)

Other

160

Total Adj EBITDA

6,010

Strategic

Report

Chief Financial Officer’s Statement

continued

Pay & Reward

Innecto’s strong performance in 2021 continued into 2022,

with consultancy income up 34% as the battle for talent

continued and demand from HRDs looking to retain and

attract their employees increased. Digital subscription

income from its proprietary HR solutions also increased by

19% on the previous year. Annualised Recurring Revenue

on these products stood at £0.5m as at 31 December 2022

(2021: 0.4m).

The acquisition of QCG in July 2022 also added to the

Group’s Pay & Reward offering with the expectations

set out at acquisition achieved in the second half of the

year. Whilst operating in a similar market to Innecto,

QCG operates in different market sectors, has a strong

presence in pay surveys and provides opportunities to

cross sell across both client bases.

Collectively this division achieved revenue of £2.0m

(2021: £1.2m) and EBITDA of £0.5m (2021: £0.3m) of which

QCG contributed £0.4m of revenue and £0.1m of EBITDA

post acquisition.

Benefits platform

Revenue from digital platform subscriptions and

commissions from third party benefit suppliers which sit on

the benefits platform rose to £4.8m in 2022 (2021: £3.3m).

Subscriptions for our enterprise platform, Hapi, gained

momentum in 2022 with ARR on the platform increasing

by 29% to £2.0m (2021: £1.6m) during the course of the

year and are expected to benefit further in 2023 with the

refined and refreshed Hapi 2.0.

Our expansion into the SME market also continued to grow

at pace, with Sage Employee Benefits, the Group’s SME

proposition being taken to market through its partner Sage.

Having signed a new five-year contract in February 2022

and with an updated version of the platform to be launched

in 2023, we are anticipating further growth in its ARR which

stood at £3.0m at the end of the year (2021: £1.6m).

As at 31 December 2022 the ARR from Benefits Platform

subscriptions across all channels stood at £5.0m (2021: £3.2m).

Adjusted EBITDA contribution of £2.9m (2021: 2.1m)

increased in line with increased revenue but also

demonstrates the increased margins available as this

area of the business scales up.

Affordable insurance

Premium income from the Group’s core insurance business

increased by £0.6m to £25.3m (2021: £24.7m).

The strong opportunity for our face-to-face sales activity,

driven by employers wishing to re-engage with their

workforce post-COVID-19, has given opportunity to

rebuild the sales team and grow the insurance book back

towards levels seen pre-COVID. £9.5m of new insurance

sales were written during the year (2021: 3.7m) which,

together with continued strong retention rates for existing

policyholders, meant that as at 31 December 2022 we have

£28.0m (2021: £24.4m) of Annualised Premium Income,

the majority of which are renewable on weekly or monthly

rolling contracts.

Claims ratios for the year increased to 27.7% (KPI's) (2021:

24.5%) higher than historic norms as hospital admittances

and visits increased post COVID-19 lockdowns. As the NHS

starts to address their long waiting lists, we anticipate this

continuing in the short to medium term.

Adjusted EBITDA contribution of £9.0m for the year

(2021: £11.0m), reflects the increased premiums and claims

costs but also the increased acquisition costs of the field

sales team as we invested heavily to re-established it at

pre-Covid levels. The benefit of the related new insurance

sales will be seen in future years.

Other owned benefits: Let’s Connect

Let’s Connect, which provides technology and other

products to employers as part of their employee benefit

provision, saw revenues decrease to £16.8m (2021: £18.2m),

although margin improvements helped mitigate the

impact on its EBITDA contribution of £0.7m (2021: £0.7m).

The industrial action which took place at its key client

in the second half of the year impacted its peak trading

period in Q4 and has led to a full impairment of the £10.6m

goodwill balance associated with its acquisition at group

level (see note 14).

Group administration expenses and central

costs

Group administration and central costs of £7.1m (2021: £8.2m)

reflected a return to a more normalised level of sales and

marketing spend post the additional investment made in

2021 alongside a reduced level of bonus costs.

Sarah Mace

Chief Financial Officer

27 March 2023

29

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Risk Management

Oversight

The Board is responsible for overseeing and maintaining

the adequacy and effectiveness of the risk management

and internal control systems as well as identifying the

nature and extent of the principle risks the Group is willing

to take in achieving its strategic objectives, including the

setting of the overall risk appetite and tolerance levels.

The Board delegates oversight of risk management to the

Risk and Compliance Committee, who in turn regularly

report up to and make recommendations to the Board.

The Risk strategy, appetite and framework are set out in

a suite of policies covering the material risks which exist

in the business; each policy is subject to annual review

and approval. We employ an Enterprise Risk Management

framework (ERM) to manage all types of risk which,

alongside our Own Risk and Solvency Assessment activity,

enables reasonable assurance to be provided to the Board

and external stakeholders that the Group is achieving

its risk management and internal controls objectives.

Effective risk management is central to our culture and key to achieving

our strategic objectives.

The effectiveness of the risk management system is also

independently assessed periodically by the outsourced

Internal Audit Function in their role as Third Line of defence,

with the results reported to the Audit Committee.

The Board is satisfied that the processes set out above

enable the Group to effectively identify, assess and

manage current and emerging risks and allow the required

focus on risk awareness, ethical behaviour and the fair

treatment of customers and colleagues.

Risk management approach

The risk environment is managed in a two-pronged approach:

top-down risks that threaten the strategic plan, and bottom-

up financial, operational, regulatory and non-insurance risks

which are identified within business areas.

The risks are captured on a risk register where the inherent

risk is identified, and the residual risk rated, after identifying

operational controls and mitigating actions.

Responsibility to maintain the register as well as to

implement and monitor mitigating actions sits with each

member of the Senior Leadership Team. Each month a Risk

Forum is held where the Senior Leadership Team discuss

the key risks, both current and emerging, with mitigating

activities and timelines for implementation agreed.

We operate a ‘three lines of defence’ approach to define

risk management within roles and responsibilities.

The Group’s risk governance is overseen by a Risk function

led by the Head of Risk, with independence assured

through direct and separate access to the Chair of the Risk

and Compliance Committee.

In early 2022 we held a Risk

Workshop, involving all members of the Board and the

Senior Leadership, to reassess how the principal risks of

the business had changed in line with the Group’s refined

strategic plan as we emerged from COVID-19.

Business Area Owner

Risk Function

Internal Audit (outsourced)

>

Risk identification.

>

Developing and oversight of the risk management

framework.

>

Risk reporting to Risk Forum, Risk and Compliance

Committee and to the Board.

>

Providing advice and guidance to business areas and

to the Senior Leadership Team and Board.

>

Assurance of the effectiveness of policies and procedures.

>

Identify, assess and manage risks on a daily basis.

>

Develop and implement policies and procedures.

>

Ownership of business practices.

>

Ensure activities are consistent with objectives.

>

Implement controls.

>

Independent assurance of the effectiveness of the first

and second lines of defence.

>

Independent reporting to the Board and to the Audit

Committee.

>

Advisory role.

30

Overview

Governance

Financial

Statements

Risk Management

continued

As part of that workshop, we identified 10 ‘Risk Themes’ and have realigned our risk registers in line with these. During the year the Risk Team worked alongside the risk champions

within the various business areas to help them identify their own key risks in line with this revised approach.

Key risks

(with an impact of

£500k+ within the

next year)

Current and emerging factors

Mitigating activities

Change

in risk

exposure

Customer and Key

Client Risk

Potential to lose a Key Client or Partner that would impact the Group’s ability

to meet its strategic objectives.

Relationship management of key clients and partners.

Early renewal/extension of key contracts.

Payroll slots for collection of insurance premiums built into contracts as ‘enduring’

wherever possible.

Increased

in 2022

Environmental,

economic or

regulatory change

impact profit

Inflation, rising interest rates, tax rises, and increased costs negatively impact the

spending power of the Group’s corporate clients and customers, leading to them

to spend less on the Group’s products and services or cancel their contracts or

insurance cover.

Candidate-led job market means it is harder to retain staff and more challenging

to recruit, with employers having to pay increased salaries to attract top talent.

Clear go to market message around how the Group’s offering can help employees

navigate through the ‘cost of living crisis’ through the use of discounts and the Group’s

‘value propositions’, alongside wellbeing and the employee assistance programme.

Engage with clients and prospective clients to help employers maximise the benefit

of their employee benefits programme to help attract and retain staff.

Offer support to financially vulnerable customers where appropriate.

Remunerate with competitive market-based pay, and competitive rewards

and benefits alongside a learning culture with great career opportunities.

Continue to offer a hybrid working policy.

No change

Technology / Cyber

Lack of technological capabilities (infrastructure, systems, solutions, products

and people skills and knowledge) could impact the competitiveness of the Group’s

products and services.

Weak approach to security could facilitate cyber-attacks or data breaches,

leading to lack of trust and reputational damage.

Delivery of Hapi version 2.0

Recruitment of specialist talent and training and upskilling of staff.

IT systems regularly tested for security from attack.

Recommendations from internal/external audits completed in 2021 actioned,

including upgrade of our firewall and introduction of a security incident and event

management system, mobile device management and data loss prevention software.

No change

Products are not

designed to meet

customer/client

requirements

Risk that we fail to deliver innovative or desirable products and services.

Changing demands and needs of consumers in the personal insurance market.

Investment in the design, build and launch of Hapi 2.0 which will have an improved

look and feel, better MI, improved functionality and greater ability to integrate

third-party suppliers.

Annual product governance review of the insurance products which considers

market and product research, design, value, build, testing, and launch and sales

channels. Better analysis of MI to help drive product enhancements and improve

supporting customer service.

Decreased

in 2022

31

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

The business is moving

forward with a

strong ESG agenda.

A purpose-led Group

As a Group driven by a passion and commitment to

improving people’s health and wellbeing, ESG is at

the core of our business. Our purpose is to protect the

unprotected and connect the unconnected. We exist

in order to create a positive impact on society:

>

Ensuring there is an affordable, straight-forward way

for all UK workers to gain access to health insurance.

>

Helping organisations provide fair and appropriate

remuneration and benefits to their workforces.

>

Supporting the holistic wellbeing of people

in the UK – both at work and at home.

The progress that we make against our ESG goals is

therefore very important to us and a priority at Board

level. To reflect this purpose, we report not only on

our Social goals, but also our Societal ones, wherein

we aim to make a positive impact on society through

our offerings.

We pride ourselves on doing the right thing, a value that

is shared throughout our entire organisation. Just as

this drives our day-to-day work, it is also reflected in

how we operate as a business at all levels.

The Company’s ESG strategy is overseen by Non-

Executive Director Maria Darby-Walker. Maria, together

with the support of the wider Board, is responsible for

developing appropriate policies and practices to ensure

that we continue to work towards our targets.

This responsibility is reflected in the fact that

progression against these targets is linked to Senior

Executive and Board compensation, with 15% of the

2021 Long Term Incentive Plan Awards being subject

to the attainment of ESG targets.

Environmental, Social and Governance

32

Overview

Governance

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

ENVIRONMENTAL

While we are a

naturally low-

emission business,

we take a proactive

approach to

mitigating the

environmental

impact of our

operations and

supply chain.

Group Environmental Policy

Our Group Environmental Policy has been formed during

the year and acknowledges our impact on the environment

and our commitments to preserving the environment in

which we operate, including our expectations regarding

reporting, supplier credentials, waste management, and

the efficient use of resources.

Carbon emissions

Overall the Group’s CO

2

production levels have increased

in the year. This is due to the benefits from the solar panels

installed at our HQ being offset by our increased levels of

face-to-face selling from the mid-point of the year and the

delayed delivery of lower emission CO

2

vehicles for our fleets

due to global shortages. These are now expected in H2 2023.

While we are a naturally low-emission business,

monitoring and reducing our carbon emissions is core

to our environmental approach. Aside from meeting our

reporting obligations, we recognise that as a global citizen

it is our responsibility to minimise our carbon footprint.

We have reported our carbon emissions in our Annual

Reports since 2021.

We have installed solar panels at our headquarters, are

examining further energy efficiency initiatives, and will be

moving to a renewable energy provider once the energy

market steadies.

TARGETS

>

Reduce Head Office 2019 carbon emissions by three tonnes

per annum.

>

Reduce 2019 fleet CO

2

usage by 25% by 2025.

>

Work towards becoming net carbon neutral by 2031.

>

No waste production target as waste is negligible.

>

Work on environmental policy for suppliers and partners

is ongoing.

The use of solar panels at our headquarters have proven

successful in significantly lowering our MegaWatt hours.

In 2022, 13.4 MWh of energy were generated which would

power 4.6 homes for a year and equates to planting 157 trees.

Task-Force on Climate-Related Financial

Disclosures (TCFD)

We continue to monitor the guidance published by the

Financial Stability Board’s Task Force on Climate-Related

Financial Disclosures (TCFD) on corporate disclosures

to enable stakeholders to better understand financial

exposures to climate-related risks. TCFD-aligned

disclosures will be mandatory for AIM-listed companies

with over 500 UK staff from 2023, and it is not yet clear

when they will be mandatory for businesses of our size.

Remote working and business travel

Our carbon emissions and energy use were particularly low

during the COVID-19 pandemic, and we are aware that the

gradual return to the office and fewer limitations on travel

will inevitably increase energy and carbon expenditures.

Our employees are supported in hybrid or fully-remote

working arrangements.

A small portion of the increase is also due

to the acquisition of a new office in 2022.

The end of lockdown has also been the

driving factor in a notable increase in

emissions from both company cars and

employee-owned vehicles in year on

year comparisons.

While absolute emissions have increased

in 2022, an increase in headcount has meant

that the increase in emissions intensity

(tCO

2

e per FTE) has been less severe.

Energy and carbon action

The entirety of the Group’s fleet is up for

renewal in 2022/23 and so a review of what

vehicles will be allowed was completed

in year. The Group, unfortunately, does

not believe that purely electric cars are

an option at this stage for its field sales

team due to the lack, for charging, of a

nationwide infrastructure. However, as a

minimum, constraints on the CO

2

emissions

of all vehicles leased were included in the

decision. Due to the supply side pressures on

new cars in 2022 a number of leases needed

short term extensions whilst orders for new

vehicles were being fulfilled. At the time

of writing the majority of the Group's fleet

should be replaced by the end of H1 2023.

Emissions and energy usage

Table 1 – Energy and carbon disclosures for reporting year. All units tCO

2

e unless otherwise stated.

Emissions source

2022

2021

Variance

Scope 1

Natural gas

90

112

(19%)

Company and leased cars

370

212

74%

Total Scope 1

460

324

42%

Scope 2

Electricity

52

49

5%

Total Scope 2

52

49

5%

Scope 3

Electricity T&D

5

4

8%

Scope 3

Employee cars

11

3

309%

Total Scope 3

16

7

124%

Total (Market Based)

532

380

40%

Total (Location Based)

528

381

39%

Total Energy Usage (kWh)

1

2,277,147

1,702,505

34%

Normaliser

1

tCO

2

e per FTE

1.9

1.6

19%

1. tCO

e per FTE for 2021 has been recalculated from 2.6 to 1.6 to reflect the inclusion of sales staff in the total

figure. The same approach has been taken in 2022.

Personal Group recognises that our

operations have an environmental impact

and we are committed to monitoring and

reducing our emissions year-on-year. We are

aware of our reporting obligations under The

Companies (Directors’ Report) and Limited

Liability Partnerships (Energy and Carbon

2022 performance

Our carbon footprint for the 2022 reporting

year has been calculated based on our

environmental impact across Scope 1, 2 and

3 (selected categories) emission sources for

the UK only. Our emissions are presented

on both a location and market basis. On a

2

e,

which represents an average impact of

2

e per full time employee, and on a

2

e.

We have calculated emission intensity

metrics on an employee basis, which we

will monitor to track performance in our

subsequent environmental disclosures.

There has been a significant year on

year increase in location-based Scope 2

increased activity as COVID restrictions

have eased, as well as an increase in the

number of full-time employees (20%).

2022 results

The methodology used to calculate our

greenhouse gas emissions is in accordance

with the requirements of the following

standards:

World Resources Institute (WRI)

Greenhouse Gas (GHG) Protocol

(revised version).

Defra’s Environmental Reporting

Guidelines: Including Streamlined Energy

and Carbon Reporting requirements

UK office emissions have been calculated

using the Defra 2022 issues of the

conversion factor repository.

Following an operational control approach

to defining our organisational boundary,

our calculated GHG emissions from business

activities in the UK fall within the reporting

period 1st January 2022 to 31st December

2022, using the reporting period of

1st January 2020 to 31st December 2020

and January 2021 to 31st December 2021

for comparison.

TARGETS

>

Pledge at least 1% of EBITDA with annual minimum of

£100k to PACT (Personal Assurance Charitable Trust)

per year which will increase funding with profitability.

>

Maintaining our long-term pledge to our school project

in Kenya (Memusi) and to increase the time-sharing given

back to our local community through volunteering and

community action.

>

Continue working towards equal gender representation

at each level in the organisation, maintaining the split at

senior level and improving in more junior roles.

>

To reflect the ethnic mix of the communities in which

we are based, improving our outreach, ensuring our

recruitment/talent management approach is inclusive

and accessible.

SOCIAL

Our goal is to ensure

that our business has a

positive social impact

on the communities

where we trade and

that Personal Group is

an employer that strives

to offer opportunity

to people of all

backgrounds.

People

Employee wellbeing remains a focus for us and we

have continued to invest significantly in training

and development, as well as providing best-in-class

employee benefits, whilst maintaining hybrid work

policies in order to create a flexible and collaborative

working environment.

After many years of conducting annual employee

surveys with steady high engagement results, we

have refreshed our approach with the aim of gaining

more meaningful colleague insights by switching to

smaller, more frequent pulse surveys. This allows

us to focus on what is important to our employees

either at a moment of time and/or on a specific

topic as part of our co-create approach, it allows for

more timely action and supports our wellbeing and

engagement strategy.

Operating ethically is also very important to us and

we have in place policies including: Treating Customers

Fairly, Whistleblowing and Anti-Bribery. We also have

a Modern Slavery policy which covers our policy

on human rights, child labour and forced labour.

Having set gender and ethnicity representation targets

at all levels of the organisation in 2021, we have seen

solid progress in 2022 on delivering on these targets.

Our focus in 2023 is to continue with our Strategic

Workforce Planning approach where we identify the

skill and capability needs – for now and the future –

business wide, and design, develop and deliver bespoke

learning interventions to support our colleague growth.

In 2022 we made no political donations.

Wellbeing

The Group’s core purpose is to protect the unprotected by

supporting workforce wellbeing and engagement, and our

offerings touch more than a million UK employees.

We are also focused on investing in and improving the

wellbeing and overall satisfaction of our own workforce

both at and outside of work. Personal Group employee

engagement and wellbeing is delivered through our

industry leading platform, Hapi and our continued high

employee engagement scores reflect our committed

and passionate team.

Employees have access to a broad range of best-in-class

benefits, including private medical and travel insurance, access

to an online GP, options to buy and sell holiday allowances,

death in service, long service rewards, access to an Employee

Assistance Programme and discounted gym memberships.

The Group pays all staff above the living wage and delivers

a programme of culturally relevant wellbeing initiatives.

Alongside flexible working hours we have a hybrid working

policy in place. We also have an employee health and

safety team, as well as training for all executives on health

and safety. We will continue to develop our employee

proposition, ensuring that the Group’s benefits remain

competitive and that we remain an employer of choice.

35

Overview

Governance

Strategic

Report

Financial

Statements

Learning and development

Our Chief People Officer oversees learning and

development amongst staff, with the Group monitoring

the average training hours per employee to ensure that all

employees have easy access to enhance their learning.

In 2022 Group employees completed approximately

9,546 training hours (2021: 6,868 hours). This included

Continuous Professional Development, Insurance

Distribution Directive alongside bespoke training courses

and apprenticeship learning. In 2022 we reviewed our

apprenticeship opportunities and have invested in existing

and new employees to offer apprenticeships aimed at

developing skills for the future.

We were delighted with the progress of our Accelerated

Learning Programme participants, all of whom have

remained with the business of employees, with the

majority being promoted internally into new roles.

The development and promotion of internal candidates

is always encouraged as appropriate.

Diversity and inclusion

Diversity, Equity and Inclusion has been identified as

an integral part of the Group’s objective of providing a

welcoming and inclusive working environment where

people are engaged, recognised and rewarded. The Board

strives for equality of opportunity for all and for the Group

to reflect the diverse communities that we serve. Not only

is this the right thing to do, but diverse, inclusive teams,

we believe, are higher performing and better for our

growth. As such the Board has put a number of initiatives

in place to ensure the Group’s desired culture is enhanced.

These include:

>

A Diversity and Inclusion working group, to ensure that

as an organisation, we continue to celebrate and support

inclusivity and diversity within our workforce.

>

A Nomination Committee, responsible for reviewing

the structure, size and composition (including the skills,

knowledge, experience and diversity) of the Board and

making recommendations to the Board with regard to

any changes.

>

A policy regarding the gender diversity of the Board,

aiming to keep the gender balance neutral.

Group employee breakdown by gender

as at 31 December 2022

Male

Female

Directors

4

3

Managers

33

30

Employees

98

101

135

134

Directors

Managers

Employees

Male

Female

36

Supporting our community

PACT

Personal Assurance Charity Trust (PACT) has

donated around £2m to charitable causes since it

was founded in 1993. The Group has historically

donated approx. £100k to PACT per year, which is

then allocated in a number of ways. Since 2020,

the Trust has refocused to ensure the money

being donated was being used effectively.

This saw the Committee move from being

simply fundraisers to become partners of local

charities. We now work with, and allocate funds

to, specific projects within many local charities

with a view to continued involvement beyond

pure financial support. Key local projects around

our offices for 2022 included:

>

MK Act – £10K towards funding the Milton

Keynes domestic abuse intervention service,

predominantly to assist the provision of safe

emergency accommodation for women and

children escaping domestic violence.

>

MK Winter Night Shelter – £10k continuing

the funding of the Personal Group Life Skills

Programme which enables life skills training

and employment training for guests of the

shelter who have just gained accommodation,

beaten an addiction or have the chance to

work with one of the charities employment

partners to reach their full potential and stand a

better chance of succeeding when they move

on from homelessness.

>

Northamptonshire Domestic Abuse Service

(NDAS) – £10K towards the cost of a children’s

support worker to help to support victims

of domestic abuse with rehabilitation

and counselling.

>

Baby Basics – £10K supporting families living in

Milton Keynes and the immediate surrounding

area who are in financial hardship. Providing

them with essential items they need, such

as cribs, beds and toiletries, for their children

aged 0 – 6 years.

>

Safety Centre – Hazard Alley – £7.5K to help

deliver bespoke knife crime intervention

sessions to 1,200 Year 6 students in

Milton Keynes.

>

Worktree – £5K towards the development

of the Virtual Career Workout which allows

volunteers to be interviewed remotely by

school classes around the country. This helps

students better understand the world of work

and different career options available to them.

>

Rainy Day – £10K supporting households

facing fuel poverty through provision of

energy saving equipment and free installation,

along with contributions direct to the energy

suppliers in extreme cases.

37

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Since 2015, Personal Group has supported the Memusi Foundation,

a charity that works to provide children in Kenya with access to

quality education, providing a safe place for children to learn and

giving support to the surrounding community. We pledged that

over a decade we would provide £0.5m to build and develop a

new school, known as Memusi B.

2022 saw:

A team from Personal Group visit the school for the first time

since the outbreak of COVID-19.

Memusi B school increased to Grade 5, providing education

to 420 children annually in a dual stream school.

Infrastructure was continually invested in; including two

new classrooms, a staff room, new toilet blocks and two

teacher's houses.

Internal investment was also made including food for all

children, desks, text books and all learning material.

Money received in the previous year for dormitories was spent

on their construction which is close to completion and will be

opened shortly for the girls to make use of this facility.

A contribution was made to the Memusi ‘Bread & Milk’ / See The

Child initiative which helped feed homeless children living on

the streets and offer support and guidance with the long-term

plan of getting children off the streets.

TARGETS

Separating Societal from Social is a change implemented by

management at the end of 2022. We are currently working

on targets for this area and will report them in the 2023

financial statements.

As Chief Wellbeing Ambassador

I want to spread the word about the

importance of employee wellbeing

and help our clients’ employees

thrive in work and in life.

Hon Colonel Dame Kelly Holmes MBE (mil)

Chief Wellbeing Officer, Personal Group

38

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Our goal is to continue to ensure and reassure our

stakeholders that our governance is robust and

compliant with all regulatory and legal frameworks.

The Board recognises the important role a robust

corporate governance framework plays in the successful

delivery of our long-term strategy and has adopted the

QCA Corporate Governance Code which we continue to

monitor our performance against in line with each of the

10 principles. (see page 45).

The Chairman and the Board is ultimately responsible

for establishing the Group’s governance structure,

the effectiveness of internal controls, risk management,

and the direction of the Group in accordance with our

purpose and values to help deliver our strategy.

Board composition

The composition of our Board are carefully selected

to ensure a diverse and varied set of skills, cultures,

experiences and knowledge to promote success within

the business.

We have targets we are working towards to ensure that

our Board is diverse and inclusive. To support this, we have

a policy in place regarding the gender diversity of the

Board and currently have 14% of Board members with

a cultural background different from the location of the

corporate headquarters.

We also strive to have equal representation of both executive

and non-executive Board members to allow for fair,

varied and independent opinion. Board members are elected

with a majority vote and have the authority to hire external

advisers or consultants without management’s approval.

2021 saw the inauguration of our Nominations Committee,

responsible for reviewing the structure, size and

composition (including the skills, knowledge, experience

and diversity) of the Board and making recommendations

to the Board with regard to any changes. The Nominations

GOVERNANCE

Governance is

central to our ethos

of operating with

integrity.

Committee Report on page 58 contains more detailed

information on the Committee’s activity during the year.

Board compensation

The Board’s compensation is determined by our

Remuneration Committee, chaired by Non-Executive

Director Maria Darby-Walker. Our shareholders have

the right to vote on executive compensation.

For more information on how the Remuneration Committee

sets appropriate compensation |

 Page 54

Policies

The following polices are currently implemented

by the Group:

Modern Slavery – The Modern Slavery Act (2015) requires

a commercial organisation over a certain size to publish

a slavery and human trafficking statement for each

financial year. This statement can be found on our

website personalgroup.com and is made available to

our entire workforce.

Whistleblowing – We have a whistleblowing policy in

place, which complies with local regulatory requirements

and is designed to protect those who report wrongdoing

in the workplace. Details of the policy are communicated

to all workforce members.

Anti-bribery and corruption – The Group’s Anti-Bribery

and Corruption Policy is reviewed annually and includes all

Directors, employees and all third parties operating on its

behalf. There were no instances of bribery or corruption

in the period.

Further detail is included in the

Corporate Governance section |

 Page 44

TARGETS

>

Maintain current equal representation of independent

Directors versus non-independent Directors.

>

Maintain equal representation of men and women on

the Board – sector average is 19%.

>

To meet blended ethnicity representation target of 20%

(taking into account the different locations we trade in).

>

Keep CEO pay as a multiple of Personal Group median in

line with market.

Why we engage with

How we engaged in 2022

What matters to the Group

Our Policyholders

Our policyholders are key to the long-term success

of the Group.

The retention of existing, and attraction of new,

policyholders is equally important.

We aim to make any interaction with Personal

Group as positive and simple as possible and

ensure that our products are regularly reviewed

and fit for purpose.

Provision of suitable and targeted employee

benefits to our relevant market sectors.

Our primary interactions are to provide individual face-to-face presentations of our products

to potential and existing policyholders at their place of work. In 2022 we expanded our sales

channels further to enhance the flexibility of purchase by enabling an online offering via some

of our clients.

In early 2022 we carried out a ‘backbook communication’ to c.90,000 policyholders, which

provided a reminder of policy conditions and benefits but also, in many instances, enhanced

the benefits received at no additional premium. We also added an additional temporary benefit

on the Hospital Plan of an additional outpatient appointment for 2022 and 2023 for existing

policyholders who held policies at 31 December 2021, in recognition of the fact that during

COVID reduced NHS activity had meant that, in many cases, they were unable to make full use

of their plan/benefits.

Other activities which took place during the year were development of an ‘insurance only’

website, to improve accessibility for policyholders, enhancement of the online claims form

and detailed one-to-one interviews of existing policyholders through a third party provider.

Subsequent to the pandemic we have maintained a hybrid working environment for our

customer relations team. We value the ability to have colleagues in the office to support

training and development of staff and to allow greater flexibility in responding to queries

and claims made by our policyholders, some of whom are calling from a place of vulnerability.

In 2022 our Customer Relations Team took over 52,400 calls and dealt with over 58,000

emails and online queries.

>

Our products are relevant and

provide cost effective protection

>

Fair and consistent pricing

>

Efficient and sympathetic

processing of claims

>

Ease of access to customer

service

>

Strong net promoter score

>

Retention rates

Our Clients

Our purpose is to help companies improve their

effectiveness and profitability by improving their

staff engagement and retention. Improving such

metrics in turn improves our customer retention

and encourages new business.

We engage and build relationships with our customers and clients in several ways, from

face-to-face interaction to holding industry and other business forums and producing white

papers on topics that are relevant for their businesses. We also recognise the importance

of system security for our customers and their employees and have ISO 27001 accreditation

across the whole Group and ISO 9001 covering the Employee Benefits Platform operated

by the Group.

>

Product range, price and quality

>

Convenience and accessibility

>

Customer service

>

Fair marketing

>

Responsible use of personal data

>

Ethics and sustainability

Section 172 statement

The Directors are aware of their duty under s172 of the Companies Act 2006 to act in the way they would consider, in good faith, would be most likely to promote the success

of the Group for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:

>

the likely consequences of its decisions in the long-term;

>

the interests of the Group’s employees;

>

the need to foster the Group’s business relationships with suppliers,

customers and others;

>

the impact of the Group’s operations on the community and the environment;

>

the desirability of the Group maintaining a reputation for high standards of

business conduct; and

>

the need to act fairly between members of the Group.

The Chairman sets out the text of s172 Companies Act 2006 on every Board agenda by way of a reminder.

The table that follows is a description of our key stakeholder groups and how we engaged with them in 2022.

40

Why we engage with

How we engaged in 2022

What matters to the Group

Our Colleagues

The Group’s long-term success is predicated on the

commitment of our employees to our purpose and

demonstration of our values. In order to deliver

great customer service and improve our already

high staff engagement scores we need to ensure

that we provide an appropriate environment and

communication channels to both attract and retain

talent for now and the future.

We have an open, collaborative, and inclusive management structure and actively engage

regularly with our employees. We do this through multiple channels led by a belief and

ethos that engagement is a two-way process. Our colleague voice is critical in enabling

a ‘co-creation’ approach when we seek to enhance not just engagement, but how best we

can improve how we do business.

We remunerate with competitive market-based pay, sector leading rewards and benefits

alongside a learning culture and great career opportunities. We have introduced a hybrid

working policy for all office-based staff, feedback tells us that this helps our colleagues

achieve a better work-life balance with subsequent gains in engagement and productivity.

>

Fair employment

>

Competitive pay and benefits

>

Development and career

opportunities

>

Collaborative and supportive

work environment

>

Health and safety and colleague

wellbeing

>

Responsible and respectful use

of personal data

>

Ethics and sustainability

Our Suppliers

Our suppliers are fundamental to the quality of

our products and to ensuring that as a business

we meet the high standard of conduct that

we set ourselves. Our Hapi platform contains

numerous third-party offerings which add value

to the overall proposition. It is important that

we ensure good working relationships with

those suppliers but also to choose partners that

allow the Group to fulfil its day-to-day operations

to deliver our products and services to the

best standard possible.

We regularly engage in open and two-way conversations with our largest suppliers.

Key suppliers are invited to attend and present at our client conferences or workshops.

We continually review and update our supplier onboarding process and conduct annual

reviews on all key suppliers to the Group.

We work with our suppliers to ensure that they have effective controls in place to protect

the security and privacy of our customers data.

>

Long-term partnerships

>

Collaborative approach

>

Open terms of business

>

Fair payment terms

Our Community and Environment

The Board recognises the importance of

leading a Group that not only generates value

for shareholders but also contributes to the

wider society.

We encourage all our employees to engage in the local community and work with our PACT

Committee to utilise the funds in the Personal Assurance Charitable Trust to support charities

at home and abroad as discussed on page 37.

We are conscious of the need for our business to focus on long-term sustainability, during

2022 the Board discussed the key causes of emissions from the Group and reviewed options

around limiting them. Orders for new fleet cars to reduce the emissions per employee have

been ordered, albeit it was determined that fully electric cars were not currently suitable for

the volume of driving undertaken by the majority of the salesforce.

We continue to review ways in which we can be more active in the local community and are

beginning discussions with local schools and colleges to support them and to offer ourselves

as a work experience possibility for their students.

>

Reduce environmental impact

>

Invest in local community

>

Promote environmental

offerings on platform, i.e. Cycle

to Work

>

Supporting local community by

creating jobs and providing work

experience and apprenticeships

Our Shareholders

Our shareholders are key to the long-term success

of the business. Through our investor engagement

activities, we strive to obtain investor buy-in into

our strategic objectives and how we plan to deliver

on them. We create value for our shareholders by

generating strong sustainable profits and dividends.

Through our investor relations programme, which includes regular updates, meetings,

roadshows and our Annual General Meeting, we ensure that shareholders’ views are brought

into the Boardroom and considered in our decision making.

>

Financial performance

>

Strategy and business model

>

Dividend

>

Long term growth

>

Reputation of the Group

41

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Board Activity in 2022

This year, the key business and activities

of the Board included…

Strategy and

Development

We are focused on building a

business with room to grow in the

medium and long term, and those

foundations are now in place

At our strategy day in June 2022, we worked on

development of the refined strategy first implemented

in 2021. An area of key focus was around how best we

can continue to improve interactions with our clients and

customers to enable us to really drive growth around our

three core strategic pillars of:

>

Driving insurance sales through new and

existing channels

>

Transforming reward and benefits

>

Accelerating SME

Following recommendations from our independent

Board effectiveness review, we have also made the

decision to restructure our Board meetings in 2023 to

allow greater focus on strategic matters, more details

on this can be found on page 44.

Open actions from the Board effectiveness review are

being worked and are all due to be completed in 2023.

Read more about Our Strategy |

 Page 17

42

Supporting, communicating with and rewarding our

own people has remained a key focus this year and

we have remained committed to a flexible hybrid

working policy to cater for a broad variety of personal

preferences and spent time reaffirming our core

values as a team.

Our culture and values are also an important part

of who we are, during the year the Board has been

working on revising the Groups values to reflect

the work undertaken in recent years and how the

business sees itself moving forward. These revised

values are still being finalised and will be announced

in due course.

In 2022 we have regularly reviewed our lead

indicators and together with a suite of KPIs which

sit beneath them to enable us to monitor our

performance against our strategy, alongside a

standard monthly business review.

There has also been a continued focus on our KPIs

around ESG, which were introduced in 2020 and have

been continually refined thereafter. Work has begun

to complete an Energy Reduction Plan as we work

towards our ESOS compliance for 2023.

All of these metrics are brought into consideration by

the Remuneration Committee for the development

of annual bonus schemes and performance targets

for the Group’s long term incentive plan for the

senior leadership team.

During 2022 the we conducted a Board effectiveness

review which highlighted some key areas for the

Board to work on in the coming year in order to

ensure a strategic focus on the long term objectives

and key resources underpinning them. There have

been eight follow up actions identified by the review

all of which are expected to be considered and dealt

with during 2023.

We have continued with ‘deep dives’ into key risk areas

at each Risk and Compliance Committee meeting on

subjects regarded as either new risks or areas where

we perceive we have increased risk which are key to

us achieving our business objectives.

In addition, through our outsourced internal audit

function, provided by RSM, we have continued to

changed our approach to ensure that we not only

focus on the effectiveness of key internal controls

but also those areas of the business that are

potentially going to witness the most change as we

progress on our journey to growth.

Board Activity in 2022

continued

Performance

Monitoring

The monthly review provided to

the Board includes an update on

all strategic KPIs as well as an

update on performance

Culture and

Engagement

The Board continues to have

a significant role to play in

establishing the culture of our

business, ensuring it is consistent

with our business model

Read more about our People |

 Page 35

Read more about Risk |

 Page 30

Read more about our Key Performance

Indicators |

 Page 22

Governance

and Risk

We continued to identify, assess,

manage and appropriately mitigate

the key risks to the Group in

achieving its objectives

43

Overview

Strategic

Report

Financial

Statements

Corporate Governance

Chairman’s Introduction

Dear Shareholder

My role as Chairman of Personal Group is to ensure that the

Board is performing its role effectively. This means making

sure the Directors have the capacity, ability, structure,

diversity and support to respond to the opportunities

being created for us, whilst having consideration of our

responsibilities under s172 of the Companies Act 2006.

I also have responsibility for ensuring the robust

governance of the Group through challenge and direction

of the Senior Leadership Team. Good governance should

enhance performance and deliver positively for our

shareholders, staff, customers, suppliers and other

stakeholders whilst still enabling achievement of the

Group’s strategic aims.

The Board continues to have a significant role to play in

establishing the culture of the business, ensuring that it is

consistent with our business model and suitably cascaded

through the Group.

This is monitored through engagement with the wider

investor community, through involvement of the Board

Committees and by use of the wide-ranging experience,

skills and capabilities of Board members.

We continue working on an integrated succession plan for

the Board and, as noted in my Chairman’s report earlier in

this document, we have experienced Board changes (both

executive and non-executive) through 2022 with Ciaran

Astin joining the Board as Non-Executive Director as of May

2022 and Liam McGrath, Chief Operating Officer, departing

the Personal Group Holdings Board in August 2022.

This year represented an opportunity for the Group

to rebound following the challenges of the COVID-19

pandemic and the Board has been focused on continued

support of the Senior Leadership Team in ensuring the

employees of the Group are supported in their roles with

our continuing hybrid working environment. Ensuring our

staff have the right support, not just in terms of equipment

but also with their mental health, has continued to be

a major priority for the Board, especially in light of the

ongoing cost of living crisis.

In 2022, we continued to develop our governance

processes to improve adherence to the Quoted Companies

Alliance (QCA) Corporate Governance Code which the

Group adopted in 2018. The Board does not consider that

The Board continues to have a significant role to play in establishing

the culture of the business

it departs from any of the principles of the Code and we

continue to monitor our performance against each of the

10 principles. The Board is able to deliver effective decision

making and subsequent drive of value for shareholders,

based on the quality information which it receives.

A board effectiveness review was carried out during

2022, in line with our commitment under the QCA Code

(Principle 7). We have addressed and will be addressing the

recommendations raised. We are committed to external

independent reviews every three years and will continue

to complete annual internal board effectiveness reviews

in the intervening years.

The Board met 10 times in 2022 and the number of

meetings each Director attended can be seen on pages

46 and 47. In addition, the reports of the Audit, Risk and

Compliance, Remuneration Committees and Nominations

and SM&CR Committee can be seen later in this section.

As we move into 2023 the Board has decided to reduce

the number of in person meetings, with six more in-depth

meetings, focusing on strategic matters, and four Board

meetings conducted remotely and used as updates on

performance. This change will have limited impact on the

Board's Committees but should enable greater focus on

strategic matters.

Martin Bennett

Independent Non-Executive Chair

2022 Committee meeting dates

Board

26 Jan

17 Feb

17 Mar

5 May

26 May

30 Jun

21 Jul

28 Sep

21 Oct

24 Nov

Audit

17 Mar

20 Sep

24 Nov

Risk & Compliance

17 Mar

26 May

20 Sep

24 Nov

Nominations

17 Feb

20 Sep

Remuneration

26 Jan

17 Mar

21 Jul

21 Oct

Governance

Corporate Governance

continued

QCA Code compliance

Principle 1 – Establish a strategy

and business model, which

promote long-term value for

shareholders.

Principle 5 – Maintain the Board

as a well-functioning, balanced

team led by the Chair.

Principle 3 – Take into account

wider stakeholder and social

responsibilities and their

implications for long-term

success.

Principle 7 – Evaluate Board

performance based on clear and

relevant objectives, seeking

continuous improvement.

Principle 9 – Maintain governance

structures and process that are

fit for purpose and support good

decision-making by the Board.

Principle 2 – Seek to understand

and meet shareholders’ needs and

expectations.

Principle 6 – Ensure that between

them the Directors have the

necessary up to date experience,

skills and capabilities.

Principle 4 – Embed effective

risk management, considering

both opportunities and threats,

throughout the organisation.

Principle 8 – Promote a corporate

culture that is based on ethical

values and behaviours.

Principle 10 – Communicate how

the Company is governed and

is performing by maintaining a

dialogue with shareholders and

other relevant stakeholders.

Personal Group provides insurance

services and a broad range of

employee benefits and wellbeing

products to businesses across the

UK. The Group enables employers

to improve employee engagement

and support their employees

physical, mental, social and

financial wellbeing, supporting

our vision of creating a brighter

future for the UK workforce.

Full details of our business model

can be found on page 16 and on

the Company website

(www.personalgroup.com).

The Group maintains, and is

satisfied that, the Board has a

suitable balance of independence

and knowledge, with Directors

encouraged to challenge all

matters. The Board meets regularly,

with a formal schedule of matters

for its approval. The Board is

supported by regular engagement

with the Senior Leadership Team,

and a system of formal Board

committees. Directors are required

to devote sufficient time to carry

out their role.

As a Board we understand our

duty to promote the success of

the Company whilst considering

the views of, and impact on,

our wider stakeholder group

of customers, policyholders,

suppliers, colleagues and our

community and environment

as well as our shareholders.

A more detailed summary of the

Group’s engagement with all our

stakeholders can be seen on pages

40 and 41.

Board members are each

set annual objectives, with

performance feedback provided

by corresponding Executive and

Non-Executive members. Board

evaluation is the responsibility

of the Chairman. Internal

board effectiveness reviews

are undertaken yearly, with

independent reviews at least every

three years. The findings from the

2022 external review have been

fed back to the Board and actions

are being worked on.

The Board is collectively

responsible for the long-term

success of the Group and for

setting and executing the

business strategy. It fulfils this

responsibility through Board and

other Committee meetings held

regularly throughout the year.

The meetings held in 2022 for the

Board and other Committees can

be seen on page 44.

Regular dialogue takes place with

shareholders through initiatives

including the Annual General

Meeting, investor roadshows,

regulatory announcements

and the Report and Accounts.

During 2022 our Chief Executive,

CFO, Chairman and other Non-

Executive Directors met virtually,

and in person, with key investors.

We also hosted our investor events

in March and September 2022.

The background and experience

of the Board ensures there is

an effective and appropriate

balance of skills and knowledge.

Additional training is provided

where needed and Board members

are encouraged to maintain

their professional development.

As noted on page 44 there has been

one addition to the Board in the

year with Ciaran Astin taking up

his role as Non-Executive, our first

Non-Executive to concurrently

hold an executive position outside

of the Group.

The Board is responsible for

identifying and mitigating

risks to the Group achieving its

strategic objectives. It addresses

risk management through an

“Enterprise Risk Management

Framework”, and a system of risk

governance, including a Risk and

Compliance Committee. During

2022, a risk based internal audit

function was again provided

by RSM. For further details see

page 51.

The Board believes Group culture is

set from the top of the organisation.

These values form a core part of

how the business is managed,

from recruitment to training, and

ongoing reward and recognition.

During the year the Group has

focused on smaller, more frequent,

pulse surveys to obtain meaningful

colleague insight on key issues. This

has allowed more focus on these

issues at the point in time it arises

and helps to facilitate the co-create

approach with our employees

supporting our wellbeing and

engagement strategy.

The Group communicates through

a variety of regular digital and

traditional communications.

These include face-to-face

meetings, the Annual Report

and Accounts, Interim Results,

investor news announcements

and information provided on

the Group’s website.

45

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

10/10

Meetings attended

10/10

Meetings attended

Board of Directors

The Board has a combined wealth of knowledge and experience to help the business achieve success and

keep it moving forward.

Martin Bennett

Non-Executive Chairman

January 2021

(previously Non-Executive

Director; appointed Chairman May 2021)

External appointments

Chairman of Ventureprise plc, Homeowner

Services, and the Association of Foreign

Exchange and Payments Companies (AFEP).

Chair of Lumon until 31 August 2022.

Martin is an experienced non-executive and

chairman, bringing over 20 years of financial

service experience. He has a diverse and

extensive skill set, stretching across commerce,

operations and finance. Prior to embarking on a

non-executive career in 2018 Martin spent nearly

15 years at HomeServe plc creating a FTSE 250

services business, holding CEO, COO and CFO

responsibilities in the UK, US and Europe.

Before this he spent three years as Finance

Director of Clarity Group and 10 years at

Arthur Andersen where he worked in audit

and transaction services.

Skills, personal qualities and capabilities

An accounting and finance graduate, Martin is a

Fellow of the Institute of Chartered Accountants.

Sarah joined Personal Group in January 2014 as

Group Financial Controller and Company Secretary.

Previously Head of Finance for private equity

owned Chicago Leisure Ltd, she also has

experience in a broad range of industries

including roles at large communications

firm Cable and Wireless and various life and

pensions companies.

Skills, personal qualities and capabilities

Sarah is a Fellow Member of the Association

of Chartered Certified Accountants and also

has a Master’s degree in mathematics from

Oxford University.

Sarah Mace

Chief Financial Officer

October 2020

(previously Company Secretary

from April 2014)

Deborah Frost

Group Chief Executive

September 2015

(previously Non-Executive

Director; appointed CEO February 2019)

Deborah was appointed Group Chief Executive

in February 2019.

Before joining Personal Group, Deborah had a

long-standing career spanning over two decades

in both industry and consultancy, specialising

in Compensation and Benefits. She co-founded

Innecto Reward Consulting in 2002, which has

since become the largest independent reward

consultancy in the UK.

Since her appointment as CEO Deborah has

led the development of Personal Group into

new market sectors, in particular building a

partnership with Sage plc to deliver a benefit

platform to UK SMEs.

Skills, personal qualities and capabilities

A Business Studies graduate, and a Chartered

Fellow of the CIPD, Deborah is a respected and

ground-breaking thought-leader in reward.

Committee membership key

Audit

Committee

Nominations &

SM&CR Committee

Remuneration

Committee

Chair of the

Committee

Risk and Compliance

Committee

Independent

Maria Darby-Walker

Senior Non-Executive Director

June 2019

(Appointed Senior Non-Executive

Director in January 2021)

External appointments

Senior Independent Non-Executive Director at

Redwood Bank Ltd and Non-Executive Director

for Amigo Loans Plc.

Maria joined Personal Group as Non-Executive

Director in June 2019 and is Chair of the

Remuneration Committee.

In 2005 she started her own consultancy,

advising the boards of leading brand names

on business-critical issues including mergers

and acquisitions, crisis management, brand

and reputation, ESG, equality and diversity,

and financial regulation. Her client list included:

The Financial Conduct Authority, The Investment

Association, Unum, Iglo / Birds Eye, Cadbury and

Rio Tinto amongst others.

Skills, personal qualities and capabilities

Beyond her technical and industry qualifications,

Maria is also a qualified leadership coach and

mentor being appointed an honorary visiting

fellow of Oxford University in September 2022.

10/10

Meetings attended

10/10

Meetings attended

10/10

Meetings attended

5/5

Meetings attended

8/10

Meetings attended

Damian first joined the business in 2015 as Senior

Finance Manager, with his role evolving to

Financial Controller in 2018. He was appointed

Finance Director and Company Secretary in 2020.

Damian has extensive knowledge and experience

in a variety of industries having held finance

positions within Amtech Group Ltd and Connells

Group subsequent to his professional training as

an auditor for Grant Thornton UK LLP.

Skills, personal qualities and capabilities

Damian is a Chartered Accountant and holds

a degree in Economics and Politics from the

University of Southampton.

Andy Lothian joined Personal Group in 1998 as

a Group Account Executive focusing on new

business sales and client servicing. His passion

for excellence, drive, and commitment has seen

him go from strength to strength. His journey at

Personal Group has evolved greatly over the last

two decades, through Sales Management roles

and eventually 11 years as Managing Director

of Personal Group Benefits.

In January 2021 Andy moved into a Non-

Executive Director role on the Board.

Skills, personal qualities and capabilities

Andy has extensive knowledge and experience of

the important day-to-day role that all Personal

Group employees play in the development and

growth of the business.

Andy Lothian

Non-Executive Director

July 2017

(previously Executive Director,

appointed Non-Executive Director in

January 2021)

External appointments

Director of Lothian Property Group.

Bob Head

Non-Executive Director

November 2016

External appointments

Non-Executive Director at Alexander Forbes

and Chair of Audit and Remcom committees

at Mirriad.

Bob joined Personal Group in July 2016. With

over 25 years in Non-Executive Director Roles,

Bob brings an extensive range of knowledge

and experience to the Board.

His diverse working life has seen him work

worldwide with almost every branch of financial

services. He also has experience of software and

marketing companies as well as government.

Skills, personal qualities and capabilities

Bob has solid blue-chip experience with big

brands and business and a rich tapestry of

management roles.

Damian Kane

Finance Director and Company Secretary

October 2020

Committee membership key

Audit

Committee

Nominations &

SM&CR Committee

Remuneration

Committee

Chair of the

Committee

Risk and Compliance

Committee

Independent

Ciaran is an experienced leader in consumer

services businesses across the insurance,

telecoms and energy sectors. He has extensive

P&L leadership experience in regulated

businesses, with a skill set spanning commercial

and customer-related functions. Ciaran currently

serves as Managing Director of ClearScore's

insurance-related business. Between 2012 and

2019, he held senior leadership roles at leading

personal lines insurers, Hastings Group and

Direct Line Group. Earlier in his career, Ciaran

spent two years driving product transformation

in Centrica's consumer business, following

seven years in commercial leadership roles in the

telecoms sector with BT Group and Telewest.

Skills, personal qualities and capabilities

Ciaran holds a Masters in Engineering from

Cambridge University.

Ciaran Astin

Non-Executive Director

May 2022

External appointments

Managing Director of DriveScore.

10/10

Meetings attended

47

Overview

Strategic

Report

Financial

Statements

Senior Leadership Team

An adept Senior Leadership Team reflecting all facets of the Group.

Richard was appointed as

Chief Information Officer

in January 2022. With a

strong technical background,

Richard can identify client

requirements and drive our

continual improvement.

Richard is also Managing

Director of Let’s Connect.

He has a wealth of

knowledge of its business

operations, products

and services and has led

the execution of large

multifaceted projects

for clients.

Julie joined Personal Group

in August 2021 as Interim

Human Resources Director

and took on the role of

Chief People Officer from

January 2022.

Julie possesses a wealth of

experience in commercial

HR and has operated within

demanding, fast-paced

environments, including

working within Financial

Services, Retail, Hospitality,

Aviation and Manufacturing.

Richard Thompson

Chief Information Officer

Julie Stayte

Chief People Officer

Deborah Frost

Group Chief Executive

See Board spread on

previous page.

Sarah Mace

Chief Financial Officer

See Board spread on

previous page.

Karen joined Personal Group

as Chief Commercial Officer

in March 2021, bringing

over 20 years’ commercial

and strategic experience to

the role.

Karen is also CEO of

Innecto Reward Consulting

where she is responsible

for providing inspired

leadership and strategic

direction across all aspects

of the company.

Karen Thornley

Chief Commercial Officer

The Senior Leadership

Team bring a range

of experience and

commercial drive which

has created a solid and

committed team, driving

the business forward

through both innovation

and a focus on execution.

Deborah Frost

Group Chief Executive

Risk and Compliance Committee Report

The Committee’s role is to oversee compliance with regulatory

requirements, assess the effectiveness of the Group’s risk management

framework and to set the group’s risk appetite.

Dear Shareholder

I am pleased to present the Risk and Compliance Committee Report for the year ending 31 December 2022.

Activity during the year

The Committee focuses its debate on key risks, emerging risks, new risks and areas where

we perceive we have increased risk.

The Committee’s Chairman reports formally to the Board on its proceedings after each

meeting and during the year the Committee met four times, overseeing significant

Group-wide projects which included:

>

A strategic review of the Group’s main

risk exposures and challenging whether

certain activities provide return on

investments which are relative to the

inherent risks involved.

>

Update and further development of

the Own Risk and Solvency Assessment

(ORSA) for Personal Assurance Plc

to account for current risks and

exposures, particularly in relation to

inflationary pressures and negative cost

of living effects which have increased

throughout 2022.

>

Review and approval of Personal

Assurance Plc’s operational resilience

self-assessment and ratification of the

supporting business impact assessments.

Meetings Held

4

Risk and Compliance

Committee members

Meeting Attendance

>

Consideration of the Group’s approach to

the challenging economic outlook which

took hold in the Autumn, including how

to optimise the Group’s current offering

and tailor the go to market message

to mitigate the risk of any impacts on

income from clients and customers.

>

Consideration of the Group’s resilience

against cyber threats following on

from external audits and reviews of

systems and controls. The Group used

specialist companies for this work and

it was designed to support the Group’s

ISO accreditation.

>

Close monitoring of the potential impact

of the energy crisis affecting the country

including development of contingency

plans for any power outages or rolling

blackouts that may occur.

Objectives

The role of the Committee is to manage

and monitor the risks and threats to the

strategic objectives of the group, set the

risk appetite for the Group, monitor and

review the impact of business decisions

upon the Group’s risk profile and manage

and monitor compliance with Prudential

Regulation Authority and Financial

Conduct Authority requirements and

other appropriate regulations which

impact the Group.

Governance

In addition, other work undertaken during

the year included:

>

The regular review, consideration and

approval of existing Group policies

used across the business.

>

Oversight of the further embedding

of data related systems and controls

(specifically GDPR).

>

Consideration of management

information which assess levels

of quality and compliance, and the

effectiveness of the Information

Security Management System.

>

Oversight of the further development

and embedding of risk management

in the “first line” environment across

the Group – including rolling out risk

management training to nominated

business area “Risk Champions”,

who have the role of coordinating risk

management activities in conjunction

with their respective Senior Leadership

Team member and being a point of

contact for their designated Risk

Team partner.

Risk and Compliance Committee Report

continued

>

Oversight of the implementation of

the FCA Consumer Duty, including

challenging, reviewing and approving

the Group’s gap analysis against the

requirements and implementation plan.

This is currently work in progress.

>

Annual review of Fair Value for

insurance customers.

>

Assessing the results from a quality

assurance review of insurance sales

to customers, which had an emphasis

on ensuring that vulnerable customers

are receiving outcomes “at least as

good as those” experienced by any

other customer.

As in previous years, the Committee has

continued to apply its mind to the risk logs

both in terms of completeness and how

risks are optimised. The Committee has

also worked closely with the Audit

Committee to ensure that the Committees

neither duplicate work nor allow things

to slip between the gaps.

Bob Head

Independent Non-Executive Director

27 March 2023

50

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Audit Committee Report

The primary role of the Audit Committee is to assist the Board in fulfilling its oversight

responsibilities in areas such as the integrity of financial reporting, the effectiveness of the internal

controls as well as oversight of the internal and external audit functions.

Dear Shareholder

The Committee oversees the appointment

of, and relationship with, the external

auditor and ensures compliance with other

regulatory requirements that are relevant

to the Group, as well as gaining reassurance

that the control environment is fit for

purpose. The internal audit function is

currently outsourced to a third-party,

and the Committee is also responsible for

overseeing the effectiveness of internal

audit in line with the Chartered Institute

of Internal Auditors (IIA’s) Guidance on

Effective Internal Audit.

Roles and Responsibilities

The Audit Committee assists the Board in

discharging its responsibilities with regard

to the oversight of:

Financial reporting:

>

Monitoring the integrity of the financial

statements of the Group, including

its annual and half yearly reports, and

considering the clarity and completeness

of disclosures therein;

>

Reviewing and challenging any changes

to accounting policies, accounting for

significant or unusual transactions and

the application of appropriate judgements

and estimates;

>

Considering new accounting standards

and pronouncements and comments from

the Financial Reporting Council; and

>

Advising the Board on whether the

Group’s financial statements are fair,

balanced and understandable. Particular

attention has been given to ensuring the

business commentary is consistent with

the reported results.

Internal and external audit:

>

Overseeing the Group’s relationship

with its external and internal

auditors, including their appointment,

remuneration, independence and the

effectiveness of the audit processes;

>

Developing and implementing a policy

on the supply of non-audit services by

the external auditor; and

>

Monitoring and reviewing the scope

of work and effectiveness of the

outsourced internal audit function in

the context of the Group’s overall risk

management system.

Internal controls:

>

Reviewing the adequacy and effectiveness

of the Group’s internal financial controls

and risk management systems; and

>

Reviewing the Group’s arrangements

with regard to employee/contractor

whistleblowing, fraud detection,

prevention of bribery and money-

laundering.

Membership and meetings

The Audit Committee comprises the

Independent Non-Executive Directors

and meets at least twice a year.

The Directors’ profiles and qualifications

are included on pages 46 and 47.

Risk matters are covered at the Risk and

Compliance Committee but all members

of the Audit Committee are also members

of the Risk and Compliance Committee,

which ensures tight co-ordination.

Three formal meetings were held during

2022 and all Committee members were

in attendance. Additionally, the remaining

Board members, Head of Risk and Company

Secretary were present at all meetings.

Meetings Held

3

Audit Committee

members

The meetings of the Committee are

designed to facilitate and encourage

communication among the Committee,

the Group, the Group’s outsourced internal

audit function (RSM) and the appointed

external auditor. The Committee meets

with the internal auditors and the external

auditors, with and without management

present, to discuss the results of their

examinations, their evaluations of the

Group’s internal control and the overall

quality of the Group’s financial reporting.

In addition, the members of the Audit

Committee also meet separately to

consider any issues.

Activities of the Audit Committee

during the year

The Committee discussed with the Group’s

internal and external auditors the overall

scope and plans for their respective

audits. As a part of these discussions the

Committee has considered whether there

are further risk areas that need to be

considered in addition to those raised by

both sets of auditors. In addition, the key

work undertaken by the Committee during

the year under review and up to the date

of this Annual Report included:

>

Review and approval of the 2021 Annual

Report and Accounts and 2022 Interim

Results statement.

>

Approval of the Solvency and Financial

Condition Report.

>

Review of internal audits carried out

by RSM.

During 2022 RSM undertook audits,

in line with the agreed scope, over areas

including field sales team remuneration,

change management and a follow up

review of responses to 2021 action

recommendations. RSM also undertook

an advisory report providing a GAP

analysis against key ESG documents,

metrics and controls.

The Committee received reports from the

internal auditors throughout the year and

was satisfied with the effectiveness of

internal controls and risk optimisation.

It supports the recommendations made by

the internal auditors and is satisfied with

the plans in place and the actions taken or

planned by management in response to

these recommendations and monitors the

clearance of the items raised to ensure that

they are resolved on a timely basis.

The approach in developing the internal

audit plan for 2022 (and for 2023) was

based on analysing the corporate

objectives, risk profile and assurance

framework of the Group, as well as other

factors affecting the Group. The aim is to

cover all significant risk areas at least once

every three years.

The Audit Committee regularly discusses

the performance of internal audit within

the Committee, with management and

with internal audit. Given the size of the

Group we believe that an outsourced

Internal Audit function gives us access to

more areas of expertise than an internally

resourced department.

Significant reporting issues

and judgements

In fulfilling its oversight responsibilities,

the Committee has reviewed and discussed

the audited consolidated financial

statements and the related schedules

within the Annual Report with Group

management, including a discussion of

the appropriateness of the accounting

principles, the reasonableness of

significant judgements and the clarity of

disclosures in the financial statements.

The areas the Audit Committee have

focused on are detailed later in the report.

Key Group issues included:

>

Investment in the salesforce and its

direct impact on the Group’s profitability;

following two years of interrupted

new business premium levels due to

lockdowns and other restrictions,

the Group needed to return to a full sales

team complement to return to normal

and service the demand of its clients.

>

An ongoing focus on cyber risks as

well as operational resilience to deliver

what we have promised our clients

and customers remains a key topic of

discussion for the Committee.

>

Consideration was given to going concern,

the adequacy of capital in a variety of

scenarios and the ability to pay a dividend

whilst maintaining our target of two times

regulatory capital.

>

The carrying value of goodwill in the

Group’s financial statements was

reviewed in line with the difficult

trading environment.

>

The acquisition accounting surrounding

the purchase of Quintige Consulting

Group Limited.

The Committee reviewed the

recommendations of the finance function

and received reports from the external

auditor on their findings. Where cost

effective to do so the Committee has

encouraged the external auditors to adopt a

controls approach to the audit rather than

substantive audit approach.

Audit Committee Report

continued

52

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

The significant reporting matters and judgements the Committee considered during the year included:

Carrying value of goodwill and other intangibles

Note 14 & 15

As a result of business acquisitions, the Group has

recognised significant balances for goodwill. Goodwill

must be tested annually for impairment; other intangible

assets are tested when there are indicators that they may

be impaired. The assessment of potential impairment

requires a number of judgements and estimates to be made

in determining the relevant future cash flows and the

discount rate to be applied.

The Committee reviewed the key financial assumptions

underpinning cash flow projections, the discount and

long-term growth rates applied thereto and the results of

sensitivity analyses. The Committee was satisfied with the

conclusion of management that, due to the macroeconomic

impact on material customer, an impairment was required

to the value proposed for Let's Connect and appropriate

disclosure has been made (see note 14 to the financial

statements for details).

The Committee was satisfied that no impairment was

needed on the goodwill of Innecto and that the accounting

surrounding the purchase of QCG and the initial assessment

of the acquired intangible assets and goodwill was appropriate.

The presentation of “Adjusted EBITDA” alongside

statutory profit.

Note 5

Adjusted EBITDA, in this context, looks to adjust for non-

underlying trading activity within the financials for year

which are material in size, in order to fairly remunerate

the management on underlying performance.

The Committee considered the approach adopted and was

satisfied that the approach continues to help provide a clear

and more balanced view of the underlying performance of

the business than simply focusing on profit after tax. It also

concluded that the approach is being applied consistently

from year to year and the rationale is clearly presented and

reconciled back to the IFRS published numbers.

The valuation of the claims provision

Note 25

The Group retains a provision for the gross estimated

liability arising from claims in the current and preceding

financial years which have not yet given rise to claims paid.

It is estimated based on the current information,

and the ultimate liability may vary as a result of subsequent

information and events.

The Committee has reviewed the methodology and

calculations relating to the claims provisions held by

the insurance entities within the Group to ensure that

the incurred but not reported claims reflect not only the

historical trends of the insurance policies sold but also

continuing impacts post COVID-19 including considerations

such as increased hospital waiting lists. The Committee was

satisfied that the amount reserved for across the Group is

appropriate given the data available. It should be noted that

the insurance business is short tail and post year end claims

are examined before the accounts are signed off.

Audit Committee Report

continued

External audit

EY LLP were first appointed for the 2019 financial year.

We value continuity providing the Group gets value for money

both for the formal reporting and the third-party assurance

that the business has a good control environment.

The Committee considers a number of areas when

reviewing the external auditor reappointment, namely

their performance in discharging the audit, the scope of

the audit and terms of engagement, their independence

and objectivity, and their reappointment and remuneration.

In addition, as noted, we are seeking more value from

the audit and encourage a control based approach rather

than substantive where it is cost effective to do so.

The external auditor reports to the Committee on

actions taken to comply with professional and regulatory

requirements and is required to rotate the lead audit

partner every five years.

There is also an active, ongoing dialogue between the

Committee and the external auditor on actions to improve

the effectiveness and efficiency of the external audit

process. In addition, the Committee considers risk areas

that might inform the audit strategy and discusses this

with the external auditors.

The Committee has confirmed it is satisfied with the

independence, objectivity and effectiveness of EY LLP

as auditor and will support a resolution to retain them

at the forthcoming Annual General Meeting.

No non-audit services were provided by the external

auditors during this financial year or since they were

originally appointed.

Bob Head

Independent Non-Executive Director

27 March 2023

53

Overview

Governance

Strategic

Report

Financial

Statements

Remuneration Committee Report

The Committee’s objective is to align our reward strategy with the

delivery of profitable and sustainable growth for the benefit of all

our stakeholders.

Dear Shareholder

On behalf of the Board, I am pleased

to present this year’s Remuneration

Committee report. The Remuneration

Report provides a comprehensive picture

of the structure of our remuneration

framework, its alignment with the

business strategy and the rest of the

workforce, as well as the decisions made

by the Committee as a result of business

performance for this year.

Aims of the Remuneration

Committee

The primary purpose of the Remuneration

Committee is to review and make

recommendations regarding the

remuneration policy for the Group,

specifically regarding the Group’s

framework of Executive Remuneration.

The Committee’s overall objective is to

align reward for the Executive Directors

with the delivery of profitable sustainable

growth for our shareholders and employees

through the Group’s remuneration

framework which:

>

Offers competitive salary packages

to attract, retain, and motivate

talented people.

>

Operates straightforward, transparent,

and effective reward schemes that

incentivise delivery of stretching annual

targets and delivery of our longer-term

business strategy.

In addition, the Committee:

>

Offers the chance for all employees

to participate in share schemes so

that everyone thinks and acts to

“run it like we own it” – one of our core

employee values.

>

Oversees and reviews the commission

and bonus arrangements for customer-

facing insurance sales employees

to ensure a proper balance between

motivating staff whilst making sales

of the highest quality (ie beyond simple

regulatory compliance).

To that end, we currently operate the

following remuneration framework:

>

Annual salary and associated benefits

(all employees).

>

Defined contribution pension scheme and

other benefits such as life cover, private

medical insurance (all employees).

>

Performance based annual bonus linked

to delivering stretching financial, business

development, and service-oriented

targets (selected employees).

>

Commission, bonus schemes and

incentives for the customer-facing

insurance teams (selected sales and

sales support employees).

>

Share schemes:

>

PG Share Ownership Plan

(all employees);

>

Company Share Option Plan

(selected employees); and

>

Long Term Incentive Plans (LTIPs)

(selected senior executives –

see page 57 for further details).

Meetings Held

4

Remuneration Committee

members

Remuneration Committee Report

continued

We have continued to consider comparisons

of remuneration for senior employees

of similar sized quoted companies in

related sectors when establishing the

levels of packages set. Our most recent

Executive and Non-Executive Directors'

benchmarking exercise was undertaken

in December 2021.

Composition of the Remuneration

Committee

The Remuneration Committee consists of

the independent Non-Executive Directors,

with the Chief Executive, Chief People

Officer, Company Secretary and any non-

Independent Non-Executive Directors

invited to be in attendance at times.

The Remuneration Committee operates

within defined terms of reference,

which were updated last year. It met four

times in 2022, with ad hoc calls taking

place when required.

None of the Committee has any personal

financial interest, conflicts of interests

arising from cross Directorships, or day-to-

day involvement in running the business

and, as such, the Committee is deemed

to be independent.

The Board determines the remuneration

of the Non-Executive Directors after

benchmarking external market research.

Non-Executive Directors are not involved

in setting their own pay and do not

participate in the bonus schemes or the

LTIPs, or in any other share award scheme.

Performance for the year & 2022

annual bonus

Despite significant progress in achieving

KPIs and underlying growth, the Group did

not achieve its goals for 2022. As a result

it has been agreed by the Committee that

no bonuses would be paid to the Executive

Directors for 2022. It has, however, been

agreed to review the bonus potential for

the leadership in future years.

The remainder of staff below the SLT

level with a contractual bonus target

have received amounts commensurate

to personal objectives being reached

but not for Group wide targets.

Pay increases

The Remuneration Committee approved

a pay increase pot of c.3.5% for all

eligible employees, including the Board,

in January 2022.

Other Committee activities for

the year

The Committee has been actively engaged

in reviewing the changing nature of

reward and benefits. The Committee is

in regular communication with the Chief

People Officer to ensure that the Group

understands the market norms and offers

packages which are competitive for our

employees. The Committee particularly

focused on the attraction and retention

of scarce talent, with a detailed review

of the pay of all employees, and those

at particular flight-risk in crucial roles

identified. Market rate adjustments were

completed and key employees were

retained through 2022.

The Committee discussed, and approved

the change to, the remuneration and

incentive programme surrounding the field

sales team. The revised programme looked

to simplify the existing scheme whilst

supporting long term career paths for staff

and adjusting for best practise guidance

offered by a recent internal audit into

the subject.

The Committee also reviewed pension

arrangements for employees, and

established a Pension Working Group to

prioritise our review of pension take-up

and encourage employees to plan for

their futures.

The year ahead

ESG goals and targets have been included

in the 2022 LTIP design, demonstrating our

commitment to ESG goals, and ensuring

that they remain top of mind for our

Executive Directors and their teams.

The Remuneration Committee remains

focused on aligning reward with delivering

long-term sustainability and growth

of the business, combined with our

on-going progressive dividend policy.

Where any material changes are made to

the remuneration policy, we will continue

to discuss our intentions with our

major shareholders and give them the

opportunity to comment.

Service contracts

The Executive Directors have service

contracts that can be terminated on six

months’ notice with the exception of

the Chief Executive who has a 12 month

notice period.

These provide for termination payments

equivalent to the notice period's basic

salary and contractual benefits.

The Non-Executive Directors have letters

of appointment that can be terminated

on six months’ notice.

55

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Remuneration Committee Report

continued

Membership of Board and Directors’ interests

The membership of the Board throughout the year is set

out herein.

The interests of the Directors and their families (including

transactions committed to before the year end and shares

held in the PGH employee share ownership plan)

in the shares of the Company as of 31 December 2021

or date of appointment if later, and 31 December 2022,

are shown in the table to the right.

At 31 December 2022, the mid-market closing share price

was 196.00p per share (31 December 2021: 325.00p).

At 31 December

2022

At 31 December

2021

Deborah Frost

(Chief Executive)

333,678

304,063

Sarah Mace

(Chief Financial Officer)

12,071

12,030

Andrew Lothian

(Non-Executive Director – Managing Director PGB Sales until December 2020)

37,532

37,532

Martin Bennett

(Independent Non-Executive Chair – Appointed January 2021)

18,070

-

Bob Head

(Independent Non-Executive)

–

–

Maria Darby-Walker

(Senior Independent Non-Executive)

–

–

Ciaran Astin

(Independent Non-Executive – Appointed May 2022)

–

–

Salary

and fees

2022

£’000

Bonus

2022

£’000

Share-based

gains on

exercise of

options

2022

£’000

Pension

contributions

2022

£’000

Total

2022

£’000

Total

2021

£’000

Deborah Frost

332

–

79

10

421

427

Sarah Mace

189

–

–

13

202

239

Liam McGrath *

124

–

–

6

130

145

Andrew Lothian

41

–

–

–

41

41

Bob Head

50

–

–

–

50

50

Maria Darby-Walker

51

–

–

–

51

49

Martin Bennett **

101

–

–

–

101

78

Ciaran Astin ***

28

–

–

–

28

–

Mark Winlow

–

–

–

–

–

33

Total

916

–

79

29

1,024

1,062

Directors’ remuneration

The Executive Directors’ remuneration packages currently

include components of a basic salary, annual bonus,

a company car or car allowance if applicable to the role,

Long Term Incentive Plan (LTIP), non-matched pension

contributions and life cover as appropriate.

The remuneration of the Directors listed by individual

Director shown to the right.

Governance

Remuneration Committee Report

continued

Directors’ share options

CSOP

On 31 December 2022 options outstanding were as follows:

Number

of shares

Exercise price

pence per share

Earliest

exercisable date

Andy Lothian

6,026

498.00

14 February 2017

Sarah Mace

6,122

490.00

28 January 2017

Deborah Frost

8,746

343.00

29 November 2024

LTIP

On 31 December 2022 options outstanding were as follows:

Number

of shares

Exercise price

pence per share

Earliest

exercisable date

Deborah Frost

435,362

5.00

01 January 2024

Sarah Mace

147,040

5.00

01 January 2024

The options above are subject to the performance criteria of the LTIP.

Company Share Option Plan

Awards under CSOPs have taken place for a number of

years and have been predominantly allocated to senior

members of staff across the business in line with the

rules on the government scheme. The options have a

requirement to be held for three years prior to exercise

and no performance obligations.

Long Term Incentive Plan

The Long Term Incentive Plan introduced in April 2021 was

established in order to reward and incentivise the senior

executives to deliver sustainable growth for the Company

and to create material value for shareholders. The scheme

accommodates performance conditions across market,

financial and ESG measures which support the growth of

the business.

The scheme has made two awards of share options to

date in April 2021 and April 2022.

The performance criteria of the awards are detailed in

Note 22.

In addition to the Executive Directors, members of the

Senior Leadership Team also had awards.

Maria Darby-Walker

Independent Non-Executive Director

Nominations Committee Report

Dear Shareholder

I am pleased to present the Nominations

Committee Report for the year ended

31 December 2022. The Committee’s

primary function is to enable focused

discussions around the composition of

the Board and the Group requirements

around SM&CR.

Objectives

The aims and objectives of the

Nominations Committee is to:

>

Ensure there is a formal, rigorous and

transparent procedure for the appointment

of new Directors to the Board and new

members of the senior management team;

>

Provide oversight of Board composition,

membership and Board and senior /

executive appointments;

>

Lead the process for appointments,

ensure plans are in place for orderly

succession to both the Board and senior

management positions, and oversee

the development of a diverse pipeline

for succession;

>

Provide independent oversight of the

Group’s compliance with the Senior

Managers and Certification Regime; and

>

Determine whether employees who are

subject to disciplinary procedures have

breached the Conduct Rules applicable

to their role and whether dismissal is an

appropriate outcome.

The Nominations Committee, assisted

by external executive search agencies as

required, primarily manages appointments

to the Board, but all Board members

have the opportunity to meet shortlisted

candidates, ensuring a wide range of

feedback in the appointment process.

All Executive Directors are engaged on a

full-time basis. Non-Executive Directors

have letters of appointment stating their

annual fee, the minimum required time

commitment and confirmation that their

appointment is subject to satisfactory

performance. Their appointment may

be terminated with a maximum of six

months’ written notice at any time.

The remuneration of the Chairman and

Non-Executive Directors is determined by

the Board following proposals from the

Nominations Committee, within the limits

set out in the Articles of Association, based

on a review of the level of fees paid by

comparator companies. Non-Executive

Directors do not participate in discussions

about their own remuneration.

Activity during the year

The Committee’s Chairman reports

formally to the Board on its proceedings

after each meeting and during the year the

Committee met twice, detail of what was

reviewed by the Committee is as follows;

Board succession

We actively manage our Board succession

plan, to ensure that our Board has an

appropriate and diverse range of skills to

enable us to deliver our strategy for the

benefit of all of our stakeholders.

We are a small and cohesive Board, and

take care to ensure that all new members

of our Board are aligned to our culture and

share our values, whatever their skills and

background. Our Board induction process,

undertaken by all new members upon

appointment, is an important way to get

The Board is satisfied that its current composition

includes an appropriate balance of skills, experience

and capabilities.

Martin Bennett

Independent Non-Executive Chairman

Meetings Held

Martin Bennett (Chair)

Maria Darby-Walker

Bob Head

Ciaran Astin

The CEO, Non-Independent NEDs,

Chief People Officer and Company

Secretary are normally present at

the meetings.

our new Board members up to speed and valued by our

Non-Executive Directors. We have a formal plan for how

Board membership should develop which aims to balance

continuity of service with a regular refreshment of skills

and experience needed to deliver our evolving strategy.

We regularly review the balance of skills on the Board as a

whole, taking account of the future needs of the business,

and the knowledge, experience, length of service and

performance of the Directors. We are satisfied with the

plan which has resulted in the placement of Ciaran Astin

on the Board. Liam McGrath left the business during 2022.

Board and Director effectiveness

The CEO receives a formal evaluation of their performance

during the year, which is conducted by the Chairman.

In addition, the CEO discusses with the Non-Executive

Directors the performance of individuals of the Executive

team and any changes that she proposes to make to this

team. Whilst this activity does not take place formally

within the meetings of the Nominations Committee,

it does form part of its work in overseeing Executive

team development and succession process, and the

pipeline of talent available for succession to the Board.

The performance of our Board and the Committees is

evaluated by the Chair and he has concluded that the Board

is functioning well, is dynamic, has a breadth and depth of

complementary skills and experience and that there is a

strong trust between the Non-Executive Directors and the

Executive Directors in the running of the Group. An external

Board effectiveness review was conducted in 2022 with

development areas being worked on.

Diversity

We fully support diversity as an important contribution

to good quality decision making and innovative thinking.

Diversity has many dimensions and we particularly value

diversity of thought, which in turn is assisted by diversity of

background and experience, as well as gender and ethnicity.

We already have on our Board a diversity of gender, skills,

experience, personality, and cognitive approach. Across

the business, teams are diverse with an even split of males

and females in management positions. However, we are

conscious that our senior leadership population does not

currently reflect the broader ethnic mix of our employees

and our customers and we will seek to address this.

We continue to review how we can further broaden our

approach, encouraging diversity and inclusion throughout

the Board and the business.

Culture and values

Preservation of our culture has always been a priority,

which stems from the values instilled by the Board.

Our culture is brought to life through our shared values and

business principles which the Board monitors through Board

reports and agenda items, engagement with employees,

and visits to the Group’s offices.

Tenure and Re-Election Of Directors

The Nominations Committee considers the length of service of Board members at least annually. The tenure of the

Directors is set out below:

Member

Appointment

Last AGM

renewal

Up for renewal

at 2023 AGM

Board role

Martin Bennett

January 2021

AGM 2021

For renewal

by rotation

Non-Executive Chairman

Deborah Frost

September 2015 (previously NED,

appointed CEO Feb 19)

AGM 2021

Chief Executive

Sarah Mace

October 2020

AGM 2021

For renewal

by rotation

Chief Financial Officer

Maria Darby-Walker

June 2019

AGM 2022

Senior Non-Executive Director

Ciaran Astin

May 2022

–

For renewal

as first year

Non-Executive Director

Bob Head

November 2016

AGM 2022

Non-Executive Director

Andy Lothian

July 2017 (previously

Executive Director,

appointed NED Jan 2021)

AGM 2021

Non-Executive Director

Martin Bennett

Independent Non-Executive Chairman

27 March 2023

Nominations Committee Report

continued

Our culture and values are an important part of what we

look for in new candidates to join our Board, so that they

may promote and engage with the development of these

aspects throughout the business. It is important that they

are aligned with our values so that they can be role models

for all our employees and stakeholders.

Certification & conduct rules

It is important for the ongoing success of the business that

rigorous certification processes and training and oversight

of compliance with the conduct rules are completed and

monitored by the Committee. We have worked hard to

articulate the conduct rules as part of the wider Group

values and have no tolerance for any breaches of the rules.

59

Directors’ Report

Principal activities

The Group is principally engaged in providing employee

services, including short-term accident and health

insurance, benefits and platform products, pay and

reward consultancy and the provision of salary sacrifice

technology products in the UK.

Results and dividends

A review of the year’s results is given in the Chief Financial

Officer’s Statement (see page 25).

The loss from continuing operations for the year is

£6,760,000 (2021: profit of £4,342,000) before taxation

of £510,000 (2021: £745,000). During the year ordinary

dividends of £3,311,000 (2021: £3,244,000) were paid.

Directors

The membership of the Board at the end of the year is

set out in the Remuneration Report on pages 54 to 57.

The Remuneration Committee Report also includes details

of the Directors’ remuneration and interests in the ordinary

shares of the Company. During the year all Directors and

officers were covered by third party indemnity insurance.

Political contributions

Neither the Company nor any of its subsidiaries made any

political donation or incurred any political expenditure

during the year (2021: £nil).

Charitable donations

Donations to charitable organisations amounted to

£100,000 (2021: £100,000).

Principal risks and uncertainties

The principal risks and uncertainties facing the Group,

along with the risk management objectives and policies

are discussed in the Risk and Compliance and Audit

Committee reports and Note 3 of these financial statements.

Capital requirements

See Note 4 of these financial statements.

Corporate governance

The Board of Personal Group Holdings Plc supports the

principles and is committed to achieving high standards

of corporate governance and has adopted the Quoted

Companies Alliance Corporate Governance Code in its

entirety. The Board’s report on the Group’s corporate

governance procedures is set out on pages 44 and 45.

Disclosure of information to auditor

The Directors who held office at the date of approval of

this Directors’ Report confirm that, so far as they are each

aware, there is no relevant audit information of which the

Group’s auditor is unaware; and each Director has taken

all the steps that they ought to have taken as a Director to

make themselves aware of any relevant audit information

and to establish that the Group’s auditor is aware of

that information.

Auditor

EY LLP have expressed willingness to continue in office.

In accordance with section 489 (4) of the Companies Act

2006 a resolution to both formally appoint and reappoint

EY LLP will be proposed at the Annual General Meeting to

be held on Thursday 4 May 2023.

The Directors present their report together with the audited financial

statements for the year ended 31 December 2022.

Other information

An indication of likely future developments in the business

and particulars of significant events which have occurred

since the end of the financial year have been included in

the Strategic Report.

BY ORDER OF THE BOARD

Sarah Mace

Chief Financial Officer

27 March 2023

60

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

In respect of the Strategic Report, Directors’

Report and the Financial Statements

The Directors are responsible for preparing the Strategic

Report, Directors’ Report and the Group and parent

Company Financial Statements in accordance with

applicable law and regulations.

Company law requires the Directors to prepare Group and

parent Company financial statements for each financial

year. Under the AIM Rules of the London Stock Exchange

they are required to prepare the Group financial statements

in accordance with International Financial Reporting

Standards as adopted by the UK (UK adopted IFRS) and

applicable law and they have elected to prepare the parent

Company financial statements on the same basis.

Under company law the Directors must not approve the

financial statements unless they are satisfied that they

give a true and fair view of the state of affairs of the Group

and parent Company and of their profit or loss for that

period. In preparing each of the Group and parent Company

financial statements, the Directors are required to:

>

Select suitable accounting policies and then apply

them consistently.

>

Make judgements and estimates that are reasonable,

relevant and reliable.

>

State whether they have been prepared in accordance

with UK adopted IFRS.

>

Assess the Group and parent Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern.

>

Use the going concern basis of accounting unless

they either intend to liquidate the Group or the parent

Company or to cease operations, or have no realistic

alternative but to do so.

The Directors are responsible for preparing the Strategic report,

Directors’ report and the Group and parent company financial statements

in accordance with applicable law and regulations.

The Directors are responsible for keeping adequate

accounting records that are sufficient to show and

explain the parent Company’s transactions and disclose

with reasonable accuracy at any time the financial

position of the parent Company and enable them to

ensure that its financial statements comply with the

Companies Act 2006. They are responsible for such

internal control as they determine is necessary to enable

the preparation of financial statements that are free

from material misstatement, whether due to fraud or

error, and have general responsibility for taking such

steps as are reasonably open to them to safeguard the

assets of the Group and to prevent and detect fraud and

other irregularities.

Under applicable law and regulations, the Directors are

also responsible for preparing a Strategic Report and

a Directors’ Report that complies with that law and

those regulations.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information

included on the Company’s website. Legislation in

the UK governing the preparation and dissemination

of financial statements may differ from legislation in

other jurisdictions.

61

Overview

Governance

Strategic

Report

Financial

Statements

Personal Group Holdings Plc |

Annual Report and Accounts 2022

Governance

Strategic

Report

Overview

Personal Group Holdings Plc |

Annual Report and Accounts 2022

62

Financial

Statements

Opinion

In our opinion:

>

Personal Group Holdings plc’s group financial statements and parent company financial

statements (the “financial statements”) give a true and fair view of the state of the

group’s and of the parent company’s affairs as at 31 December 2022 and of the group’s

loss for the year then ended;

>

the group financial statements have been properly prepared in accordance with UK

adopted international accounting standards;

>

the parent company financial statements been properly prepared in accordance with UK

adopted international accounting standards as applied in accordance with section 408

of the Companies Act 2006; and

>

the financial statements have been prepared in accordance with the requirements of

the Companies Act 2006.

We have audited the financial statements of Personal Group Holdings which comprise:

Group

Parent company

The financial reporting framework that has been applied in their preparation is applicable law

and UK adopted international accounting standards and as regards to the parent company

financial statements, as applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our responsibilities under those standards are further described

in the Auditor’s responsibilities for the audit of the financial statements section of our

report below. We are independent of the group and parent company in accordance with

the ethical requirements that are relevant to our audit of the financial statements in the

UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we

have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate

to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of

the going concern basis of accounting in the preparation of the financial statements

is appropriate. Our evaluation of the directors’ assessment of the group and parent

company’s ability to continue to adopt the going concern basis of accounting included

the following procedures:

>

confirmed our understanding of management’s going concern assessment process and

obtained management’s assessment which covers 12 months ending 27 March 2024;

>

obtained the financial forecasts prepared by the Group and assessed the

appropriateness of assumptions applied in the modelled stress scenarios based

on our understanding of the business and the Group’s historical performance;

>

performed enquiries of management and those charged with governance to identify

risks or events that may impact the Group’s ability to continue as a going concern.

We also reviewed management’s assessment approved by the Board, minutes of

meetings of the Board and its committees, and made enquiries as to the impact of

market conditions on the business; and

>

assessed the appropriateness of the going concern disclosures by comparing the

consistency with management’s assessment and for compliance with the relevant

reporting requirements.

Governance

Strategic

Report

Overview

Personal Group Holdings Plc |

Annual Report and Accounts 2022

63

Financial

Statements

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance

materiality determine our audit scope for each entity within the Group. Taken together,

this enables us to form an opinion on the consolidated financial statements. We take into

account size, risk profile, the organisation of the group and effectiveness of group wide

controls, changes in the business environment, the potential impact of climate change

and other factors such as recent Internal audit results when assessing the level of work

to be performed at each entity.

In assessing the risk of material misstatement to the Group financial statements, and to

ensure we had adequate quantitative coverage of significant accounts in the financial

statements, of the five reporting components of the Group, we selected four components,

which represent the principal business units within the Group.

Of the five components selected, we performed an audit of the complete financial

information of four components (“full scope components”) which were selected

based on their size or risk characteristics. For the remaining component (“specific

scope components”), we performed audit procedures on specific accounts within

that component that we considered had the potential for the greatest impact on the

significant accounts in the financial statements either because of the size of these

accounts or their risk profile.

For the current year, the full scope components contributed 91% (2021: 89%) of the

Group’s Profit before tax, 93% (2021: 98%) of the Group’s Revenue.

The specific scope component contributed 7% (2021: 6%) of the Group’s Profit before tax,

4% (2021: 2%) of the Group’s Revenue. The audit scope of these components may not have

included testing of all significant accounts of the component but will have contributed to

the coverage of significant accounts tested for the Group.

Based on management’s assessment, we have observed that the Group is able to

continue to have surplus cash and solvency above the solvency requirements within its

two regulated entities in a number of extreme downside scenarios and the Group has

continued to service customers and meet its commitments in the current environment.

Based on the work we have performed, we have not identified any material uncertainties

relating to events or conditions that, individually or collectively, may cast significant

doubt on the group and parent company’s ability to continue as a going concern for the

period ending 27 March 2024.

Our responsibilities and the responsibilities of the directors with respect to going concern

are described in the relevant sections of this report. However, because not all future

events or conditions can be predicted, this statement is not a guarantee as to the group’s

ability to continue as a going concern.

Overview of our audit approach

Audit scope

We performed full scope audit of four components of the Group:

UK core insurance (Personal Assurance plc),

Guernsey core insurance (Personal Assurance (Guernsey)

Limited),

IT salary sacrifice (PG Let’s Connect IT Solutions Limited),

Software as a service (Personal Management Solutions

Limited)

In addition, we performed audit procedures on specific balances

for Innecto People Consulting Limited, included in the Group

component Software as a service.

The components where we performed full or specific audit

procedures accounted for 97% of the Group revenue and 98%

of the Group profit before tax.

Key audit matters

Valuation of PG Let’s Connect goodwill

Valuation of Innecto goodwill and other intangible assets

Acquisition of Quintage Consulting Group

Materiality

Overall group materiality of £195,050 which represents 5%

of consolidated profit before tax

Governance

Strategic

Report

Overview

Personal Group Holdings Plc |

Annual Report and Accounts 2022

64

Financial

Statements

Climate change

Stakeholders are increasingly interested in how climate change will impact the Group.

The Group has determined that the most significant future impacts from climate change

on their operations in the ESG section of the strategic report. The Group has also explained

their climate commitments on page 33 in the ESG section of the strategic report. All of

these disclosures form part of the “Other information,” rather than the audited financial

statements. Our procedures on these unaudited disclosures therefore consisted solely

of considering whether they are materially inconsistent with the financial statements,

or our knowledge obtained in the course of the audit or otherwise appear to be materially

misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change

on the Group’s business and any consequential material impact on its financial statements.

Our audit effort in considering climate change was focused on challenging management’s

risk assessment of the impact of physical and transition risks and the resulting conclusion

that there was no material impact from climate change and the adequacy of the Group’s

disclosures on page 79 of the financial statements which explain the rationale.

We also challenged the Directors’ considerations of climate change risks in their assessment

of going concern and viability and associated disclosures.

Based on our work we have not identified the impact of climate change on the financial

statements to be a key audit matter or to impact a key audit matter.

The charts below illustrate the coverage obtained from the work performed

by our audit teams.

Profit before tax

Revenue

93% Full scope components

4% Specific scope components

3% Other procedures

91% Full scope components

7% Specific scope components

2% Other procedures

Involvement with component teams

In establishing our overall approach to the Group audit, we determined the type of

work that needed to be undertaken at each of the components by us, as the primary

audit engagement team, or by component auditors from other EY global network firms

operating under our instruction.

Of the four full scope components, audit procedures were performed on these directly by

the primary audit team, EY UK, whilst audit procedures on the remaining one component

(Personal Assurance (Guernsey) Limited) were performed by the component audit team,

EY Guernsey.

Independent Auditor’s Report

Governance

Strategic

Report

Overview

Personal Group Holdings Plc |

Annual Report and Accounts 2022

65

Financial

Statements

Risk

Our response to the risk

Key observations

communicated to the

Audit Committee

Valuation of PG Let’s Connect

Goodwill (2022: £0m, 2021:

£10.6m)

We consider the risk associated

with the valuation of PG Let’s

Connect goodwill to be greater as

a result of increased uncertainty

in relation to future cash flow

projections as a result of the impact

from the COVID-19 pandemic,

economic uncertainty along with

key customer contract renewals

and ongoing supply issues.

Refer to Accounting policies

(page 83); and Note 14 of

the Consolidated Financial

Statements (pages 95 and 96).

The PG Let’s Connect goodwill

balance as at 31 December 2022

has been fully impaired to nil.

To obtain sufficient audit evidence to

conclude on the valuation of PG Let’s

Connect goodwill, we performed the

following procedures:

>

Examined and assessed the

appropriateness of management’s

impairment model, including an

identification of the cash generating unit

(“CGU’) and attributable cashflows,

an assessment of discounted cash flows,

and understanding of the significant

assumptions used in the impairment

test for the identified CGU;

>

Considered the increased uncertainty in

the underlying forecasts and challenged

the future cash flow projections of the

CGU, including the appropriateness of the

applied short-term and long-term growth

rates and estimated conversion rates;

>

Reviewed post year end information

available to assess the likelihood of the

key contract renewal.

>

Assessed the appropriateness of the

identified CGU and attributed cash flows;

>

Challenged the future cash flow

projections of Lets Connect to ensure

pipeline business and conversion

rates included in the projections are

appropriate by comparing to prior year

accuracy of forecasting;

>

Engaged our valuation specialists

to assess the reasonableness of the

impairment including an assessment

of the discount rate; and

>

Considered whether the applied

accounting treatment is in compliance

with IFRS and the Group’s accounting

policy, and the Group disclosures are in line

with the required reporting framework.

We have reviewed

managements Let’s

Connect impairment

paper along with post

year end information

available which shows

the loss of a major

customer, leading to a

fall in cash flows which

no longer support

the recoverability of

goodwill.

Based on the above

considerations, we

are satisfied that the

Let’s Connect goodwill

impairment of £10.6m

being recognised at

31 December 2022 is

appropriate.

We have reviewed the

related disclosures and

concluded that these

accurately reflect the

impairment recorded

during the year.

Governance

Strategic

Report

Overview

Personal Group Holdings Plc |

Annual Report and Accounts 2022

66

Financial

Statements

Risk

Our response to the risk

Key observations

communicated to the

Audit Committee

Valuation of goodwill and

other intangible assets arising

on acquisition of Quintage

Consulting Group (2022: £0.9m)

Refer to Accounting policies

(page 83); and Note 14 of

the Consolidated Financial

Statements (pages 95 to 97).

On 1st July 2022, Personal Group

Holdings Plc acquired Quintage

Consulting Group Limited ("QCG"),

a leading employee experience

and reward consultancy, for a

cash consideration of £0.9m.

We consider the identification

and valuation of identifiable

intangible assets such as

customer relationships, acquitted

workforce and brand. The QCG

acquisition has been classed as a

significant risk due to the nature

of judgments and estimates

involved in valuing the intangible

assets acquired.

To obtain sufficient audit evidence to

conclude on the valuation of intangible

assets arising on acquisition of QCG and

the valuation of goodwill at the year end,

we performed the following procedures:

>

Examined the QCG Sale and Purchase

Agreement to understand terms and

conditions and their impact on the

acquisition accounting;

>

Assessed appropriateness of the identified

intangible assets and cash flows identified

as attributable to these assets;

>

Reviewed the valuation report of

management’s expert and assessed the

methodology and assumptions adopted by

management for calculating the fair values

of intangible assets arising on acquisition;

>

Engaged EY valuation specialists to assess

the reasonableness of the key assumptions

by considering Personal Group’s (QCG’s)

specific circumstances as well as

comparable companies;

>

Assessed completeness of the intangible

assets arising from acquisition;

>

Assessed appropriateness of the identified

CGU and challenged the profitability

projections of the CGU, specifically growth

rate, royalty rates and obsolescence

assumptions;

>

Assessed appropriateness of the

impairment model and challenged the

key assumptions applied by management,

specifically discount rate and short-term

and long-term growth rates; and

>

Considered whether the applied

accounting treatment is in compliance

with IFRS and the Group’s accounting

policy, and the Group disclosures are in line

with the required reporting framework.

We are satisfied that the

intangible assets arising

from the acquisition of

QCG are appropriately

identified and accounted

for and their valuation

at the acquisition date is

materially correct.

We are satisfied that

there is no impairment

and the carrying value

of the goodwill is

appropriate as at

31 December 2022.

In addition, we are

satisfied that the

accounting for the

acquisition and related

disclosures are in

compliance with the

applicable accounting

framework.

Risk

Our response to the risk

Key observations

communicated to the

Audit Committee

Valuation of Innecto goodwill

(2022: £2.6m, 2021: £2.6m)

We consider the risk associated with

the valuation of Innecto goodwill

to have increased as a result of

increased uncertainty over the

future cash flow projections due

to the COVID-19 pandemic.

Refer to Accounting policies

(page 83); and Note 14 of

the Consolidated Financial

Statements (pages 95 to 97).

The Innecto goodwill arising on

consolidation represents the

excess of the costs of acquisition

over the Group’s interest in the fair

value of the identified assets and

liabilities at the date of acquisition

of Innecto in 2019.

As at 31 December 2022 we noted

that the value of the Innecto

goodwill was most sensitive to

the discount rate and the short-

term growth rates of the digital

sales. The forecasted cash flows

are dependent on the continued

projected growth from digital and

consultancy income. Current 2023

forecasts show a more positive

outlook for Innecto, but due to

the economic uncertainty and

inflationary pressures that may

impact the business’s ability to

generate new business, uncertainty

related to the future cash flows

and sensitivity to the discount rate

continue to remain.

The identified key assumptions

involve significant judgement

about future events for which small

changes can result in a material

impact to the resultant valuation

and therefore leads to a greater risk

of material misstatement.

To obtain sufficient and appropriate